avatar Curo Financial Technologies Corp. Finance, Insurance, And Real Estate

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    CORPORATE EXECUTIVE MANAGEMENT HEADQUARTERS Don Gayhardt David Strano 3527 N. Ridge Road Chief Executive Officer Chief Accounting Officer Wichita, KS 67205 William Baker Joyce Batterson Phone: 316-722-3801 President, Chief Compliance Officer Email: IR@CURO.com Chief Operating Officer JIlllan Slagter Roger Dean Chief Human Resources Officer TRANSFER AGENT Executive Vice President, AND REGISTRAR Chief Financial Officer, Melissa Soper ‘Treasurer SeniorVice President, ‚American Stock Transfer Public Affairs & Trust Company, LLC Terry Pittman 6201 15th Avenue Executive Vice President, Ryan Rathje Brooklyn, NY 11219 Chief Information Officer Chief Product Officer Vin Thomas Rich Welshaar INDEPENDENT Chief Legal Officer, SeniorVice President, REGISTERED PUBLIC Corporate Secretary Chief Risk Officer ACCOUNTING FIRM Deloitte & Touche LLP BOARD OF DIRECTORS FORM 10-K REPORT Doug Rippel Mike McKnight Acopyofthis Annual Report and Executive Chairman Co-Founder of CURO the Annual Report to the Securities Co-Founder of CURO Partner of Tacoma Capital and Exchange Commission on Executive Chairman of Form 10-K for 2020, including the AmericanFirst Gillian Van Schaick consolidated financial statements, Former Executive Vice may be obtained by any Chris Masto President, Head of US stockholder without charge by Lead IndependentDirector Regulatory Compliance writing our Chief Accountin Co-Founderand Senior of HBSC Officer at the address above or by Advisor of FFL Partners accessing the “Investors” section Elizabeth Webster of the Company's website at Don Gayhardt FormerExecutive Vice WWW.CUFO.COM. Chief Executive Officer President, Head of Human Resources of TD Bank Chad Faulkner MARKET INFORMATION Co-Founder of CURO Dale E. Williams Chief Executive Officer of FormerExecutive Vice New York Stock Exchange Sports Academy President, Chief Financial (symbol: CURO) Officer of Tempur Sealy Andrew Frawley International CURO Chief Executive Officer LISTED of V12 Data Karen Winterhof YSE Director of FFL Partners David Kirchheimer FormerChief Financial Officer of Oaktree Capital Management


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    LETTER FROM THE CEO Dear Fellow Shareholders: Giventhefar-reaching impacts of the COVID-19 pandemic, a severe economic downtum and visible social injustice, the challenges of 2020 will be permanently etched in our collective memories. At CURO, wa strive to always Serve our customers with respect, humility and integrity. Staying true to these core values has never been more important than it was over the past year. Our company — your company — responded with urgency and passion — hallmarks of our culture — working tirelessly to promote the safety and well-being of our employees, customers and communities. As an essential business, we had and retain a special In the days of COVID-19. Rapid Cash has been a great help to me in these hard responsibility to respond to these unprecedented times. I want to personally give KUDOS challenges. Customers use our stores and online platforms to Arturo and Melanie for the exceptional to access short-term credit and to meet their everyday customer service, and professionalism, that they always give when visit your financial services needs and our talented frontline MLK location, it's already kinda teammates acted with selflessness and dedication while embarrassing to be in the position of, not adhering to ourstrict health and safety protocols. We could being able to pay yourbills. But those 2 are so kind to me and they ara an asset lo not be more proud of this group and their actions have your business. Keep up the excellent strengthened our culture and company in ways that will work...Melanie and Arturo!!! pay off wellinto the future. Annette L. | US Taking Care of Customers In March of 2020, we instituted a comprehensive COVID-19 Customer Care Program. Through this program, which I was approved right came from special programs that we had put in place in away. | recelved what | the wake of natural disasters such as Hurricane Harvey, requested and it was a we empowered our customer care specialists to RdesNT recommend Speedy provide broad-based relief including payment Cash to anyone. With waivers and deferrals, interest and fee forgiveness, this COVID-19 it has due date changes and extended payment plans. been hard on everyone. Thank you Speedy Cash We also suspended all returned item fees through for helping me right 2020. Through February of 2021, we provided away when needed. paymentrelief to 16% of our active customers, including more than $6 million in principal and interest waivers. In addition, we waived over Patricia E. | US $11 milion in fees for retumed items and for cashing more than 50,000 stimulus checks. Helping our customers navigate financial hardship continues to be our first priority.


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    Giving Back to the Community To support those workingtirelessly to battle COVID-19, we committed $650,000 to provide balanced, healthy meals to healthcare workers. In the U.S., we are proud to be the largest sponsor of Frontline Foods, an organization devoted to feeding healthcare workers on the frontlines of the pandemic.In addition to supporting the city chapters with the greatest need, we launched the Frontline Foods Wichita chapterthat delivered more than 10,000 meals to healthcare workers and first responders in our hometown. Similarly, volunteers from Cash Money, CURO's largest brand in Canada, established their own Meals2Frontine program to deliver balanced, healthy meals to healthcare workers across the greater Toronto area. Our Canadian program has already delivered more than 21,000 meals to workers in more than 65 different facilities and our work will continue on through 2021. We hopetheseefforts have made the arduous work of healthcare workers and first responders a bit casier. Supporting Equality As COVID-19 upended our way of life, the visible social and racial injustice events of 2020 brought the long-standing problem of systemic discrimination to the forefront and demanded that companies take action to address inequality. In June of 2020, with support from our Board of Directors and sponsorship by our executives and employees fromall levels and departments of our company, we created a Diversity and Inclusion Council. The mission of our Council is to create an inclusive work environment where all people feel comfortable being themselves and are encouraged to use their diverse experiences and backgroundsto strengthen our company's vision, values, growth and progress. In recognition of Juneteenth, an important day of reflection on the Importance of racial equality, we donated $100,000 to the Thurgood Marshall College Fund which provides scholarships, mentoring and career support to students attending historically black collages and universities. | am grateful to our teammates in both the US and Canada whehave volunteered to join the Council and are committed to work with our executive leadership team and Board to focus on incorporating diversity and inclusion into our employee experience, identifying opportunities to engage with our intemal and extemal communities and to champion


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    The Powerof Call, bestpractices across our organization. We want the work of Click or Come In the Council to be about actions, not words and to focus on initiatives that will have a durable and positive impact on all Our experience in 2020 company stakeholders. highlighted the value of our omni-channel platform and the ability of our customers to seamlessly transition from After a year unlike any in our history, we exited 2020 our store to digital channels. encouraged by theresiliency of our business. Despite the impacts associated with COVID-19 and related goverment support programsthat lowered customer loan demand and 11% loan balances for most of 2020, historically good credit Increase of performanceandstrict expense management allowed us to post solid eamings for each quarter of 2020. Our financial results benefitted from decisive actions taken in mid-March 2020 to meaningfully reduce our operating expenses across several major categories including advertising, variable Inthe U.S., 68% of our compensation, suspension of merit increases and savings transactions occurred online from work-from-nome initiatives. We also significantly during the fourth quarter of increased our cash and liquidity levels during the year, 2020 compared to 57% in providing greater balance sheetflexibility and positioning us to the first quarter of 2020. pursue value-creating growth investment opportunities. 12% Increase of Overthe past several years, our Board and leadership team Canada Online have been focused on how the confluence of technological Transactions and regulatory challenges and changes will shape our Q1 VS Q4 company's future. We are focused on investing in 2020 opportunities that allow us to provide credit in the three main consumerverticals: In Canada, where online adoption continues to lag the ® Direct-to-consumer, both online and brick-and-mortar U.S., we experienced a © Point-of-sale (‘POS’); and similar mix shift toward + Card-based applications online, with 35% of our transactions conducted Investments in these areas will be in () internal product online during the fourth development; (i) strategic minority investments; and (il quarter of 2020 compared to acquisitions — and we have seengreat progress and success 23% in thefirst quarter of in all three areas: 2020. In December 2020, Katapult, which provides POS finance Webelieve that we provide exclusively to e-commerce retailers, such as Lenovo and our customers with Wayfair, reached an agreement with FinServ Acquisition market-leading digital tools in Corp., a special purpose acquisition company, or SPAC,that both the US and Canada and will result in Katapult becoming a publicly-traded company in wewill continue to invest in the first half of 2021. Based on FinServ's share price (as of these capabilities to maintain April 13, 2021) and assuming our eam-out shares vest based these leadership positions. upon that share price, the total value of our Katapult investment is approximately $440 million providing an impressive retum IK on our $27.5 million cash investment Katapult N in this business.


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    * We acquired 100% ownership of Hexti solutions to a broader range of borrowers over Financial, a leading provider of time. This creates a win for customers across buy-now-pay-later and POS consumerfinancing the prime/non-prime spectrum by providing solutions to major Canadian brick-and-mortar them with the credit needed to improve their and e-commerce retailers, including Staples, lives while delivering increased sales for Flexiti’s Sleep Country and The Brick. The Hexiti merchantpartners. acquisition, announced on February 1, 2021, provides access to the full spectrum of Our U.S. businesses will continue to face Canadian consumers acrossall credit tiers and ongoing COVID-19 related headwindsin thefirst the Flexiti private label half of 2021 as additional governmental stimulus credit card is accepted at un continues to reduce loan demand while over 5,000 storefront © supporting our historically strong credit. We locations across Canada. FLEXITI believe we are well positioned to see growth in our U.S. business as the economyrecovers and ® 2020 saw us meaningfully expand our product customer demand normalizes, which we expect offerings through the organic development and to see in the second half of 2021. We will feature enhancement in near-prime installment continue to invest in our technology and risk and loans and our DDA-account product and we analytics platforms that allow us to quickly expect that in 2021 we will have new product migrate customers to our online channel and to introductions in non-prime POS in Canada. refine our credit decisioning model to support new product opportunities. Optimistic About Our Future I'd like to close by thanking our 4,000 team As | write this letter, most signs point to the members who continue to meet our customers’ pandemic ending in 2021 but many everyday needs for financial services while uncertainties still exist, most notably and executing on our strategic priorities. Their currently the surge in cases in Canada in in accomplishments are even more impressive in several US states and evolving questions about light of the unique challenges presented by the the safety of several of the vaccines. Hopefully pandemic. The past year has demonstrated that by the time you are reading this letter these our fundamental values are strong, our team is uncertainties will have been resolved, but | resilient and that we are truly passionate about highlight these developments as a way of caring for our customers and communities. As cautioning our shareholders that the way forward we continue to broaden our scope and — and upward — in 2021 will inevitably present capabilities as a full spectrum consumerlender, challenges thatwill require us to shift the course we approachthe next year with both enthusiasm of strategy and execution in ways that we cannot and optimism. completely imagine or plan for today. On behalf of CURO and our Board of Directors, We started 2021 with significant optimism | thank you for your continued support. around our opportunity to continue growing in Canada. With our Flexiti acquisition, Canada Sincerely, accounts for approximately 66% of our loan balances on a pro forma basis and we now have omni-channel capabilities to reach customers in all ways they access credit. Even in the face of COVID-related store closures, Hexiti's originations have increased from $49 million in Don Gayhardt 2017 to $292 million in 2020 and Flexiti's team is CEO engaged with a number of potential new merchant partners. Further, we also see a significant opportunity to extend Flexiti's


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    UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-38315 CURO GROUP HOLDINGS CORP. (Exact name of registrant as specified in its charter) Delaware 90-0934597 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 3527 North Ridge Road, Wichita, KS 67205 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (316) 722-3801 Securities Registered Pursuant to Section 12(b) of the Act: Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered Common Stock, $0.001 par value per share CURO New York Stock Exchange Securities Registered Pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Emerging growth company ☐ Smaller reporting company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒


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    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ The aggregate market value of 18,952,976 shares of the registrant’s common stock, par value $0.001 per share, held by non-affiliates on June 30, 2020 was approximately $154,845,814. At March 3, 2021 there were 41,533,231 shares of the registrant’s common stock, $0.001 par value per share, outstanding. Documents incorporated by reference: Portions of the definitive proxy statement for the registrant's Annual Meeting of Stockholders expected to be held on May 13, 2021 are incorporated by reference into Part III of this report.


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    CURO GROUP HOLDINGS CORP. AND SUBSIDIARIES YEAR ENDED December 31, 2020 TABLE OF CONTENTS PART I Item 1. Business 1 Item 1A. Risk Factors 26 Item 1B. Unresolved Staff Comments 37 Item 2. Properties 37 Item 3. Legal Proceedings 37 Item 4. Mine Safety Disclosures 37 PART II Market for Registrant's Common Equity, Related Stockholder Item 5. Matters and Issuer Purchases of Equity Securities 38 Item 6. Selected Financial Data 38 Management's Discussion and Analysis of Financial Condition Item 7. and Results of Operations 42 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 70 Item 8. Financial Statements and Supplementary Data 71 Changes in and Disagreements with Accountants on Item 9. Accounting and Financial Disclosure 124 Item 9A. Controls and Procedures 124 Item 9B. Other Information 125 PART III Item 10. Directors, Executive Officers and Corporate Governance 126 Item 11. Executive Compensation 126 Security Ownership of Certain Beneficial Owners and Item 12. Management and Related Stockholder Matters 126 Certain Relationships and Related Transactions, and Director Item 13. Independence 126 Item 14. Principal Accountant Fees and Services 126 PART IV Item 15. Exhibits, Financial Statement Schedules 127 Item 16. Form 10-K Summary 127 Signatures 132


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    GLOSSARY Terms and abbreviations used throughout this report are defined below. Term or abbreviation Definition 12.00% Senior Secured Notes, issued in February and November 2017 for a total of $470.0 million 12.00% Senior Secured Notes due March 1, 2022, fully extinguished September 2018 The final rule issued by the CFPB in 2017 regarding Payday, Vehicle Title and Certain high Cost 2017 Final CFPB Rule Installment loans. 2017 Tax Act Tax Cuts and Jobs Act of 2017 The proposed issued by the CFPB in 2019 which proposed to rescind the mandatory underwriting 2019 Proposed Rule provisions of the 2017 Final CFPB Rule. Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 9, 2019 Form 10-K 2020 The final rule issued by the CFPB in 2020 which rescinded part of the 2017 Final CFPB Payday 2020 Final CFPB Rule Rule 2020 Form 10-K Annual Report on Form 10-K for the year ended December 31, 2020 8.25% Senior Secured Notes, issued in August 2018 for $690.0 million, which mature on September 8.25% Senior Secured Notes 1, 2025 California Assembly Bill 539, which imposes an annual interest rate cap of 36% plus Federal Funds AB 539 Rate on all consumer loans between $2,500 and $10,000 Ad Astra Recovery Services, Inc., our former exclusive provider of third-party collection services for Ad Astra the U.S. business that we acquired in January 2020 EBITDA plus or minus certain non-cash and other adjusting items; Refer to "Supplemental Non- Adjusted EBITDA GAAP Financial Information" for additional details Allowance coverage Allowance for loan losses as a percentage of gross loans receivable AOCI Accumulated Other Comprehensive Income (Loss) ASC Accounting Standards Codification ASU Accounting Standards Update Utilized to calculate product yield and NCO rates; calculated as average of beginning of quarter and Average gross loans receivable end of quarter gross loans receivable BNPL Buy-Now-Pay-Later bps Basis points CAB Credit access bureau CARES Act Coronavirus Aid, Relief, and Economic Security Act Cash Money Cash Money Cheque Cashing Inc., a Canadian wholly-owned subsidiary of the Company Cash Money Revolving Credit Facility C$10.0 million revolving credit facility with Royal Bank of Canada CDOR Canadian Dollar Offered Rate CFPB Consumer Financial Protection Bureau CFTC CURO Financial Technologies Corp., a U.S. wholly-owned subsidiary of the Company Factors that impacted year-over-year comparisons caused by the 2019 coronavirus, including lower COVID-19 Impacts consumer demand, increased or accelerated repayments and favorable payment trends as customers benefited from government stimulus programs CSO Credit services organization CSO fee A fee charged to customers for loans Guaranteed by the Company CURO Canada Receivables Limited A Canadian bankruptcy remote special purpose vehicle and an indirect wholly-owned subsidiary of Partnership the Company A U.S. bankruptcy remote special purpose vehicle and an indirect wholly-owned subsidiary of the CURO Receivables Finance II, LLC Company EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization Exchange Act Securities Exchange Act of 1934, as amended FASB Financial Accounting Standards Board FFL Friedman Fleischer & Lowe Capital Partners II, L.P. and its affiliated investment funds FinServ Acquisition Corp. a publicly traded special purpose acquisition company (trading symbol FinServ FSRV)


