Company: ATLCL
Filing Date: 2025-03-19
Form Type: CORRESP
Source: 0001437749-25-008467
Chunk: 7

Company: Atlanticus Holdings Corp
Filing Date: 2025-03-19
Form: CORRESP
Chunk 7
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 the degree of imprecision inherent in the estimate. |

As noted above, the misstatement being assessed arises from the improper inclusion of inputs (future purchases and the merchant fees associated with those purchases) in the models used to calculate fair value. The fair value of receivables is a management estimate with a high degree of imprecision. While the errors are related to the improper inclusion of inputs in this valuation, management notes the financial statement line item impacts of the receivables balances have been a small fraction (less than [*****]%) of the value of these assets, as further described below. Further, while the methodology utilized to measure fair value in this case has been determined to require adjustment for consistency with ASC 820, management has previously measured fair value in good faith based on a consistent methodology which was reviewed with third-party valuation experts (including one Big 4 Accounting firm) in prior years.

| B. | Whether the misstatement masks a change in earnings or other trends. |

No – the unadjusted misstatement results in lower earnings and profitability trends. As such, the misstatement does not mask changes in earnings or other trends that would have caused the Company to be viewed less favorably to analysts or others in the marketplace. Furthermore, the unadjusted misstatement decreased the Fair Value of Loans Receivable asset, which is a focus of investors in the marketplace.

[*****] Omitted and provided under separate cover to the Staff pursuant to Rule 83.
[*****] Omitted and provided under separate cover to the Staff pursuant to Rule 83.
[*****] Omitted and provided under separate cover to the Staff pursuant to Rule 83.

6

Confidential Treatment Requested by Atlanticus Holdings Corporation

AHC2 - 006

| C. | Whether the misstatement hides a failure to meet analysts’ consensus expectations for the enterprise. |

No – the removal of future purchases and the merchant fees associated with those purchases would have increased the value of the Loan Receivable asset and decreased the associated change in fair value expense, thereby increasing net margin and net income. Analysts also follow earnings per share (“EPS”) as a key metric. Correcting these amounts in the prior periods would have improved financial performance for the Company, increasing pretax and net income as well as EPS.

| D. | Whether the misstatement changes a loss into income or vice versa. |

No – the removal of future purchases and the merchant fees associated with those purchases would not have changed net income amounts into losses or vice versa.

| E. |