Company: ATLCL
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001437749-25-033947
Chunk: 156

Company: Atlanticus Holdings Corp
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 1
Chunk 156
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 investments in companies engaged in mobile technologies, marketplace lending and other financial technologies. None of these companies are publicly-traded, and the carrying values of our investments in these companies are not material.
    
   Within our Auto Finance segment, our CAR subsidiary operations principally purchase and/or service loans secured by automobiles from or for, and also provide floor plan financing for, a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, used car business. We purchase auto loans at a discount and with dealer retentions or holdbacks that provide risk protection. Also within our Auto Finance segment, we are providing certain installment lending products in addition to our traditional loans secured by automobiles.

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   Rules enacted by the Consumer Financial Protection Bureau ("CFPB") which could limit the late fees charged to consumers were vacated in  April 2025. The Courts determined that the CFPB violated the Credit Card Accountability and Disclosure Act's and the Administrative Procedure Act requirement that penalty fees be "reasonable and proportional" to the violation. In order to mitigate these impacts and continue to serve consumers, our bank partners took a number of steps, from modifying products and policies (such as further tightening the criteria used to evaluate new loans) to changing prices (including increasing interest rates and fees charged to consumers) which are included in our fair value calculations. See Note 7 "Fair Values of Assets and Liabilities" for more information on our fair value measurements. 

    2.  Acquisition of Mercury Financial LLC 

   On  September 11, 2025, the Company closed the acquisition of all outstanding equity interests of Mercury Financial LLC (“Mercury”), a leading data- and tech-centric credit card platform utilized by bank partners to provide credit cards to near-prime consumers in the U.S. The acquisition aligns with Atlanticus’ strategic objective to expand its consumer credit offerings and increase scale within its credit card operations. At the closing, Mercury became a wholly-owned subsidiary of Atlanticus. 
    
   Total purchase consideration was approximately $166.5 million in cash. In addition to the purchase consideration, the seller has the opportunity under the purchase agreement to receive earn out payments for up to three years following the closing of the acquisition in an amount equal to 75% of the amount by which the charge-offs of Mercury’s acquired receivables are less than agreed-upon charge-off levels. We have determined the contingent consideration meets the definition