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    Term or abbreviation Definition Financial Technology; the term used to describe any technology that delivers financial services FinTech through software, such as online banking, mobile payment apps or cryptocurrency Flexiti Flexiti Financial Inc. Gross loans receivable plus loans originated by third-party lenders which are Guaranteed by the Gross Combined Loans Receivable Company GST Goods and Services Tax Loans originated by third-party lenders through CSO program which we guarantee but are not Guaranteed by the Company included in the Consolidated Financial Statements ICFR Internal control over financial reporting Katapult Holdings, Inc., a lease-to-own platform for online, brick and mortar and omni-channel Katapult retailers NASDAQ National Association of Securities Dealer Automated Quotation NCO Net charge-off; total charge-offs less total recoveries NOL Net operating loss A four-year revolving credit facility with Waterfall Asset Management, LLC with capacity up to Non-Recourse Canada SPV Facility C$250.0 million A four-year, asset-backed revolving credit facility with Atalaya Capital Management with capacity up Non-Recourse U.S. SPV Facility to $200.0 million if certain conditions are met NYSE New York Stock Exchange POS Point-of-sale Redemption The transaction whereby the 12.00% Senior Secured Notes were partially redeemed ROU Right of use RSU Restricted Stock Unit SEC Securities and Exchange Commission Senior Revolver Senior Secured Revolving Loan Facility with borrowing capacity of $50.0 million Sequential The change from the third quarter of 2020 to the fourth quarter of 2020 SPAC Special Purpose Acquisition Company SRC Smaller Reporting Company as defined by the SEC Troubled Debt Restructuring. Debt restructuring in which a concession is granted to the borrower as TDR a result of economic or legal reasons related to the borrower's financial difficulties U.K. Subsidiaries Collectively, Curo Transatlantic Limited and SRC Transatlantic Limited U.S. United States of America U.S. GAAP Generally accepted accounting principles in the U.S. Verge Credit loans Loans originated and funded by a third-party bank VIE Variable Interest Entity; our wholly-owned, bankruptcy-remote special purpose subsidiaries


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    PART I The terms “CURO," "we,” “our,” “us” and “Company” include CURO Group Holdings Corp. and all of its direct and indirect subsidiaries as a combined entity, except where otherwise stated. CFTC includes its direct and indirect subsidiaries as a consolidated entity, except where otherwise stated. The following discussion of financial condition, results of operations, liquidity and capital resources and certain factors that may affect future results, including economic and industry-wide factors, should be read in conjunction with our Consolidated Financial Statements and accompanying notes included herein. This description of our business contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risk, uncertainties and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. Except as required by applicable law and regulations, we undertake no obligation to update any forward-looking statements or other statements we may make in the following discussion or elsewhere in this document even though these statements may be affected by events or circumstances occurring after the forward-looking statements or other statements were made. Please see the section titled “Risk Factors” below for a discussion of the uncertainties, risks and assumptions associated with these statements. ITEM 1. BUSINESS Company History and Overview We are a growth-oriented, technology-enabled, and highly diversified consumer finance company currently serving a wide range of non-prime consumers in the U.S. and Canada. CURO was founded in 1997 to meet the growing needs of non-prime consumers looking for access to credit. With more than 20 years of experience, we offer a variety of convenient, accessible financial and loan services across all of our markets. We operate in the U.S. under three principal brands, “Speedy Cash,” “Rapid Cash” and “Avio Credit” and participate in the operations of "Verge Credit." We also offer demand deposit accounts in the U.S. under Revolve Finance, and prepaid debit cards in North America under the Opt+ brand. As of December 31, 2020, our store network consisted of 412 locations across 14 U.S. states and we offered our online services in 34 U.S. states. We operate in Canada under “Cash Money” and “LendDirect” brands. As of December 31, 2020, we operated in seven Canadian provinces and offered our online services in five Canadian provinces. Following regulatory changes in 2017 and 2018 impacting the Single-Pay product, which, in turn, led us to rapidly expand our Open-End product, Canada gross loans receivables as a percentage of total Company Owned gross loans receivable increased from 24.4% as of December 31, 2016 to 59.6% as of December 31, 2020. In recent years, we have diversified our product offerings and regulatory profile through our investment in Katapult and our participation in Verge Credit. As of December 31, 2020, we held an approximately 40% fully diluted interest in Katapult, a leading e-commerce POS FinTech platform focused on non-prime consumers. We also maintain a technology, marketing and servicing relationship for Verge Credit loans, originated and funded by our bank partner, Stride Bank N.A. These strategic investments and partnerships help serve our current core customers and allow us to access new markets. In February 2021, we entered into an agreement to acquire Flexiti, an emerging growth Canadian POS/BNPL consumer lender, which we expect to close in the first quarter of 2021. See "—Flexiti Acquisition Agreement" below for additional details. For our core non-prime products, we believe that we have the only true omni-channel customer acquisition, onboarding and servicing platform that is integrated across online, store, mobile and contact center touchpoints. Our IT platform, which we refer to as “Curo,” seamlessly integrates customer acquisition, loan underwriting, scoring, servicing, collections, regulatory compliance and reporting activities into a single, centralized system. We use advanced risk analytics powered by proprietary algorithms and nearly 20 years of loan performance data to efficiently and effectively score our customers’ loan applications. From 2010 to 2020, we extended over $19.9 billion in total credit across approximately 49.9 million total loans. Our core non-prime offerings include a broad range of direct-to-consumer finance products focusing on Open-End, Unsecured Installment and Secured Installment loans. Through our investment in Katapult, we added POS financing options for consumers, which will be further strengthened upon the closing of the Flexiti acquisition. We also provide a number of ancillary financial products such as credit protection insurance in the Canadian market, demand deposit accounts (Revolve Finance), proprietary general-purpose reloadable prepaid debit cards (Opt+), check cashing, retail installment sales and money transfer services. We believe that our core products allow us to serve a broader group of consumers than our competitors. Our ability to tailor our core products to fit consumer needs coupled with the flexibility of our products, particularly our Open-End and Installment 1


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    products, allows us to continue serving customers as their credit needs evolve and mature. Our broad product suite creates a diversified revenue stream and our omni-channel platform seamlessly delivers our core products across all contact points – we refer to it as “Call, Click or Come In.” We believe these complementary channels drive brand awareness, increase approval rates, lower customer acquisition costs and improve customer satisfaction levels and customer retention. We have designed our core products and customer experience to be consumer-friendly, accessible and easy to understand. Our platform and product suite enables us to provide a number of key benefits that appeal to our customers: • transparent approval process; • flexible loan structure, providing greater ability to manage monthly payments; • simple, clearly communicated pricing structure; and • full customer account management online and via mobile devices. We serve the large and growing market of individuals who have limited access to traditional sources of consumer credit and financial services. We define the resulting addressable market as non-prime consumers, which includes underbanked or unbanked consumers, in the U.S. and Canada. According to a study by the Financial Health Network conducted in 2019, in the U.S. alone, 66 million consumers have low to moderate income while 51 million have volatile income. The same study highlighted that (i) 91 million individuals have credit challenges as a result of subprime credit scores below 600 or are unscorable due to lack of sufficient credit file information and (ii) approximately 63 million individuals are underbanked, or unbanked, as they struggle with access to mainstream financial products to meet their needs. Additionally, the Federal Reserve Bank of New York estimates, based on a 2019 publication, Unequal Access to Credit: The Hidden Impact of Credit, that approximately 38% of U.S. consumers are underserved by prime credit financial institutions. In the Canadian market, financial services research firm TransUnion estimates that about one-third of Canada’s 30 million active consumers have either subprime or near-prime credit, holding about one-fifth, or $419 billion, of the country’s total outstanding household debt. With an addressable non-prime market estimated at over 150 million consumers in the U.S. and Canada, we believe that our scalable omni-channel platform and diverse, continuously evolving product offerings are better positioned than our competitors to gain market share. In addition to our core direct-to-customer products, we made our first investment in Katapult in 2017, which we increased on two occasions in 2020. Katapult is an e-commerce focused FinTech company offering an innovative lease financing solution to consumers and enabling essential transactions at the merchant POS. At the time of our first investment, we identified multiple catalysts for future success–an innovative e-commerce POS business model, a focus on the vast and under-penetrated non- prime financing market, and a clear and compelling value proposition for merchants and consumers. We believe Katapult is poised to cater to this near-term demand growth. Katapult’s sophisticated end-to-end technology platform provides consumers a seamless integration with online, brick and mortar and omni-channel merchants, giving the consumer an exceptional purchasing experience. Based on a June 2020 Wall Street firm equity-analyst reports, 38% of U.S. consumers are considered non-prime or underserved and the durable goods e-commerce market is expected to grow from $180 billion in 2020 to an estimated $300 billion in 2023. To date, our cumulative cash investment in Katapult is $27.5 million. In December 2020, Katapult and FinServ, a SPAC, announced their intent to merge, which resulted in an implied pro forma enterprise value for the combined entity of nearly $1.0 billion at the time of announcement. Immediately prior to the announcement, we owned approximately 40% of Katapult on a fully diluted basis. For additional information regarding Katapult, refer to "—Katapult Investment" below. In 2019, we launched a bank-sponsored Unsecured Installment loan product, Verge Credit. We market and service loans and the bank licenses our proprietary credit decisioning for its loan scoring and approval. After the bank originates and holds the loans for a period of time, we then acquire a variable participating interest in these loans, which are included in Gross loans receivable on the Consolidated Balance Sheets. As of December 31, 2020, our participating interest was $27.0 million. In January 2020, we acquired 100% of the outstanding stock in Ad Astra, a former related party. Prior to the acquisition, Ad Astra was our exclusive provider of third-party collection services for owned and managed loans in the U.S. that are in later- stage delinquency. Ad Astra, now a wholly-owned subsidiary, is included in the Consolidated Financial Statements. See Note 15, "Acquisitions" of Item 8. Financial Statements and Supplementary Data for additional details. 2


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    In January 2021, as further discussed below in "—Flexiti Acquisition Agreement," we announced an agreement to acquire Flexiti, one of Canada’s fastest-growing POS/BNPL providers with a market-leading omni-channel FinTech platform. This acquisition serves as an important milestone for CURO’s continued value creation in Canada allowing us to serve consumers across the complete credit spectrum with an expanded product set. The transaction has been approved by the Board of Directors of each company and is expected to close in the first quarter of 2021, subject to customary Canadian regulatory approvals. In February 2019, we placed our U.K. operations into administration, as described further in Note 22, "Discontinued Operations" of Item 8. Financial Statements and Supplementary Data, which resulted in treatment of the U.K. segment as discontinued operations for all periods presented. Throughout this 2020 Form 10-K, current and prior period financial information is presented as if the U.K. segment was excluded from continuing operations. Our industry is highly regulated and compliance with local, state, federal and provincial regulations has had, and will continue to have, a material impact on our earnings and financial position and has required us at times to modify our products and services to comply with such regulations. See "—Regulatory Environment and Compliance" and "Risk Factors—Risks Relating to the Regulation of Our Industry" below for additional information. Katapult Investment In December 2020, we announced that we were in a position to benefit from Katapult's announced definitive merger agreement with FinServ (NASDAQ: FSRV), a publicly traded SPAC. As of March 4, 2021, the market value of total consideration to us at the closing of the transaction is between $425 million and $435 million in cash and stock in the new company, based on the market value of FSRV stock of $13.16, which includes value associated with the expected earn-out achieved under the merger agreement at that value. The final consideration mix between cash and stock will vary based on the SPAC's investor redemptions and certain other adjustments. A $1 change in the market value of FSRV stock is expected to result in a 5% to 8% change in the value of expected consideration we will receive. When the transaction is closed, the resulting public entity will trade as KPLT on NASDAQ. Upon closing, the transaction is expected to increase our cash balances which will provide greater balance sheet flexibility for growth potential opportunities, including strategic M&A that will expand our product offerings and market reach. Furthermore, we will retain an ownership stake in Katapult, expected to be at least 21% on a fully diluted basis, with two Board seats, allowing us to continue to actively participate in the future direction of Katapult. The transaction is expected to close during the first half of 2021 and remains subject to approval by FinServ stockholders and other customary closing conditions. As detailed in the press release from Katapult and FinServ on December 18, 2020, the Boards of Directors of both Katapult and FinServ have unanimously approved the transaction. Flexiti Acquisition Agreement In February 2021, we announced an agreement to acquire Flexiti, an emerging growth Canadian POS/BNPL lender. Under the terms of the acquisition agreement, which we expect to close in the first quarter of 2021, we will pay cash at closing of approximately $85 million plus contingent consideration of up to $36 million based on achievement of risk-adjusted revenue and origination targets over the succeeding two years. Flexiti, one of Canada’s fastest growing companies, is a privately held POS/BNPL lender headquartered in Toronto, offering customers flexible payment plans at retailers of goods such as furniture, appliances, jewelry and electronics. Flexiti has experienced strong growth with originations increasing from C$49 million in 2017 to an estimated C$290 million in 2020. Through the company’s award-winning FinTech platform and proprietary technology, customers can be approved instantly to shop with their FlexitiCard, which can be used online or in-store to make additional purchases, within their credit limit, without needing to reapply. The acquisition of Flexiti provides us a high-growth engine and further diversifies our revenue and channel mix by product and geography. CURO's resulting platform accesses the full spectrum of Canadian consumers by adding an established omni- channel private label credit card platform and POS financing capabilities to our existing market-leading direct-to-consumer loan offerings. Flexiti primarily serves prime consumers; thus the combination presents significant revenue and earnings growth opportunities by using our expertise to expand Flexiti’s non-prime product offerings. The transaction also provides the opportunity to leverage our loan servicing experience to improve Flexiti’s profit margins. In connection with the transaction, Flexiti refinanced and expanded its non-recourse asset-backed warehouse financing facility from C$380 million to C$500 million. 3


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    Impacts of COVID-19 in 2020 and Our Response The outbreak of COVID-19 contributed to significant volatility and uncertainty in markets and the global economy beginning in early 2020. This resulted in various impacts to our operations beginning late in the first quarter of 2020, including a decrease in demand for our loan products, a decrease in credit losses, the temporary tightening of credit to consumers, and the reduction of certain controllable expenditures. As of December 31, 2020, our loan receivable balance continues to be lower relative to the same period a year ago. Refer to Note 1, "Summary of Significant Accounting Policies and Nature of Operations" and Note 2, "Loans Receivable and Revenue" for a description of the general impact to our customers, our accounting related to loans impacted by COVID-19, the U.S. and Canadian government responses to the COVID-19 pandemic and the potential impact on our Consolidated Financial Statements. Throughout the COVID-19 pandemic, we have remained focused on protecting the health and well-being of our employees, customers, and the communities in which we operate, while assuring the continuity of our business operations. We are considered an essential financial service and our stores have remained open to facilitate the needs of our customers during local government lock down orders. While resurgences of the pandemic have occurred and could continue to occur in both the U.S. and Canadian jurisdictions, with local governmental bodies issuing guidelines on reopening procedures depending on the severity of resurgences, we have established processes and procedures during the crisis to help ensure that we can continue to operate safely for both our employees and customers. We also took various steps to ensure our financial stability while maintaining the health and well-being of our employees and customers: • established an enhanced Customer Care Program, as described below; • made adjustments to our credit underwriting models, initially tightening approval rates and enhancing our employment and income verification practices for both store and online lending platforms, while later adapting these models to changes in demand; • implemented work-from-home for virtually all 1,100 of the Company’s contact center and corporate support personnel in Wichita, Toronto and Chicago; • cancelled the 2020 Short-Term Incentive Plan and instead, implemented reduced discretionary variable compensation late in the year; and • terminated our $25 million share repurchase program that was approved in February 2020 following $0.8 million of repurchases. To better serve our customers as they faced unprecedented economic challenges and uncertainties during the COVID-19 pandemic, we established an enhanced Customer Care Program. The program enables our team members to provide relief to customers in various ways, ranging from due date extensions, interest or fee forgiveness, payment waivers or extended payment plans, depending on a customer’s individual circumstances. As of December 31, 2020, we had granted concessions on more than 82,000 loans, or 15% of our active loans, and waived over $5.8 million in payments and fees. We have also temporarily suspended certain returned item fees. While relief under this program continues to be available to customers through March 2021, utilization of these benefits has slowed to insignificant levels. Approximately 27,000 of the loans on which we granted concessions qualified as TDRs as of December 31, 2020. See Note 2, "Loans Receivable and Revenue" of the Notes to the Consolidated Financial Statements for additional information. For our communities, we have contributed over $700,000 to support local healthcare workers battling COVID-19 through financial support to Frontline Foods. In addition, our CURO volunteers have personally coordinated more than 30,000 meals to area hospitals in Wichita and Toronto. Smaller Reporting Company We qualify as an SRC as defined by the SEC, which allows us to report information about our business under scaled disclosure requirements. SRC status is determined on an annual basis as of the last business day of our most recently completed second fiscal quarter. We met the definition of an SRC as of June 30, 2020. See Note 1, "Summary of Significant Accounting Policies and Nature of Operations" of Item 8. Financial Statements and Supplementary Data for additional details of our SRC status and its impact on our Consolidated Financial Statements. 4


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    Other 2020 Developments Credit Facilities On April 8, 2020, we entered into the Non-Recourse U.S. SPV Facility to provide financing for U.S. Installment and Open-End receivables, including our participating interest in loans originated by a bank. The credit facility, which was initially entered into with a borrowing capacity of $100.0 million, was expanded in August 2020 to $200.0 million and is dependent upon the borrowing base of eligible collateral and certain other conditions, as described in Note 7, "Debt" of the Notes to the Consolidated Financial Statements. For recent developments related to our Senior Secured Notes, Non-Recourse Canada SPV facility and other capital resources, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” California Assembly Bill 539 On September 13, 2019, the California legislature passed Assembly Bill 539, which imposes an interest rate cap of 36%, plus the Federal Funds Rate (0.25% as of December 31, 2020), on all consumer loans between $2,500 and $10,000. The bill became effective on January 1, 2020. Revenue from California Installment loans, all of which significantly exceeded the new prospective rate cap, amounted to 8.0% of total revenue for the year ended December 31, 2020 compared to 12.2% for the year ended December 31, 2019. As a result, we stopped originating Installment products in California on January 1, 2020 and are exploring various products to serve consumers under the new rules. See "—Regulatory Environment and Compliance" in for additional details. CFPB Rule on Small Dollar Lending On July 7, 2020, the CFPB issued the 2019 Proposed Rule and rescinded the mandatory underwriting provisions of the 2017 Final CFPB Rule. However, the CFPB did not rescind or alter the payment provisions of the 2017 Final CFPB Rule. We cannot predict when the payment provisions of the 2017 Final CFPB Rule will come into effect, given that the rule is currently stayed as a result of an industry legal challenge. See "—Regulatory Environment and Compliance" below for additional details of the CFPB rulemaking initiatives related to small dollar lending. Our Core Products and Services Overview of Loan Product Revenue The following charts depict the revenue contribution, including CSO fees, of the products and services that we currently offer: 2020 Revenue 2019 Revenue 2018 Revenue Composition Composition Composition Single-Pay Single-Pay Single-Pay 17% 21% 14% Ancillary Ancillary Ancillary 7% 5% 5% Open-End Open-End Open-End 29% 22% 14% Installment Installment 49% 56% Installment 60% We offer a broad range of consumer finance products, including Open-End, Unsecured Installment, Secured Installment and Single-Pay loans. We have tailored our products to fit our customers’ particular needs as they access and build credit. Our products are licensed and governed by enabling federal and state legislation in the U.S. and federal and provincial regulations in Canada. For additional details and information regarding recent regulatory developments, see "—Regulatory Environment and Compliance" below. 5


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    Open-End Loans Open-End loans are a line of credit without a specified maturity date. Customers in good standing may draw against their line of credit, repay with minimum, partial or full payment and redraw as needed. We report and earn interest on the outstanding loan balances. Customers may prepay without penalty or fees. Typically, customers do not initially draw the full amount of their credit limits. We began to expand the Open-End product in both the U.S. and Canada in late 2017 and, in 2018, following regulatory changes impacting the Single-Pay product, we significantly expanded the product in Canada and continued to do so throughout 2020. Canada Open-End loans comprised 91.8%, 83.4%, and 75.3% of our total loans offered in Canada as of December 31, 2020, 2019 and 2018, respectively. In terms of consolidated revenue, Open-End loans comprised 29.4%, 21.5% and 13.6% of our consolidated revenue during the years ended December 31, 2020, 2019 and 2018, respectively. Unsecured Installment Loans Unsecured Installment loans are fixed-term, fully amortizing loans with a fixed payment amount due each period during the term of the loan. Loans are originated and owned by us or third-party lenders pursuant to CSO and CAB statutes, which we collectively refer to as our CSO programs. For CSO programs, we arrange and guarantee the loans. Payments are due bi- weekly or monthly to best match the customer's payroll cycle. Customers may prepay without penalty or fees. Unsecured Installment loans comprised 40.0%, 46.5% and 50.1% of our consolidated revenue during the years ended December 31, 2020, 2019 and 2018, respectively. As further explained in "—Regulatory Environment and Compliance" below, to comply with AB 539 we stopped originating new Unsecured Installment loans in California on January 1, 2020. California Unsecured Installment loans comprised 30.2%, 39.9% and 37.3% of our Company-Owned Unsecured Installment loan revenue, or 13.9%, 19.1% and 17.6% of total Unsecured Installment loan revenue during the years ended December 31, 2020, 2019 and 2018, respectively. The impact of AB 539 and similar regulations, as well as the general slowdown in demand for Unsecured Installment loans as a result of COVID-19, is partially offset by the introduction and growth of our participation in Verge Credit Unsecured Installment loans originated by a bank in 2020. As of December 31, 2020, our participating interest in Verge Credit loans comprised 26.4% of total Company Owned Unsecured Installment loans. Secured Installment Loans Secured Installment loans are similar to Unsecured Installment loans except that they are secured by a clear vehicle title or security interest in the vehicle. These loans are originated and owned by us or by third-party lenders through our CSO programs. The customer receives the benefit of immediate cash and retains possession of the vehicle while the loan is outstanding. The loan requires periodic payments of principal and interest with a fixed payment amount due each period during the term of the loan. Payments are due bi-weekly or monthly to match the customer's payroll cycle. Customers may prepay without penalty or fees. Secured Installment loans comprised 9.3%, 9.7% and 10.6% of our consolidated revenue during the years ended December 31, 2020, 2019 and 2018, respectively. As further explained in "—Regulatory Environment and Compliance" below, to comply with AB 539 we stopped originating new Secured Installment loans in California on January 1, 2020. California Secured Installment loans comprised 25.6%, 34.4% and 38.0% of our Secured Installment loan revenue during the years ended December 31, 2020, 2019 and 2018, respectively. Single-Pay Loans Single-Pay loans are generally unsecured short-term, small-denomination loans whereby a customer receives cash in exchange for a post-dated personal check or a pre-authorized debit from the customer’s bank account. We defer deposit of the check or debiting of the customer’s bank account until the loan's due date, which typically falls on the customer’s next payroll date. Single-Pay loans comprised 14.2%, 16.8% and 21.0% of our consolidated revenue during the years ended December 31, 2020, 2019 and 2018, respectively. Ancillary Products We offer consumers a number of ancillary financial products, including check cashing, proprietary general-purpose reloadable prepaid debit cards (Opt+), demand deposit accounts (Revolve Finance), credit protection insurance in the Canadian market, retail installment sales and money transfer services. 6


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    • Insurance Revenue: We earn revenue from the sale of credit protection insurance in the Canadian market, which is recognized ratably over the term of the loan. Credit protection insurance is available to consumers on Open-End and Installment products. For the years ended December 31, 2020, 2019 and 2018, insurance revenues were $35.6 million, $34.6 million and $18.3 million, respectively. • Opt+: We had over 49,000 active Opt+ cards as of December 31, 2020, which included any card with a positive balance or transaction in the past 90 days. Opt+ customers have loaded over $2.8 billion to their cards since we started offering this product in 2011. • Revolve Finance: Revolve Finance launched during the first quarter of 2019 and provides customers with a checking account solution that combines a Visa-branded debit card, a number of technology-enabled tools and optional overdraft protection. For the year ended December 31, 2020, our customers loaded $109.6 million on over 23,000 Revolve Finance cards. Ancillary products comprised 7.0%, 5.5% and 4.8% of our consolidated revenue during the years ended December 31, 2020, 2019 and 2018, respectively. CSO Programs Through our CSO programs, we act as a credit services organization/credit access business on behalf of customers in accordance with applicable state laws. We currently offer loans through CSO programs in stores and online in the state of Texas and, until to May 2019, Ohio. As a CSO we earn revenue by charging the customer a CSO fee for arranging an unrelated third party to make a loan to that customer. We offer Unsecured Installment loans and Secured Installment loans with maximum terms of 180 days. We currently have relationships with three unaffiliated third-party lenders for our CSO programs. We periodically evaluate the competitive terms of these lender contracts, which could result in the transfer of volume and loan balances between lenders. Under our CSO programs, we provide certain services to a customer in exchange for a CSO fee payable to us by the customer. One of the services is to guarantee the customer’s obligation to repay the loan. For CSO loans, each lender is responsible for providing the criteria by which the customer’s application is underwritten and, if approved, determining the amount of the customer loan. We in turn are responsible for assessing whether or not we will guarantee the loan. This guarantee represents an obligation to purchase specific loans if they go into default and is included in "Liability for losses on CSO lender-owned consumer loans" in our Consolidated Balance Sheets. CSO fees are calculated based on the amount of the customer’s outstanding loan in compliance with applicable statute. We earn CSO fees ratably over the term of the loan as the customer makes payments. If a loan is paid off early, no additional CSO fees are due or collected. During the years ended December 31, 2020 and 2019, 60.7% and 58.2%, respectively, of Unsecured Installment loans, and 59.1% and 54.3%, respectively, of Secured Installment loans, originated under CSO programs were paid off prior to the original maturity date. Since CSO loans are made by a third-party lender, we do not include them in our Consolidated Balance Sheets as loans receivable; instead, we include fees receivable in “Prepaid expenses and other” in our Consolidated Balance Sheets. Geography and Channel Mix For the years ended December 31, 2020, 2019 and 2018, approximately 75.4%, 80.0% and 81.6%, respectively, of our consolidated revenues were generated from services provided within the U.S. and approximately 24.6%, 20.0% and 18.4%, respectively, were generated from services provided within Canada. For each of the years ended December 31, 2020 and 2019, approximately 60.7% and 61.6%, respectively, of our long-lived assets were located within the U.S., and approximately 39.3% and 38.4%, respectively, were located within Canada. See Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" for additional information on our geographic segments. Stores: As of December 31, 2020, we had 412 stores across 14 U.S. states and seven provinces in Canada, which included the following: • 210 U.S. locations: Texas (86), California (37), Nevada (19), Arizona (12), Tennessee (11), Kansas (10), Illinois (8), Alabama (7), Missouri (5), Louisiana (5), Colorado (3), Oregon (3), Washington (2) and Mississippi (2); and 7


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    • 202 Canadian locations: Ontario (135), Alberta (27), British Columbia (24), Saskatchewan (6), Nova Scotia (5), Manitoba (4) and New Brunswick (1). Online: We lend online in 34 states in the U.S. and five provinces in Canada. For the years ended December 31, 2020, 2019 and 2018, revenue generated through our online channel represented 49%, 46% and 42%, respectively, of consolidated revenue. Below is an outline of the primary products we offered as of December 31, 2020: Open-End Unsecured Installment (1) (2) Secured Installment (1) Single-Pay Online and in-store: 8 Online and in-store: 26 U.S. Online and in-store: 7 Online and in-store: 11 Channel U.S. states and Canada states and Canada U.S. states U.S. states and Canada Approximate Average Loan Size $955 $676 $1,224 $320 Duration Revolving/Open-Ended Up to 60 months Up to 24 months Up to 62 days Daily interest rates Fees ranging from $13 ranging from 0.13% to 15.9% average monthly 13.3% average monthly to $25 per $100 Pricing 0.99% interest rate (3) interest rate (3) borrowed Gross combined loans receivable $358.9 million $145.6 million $49.6 million $43.8 million (1) Includes CSO loans (2) Includes Verge Credit, originated by a third-party bank (3) Weighted average of the contractual interest rates for the portfolio as of December 31, 2020. Excludes CSO fees Industry Overview Through December 31, 2020, we operated in a segment of the financial services industry that provides lending products to non-prime consumers in need of convenient and flexible access to credit and other financial products. In the U.S. alone, according to a 2019 study by the Financial Health Network, these underserved consumers in our target market spent an estimated $189 billion in fees and interest in 2018 related to credit products similar to those we offer. We believe our target consumers have a need for tailored financing products to cover essential expenses and episodic cash shortfalls. In 2020, as the COVID-19 pandemic began to impact much of the global economy, lower-income consumers in the U.S. continued to increase their spending despite being impacted the most of any income group by job losses. According to an October 2020 JPMorgan Chase Institute study, spending by the unemployed increased by 22% upon receipt of unemployment, which included additional stimulus payments by the U.S. government, and then declined 14% after the expiration of the stimulus. During times of economic volatility, our target consumers periodically exhibit higher income volatility and require access to additional financing products. A study published in 2019 by JPMorgan Chase, which analyzed the transaction information of six million of its account holders between October 2012 and December 2018 in the U.S., found that the median volatility in month- to-month income, on average, was 36%. This study also determined that households need roughly six weeks of take-home liquid assets to weather a simultaneous income dip and expenditure spike, with 65% of U.S. households lacking a sufficient cash buffer to do so. We believe we can meet the needs of consumers, including during periods of economic volatility, through the thoughtful and responsible use of our proprietary credit decisioning model. In catering to these customers, we compete against a wide variety of consumer finance providers, including online and branch- based consumer lenders, credit card companies, pawn shops, rent-to-own and other financial institutions that offer similar financial services. The Financial Health Network noted in its 2019 study that the compound annual growth rate from 2015 to 2018 in the U.S. for installment loans and loans originated by non-bank lenders, primarily through online channels, was 13.8% and 27.3%, respectively. As discussed further in "—Regulatory Environment and Compliance", our industry is highly regulated at the federal, state and local levels in the U.S. and at the federal and provincial levels in Canada. In general, these regulations are designed to protect our consumers and the public, while providing guidelines for business operations. We believe our (i) experienced management team, (ii) proprietary industry technology, (iii) ability to successfully navigate previous regulatory changes, and (iv) flexibility to tailor our products or create new products to meet new regulatory guidelines will allow us to successfully manage future challenges and obstacles. In addition to the broad trends impacting the consumer finance landscape, we believe we are well positioned to grow our market share as a result of several changes related to consumer preferences within our industry. Enhanced by the impacts of 8


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    COVID-19 during 2020, we believe that evolving consumer preferences, including increased use of mobile devices and overall adoption rates for technology are driving significant change in our industry that benefits CURO. • Increasing adoption of online channels—Our experience, particularly in 2020 as COVID-19 forced a shift in consumer behavior to transact from home, is that customers prefer service across multiple channels or touch points. For the year ended December 31, 2020, our consolidated total revenue generated through online channels represented 48.5% of our total revenues for the year, compared to 45.6% for the year ended December 31, 2019. • Increasing adoption of mobile devices—With the proliferation of improved smartphone service plans, many of our non-prime customers have moved to mobile devices for loan origination and servicing. According to a 2019 study by the Pew Research Center covering the U.S. and Canada, smartphone penetration among adults was 81% and 66%, respectively. Additionally, according to Statista, the smartphone penetration rate in the U.S., when compared to the total population, increased from 20.2% in 2010 to 72.2% in 2020, while in Canada, they project an increase in smartphone users of over 3 million people between 2018 and 2024. In 2012, less than 44% of our U.S. customers reached us via a mobile device, whereas in the fourth quarter of 2020, that percentage had grown to over 88%. • Shifting preference towards Installment and Open-End loans—Given our experience in offering Installment and Open-End loan products since 2008, we believe that Single-Pay loans are becoming less popular or less suitable for a growing portion of our customers. Our customers generally have shown a preference for Installment and Open-End loan products, which typically have longer terms, lower periodic payments and a lower relative cost than Single-Pay products. Offering more flexible terms and lower payments also significantly expands our addressable market by broadening our products’ appeal to a larger proportion of consumers. For example, our Installment and Open-End loans increased from 58.8% of total Company-Owned loans at the beginning of 2015 to 92.1% at December 31, 2020, with growth in Canada Installment and Open-End loans from $50.0 million as of September 30, 2017 to $312.2 million as of December 31, 2020. Our Strengths We believe the following foundational competitive strengths differentiate us from our competitors: • Differentiated, omni-channel platform—We believe we have the only fully-integrated store, online, mobile and contact center platform to support omni-channel customer engagement for non-prime customers in the U.S. and Canada. We offer a seamless “Call, Click or Come In” capability for customers to apply for loans, receive loan 9


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    proceeds, make loan payments and otherwise manage their accounts, whether in store, online or over the phone. We believe the strength of our online platform during the COVID-19 pandemic in 2020 was advantageous as customers could easily utilize the channel during periods of peak outbreaks or resurgences. Our online customer transactions increased significantly relative to all types of transactions, which resulted in a similar increase in revenue from online transactions, relative to total revenue. Despite the increase in online traffic, our customers can utilize any of our three channels at any time and in any combination to obtain a loan, make a loan payment or manage their accounts. In addition, we have our “Site-to-Store” capability, for which customers that do not qualify for a loan online are directed to a store to complete a loan transaction. Our "Site-to-Store" program resulted in approximately 133,000 loans in the year ended December 31, 2020. These aspects of our platform enable us to source a larger number of customers, serve a broad range of customers and continue serving these customers for long periods of time. • Recession-resilient business—In addition to channel diversification, we believe our business is adaptable to various economic cycles. Our customers require essential financial services and value timely, transparent, affordable and convenient alternatives to banks, credit card companies and other traditional financial services companies, which are not generally available to them. Changes to our products or processes are at times needed to suit the specifics of a particular economic downturn, such as the Customer Care Program we instituted in 2020 in response to the impact COVID-19 had on our customers. Our customers have historically shown a greater ability to manage credit throughout economic downturns compared to prime customers, as measured by the relative change in their delinquency and charge-off data during economic downturns. During 2020, as a result of various COVID-19 impacts such as cautious customer behavior, government stimulus programs, and our tightening of credit, demand for our products decreased relative to pre-COVID-19 levels while credit losses and delinquencies remained well below historical levels. Sequential growth in the last two quarters of 2020 outpaced the comparable quarters in 2019 as the outsized impacts of stimulus programs in the U.S. and Canada phased out. • Compelling new products expand growth opportunities—We continue to maintain our current customer relationships and attract new customers through our consistently innovative approach to new products. In February 2019, we launched Revolve Finance, a checking account solution, with FDIC-insured deposits, that combines a Visa- branded debit card, a number of technology-enabled tools and optional overdraft protection. During the fourth quarter of 2019, we partnered with a bank to launch an Unsecured Installment loan product, Verge Credit. We market and service loans and the bank licenses our proprietary credit decisioning for its loan scoring and approval. As of December 31, 2020, Verge Credit loans were offered in 17 states and we held $27.0 million in participating interest in these loans classified within loans receivable. • Experienced management and flexible platform—We believe our management team is among the most experienced in the industry with over a century of collective experience and an average tenure with CURO of nearly nine years. Importantly, our management team has experience through various economic cycles, which we leveraged during the COVID-19 crisis in 2020. We also have deep personnel strength across key functional areas including compliance, IT, credit decisioning, marketing, legal and finance. Our leadership experience has allowed us the ability to transition quickly to changes in regulatory environment, economic cycles and customer preferences, as we did with our successful transition to Open-End in Canada starting in 2018; our launch of the Verge Credit brand in late 2019 and into 2020; and our ability to deploy capital efficiently as we did in late 2020 and early 2021, when we announced our significant return on investment in Katapult and our agreement to purchase Flexiti, respectively. • Proprietary credit decisioning model—Curo, our leading analytics and information technology tools drives strong credit risk management. Curo is a bespoke, proprietary IT platform that seamlessly integrates activities related to customer acquisition, underwriting, scoring, servicing, collections, compliance and reporting. Our analytics team utilizes Curo to gather data and performance records for research and development purposes to assist in our continued development of new models. Curo is underpinned with 20 years of continually updated customer data proven profitable across credit cycles and comprising over 92 million loan records (as of December 31, 2020) used to formulate our robust, proprietary underwriting algorithms. This platform then automatically applies multi-algorithmic analysis to a customer’s loan application to produce a “Curo Score” which drives our underwriting decision. This fully integrated IT platform enables us to make real-time, data-driven changes to our customer acquisition and risk models, which yield significant benefits in terms of customer acquisition costs and credit performance. • Sophisticated customer analytics—Our analytic tools and multi-faceted marketing strategy drives low customer acquisition costs. Our marketing strategy includes a combination of strategic direct mail, television advertisements and online and mobile-based digital campaigns, as well as strategic partnerships. Our Marketing, Risk and Credit Analytics team uses Curo to cross reference marketing spend, new customer account data and granular credit metrics to optimize our marketing budget across these channels in real time and to produce higher quality new loans. 10


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    In addition to these diversified marketing programs, our stores play a critical role in creating brand awareness and driving new customer acquisition. • Attractive and stable markets—We have increased our diversification by product (such as Revolve and Verge Credit) and geography (such as Open-End in Canada), allowing us to serve a broader range of customers with a flexible product offering. As part of this effort, we have also developed and launched new brands and will continue to develop new brands with differentiated marketing messages. These initiatives have helped diversify our revenue streams by enabling us to appeal to a wider array of borrowers. In addition to product and geographic diversification, we acquired Ad Astra in January 2020, which was previously our exclusive provider of third-party collection services for the U.S. business. The acquisition brought all U.S. servicing and recovery in-house, drives operational and financial synergies to ensure all aspects of the recovery portfolio are coordinated, reduces operational redundancy and increases peak volume management, improves compliance synergies, and facilitates integrated and personalized credit risk management strategies and campaign management across the servicing and recovery lifecycle. In addition to the strengths above, we believe the following core competencies are essential to succeed in this industry: • Focus on customer experience—We focus on customer service and experience and have designed our stores, website and mobile application interfaces to appeal to our customers’ needs. We continue to augment our web and mobile app interfaces to enhance our “Call, Click or Come In” strategy, with a focus on adding functionality across all our channels. We invest considerable time and resources on web design and mobile optimization to ensure our websites are quick and responsive, and support the mobile phone brands and sizes that our customers use. Our stores are branded with distinct and recognizable signage, are conveniently located and typically are open seven days a week. Furthermore, we employ highly experienced store managers, which we believe are a critical component to driving customer retention while lowering acquisition costs and maximizing store-level margins. As of December 31, 2020, the average tenure of our U.S. and Canada store managers, district managers and regional directors was approximately 10 years, 13 years and 16 years, respectively. • Strong compliance culture with centralized collections operations—We consistently engage in proactive and constructive dialogue with regulators in each of our jurisdictions and have made significant investments in best- practice automated tools for monitoring, training and compliance management systems, which are integrated into Curo. In addition to conducting semi-annual compliance audits, our in-house centralized collections strategy, supported by our proprietary back-end customer database and analytics team, drives an effective, compliant and highly scalable model. • Demonstrated access to capital markets and diversified funding sources—We have raised over $2.4 billion of debt financing across 10 separate offerings and various credit facilities since 2010, most recently in April 2020. This aggregate amount includes $690.0 million of 8.25% Senior Secured Notes due 2025, a C$175.0 million Non- Recourse Canadian revolving facility due 2023 to support growth of multi‑pay products in Canada, and a $200 million Non-Recourse U.S. revolving facility due 2024. We also have U.S. and Canadian bank revolving credit facilities to supplement intra-period liquidity. We believe our access to the capital markets and diversified funding sources is an important significant differentiator, as certain competitors may have trouble accessing capital to fund their business models if credit markets tighten. For more information, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” • History of growth and profitability—Throughout our operating history we have maintained strong profitability and growth. Between 2010 and 2020 we grew revenue, Adjusted EBITDA and Adjusted Net Income at a compound annual growth rate of 15.3%, 14.4% and 12.8%, respectively. For more information on non-GAAP measures, see Item 6. "Selected Financial Data—Supplemental Non-GAAP Financial Information." At the same time, we have significantly expanded our product offerings to better serve our growing and expanding customer base. • Continuation of return of stockholder's capital—In 2019 and 2020, we initiated share repurchase programs and stock dividends to provide our stockholders with a return of capital. In 2019 and leading up to the onset of COVID-19 in early 2020, we maintained share repurchase programs resulting in over $50 million of shares bought back and held in treasury. In 2020, we instituted an annual $0.22 per share dividend, paid quarterly, which we renewed in 2021. Although we terminated the share repurchase in March 2020 due to COVID-19, we continued to pay dividends throughout 2020 out of quarterly profits. 11


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    Growth Strategy We believe our diversification through brands, products, and geography provides positions us well for long-term growth. Our recent investments in Canada, Katapult and card products allows us to be a full-spectrum lender to meet our target customers' evolving credit demands. • Full Spectrum Lending—In addition to growing our existing suite of loan products, we are focused on expanding the total number of customers that we serve through product, geographic and channel expansion. These efforts include expansion of our online channel, which proved helpful to our customers during the COVID-19 pandemic in 2020. However, we continue to invest in and introduce additional products to address our customers’ preference for longer- term products that allow for greater flexibility in managing their monthly payments. Canada card products offers compelling new growth opportunities In February 2021, we announced an agreement to acquire Flexiti, an emerging growth Canadian POS / BNPL provider. Flexiti is a growing FinTech company that provides POS financing and BNPL capabilities through an omni- channel platform to Canadian retailers. This acquisition positions us as a full-credit-spectrum lender in Canada and enhances our long-term growth trajectory, further diversifies our revenue mix by product and geography and helps to mitigate regulatory risk given Canada's historically stable regulatory environment. Upon closing of the acquisition, which we expect in the first quarter of 2021, we will reach consumers in Canada through all the ways in which they access credit directly both in-store and online by credit cards or at the POS. We believe that having these various consumer touch points provides us a significant competitive advantage as the ways in which consumers pay for things and borrow continues to evolve. Once integrated, the addition of Flexiti will be an important milestone for our continued value creation and positions CURO as a top three non-bank lender in Canada. Canada direct lending contributing to future growth Our investment in our Open-End product in Canada has been successful and provides an avenue for long-term growth. We expanded Open-End loan products under our LendDirect brand to include additional provinces and increased customer acquisition efforts in existing markets. We also accelerated our offering of Open-End products under our Canadian CashMoney brand. In late 2017 and 2018, we launched Open-End loans in Alberta and Ontario, respectively, with a significant increase in mid-2018 following regulatory changes impacting other products. In 2019, we began offering Open-End loans in British Columbia. Although our revenue in Canada was impacted by COVID-19 in 2020, our Open-End product there continued to generate strong revenue and loan growth through the year. Based on market trends in 2020, we estimate that the consumer credit opportunity for installment balances is approximately C$175 billion. We also believe these customers represent a highly fragmented market with low penetration by our industry which represents a growth opportunity for us. 12


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    We believe the historic stability in Canada's regulatory environment, historical performance by Canadian customers, and the continued demand by customers for a long-term and flexible product provide a growth opportunity over a longer horizon while diversifying (i) geographically, (ii) through product expansion, and (iii) through customer risk profiles, while helping to mitigate regulatory risk. Katapult We made our first investment in Katapult in 2017 and to date, our cumulative cash investments in Katapult is $27.5 million. In December 2020, Katapult and FinServ announced their intent to merge, which resulted in an implied pro forma enterprise value for the combined entity at nearly $1.0 billion at the time of announcement. Immediately prior to the announcement, we owned approximately 40% of Katapult on a fully diluted basis. Upon closing, the merger is expected to provide us a combination of cash and stock consideration between $425 million and $435 million. We expect Katapult will contribute to our long-term growth trajectory through both our ownership stake in the form of earnings and through cash we expect to receive, net of tax, upon closing of the Katapult and FinServ merger. We will retain an ownership stake in Katapult of at least 21% on a fully diluted basis. Additional growth opportunities from recent investments In the fourth quarter of 2019, we partnered with a bank to launch a bank-sponsored Unsecured Installment loan product, marketed as Verge Credit. We market and service loans on behalf of the bank and they license our proprietary credit decisioning for their scoring and approval and also originate the loans. In 2020, despite the onset and spread of COVID-19, Verge Credit loan balances grew to $27.0 million. In the first quarter of 2019, we launched Revolve Finance, a checking account solution, with FDIC-insured deposits, that combines a Visa-branded debit card, a number of technology-enabled tools and optional overdraft protection. In the second quarter of 2017, we launched Avio Credit, an online U.S. product designed for individuals in the 600-675 FICO band. This product is structured as an Unsecured Installment loan with varying principal amounts and loan terms up to 48 months. Open-End and Installment loans accounted for 78.8% of our consolidated revenue for the year ended December 31, 2020, up from 19% in 2010. We believe that the revenue growth for these products reflects our customers' preferences. We anticipate that these products will continue to account for a greater share of our revenue and provide us a competitive advantage versus other consumer lenders with narrower product focus - for example, legacy Single- Pay storefront lenders. Investments in our processes and technology • Continue to improve the customer journey and experience—We continuously seek to enhance our “Call, Click or Come In” customer experience and execution, with projects ranging from continuous upgrades of our web and mobile app interfaces to enhanced service features to payment optimization. 13


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    Increased focus on online channels—As COVID-19 has demonstrated, our attention to investment in online channels has proven to be a significant revenue driver. The pandemic enhanced customer transaction volume shift online, accelerating trends we previously observed. While customers may return to stores as the pandemic ceases, we expect online channel usage will expand over time. • Continue to focus on our core capabilities—We believe that our ability to continue to be successful in developing and managing new products is based upon our capabilities in three key areas: • Loan Underwriting: Installment and Open-End products are more affordable and useable for customers but require increasingly sophisticated underwriting and decisioning to optimize customer acquisition cost while balancing credit risk with approval rates. Our analytics platform combines data from over 92 million records (as of December 31, 2020), supplemented with predictive data from third-party reporting agencies. • Collections and Customer Service: Installment and Open-End products have longer terms than Single-Pay loans. Longer duration drives the need for a more comprehensive collection and a credit-default servicing strategy that emphasizes curing a default and returning the customer to good standing. We utilize a centralized collection model that eliminates the need for our store personnel to contact customers to resolve a delinquency. We have also invested in building new contact centers in the U.S. and Canada, each of which utilizes sophisticated dialer technologies to help us contact our customers in a scalable, efficient manner. In an effort to streamline all our collection solutions, we purchased Ad Astra in January 2020, which was previously our exclusive provider of third-party collection services for owned and managed loans in the U.S that are in later-stage delinquency. The acquisition provided significant operational, financial and compliance synergies. • Funding: The shift to larger balance loans with extended terms requires more substantial and more diversified funding sources. Given our deep and successful track record in accessing diverse sources of capital, we believe that we are well-positioned to support future new product transitions. • Continue to bolster our core business through enhancement of our proprietary risk scoring models—We continuously refine and update our credit models to drive additional improvements in our performance metrics. By regularly updating our credit underwriting algorithms, we continue to enhance the value of each customer relationship through improved credit performance. By combining these underwriting improvements with data-driven marketing spend, we believe our optimization efforts will produce margin expansion and earnings growth. • Monitor and appropriately increase approval rates to our applicants—Growth and optimization of customer acquisition spending depends on maintaining high approval rates balanced with credit risk management. We continually improve our scoring models to optimize a profitable balance of application approval rates and portfolio performance. We balance growth with our credit risk management in all economic cycles and are mindful as to when and how to tighten our credit approval process, such as our tightening during the COVID-19 crisis. • Expand credit for our borrowers—Through extensive testing and proprietary underwriting, we have successfully increased credit limits for customers, enabling us to offer “the right loan to the right customer.” The favorable customer acceptance rates and credit performance have improved overall loan-vintage and portfolio performance. For the year ended December 31, 2020, our average loan amount for Unsecured and Secured Installment loans was $676 and $1,224, respectively, while our average loan balance outstanding for Open-End loans was $551 in the U.S. and $1,315 in Canada. 14


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    • Enhance our network of strategic affiliate marketing partnerships—Our strategic affiliate partnership network generates customer applicants that we can close using our diverse array of marketing channels. By further leveraging these existing networks and expanding the reach of our partnership platform to include new relationships, we can increase the number of overall successful leads we receive. • Marketing Expansion—We reach our customers using a multi-channel approach, including addressable TV, text to apply and enhanced digital ads utilizing our site-to-store concept to stay ahead of the continually developing landscape of our customers' behavior and needs. These approaches are incorporated into our core marketing and sponsorships through certain major events, such as NASCAR auto racing, to expand our brand awareness. Customers Our customers require essential financial services and value timely, transparent, affordable and convenient alternatives to banks, credit card companies and other traditional financial services companies, which are not generally available to them. In the U.S., our customers generally earn between $15,000 and $85,000 annually. In Canada, our customers generally earn between C$15,000 and C$75,000 annually. Based on our experience, our target consumer utilizes the services provided by our industry for a variety of reasons, including that they often: • have immediate need for cash between paychecks; • have been rejected for traditional banking services; • maintain insufficient account balances to make a bank account economically efficient; • prefer and trust the simplicity, transparency and convenience of our products; • need access to financial services outside of normal banking hours; and • reject complicated fee structures in some bank products (e.g., credit cards and overdrafts). Marketing We use a multi-channel approach to attract new customers, with a variety of targeted and direct response strategies to build brand awareness and drive customer traffic in stores, online and to our contact centers. These strategies include direct- response spot television, radio campaigns, point-of-purchase materials, multi-listing and directory program for print and online yellow pages, local store marketing activities, prescreen direct mail campaigns, robust online marketing strategies and “send a friend” and word-of-mouth referrals from satisfied customers. We also utilize our unique capability to drive customers applying online to our store locations–a program we call “Site-to-Store.” Information Systems Curo is our proprietary IT platform and is a unified, centralized platform that seamlessly integrates activities related to customer acquisition, underwriting, scoring, servicing, collections, compliance and reporting. Curo is scalable and has been successfully implemented in the U.S. and Canada and is designed to support and monitor compliance with regulatory and other legal requirements. Our platform captures transactional history by store and by customer, which allows us to track loan originations, payments, defaults and payoffs, as well as historical collection activities on past-due accounts, all in a single data base. In addition, our stores perform automated daily cash reconciliation at each store and every bank account in the system. Curo enables us to make real-time, data-driven changes to our acquisition and risk models, which yields significant benefits in terms of customer acquisition costs and credit performance. Each of our stores and all of our customer service collections representatives have secure, real-time access to it. Curo and its proprietary algorithms are used for every aspect of underwriting and scoring of our loan products. The customer application, approval, origination and funding processes differ by state, country and by channel. For in-store loans, the customer presents required documentation, including a recent pay stub or support for underlying bank account activity for in- person verification. For online loans, application data is verified with third-party data vendors, our proprietary algorithms and/or tech-enabled account verification. Our proprietary, highly scalable scoring system employs a champion/challenger process, whereby models compete to produce the most successful customer outcomes and profitable cohorts. Our algorithms use data relevancy and machine learning techniques to identify approximately 60 variables from a universe of approximately 11,600 that are the most predictive in terms of credit outcomes. The algorithms are continuously reviewed and refreshed and are focused on a number of factors related to disposable income, expense trends and cash flows, among other factors, for a given loan applicant. The predictability of our scoring models is driven by the combination of application data, purchased third-party data and our robust internal database of over 92 million records as of December 31, 2020 associated with loan information. These variables are then analyzed using a series of algorithms to produce a "Curo Score" that allows us to optimize lending decisions in a scalable manner. 15


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    Cybersecurity Management We rely on information technology systems and networks in connection with many of our business activities. Many of these systems and networks are managed directly by us, while some are managed by third-party service providers and are not under our day-to-day control. However, we do have oversight of the services provided by third-party service providers. We frequently evaluate ourselves for appropriate business continuity and disaster recovery planning through the use of test scenarios and simulations. Our networks and systems are tested multiple times throughout the year by third-party security firms through penetration and vulnerability testing and our networks and systems are monitored by intrusion detection services as well as state-of-the-art network behavior analysis hardware and software. All systems have vulnerabilities mitigated through a robust patch management program that is reviewed annually. We employ a skilled IT workforce to implement our cybersecurity programs and to perform all security and compliance-related responsibilities in a timely manner. For risks associated with cybersecurity, see “Item 1A – Risk Factors.” Collections To enable store employees to focus primarily on customer service and to improve effectiveness and compliance management, we operate centralized collection facilities in the U.S. and Canada. Our collections personnel contact customers after a missed payment, primarily via phone calls, letters, text, push notifications and emails, and help the customer understand available payment arrangements or alternatives to satisfy the deficiency. We use a variety of collection strategies, including payment plans, settlements and adjustments to due dates. Collections teams are trained to apply different strategies and tools for the various stages of delinquency and also employ varying methodologies by product type. We assign delinquent loan accounts in the U.S. to Ad Astra typically after 91 days without a scheduled payment. We acquired Ad Astra in January 2020, and its results are included in our Consolidated Financial Statements. Under our policy, the precise number of days past-due to trigger a collection-agency referral varies by state and product and requires, among other things, that proper notice be delivered to the customer prior to assignment. Once a loan meets the criteria set forth in the policy, it is automatically referred to Ad Astra for collection. We make changes to our policy periodically in response to various factors, including regulatory developments and market conditions. As delinquent accounts are paid, either directly to us or Ad Astra, Curo updates these accounts in real time. This ensures that collection activity will cease the moment a customer’s account is brought current or paid in full and considered in “good standing.” See Note 16, “Related Party Transactions" of the Notes to Consolidated Financial Statements for a description of our relationship with Ad Astra. For the impact to our collections practices in 2020 as a result of COVID-19 and our institution of the Customer Care Program to aid our customers, refer to "–Company History and Overview—Impacts of COVID-19 in 2020 and Our Response." Competition We believe that the primary factors upon which we compete are: • range of services and products; • flexibility of product offering; • convenience; • reliability; • fees; • experienced management; and • speed. Our customers value service that is quick and convenient, lenders that can provide the most appropriate structure, loan terms that are fair and payments that are affordable. We face competition in all of our markets from other alternative financial services providers, banks, savings and loan institutions, short-term consumer lenders and other financial services entities. Generally, the landscape is characterized by a small number of large, national participants with a significant presence in markets across the country and a significant number of smaller localized operators. Our competitors in the alternative financial services industry include monoline operators (both public and private) specializing in short-term cash advances, multiline providers offering cash advance services in addition to check cashing and other services, and subprime specialty finance and consumer finance companies, as well as businesses conducting operations online and by phone. 16


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    Seasonality Our lending business typically experiences the greatest demand during the third and fourth calendar quarters, with reduced demand in the first calendar quarter as a result of U.S. federal income tax refunds and credits. Typically, our cost of revenue for our loan products, which represents our provision for loan losses, is lowest as a percentage of revenue in the first quarter of each year due to our customers’ receipt of income tax refunds, and increases as a percentage of revenue for the remainder of the year. As a result, we experience seasonal fluctuations in our U.S. operating results and cash needs. Our lending business in Canada is less subject to seasonality than our U.S. lending business. Human Capital Resources As of December 31, 2020, we had approximately 3,900 employees, approximately 2,700 of whom work in our stores. In addition to our corporate headquarters in Wichita, Kansas, we have a FinTech office in Chicago, Illinois, which allows us to attract and retain talented IT development and data science professionals. None of our employees are unionized or covered by a collective bargaining agreement and we consider our employee relations to be good. We believe that customer service is critical to our continued success and growth. As such, we have staffed each of our stores with a full-time Store Manager, Branch Manager or Manager, who runs the day-to-day operations of the store. The Manager is typically supported by two to three Senior Assistant Managers and/or Assistant Managers and three to eight full-time Customer Advocates. Customer Advocates conduct the POS activities and greet and interact with customers from a secured area behind expansive windows. We believe staff continuity is critical to our business. We believe that our pay rates are equal to or better than all of our major competitors and we regularly evaluate our benefit plans to maintain their competitiveness. We are committed to the health and safety of every person who comes in our stores. During 2020, as a result of COVID-19, we implemented additional safety protocols to protect our frontline store employees, customers and our communities, including enhanced protocols regarding social distancing and routine store cleaning. We temporarily closed a number of stores for a limited amount of time for suspected or confirmed infections, which affected our total store volume. With pay supplements to support full-time employees working reduced hours and no furloughs or layoffs, we effectively maintained full employment in the U.S. and Canada during the year. For most of our contact center and corporate support employees, a remote-work policy was instituted and we are evaluating best practices and timelines for returning to the office. Our experienced teams adapted quickly to the changes and have managed our business successfully during this challenging time. Regulatory Environment and Compliance The alternative financial services industry is regulated at the federal, state and local levels in the U.S. and at the federal and provincial levels in Canada. Laws and regulations governing our loan products typically impose restrictions and requirements, such as those on: • interest rates and fees; • maximum loan amounts; • the number of simultaneous or consecutive loans and required waiting periods between loans; • loan extensions and refinancings; • payment schedules (including maximum and minimum loan durations); • required repayment plans for borrowers claiming inability to repay loans; • disclosures; • security for loans and payment mechanisms; • licensing; and • database reporting and loan utilization information. We are also subject to laws and regulations relating to our other financial products, including those governing recording and reporting certain financial transactions, identifying and reporting suspicious activities and safeguarding the privacy of customers’ personal information. For more information regarding the regulations applicable to our business and the risks to which they subject us, see the section entitled “Item 1A—Risk Factors.” The legal environment is constantly changing as new laws and regulations are introduced and adopted, and existing laws and regulations are repealed, amended, modified or reinterpreted. We work with regulatory authorities, both directly and through our active memberships in industry trade associations, to support our industry and to promote the development of laws and regulations that we believe are equitable to businesses and consumers alike, that facilitate competition thus lowering costs 17


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    associated with financial products and services, and enable consumers to access responsible credit products that meet their needs. Due to the evolving nature of laws and regulations, new or revised laws or regulations could adversely impact our current product offerings or alter the economic performance of our existing products and services. For example, the 2017 Final CFPB Rule will likely increase costs and lessen the effectiveness of our loan servicing and collections. In addition, the CFPB has issued its debt collection rule which will apply to the third-party collection activities of Ad Astra. We cannot provide any assurances that additional federal, state, provincial or local laws or regulations will not be enacted in the future in any of the jurisdictions in which we operate. It is possible that future changes to statutes or regulations will have a material adverse effect on our results of operations or financial condition. U.S. Regulations U.S. Federal Regulations The U.S. federal government and its agencies possess significant regulatory authority over consumer financial services and these laws and regulations have a significant impact on our operations. Dodd-Frank. In 2010, the U.S. Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd- Frank"). Title X of this legislation created the CFPB, which provides the CFPB with broad rule-making, supervisory and enforcement powers with regard to consumer financial services. Title X of Dodd-Frank also contains “UDAAP” provisions, which declare unlawful “unfair,” “deceptive” and “abusive” acts and practices in connection with the delivery of consumer financial services and gives the CFPB the power to enforce UDAAP prohibitions and to adopt UDAAP rules defining, within constraints, unlawful acts and practices. In January, 2020, the CFPB issued a policy statement indicating how and when it will apply the abusive standard and seek monetary relief for abusive conduct. Additionally, the Federal Trade Commission Act prohibits “unfair” and “deceptive” acts and practices in connection with a trade or business and gives the Federal Trade Commission enforcement authority to prevent and redress violations of this prohibition. 2017 and 2020 Final CFPB Rules. Pursuant to its authority to adopt UDAAP rules, the CFPB, under its initial Director Richard Cordray, issued the 2017 Final CFPB Rule. The 2017 Final CFPB Rule contained both “mandatory underwriting” or “ability-to- repay” (“ATR”) provisions and payment restrictions. The mandatory underwriting provisions applied to short-term consumer loans (with terms of 45 days or less) and longer-term balloon payment loans (i.e., any payments more than twice the size of other payments). These provisions imposed rigid ATR requirements and verification requirements on the industry, subject to a limited exception for certain loans in a sequence starting with a loan limited to $500 and declining for each new loan in the sequence. The repayment provisions apply to the foregoing loans and to longer-term loans with (a) annual percentage rates exceeding 36% and (b) lender access to the consumer’s account, whether by ACH, card payment, check or otherwise. The payment provisions generally prohibit lenders from seeking payment, without explicit reauthorization, when two consecutive payments have failed due to insufficient funds and also require a series of prescribed notices for initial payments, “unusual” payments (by amount, payment date or payment modality) and the triggering of limitations after two consecutive failed payments, and a consumer rights notice after two consecutive payment attempts have failed due to insufficient funds. The 2017 Final CFPB Rule was originally scheduled to go into effect, in its entirety, by August 2019. However, before that time, then-Acting Director Mick Mulvaney announced that the CFPB would reconsider the mandatory underwriting provisions of the 2017 Final CFPB Rule and delay their effective date. Additionally, the Community Financial Services Association (the “CFSA”) and the Consumer Service Alliance of Texas, two industry trade groups, brought a lawsuit (the “Texas Lawsuit”) against the CFPB in a federal district court in Texas. The Texas Lawsuit challenged the entire 2017 Final CFPB Rule and resulted in a court-ordered stay of the Rule. In July 2020, the CFPB under then-Director Kathy Kraninger adopted a new rule (the “2020 Final CFPB Rule”) that rescinded the mandatory underwriting provisions of the 2017 Final CFPB Rule but left the payment provisions fully intact. Subsequent to the adoption of the 2020 Final CFPB Rule, the plaintiffs in the Texas Lawsuit filed an amended complaint and a motion for a preliminary injunction against the remaining payment provisions of the 2017 Final CFPB Rule. They argue that the 2017 Final CFPB Rule is arbitrary and capricious (in particular, insofar as it fails to distinguish in its treatment between declined payment card transactions, which generally do not give rise to bank charges, and dishonored ACH payments and checks, which do) and also that it is invalid because it was adopted by a single Director (Richard Cordray), who was not at the time dischargeable without cause under the Dodd-Frank Act, an agency structure subsequently found to be unconstitutional by 18


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    the Supreme Court. In December 2020, the parties to the Texas Lawsuit completed the briefing of cross motions for summary judgment. Meanwhile, in October 2020, a community group, The National Association for Latino Community Asset Builders ("NALCAB"), filed a lawsuit against the CFPB in the federal district court for the District of Columbia (the “DC Lawsuit”). The DC Lawsuit seeks to overturn the 2020 Final CFPB Rule and reinstate the mandatory underwriting provisions of the 2017 Final CFPB Rule. The CFSA has intervened as a defendant in the case and the CFPB has filed a motion to dismiss the complaint for lack of standing, supported by the CFSA. The CFPB motion is primarily premised on the arguments that the NALCAB has failed to sufficiently allege injury to itself or its members and that any injuries are speculative. There has been no briefing on the merits. We believe that complying with the mandatory underwriting provisions of the 2017 Final CFPB Rule would have been costly and would have had a material adverse effect on our business and results of operations, and would have significantly reduced the permitted borrowings by individual consumers. We cannot provide assurance that the CFPB and CFSA will prevail in the DC Lawsuit nor that Congress will not pass legislation and the CFPB will not adopt a rule that would have comparable (or worse) impact on us. Likewise, we cannot provide assurance that the CFSA will prevail in the Texas Lawsuit. If it does not prevail in the district court or any ensuing appeal, either in whole or at least with respect to card transactions, the payment provisions would require significant modifications to our payment, customer notification and compliance systems and create delays in initiating automated collection attempts when payments we initiate are unsuccessful. These modifications would increase costs and reduce revenues, albeit to a far lesser extent than the mandatory underwriting provisions. Accordingly, unless the payment provisions are declared invalid in the Texas Lawsuit, they may have a material adverse effect on our results of operations. For additional discussion of the potential impact of the 2017 Final CFPB Rule and 2020 Final CFPB Rule on us, see “Risk Factors—Risks Relating to Our Industry." CFPB Debt Collection Rule. In May 2019, the CFPB published in the Federal Register a proposed debt collection rule to amend Regulation F which would apply to debt collectors that are subject to the Fair Debt Collection Practices Act ("FDCPA”), such as our Ad Astra subsidiary. The proposed rule addressed a variety of topics, including third-party debt collector communications, collection practices and collection disclosures. Among other things, the proposed rule announced new restrictions on collection-related communications with consumers, such as imposing a specific limit on the number of times a debt collector can place telephone calls to consumers each week, as well as a mandatory waiting period following a successful telephone communication with the consumer. The proposed rule also offered a series of new collection disclosures. In February 2020, the CFPB supplemented the proposed debt collection rule to amend Regulation F to prescribe federal rules governing disclosures when collecting time-barred debts and debts on behalf of deceased consumers. On October 30, 2020, the CFPB issued the first part of its Final Debt Collection Practices (Regulation F) Rule (the “Debt Collection Rule”), which, among other things, addresses the use of various communication channels to collect debts, imposes new collection requirements and limitations and clarifies existing prohibitions on harassment or abuse, false or misleading representations and unfair debt collection practices under the FDCPA. On December 18, 2020, the CFPB issued the second part of its Final Debt Collection Practices (Regulation F) Rule, which addressed disclosures for consumers when attempting to collect a debt by a collector (e.g., the validation notice), and imposed requirements for furnishing information about a debt to consumer reporting agencies. The CFPB ultimately decided not to mandate any uniform time-barred debt disclosure as initially suggested in the May 2019 proposal but did set forth in the commentary to the Debt Collection Rule that disclosing the time- barred status of an account when collecting may be required to avoid a UDAAP violation. The full Debt Collection (Regulation F) Rule is effective November 30, 2021. Adoption of the Debt Collection Rule will require significant changes in Ad Astra’s collection practices to ensure compliance. Ad Astra is working to evolve its collection practices to align with the Debt Collection Rule and ensure compliance with the new requirements, available communication channels and address other aspects of the Debt Collection Rule. CFPB Enforcement. In addition to Dodd-Frank's grant of rule-making authority to the CFPB, which resulted in the 2017 Final CFPB Rule and the CFPB Debt Collection Rule, Dodd-Frank gives the CFPB authority to pursue administrative proceedings or litigation for violations of federal consumer financial laws (including Dodd-Frank’s UDAAP provisions and the CFPB’s own rules). In these proceedings, the CFPB can obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief) and monetary penalties ranging from approximately $6,000 per day for ordinary violations of federal consumer financial laws to approximately $30,000 per day for reckless violations and $1.2 million per day for knowing violations. Also, where a company has violated Title X of Dodd-Frank or CFPB regulations promulgated thereunder, Dodd-Frank empowers state attorneys general and state regulators to bring civil actions for the kind of cease and desist orders available to the CFPB (but not for civil penalties). Potentially, if the CFPB, the FTC or one or more 19


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    state officials believe we have violated the law, they could exercise their enforcement powers in ways that would have a material adverse effect on us. CFPB Supervision and Examination. Additionally, the CFPB has supervisory powers over many providers of consumer financial products and services, including explicit authority to examine payday lenders, and has released its Supervision and Examination Manual, which includes a section on Short-Term, Small-Dollar Lending Procedures. In the past, the CFPB has conducted supervisory and/or limited scope examinations of our business. Neither these examinations nor any Examination Reports had a material effect on our results of operations or financial condition. In July 2020, we received a Prioritized Assessment Information Request of Short-Term, Small Dollar Loans for the purpose of determining what changes we made in response to COVID-19 challenges, as well as any associated risks to consumers. The scope of the higher-level inquiry covered the period March 1, 2020 through June 30, 2020. In January 2021, we received a closing letter from the CFPB concerning the Prioritized Assessment Information Request Letter stating that the CFPB does not need to receive any additional information or reporting. Similarly, in June 2020, Ad Astra received a Prioritized Assessment Information Request of Debt Collection for the purpose of determining what changes Ad Astra made in response to COVID-19 challenges, as well as any associated risks to consumers. The scope of this inquiry covered the period January 1, 2020 through May 31, 2020. In September 2020, Ad Astra received a closing letter from the CFPB concerning the Prioritized Assessment Information Request Letter stating that the CFPB does not need to receive any additional information or reporting. The CFPB commenced its first examination of Ad Astra in October 2020, which covered the period from September 1, 2019 through August 31, 2020. The examination is ongoing and its purpose is to assess Ad Astra’s compliance management system and debt collection practices. While we do not expect that matters arising from this examination will have a material impact, Ad Astra has made in recent years and is continuing to make, certain enhancements to its compliance procedures and debt collection practices. We cannot predict how current or future examinations or Examination Reports will impact us. Possible Changes in Practices. While we do not expect that matters arising from our past CFPB examinations will have a material impact on us, we have made in recent years and are continuing to make, at least in part to meet the CFPB's expectations, certain enhancements to our compliance procedures and consumer disclosures. For example, even if the payment provisions of the Final 2017 CFPB Rule do not become effective, we are likely to make changes to our payment practices in a manner that will increase our costs and/or reduce our consolidated revenues. On January 27, 2020, the CFPB published in the Federal Register a policy statement on the use of “compliance aids.” While the CFPB stated that compliance aids are not regulations or official interpretations and therefore compliance with them is not required, we intend to make reasonable efforts to incorporate the CFPB's aids and guidance in our business practices. We do not believe that doing so will have a material impact on our operations, results or financial condition. Anti-Arbitration Rule. Under its authority to regulate pre-dispute arbitration provisions pursuant to Section 1028 of Dodd-Frank, in July 2017 the CFPB issued a final rule prohibiting the use of mandatory arbitration clauses with class-action waivers in agreements for certain consumer financial products and services, including those applicable to us. Subsequently, Congress overturned this anti-arbitration rule. As a result, the rule will not become effective, and, pursuant to the Congressional Review Act, substantially similar rules may only be reissued with specific legislative authorization. However, Congress could potentially enact a law having a similar effect, which may be more likely than in the past now that Democrats have assumed control over both houses of Congress. MLA. The Military Lending Act (the "MLA"), enacted in 2006, and amended on July 22, 2015, and implemented by the Department of Defense (the "DoD"), imposes a 36% cap on the “all-in” annual percentage rates charged on loans to active- duty members of the U.S. military, Reserves and National Guard and their dependents. Accordingly, we do not meet all the requirements in the law in order to make loans to borrowers protected by the MLA. Enumerated Consumer Financial Services Laws, Telephone Consumer Protection Act ("TCPA") and CAN-SPAM. The Truth in Lending Act ("TILA") and Regulation Z require creditors to deliver disclosures to borrowers prior to consummation of both closed-end and open-end loans and, additionally for open-end credit products, periodic billing statements and change-in-terms notices. For closed-end loans, the lender must disclose the annual percentage rate, finance charge, amount financed, total of payments, payment schedule, late fees and any security interest. For open-end credit, the borrower must be provided with key information that includes annual percentage rates and balance computation methods, various fees and charges and any security interest. 20


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    Under the Equal Credit Opportunity Act ("ECOA") and Regulation B, we may not discriminate on various prohibited bases, including race, color, religion, national origin, sex, marital status or age (provided that the applicant has the capacity to enter into a binding contract); the fact that all or part of the applicant’s income is due to receipt of government benefits, or retirement or part-time income, or the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act, and we must also deliver notices specifying the basis for credit denials, as well as certain other notices. The Fair Credit Reporting Act ("FCRA") regulates the use of consumer reports and reporting of information to credit reporting agencies. The FCRA limits the permissible uses of credit reports and requires us to provide notices to customers when we take adverse action or increase interest rates based on information obtained from third parties, including credit bureaus. We are also subject to additional federal requirements with respect to electronic signatures and disclosures under the Electronic Signatures In Global And National Commerce Act ("ESIGN") and requirements with respect to electronic payments under the Electronic Funds Transfer Act ("EFTA)" and Regulation E. EFTA and Regulation E requirements also have an important impact on our prepaid debit card services business. The EFTA and Regulation E protect consumers engaging in electronic fund transfers and contain restrictions, require disclosures and provide consumers certain rights relating to electronic fund transfers. Among other limitations, they prohibit creditors from conditioning the extension of credit on the consumer's repayment through electronic fund transfers authorized in advance to recur at substantially equal intervals. Additionally, we are subject to the TCPA, CAN-SPAM Act and regulations of the Federal Communications Commission, which include limitations on telemarketing calls, auto-dialed calls, pre-recorded calls, text messages and unsolicited faxes. While we believe that our practices comply with the TCPA, the TCPA has given rise to a spate of litigation nationwide. We apply the FDCPA as a guide in conducting our first-party collection activities for delinquent loan accounts, and we are subject to applicable state collections laws as well. For our third-party collection activities by Ad Astra, we are required to comply with the FDCPA and applicable state collections laws. Bank Secrecy Act and Anti-Money Laundering Laws. Under regulations of the U.S. Department of the Treasury (the "Treasury Department") adopted under the Bank Secrecy Act of 1970 ("BSA"), we must report currency transactions in an amount greater than $10,000 by filing a Currency Transaction Report ("CTR"), and we must retain records for five years for purchases of monetary instruments for cash in amounts from $3,000 to $10,000. Multiple currency transactions must be treated as a single transaction if we have knowledge that the transactions are by, or on behalf of, the same person and result in either cash in or cash out totaling more than $10,000 during any one business day. We are required to file a CTR for any transaction which appears to be structured to avoid the required filing where the individual transaction or the aggregate of multiple transactions would otherwise meet the threshold and require the filing of a CTR. The BSA also requires us to register as a money services business with the Financial Crimes Enforcement Network of the Treasury Department ("FinCEN"). This registration is intended to enable governmental authorities to better enforce laws prohibiting money laundering and other illegal activities. We are registered as a money services business with FinCEN and must re-register with FinCEN by December 31 every other year. We must also maintain a list of names and addresses of, and other information about, our stores and must make that list available to FinCEN and any requesting law enforcement or supervisory agency. That store list must be updated at least annually. Federal anti-money-laundering laws make it a criminal offense to own or operate a money transmittal business without the appropriate state licenses, which we maintain. In addition, the USA PATRIOT Act of 2001 and its corresponding federal regulations require us, as a “financial institution,” to establish and maintain an anti-money-laundering program. Such a program must include: (i) internal policies, procedures and controls designed to identify and report money laundering; (ii) a designated compliance officer; (iii) an ongoing employee-training program; and (iv) an independent audit function to test the program. In addition, federal regulations require us to report suspicious transactions involving at least $2,000 to FinCEN. The regulations generally describe four classes of reportable suspicious transactions: one or more related transactions that the money services business knows, suspects or has reason to suspect, (i) involve funds derived from illegal activity or are intended to hide or disguise such funds, (ii) are designed to evade the requirements of the BSA, (iii) appear to serve no business or lawful purpose, or (iv) involve the use of the money service business to facilitate criminal activity. The Office of Foreign Assets Control ("OFAC") publishes a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted or sanctioned countries. It also lists individuals, groups and entities, such as terrorists and narcotics traffickers, designated under programs that are not country-specific. Collectively, such individuals and companies are called “Specially Designated Nationals.” Their assets are blocked and we are generally prohibited from dealing with them. Privacy Laws. The Gramm-Leach-Bliley Act of 1999 and its implementing federal regulations require us generally to protect the confidentiality of our customers’ nonpublic personal information and to disclose to our customers our privacy policy and 21


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    practices, including those regarding sharing the customers’ nonpublic personal information with third parties. That disclosure must be made to customers at the time the customer relationship is established and at least annually thereafter, unless posted on our website. U.S. State and Local Regulations Currently, we make loans in approximately 34 states in the U.S. pursuant to enabling legislation that specifically allows direct loans of the type that we make. In three other states, we make open-end loans pursuant to a contractual choice of Kansas law. In Texas, we operate under a CSO model, where we are paid by borrowers to facilitate loans from lenders unaffiliated with us. Short-term consumer loans must comply with extensive laws of the states where our stores are located or, in the case of our online loans, where the borrower resides. In the event of serious or systemic violations of state law by us or, in certain instances, our third-party service providers when acting on our behalf, we would be subject to a variety of regulatory and private sanctions. These could include license suspension or revocation (not necessarily limited to the state or product to which the violation relates); orders or injunctive relief, including orders providing for rescission or reformation of transactions or other affirmative relief; and monetary relief. Depending upon the nature and scope of any violation and/or the state in question, monetary relief could include restitution, damages, fines for each violation and/or payments to borrowers equal to a multiple of the fees we charge and, in some cases, principal as well. Thus, violations of these laws could potentially have a material adverse effect on our results of operations or financial condition. For more information regarding the regulations applicable to our business and the risks to which they subject us, see the section entitled “Item 1A—Risk Factors.” Recent and Potential Future Changes in the Law: During the past few years, legislation, ballot initiatives and regulations have been proposed or adopted in various states that would prohibit or severely restrict our short-term consumer lending. In California, the Governor signed Assembly Bill 539 in October 2019, and the law became effective on January 1, 2020. AB 539 imposes an annual interest rate cap of 36% plus the Federal Funds Rate (0.25% as of December 31, 2020) on all consumer loans between $2,500 and $10,000. Our California Installment loans produced 8.0% of our total consolidated revenue from continuing operations for the year ended December 31, 2020. As of December 31, 2020, gross loans receivable on California Unsecured and Secured Installment loans amounted to $23.6 million and $13.7 million, respectively. We continue to evaluate alternatives available to service customers in the California market. There can be no assurance that we will be able to implement a strategy to replace our California Installment loans at rates above 36%, or if we do, that we will be able to avoid or surmount any legal attacks on any such strategy. We have launched a test California installment loan at rates in compliance with the new restrictions. At this point, it is too early to determine if these new lower rate installment loans will be sustainable or profitable. Refer to “Item 1A—Risk Factors” for additional information regarding the impact of this law to our business. We, along with others in the short-term consumer loan industry, intend to continue to inform and educate legislators and regulators and to oppose legislative or regulatory action that would unduly prohibit or severely restrict short-term consumer loans as compared with those currently allowed. Nevertheless, if legislative or regulatory action with that effect were taken in states in which we have a significant number of stores (or at the federal level), that action could have a further material adverse effect on our loan-related activities and revenues. Texas CSO Lending: The CSO model is expressly authorized under Section 393 of the Texas Finance Code. As a CSO, we serve as an arranger for consumers to obtain credit from independent, non-bank consumer lending companies and we guaranty the lender against loss. As required by Texas law, we are registered as a CSO and, for our online services and services in some storefronts, also licensed as a CAB. Texas law subjects us to audit by the State’s Office of Consumer Credit Commissioner and requires us to provide expanded disclosures to customers regarding credit service products. Nearly 50 Texas cities, including Austin, Dallas, San Antonio and Houston, have passed substantially similar local ordinances addressing products offered by CABs. These local ordinances place restrictions on the amounts that can be loaned to customers and the terms under which the loans can be repaid. As of December 31, 2020, we operated 68 stores in Texas cities with local ordinances. We have been cited by the City of Austin for alleged violations of the Austin ordinance but believe that: (i) the ordinance conflicts with Texas state law, and (ii) our product in any event complies with the ordinance, when the ordinance is properly construed. The Austin Municipal Court agreed with our position that the ordinance conflicts with Texas law and, accordingly, did not address our second argument. However, in September 2017, the Travis County Court reversed this decision and remanded the case to the Municipal Court for further proceedings consistent with its opinion (including, presumably, a decision on our second argument). To date, a hearing and trial on the merits have not been scheduled. Accordingly, we do not expect to have a final trial-court determination on the lawfulness of our CAB program under the Austin ordinance (and similar ordinances in other Texas cities) for some time (much less a decision no longer subject to appeal). An 22


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    adverse final decision could potentially result in material monetary liability in Austin and possibly other cities and would force us to restructure the loans we arrange in Texas. California Privacy Rights Act: In 2018, the California Consumer Privacy Act (“CCPA”) was passed into law, effective January 1, 2020. CCPA broadens consumer rights with respect to personal information, imposing expanded obligations to disclose the categories and uses of personal information a business collects, providing consumers a right to access that information, a right to opt out of the sale of personal information, and a right to request that a business delete personal information about the consumer subject to certain exemptions. CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, which may increase the costs of data breach litigation. A ballot initiative passed November 2020 entitled California Privacy Rights Act (“CPRA”) mirrors many concepts from the European General Data Protection Regulation, which becomes effective January 1, 2023 but contains a look back provision to January 1, 2022. This initiative expands consumer rights such as a right to correct inaccurate information, restricts ability to share information, establishes an independent enforcement agency, and requires data minimization and publication requirements related thereto. The CPRA tolls the exemption of the original CCPA legislation to employee and business-to-business data, except as to notice requirements, until the effective date. The Attorney General is instructed to provide substantial regulations by July 1, 2022. We anticipate this having a further impact on our business leading up to the effective date of January 1, 2023 as we work to become compliant with the net new provisions while awaiting the regulations. We anticipate that states and possibly the federal government will adopt laws similar to the CPRA in the future. While it is too early to know the full impact, these developments could increase costs or otherwise adversely affect our business. In the case of De La Torre v. CashCall, Inc., in 2017, the Ninth Circuit U.S. Court of Appeals certified the following question to the California Supreme Court: “Can a 96% interest rate on consumer loans of $2500 or more governed by California Finance Code § 22303, render the loans unconscionable under California Finance Code § 22302?” In August of 2018, the California Supreme Court decided that the interest rate on a consumer loan of $2,500 or more can render the loans unconscionable under Cal. Fin. Code § 22303. However, the Court did not address whether the loans in question were in fact unconscionable. The Court stressed that in order to find that an interest rate is unconscionable, courts must conduct an individual analysis of whether "under the circumstances of the case, taking into account the bargaining process and prevailing market conditions" a "particular rate was 'overly harsh,' 'unduly oppressive,' or 'so one-sided as to shock the conscience.'" This analysis is "highly dependent on context" and "flexible," according to the Court. The Court warned that lower courts should be wary of and must avoid remedies that amount to an "across-the-board imposition of a cap on interest rates." Subsequent to the California Supreme Court’s decision in De La Torre, on August 31, 2018, a class action lawsuit was filed against Speedy Cash in the Southern District of California. The complaint alleges that Speedy Cash charges unconscionable interest rates, in violation of consumer protection statutes, and seeks restitution and public injunctive relief. Speedy Cash filed a motion to compel arbitration and stay proceedings on October 30, 2018. The District Court denied the motion. Speedy Cash filed an appeal of the order with the Ninth Circuit Court of Appeals and the District Court agreed to stay the proceedings in the trial court until June 1, 2020. During the course of the appeal, a California statute took effect as of January 1, 2020 that prohibits finance lenders from issuing loans between $2,500 and $10,000 with charges over 36% calculated as an annual simple interest rate (plus the prior month’s Federal Funds Rate). On June 9, 2020, the Ninth Circuit Court of Appeals entered a memorandum vacating and remanding the District Court’s opinion, and directing the Court to consider what effect, if any, California Financial Code § 22304.5(a) has on its analysis. On October 16, 2020 a hearing was held on Speedy Cash’s motion to compel arbitration. The Court ultimately issued an order denying Speedy Cash’s motion on November 20, 2020. Because the District Court did not restrict its analysis to the limited purpose of considering what effect, if any, California Financial Code § 22304.5(a) had on its analysis, as directed by the remand by the Ninth Circuit Court of Appeals, Speedy Cash filed an appeal and motion to stay proceedings. On February 16, 2021, the District Court issued an order granting Speedy Cash's motion to stay proceedings in the trial court, pending the resolution of the appeal with the Ninth Circuit Court of Appeals. Additional Laws: Like our lending businesses, our non-lending businesses are supervised by state authorities in each state where we are licensed. We are subject to regular state examinations and audits and must address with the appropriate state agency any findings or criticisms resulting from these examinations and audits. Most states have laws and regulations governing check cashing, money transmission and debt collection, including licensing and bonding requirements and laws regarding maximum fees, recordkeeping and/or posting of fees, and our business is subject to various local regulations, such as local zoning, occupancy and debt collection regulations. These state and local regulations are subject to change and vary widely from state to state and city to city. 23


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    We cannot provide any assurances that additional state or local statutes or regulations will not be enacted in the future in any of the jurisdictions in which we operate. Additionally, we cannot provide any assurances that any future changes to statutes or regulations will not have a material adverse effect on our results of operations or financial condition. Canada Regulations In May 2007, Canadian federal legislation was enacted that exempts from the criminal rate of interest provisions of the Criminal Code (which prohibit receiving (or entering into an agreement to receive) interest at an effective annual rate that exceeds 60% on the credit advanced under the loan agreement) cash advance loans of $1,500 or less if the term of the loan is 62 days or less (“payday loans”) and the person is licensed under provincial legislation as a short-term cash advance lender and the province has been designated under the Criminal Code. Currently, Ontario, Alberta, British Columbia, Manitoba, Nova Scotia, Prince Edward Island, Saskatchewan, New Brunswick and Newfoundland have provincial enabling legislation allowing for payday loans and have also been designated under the Criminal Code. Under the provincial payday lender legislation there are generally cost of borrowing disclosure requirements, collection activity requirements, caps on the cost of borrowing that may be recovered from borrowers and restrictions on certain types of lending practices, such as extending more than one payday loan to a borrower at any one time. Canadian provinces periodically review the regulations for payday loan products. Some provinces specify a time period within the Act while other provinces are silent or simply note that reviews will be periodic. Nova Scotia In September 2018, Nova Scotia completed its triennial review process of borrowing rates. In November 2018, the Utility and Review Board announced its decision to reduce the maximum cost of borrowing from C$22 per C$100 to C$19 per C$100, effective February 1, 2019. The remaining recommendations of the Review Board, mainly an extended payment plan offering, may be considered by the regulator. Cash Money operated five retail store locations as of December 31, 2020 and has an internet presence in Nova Scotia. British Columbia Effective September 1, 2018, the British Columbia Ministry of Public Safety and Solicitor General (the "Ministry") reduced the total cost of borrowing to C$15 per C$100 lent. On May 16, 2019, Parliament Bill 7 titled “Business Practices and Consumer Protection Amendment Act, 2019" became law, which allows the Ministry to (i) define a high cost credit product and (ii) require licensing and consumer protection oversight. It also authorizes the Ministry to prescribe regulations regarding high cost credit products, including a cooling off period between loans, cost/optional services disclosure requirements, and prohibition of concurrent loan products. It is too early to predict the outcome of the regulations setting process and its impact on our operations. As of December 31, 2020, we operated 24 of our 202 Canadian stores and conducted online lending in British Columbia. Revenues in British Columbia were approximately 9.7% of our Canadian revenues and 2.4% of total consolidated revenues for the year ended December 31, 2020. Ontario In April 2017, Bill 59 titled “Putting Consumers First Act (the “PCF Act”), which proposed additional consumer protection measures, received Royal Assent. A majority of the Single-Pay-loan-related provisions in the PCF Act were subject to a further regulatory process. In December 2017, the Ministry announced the new regulations with respect to payday loans. Most notably, the Ministry detailed two new regulations effective July 1, 2018: (i) a requirement to make the third loan originated by the same customer within 63 days repayable in two or three installments, depending on the customer’s pay frequency, and; (ii) a requirement for the loan amount not to exceed 50% of the customer’s net pay in the month prior to the loan. Additionally, in the December 2017 announcement, the Ministry confirmed a decrease in the maximum cost of borrowing from C$18 per C$100 lent to C$15 per C$100 lent, and capped NSF fees at C$25. As of December 31, 2020, we operated 135 of our 202 Canadian stores and conducted online lending in Ontario. Revenues in Ontario were approximately 67.2% of our Canadian revenues and 16.6% of total consolidated revenues for the year ended December 31, 2020. 24


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    On March 16, 2021, Ontario will hold a roundtable to consider proposals for regulation of alternative financial services other than Single-Pay loans. Alberta Alberta passed Bill 15 titled “An Act to End Predatory Lending,” which, among other things, included (for loans in scope) a reduction in the maximum cost of borrowing from C$23 to C$15 per C$100 lent (effective August 2016) and a requirement that all loans be repaid in installments (effective November 30, 2016). For customers paid semi-monthly, bi-weekly or on a more frequent basis, at least three installment payments would be required. For customers paid on a monthly basis, at least two installment payments would be required. All covered loan terms must be no less than 42 days and no greater than 62 days, with no penalty for early repayment. Additionally, the Bill included a provision for a reduction in the cost of borrowing to 60% APR when alternative options for credit exist and are being utilized by a sufficient number of individuals. As a result of these regulatory changes, we introduced an Installment product during 2016 and, by the end of 2017, offered only Installment and Open-End products. On December 15, 2017, a bill titled “A Better Deal for Consumers and Businesses Act,” which covered a number of industries including high-cost credit businesses and was intended to provide the government with the authority to promulgate certain regulations to further ensure consumer protection received Royal Assent. Effective January 1, 2019, a high-cost credit regime went into effect, which resulted in additional regulations being passed setting out a regime for such products, including installment loans with an APR of 32% or more and lines of credit with an annual interest rate of 32% or more. Among other things, high-cost lenders are required to hold a license and to provide additional disclosures to borrowers. As of December 31, 2020, we operated 27 of our 202 Canadian stores and conducted online lending in Alberta. Revenues in Alberta were approximately 16.9% of our Canadian revenues and 4.2% of total consolidated revenues for the year ended December 31, 2020. Manitoba In January 2016, the Province of Manitoba announced a Public Utilities Board ("PUB") hearing to specifically review and consider a reduction in the rate from C$17 per C$100 lent to C$15 per C$100 lent and a reduction in the maximum amount borrowers can loan from 30% of net pay to 25% of net pay. In June 2016, the PUB issued its report to the government recommending that these proposed changes not be made. It is unknown if and when the government may adopt the recommendations of the PUB, however, legislation has been introduced which, if passed, would repeal the provisions for the PUB to review and make recommendations about the cost of credit for payday loans, as well as the maximum fees for cashing government checks. Such matters would instead be set by regulation. As of December 31, 2020, we operated four stores in Manitoba. Saskatchewan Effective February 2018, Saskatchewan amended its Payday Loan Regulations to provide that the maximum rate that may be charged to a borrower be reduced from C$23 per C$100 lent to C$17, and the maximum fee for a dishonored check be reduced from C$50 to C$25. As of December 31, 2020, we operated six stores in Saskatchewan. Installment and Open-End loans are subject to the Criminal Code annual interest rate cap of 60%. Providers of these types of loans are also subject to provincial legislation that requires lenders to provide certain disclosures, prohibits the charging of certain default fees and extends certain rights to borrowers, such as prepayment rights. Alberta and Manitoba have enacted legislation that specifically regulates high-cost credit grantors, which define a high-cost credit product, and require licensing and additional consumer protection oversight. Similar legislation has been proposed, but is not yet in force, in British Columbia. In addition, in Ontario, the PCF Act provides the Ontario Ministry with the authority to impose additional restrictions on lenders which offer installment loans, subject to a regulatory process, including: (i) requiring a lender to take into account certain factors with respect to the borrower before entering into a credit agreement with that borrower; (ii) capping the amount of credit that may be extended; (iii) prohibiting a lender from initiating contact with a borrower for the purpose of offering to refinance a loan; and (iv) capping the amount of certain fees that do not form part of the cost of borrowing. In July 2017, the Ministry of Government and Consumer Services issued a consultation document requesting feedback on questions regarding a new regime for high-cost credit and limits on optional services, such as optional insurance. The proposed high-cost credit regime would apply to loans with an annual interest rate that exceeds 35%. The Ministry summary accompanying the consultation 25


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    document stated that a further consultation paper would be issued in the fall of 2017 on those matters and that the Ministry expected that regulation would be enacted in early 2019. In January 2021, the Ontario government launched a subsequent consultation on the regulation of high-cost credit. The consultation proposals include defining high-cost credit to include loans with an annual interest rate that exceeds the Bank of Canada Bank Rate plus 25%, and additional licensing, borrower protections and fees that could be charged in connection with any loan that would fall under the definition of high-cost credit. The consultation will close in March 2021. It is too early to predict the outcome of the consultation process and its impact on our operations. Other Federal Matters In Canada, the federal government generally does not regulate check cashing businesses, except in respect of federally regulated financial institutions (and other than the Criminal Code of Canada provisions noted above in respect of charging or receiving in excess of 60% annual interest rate on the credit advanced in respect of the fee for a check cashing transaction), nor do most provincial governments generally impose any regulations specific to the check cashing industry. The exceptions are the provinces of Quebec, where check cashing stores are not permitted to charge a fee to cash a government check; and Manitoba, British Columbia and Ontario, where the province imposes a maximum fee to be charged to cash a government check. The province of Saskatchewan also regulates the check cashing business but only in respect of provincially regulated loan, trust and financing corporations. Cash Money does not operate in the province of Quebec. Available Information Information about us, including our Code of Business Conduct and Ethics, Corporate Governance Guidelines and charters of our standing committee is available at our website at www.curo.com. Printed copies of the documents listed above are available upon request, without charter, by writing to us at 3527 North Ridge Road, Wichita, Kansas 67205, Attention: Investor Relations. We also make available on or through our website at www.ir.curo.com, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports (along with certain other Company filings with the SEC) as soon as reasonably practicable after we electronically file those reports with or furnish them to the SEC. These materials are also accessible on the SEC's website at www.sec.gov. ITEM 1A. RISK FACTORS Our operations and financial results are subject to many risks and uncertainties that could adversely affect our business, results of operations, financial condition or share price. While we believe we discuss below the key risk factors affecting our business, there may be additional risks and uncertainties not currently known or that we currently deem to be immaterial that may adversely affect our business, results of operations, financial condition or share price. You should carefully consider the risk factors. Risks Relating to Our Business If our allowance for loan losses is not adequate to absorb our actual losses, this could have a material adverse effect on our results of operations or financial condition. Our customers may fail to repay their loans in full. We maintain an allowance for loan losses for estimated probable losses on company-funded loans and loans in default. See Note 1, “Summary of Significant Accounting Policies and Nature of Operations” of the Notes to Consolidated Financial Statements for factors we consider in estimating the allowance for loan losses. We also maintain a liability for estimated incurred losses on loans funded by third-party lenders under our CSO programs, which we guarantee. As of December 31, 2020, our aggregate allowance for loan losses and liability for losses associated with the guaranty for loans not in default (including loans funded by third-party lenders under our CSO programs) was $93.4 million. This reserve is an estimate. Actual losses are difficult to forecast, especially if losses stem from factors that we have not experienced historically, and unlike traditional banks, we are not subject to periodic review by bank regulatory agencies of our allowance for loan losses. As a result, our allowance for loan losses may not be sufficient to cover incurred losses or comparable to that of traditional banks subject to regulatory oversight. If actual losses are greater than our reserve and allowance, this could have a material adverse effect on our results of operations or financial condition. Because of the non-prime nature of our customers, we have experienced a high rate of NCOs as a percentage of revenues and it is essential that we price loans appropriately. We rely on our proprietary credit and fraud scoring 26


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    models to forecast loss rates. If we are unable to effectively forecast loss rates, it will negatively and materially impact our operating results. Because of the non-prime nature of our customers, we have much higher charge-off rates than traditional lenders. Accordingly, it is essential that we price our products appropriately to account for these credit risks. In deciding whether to extend credit, and the terms on which we or the originating lenders are willing to provide credit, including the price, we and the originating lenders rely heavily on our proprietary credit and fraud scoring models, which are an empirically derived suite of statistical models built using third-party data, customer data and our historical credit experience. If we do not regularly enhance our scoring models to ensure optimal performance, our models may become less effective. If we are unable to rebuild our scoring models or if they do not perform as expected, our products could experience increasing defaults, higher customer acquisition costs, or both. If our scoring models fail to adequately predict the creditworthiness of customers, or if they fail to assess prospective customers’ ability to repay loans, or other components of our credit decision process fails, higher than forecasted losses may result. Similarly, if our scoring models overprice our products, we could lose customers. Factors such as COVID-19 impact our customers' ability to repay loans, and government programs focused on the pandemic, such as stimulus programs, can further add volatility to loan balances, repayments and profitability. Furthermore, if we are unable to access third-party data, or access to such data is limited or cost prohibitive, our ability to accurately evaluate potential customers will be compromised. As a result, we may be unable to effectively predict probable credit losses inherent in the resulting loan portfolio, and we, and the originating lender (where applicable), may experience higher defaults or customer acquisition costs, which could have a material adverse effect on our business, prospects, results of operations or financial condition Additionally, if any of the models or tools used to underwrite loans contain errors in development or validation, such loans may result in higher delinquencies and losses. Moreover, if future performance of customer loans differs from past experience, delinquency rates and losses could increase, all which could have a material adverse effect on our business, prospects, results of operations or financial condition. An inability to effectively forecast loss rates could also inhibit our ability to borrow from our debt facilities, which could further hinder our growth and have a material adverse effect on our business, prospects, results of operations or financial condition. Changes in the demand for our products and specialty financial services or our failure to adapt to such changes could have a material adverse effect on our business, prospects, results of operations or financial condition. The demand for a product or service may change due to many factors such as regulatory restrictions that reduce customer access to products, the availability of competing products, reduction in our marketing spend, macroeconomic changes or changes in customers’ financial conditions among others. If we do not adapt to a significant change in customers’ demand for, or access to, our products or services, our revenue could decrease significantly. Even if we make adaptations or introduce new products or services, customer demand could decrease if the adaptations make them less attractive or less available, all of which could have a material adverse effect on our business, prospects, results of operations or financial condition. If we are unable to manage growth effectively, our results of operations or financial condition may be materially adversely affected. We may not be able to successfully grow our business. Failure to grow the business and generate sufficient levels of cash flow could inhibit our ability to service our debt obligations. Our expansion strategy, which contemplates disciplined growth in Canada and the U.S., increasing the market share of our online operations, selectively expanding our offering of installment loans and potential expansion in other international markets, is subject to significant risks. The profitability of our operations and any future growth depends upon many factors, including our ability to appropriately price our products, manage credit risk, respond to regulatory and legislative changes, obtain and maintain financing, hire, train and retain qualified employees, obtain and maintain required permits and licenses and other factors, some of which are beyond our control, such as changes in regulation and legislation. As a result, our profitability and cash flows could suffer if we do not successfully implement our growth strategy. We may not achieve the expected benefits of newly-acquired business, including Flexiti, and any acquisition could disrupt our business plans or operations. From time-to-time, we may purchase other businesses that may enhance our product platform or technology, expand the breadth of our markets or customer base or advance our business strategies. The success of any acquisition depends upon our ability to effectively integrate the management, operations and technology of the acquired business into our existing management, operations and technology platforms. Integration can be complex, expensive and time-consuming. The failure to successfully integrate acquired businesses into our organization in a timely and cost-effective manner could materially 27


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    adversely affect our business, prospects, results of operations or financial condition. The integration process could involve loss of key employees, disruption of ongoing businesses, incurrence of tax costs or inefficiencies or inconsistencies in standards, controls, information technology systems, procedures and policies. As a result, our ability to maintain relationships with customers, employees or other third-parties or our ability to achieve the anticipated benefits of acquisitions could be adversely affected and harm our financial performance. In that regard, we may not be able to successfully integrate Flexiti or otherwise realize the expected benefits of the acquisition, including anticipated annual operating costs and capital synergies, and the combined business could underperform relative to our expectations. Our substantial indebtedness could materially impact our business, results of operations or financial condition. We have significant debt. The amount of our indebtedness could have significant effects on our business, including: • making it more difficult to satisfy our financial obligations; • inhibiting our ability to obtain additional financing for operational and strategic purposes; • requiring the use of a substantial portion of our cash flow from operations to pay interest on our debt, which reduces funds available for other operational and strategic purposes; • putting us at a competitive disadvantage compared to our competitors that may have proportionately less debt; • restricting our ability to pay dividends; and • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate. For instance, our ability to offer our current products or services or the financial performance of these products and services could be negatively impacted by regulatory changes, which could inhibit our ability to comply with the terms of our debt. If our cash flows and capital resources are insufficient to fund our debt obligations, or if we confront regulatory uncertainty or challenges in debt capital markets, we may not be able to refinance our indebtedness prior to maturity on favorable terms, or at all. In addition, prevailing interest rates or other factors at the time of refinancing could increase our interest or other debt capital expense. A refinancing could also require us to comply with more onerous covenants on our business operations. If we are unable to refinance our indebtedness prior to maturity we will be required to pursue alternative measures that could include restructuring our current indebtedness, selling all or a portion of our business or assets, seeking additional capital, reducing or delaying capital expenditures, or taking other steps to address obligations under the terms of our indebtedness. Our ability to meet our debt obligations depends on our future performance, which will be affected by financial, business, economic, regulatory and other factors, many of which we cannot control or predict. Our business may not generate sufficient cash flow from operations and we may not realize our anticipated growth in revenue and cash flow, either of which could result in being unable to repay indebtedness, or to fund other liquidity needs. If we do not have enough capital resources, we may need to refinance all or part of our debt, sell assets or borrow more funds, which we may not be able to do on terms acceptable to us, or at all. In addition, the terms of existing or future debt agreements may restrict us from pursuing any of these alternatives. In preparing our financial statements, including implementing accounting principles, financial reporting requirements or tax rules or tax positions, we use our judgment and that judgment encompasses many risks. We prepare our financial statements in accordance with U.S. GAAP and its interpretations are subject to change. If new rules or interpretations of existing rules require us to change our accounting, financial reporting or tax positions, our results of operations or financial condition could be materially adversely affected, and we could be required to restate financial statements. Preparing financial statements requires management to make estimates and assumptions, including those impacting allowances for loan losses, goodwill and intangibles and accruals related to self-insurance and CSO guarantee liability. These affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as well as the reported amounts of revenue and expenses. In addition, management’s judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against deferred tax assets. As a result, our assumptions and provisions may not be sufficient to cover actual losses. If actual losses are greater than our assumptions and provisions, our results of operations or financial condition could be adversely affected. Further, FASB issued new guidance that will require us to adopt the current expected credit loss (“CECL”) model to evaluate impairment of loans. The CECL approach, effective for us by January 1, 2023, requires evaluation of credit impairment based on an estimate of life of loan losses as opposed to credit impairment based on incurred losses. If we misinterpret, or make inaccurate assumptions under, the new guidance, our results of operations or financial condition could be adversely affected. 28


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    Changes in our financial condition or a potential disruption in the capital markets could reduce available capital. If we do not have sufficient funds from our operations, excess cash or debt agreements, we will be required to rely on banking and credit markets to meet our financial commitments and short-term liquidity needs. We also expect to periodically access debt capital markets to finance growth. Efficient access to such markets, which could be critical for us, may be restricted due to many factors, including deterioration of our earnings, cash flows, balance sheet quality, overall business or industry prospects, adverse regulatory changes, disruption to or deterioration in capital markets or a negative bias toward our industry by consumers. Disruptions and volatility in capital markets may cause banks and other credit providers to restrict availability of new credit. We may also have more limited access to commercial bank lending than other businesses due to the negative bias toward our industry. If adequate funds are not available, or are not available at favorable terms, we may not have sufficient liquidity to fund our operations, make future investments, take advantage of strategic opportunities or respond to competitive challenges, all of which could negatively impact our ability to achieve our strategic plans. Additionally, if the capital and credit markets experience volatility, and the availability of funds is limited, third parties with whom we do business may incur increased costs or business disruption and this could have a material adverse effect on our business relationships with such third parties. Adverse economic conditions, including those resulting from weather-related events or other natural disasters, man- made events or health emergencies, could have an adverse impact on our business or the economy and could cause demand for our loan products to decline or make it more difficult for our customers to make payments on our loans and increase our default rates, which could adversely affect our results of operations or financial condition. We operate stores across the U.S. and Canada and derive the majority of our revenue from consumer lending. Macroeconomic conditions, such as employment, personal income and consumer sentiment, may influence demand for our products. Additionally, weather-related events, power losses, telecommunication failures, terrorist attacks, acts of war, widespread health emergencies, and similar events, may significantly impact our customers’ ability to repay their loans and cause other negative impacts on our business. These conditions may result in us changing the way we operate our business, including tightening credit, waiving certain fees and granting concessions to customers. Our underwriting standards require our customers to have a steady source of income. Therefore, if unemployment increases among our customer base, the number of loans we originate may decline and defaults could increase. If consumers become more pessimistic regarding the economic outlook and spend less and save more, demand for consumer loans may decline. Accordingly, poor economic conditions could have a material adverse effect on our results of operations or financial condition. In addition, a widespread health emergency, such as COVID-19, and perceptions regarding its impact may continue to negatively affect the North American and global economy, travel, employment levels, employee productivity, demand for and repayment of our loan products and other macroeconomic activities, which could adversely affect our business, results of operations or financial condition. Given the dynamic nature of the pandemic, however, the extent to which it may impact our results of operations or financial condition will depend on future developments, which are highly uncertain and cannot be predicted. Failure to comply with debt collection regulations, or failure of our third-party collection agency to comply with debt collection regulations, could subject us to fines and other liabilities, which could harm our reputation and business. In January 2020, we acquired Ad Astra, our exclusive provider of third-party collection services for U.S. operations. Both federal and state law regulate debt collection communication and activities. Regulations governing debt collection are subject to changing interpretations that differ from jurisdiction to jurisdiction. Regulatory changes could make it more difficult for us and any collections agencies we may use to effectively collect on the loans we originate. In 2016, the CFPB issued the 2016 CFPB Outline intended to increase consumer protection pertaining to third-party debt collectors and others covered by the FDCPA. The 2016 CFPB Outline would apply to the attempts of our third-party collection agency to collect debt originated by other lenders, including under our CSO programs. The proposals would not apply to our attempts to collect debt that we originate; however, the CFPB has announced that it plans to address consumer protection issues involving first-party debt collectors and creditors separately. On October 30, 2020, the CFPB issued the first part of its Final Debt Collection Practices (Regulation F) Rule which addressed, among other things, communications in connection with debt collection and prohibitions on harassment or abuse, false or misleading representations, and unfair debt collection practices. See "Regulatory Environment and Compliance—U.S. Regulations—U.S. Federal Regulations—CFPB Debt Collection Rule." Adoption of the Regulation F Rule will require significant changes in Ad Astra’s collection and we are not able to give any assurance that the effect of these new rules will not have a material impact on our results of operations or financial condition. 29


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    Goodwill comprises a significant portion of our assets. We assess goodwill for impairment at least annually. If we recognize an impairment, it could have a material adverse effect on our results of operations or financial condition. We assess goodwill for impairment on an annual basis at the reporting unit level. We assess goodwill between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Our impairment reviews require extensive use of accounting judgment and financial estimates. Application of alternative assumptions and definitions could produce significantly different results. We may be required to recognize impairment of goodwill based on future events or circumstances. A material impairment of goodwill could adversely affect our results of operations or financial condition. Due to the current economic environment and the uncertainties that future economic consequences will have on our reporting units, we cannot be sure that our estimates and assumptions made for purposes of our annual goodwill impairment test will be accurate predictions of the future. If our assumptions regarding forecasted revenues or margins for our reporting units are not achieved, we may be required to record goodwill impairment losses in the future. We cannot determine if any such future impairment will occur, and if it does occur, whether such charge would be material. Our lending business is somewhat seasonal which causes our revenues to fluctuate and could have a material adverse effect on our ability to service our debt obligations. Our U.S. business typically experiences reduced demand in the first quarter as a result of customers’ receipt of tax refund checks. Demand for our U.S. lending services is generally greatest during the third and fourth quarters. This seasonality requires us to manage our cash flows during the year. If a governmental authority pursued economic stimulus actions or issued additional tax refunds or tax credits at other times during the year, such actions could have a material adverse effect on our business, prospects, results of operations or financial condition during those periods. If our revenues fall substantially below expectations during certain periods, our annual results and our ability to service our debt obligations could be materially adversely affected. Our debt agreements contain covenants which may restrict our flexibility to operate our business. If we do not comply with these covenants, our failure could have a material adverse effect on our results of operations or financial condition. Our debt agreements contain customary covenants, including limitations on indebtedness, liens, investments, subsidiary investments and asset dispositions, and require us to maintain certain leverage and interest coverage ratios. Failure to comply with these covenants could result in an event of default that, if not cured or waived, could reduce our liquidity and have a material adverse effect on our operating results and financial condition. In addition, an event of default under one of our debt agreements may result in all of our outstanding debt to become immediately due and payable. In addition, our SPV facilities contain default, delinquency and net spread ratio limits and our U.S. SPV facility contains a cash collection percentage limit on the receivables pledged to each facility. If we exceed these limits, our ability to draw under these facilities could be impacted. Further, if we exceed ratios, we may be required to redirect all excess cash to the lenders. Failure to comply with debt covenants could have a material adverse effect on our liquidity, results of operation or financial condition if we are unable to access capital when we need it or if we are required to reduce our outstanding indebtedness. Because we depend on third-party lenders to provide cash needed to fund our loans, an inability to affordably access third-party financing could have a material adverse effect on our business. Our principal sources of liquidity to fund our customer loans are cash provided by operations, funds from third-party lenders under CSO programs, and our SPV facilities. We may not be able to secure additional operating capital from third-party lenders or refinance our existing credit facilities on reasonable terms or at all. As the volume of loans that we make to customers increases, we may have to expand our borrowing capacity on our existing SPV facilities or add new sources of capital. If the underlying collateral does not perform as expected, our access to the SPV facilities could be reduced or eliminated. The availability of these financing sources depends on many factors, some of which we cannot control. In the event of a sudden shortage of funds in the banking system or capital markets, we may not be able to maintain necessary levels of funding without incurring high funding costs, suffering a reduction in the term of funding instruments, or having to liquidate certain assets. If our cost of borrowing increases or we are unable to arrange new methods of financing on favorable terms, we may have to curtail our origination of loans, which could have a material adverse effect on our results of operations or financial condition. 30


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    We may be unable to protect our proprietary technology and analytics or keep up with that of our competitors. The success of our business depends to a significant degree upon the protection of our proprietary technology, including Curo, our IT platform, which we use for pricing and underwriting loans. We seek to protect our intellectual property with non- disclosure agreements with third parties and employees and through standard measures to protect trade secrets. We also implement cybersecurity policies and procedures to prevent unauthorized access to our systems and technology. However, we may be unable to deter misappropriation of our proprietary information, detect unauthorized use or take appropriate steps to enforce our intellectual property rights. We do not have agreements with all of our employees requiring them to assign to us proprietary rights to technology developed in the scope of employment. Additionally, while we have registered trademarks and pending applications for trademark registration(s), we do not own any patents or copyrights with respect to our intellectual property. If a competitor learns our trade secrets (especially with regard to our marketing and risk management capabilities), if a third- party reverse engineers or otherwise uses our proprietary technology, or if an employee makes commercial use of the technology they develop for us, our business will be harmed. Pursuing a claim against a third-party or employee for infringement would be costly and our efforts may not be successful. If we are unable to protect our intellectual property, our competitors would have an advantage over us. If a third party cannot provide us products, services or support, it could disrupt our operations or reduce our revenue. Some of our lending activity depends on support we receive from third parties, including lenders who make loans to our customers under CSO programs and other third parties that provide services to facilitate lending, loan underwriting and payment processing. We also use third parties to support and maintain certain of our communication and information systems. If our relationship with any of these third parties end and we are unable to replace them or if they do not maintain quality and consistency in their services, we could lose customers which would substantially decrease our revenue and earnings. In Texas, we rely on third-party lenders to conduct business. Regulatory actions can materially and adversely affect our third-party product offerings. In Texas, we currently operate as a CSO or a CAB, arranging for unrelated third-parties to make loans to our customers. There are a limited number of third-party lenders that make these types of loans and there is significant demand and competition for the business of these companies. These third parties rely on borrowed funds to make consumer loans. If they lose their ability to make loans or become unwilling to make loans to us and we cannot find another lender, we would be unable to continue offering loans in Texas as a CSO or CAB, which would adversely affect our results of operations or financial condition. Our core operations are dependent upon maintaining relationships with banks and other third-party electronic payment solutions providers. Any inability to manage cash movements through the banking system or the Automated Clearing House (“ACH”) system would materially impact our business. We maintain relationships with commercial banks and third-party payment processors who provide a variety of treasury management services including depository accounts, transaction processing, merchant card processing, cash management and ACH processing. We rely on commercial banks to receive and clear deposits, provide cash for our store locations, perform wire transfers and ACH transactions and process debit card transactions. We rely on the ACH system to deposit loan proceeds into customer accounts and to electronically withdraw authorized payments from those accounts. It has been reported that U.S. federal regulators have taken or threatened actions, commonly referred to as “Operation Choke Point,” intended to discourage banks and other financial services providers from providing access to banking and third-party payment processing services to lenders in our industry. Additionally, legislation called the "Fair Access to Financial Services Act of 2020" has not yet been enacted and implemented. We can give no assurances that actions akin to Operation Choke Point will not intensify or resume, or that the effect of such actions against banks and/or third-party payment processors will not pose a threat to our ability to maintain relationships with commercial banks and third-party payment processors. The failure or inability of retail banks and/or payment providers to continue to provide services to us could adversely affect our operations. 31


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    Improper disclosure of customer personal data could result in liability and harm our reputation. Our costs could increase as we seek to minimize or respond to cybersecurity risks and security breaches. We store and process large amounts of personally identifiable information, including sensitive customer information. While, we believe that we maintain adequate policies and procedures, including antivirus and malware software and access controls, and use appropriate safeguards to protect against attacks, it is possible that our security controls over personal data and our employee training may not prevent improper disclosure of personally identifiable information. Such disclosure could harm our reputation and subject us to liability under laws that protect personal data, resulting in increased costs or loss of revenue. We are subject to cybersecurity risks and security breaches which could result in the unauthorized disclosure or appropriation of customer data. We may not be able to anticipate or implement effective preventive measures against these types of breaches, especially because the techniques change frequently or are not recognized until launched. We may need to expend significant resources to protect against security breaches or to address problems caused by breaches. Actual or anticipated attacks and risks may increase our expenses, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants. Our protective measures also could fail to prevent a cyber-attack and the resulting disclosure or appropriation of customer data. A significant data breach could harm our reputation, diminish customer confidence and subject us to significant legal claims, any of which may have a material adverse effect on us. A successful penetration of our systems could cause serious negative consequences, including significant disruption of our operations, misappropriation of our confidential information or that of our customers or damage to our computers or systems or those of our customers and counterparties, and could result in violations of applicable privacy and other laws, financial loss to us or to our customers, loss of confidence in our security measures, customer dissatisfaction, significant litigation exposure and harm to our reputation, all of which could have a material adverse effect on us. In addition, our applicants provide personal information, including bank account information when applying for loans. We rely on encryption and authentication technology licensed from third parties to provide the security and authentication to effectively secure transmission of confidential information. The technology we use to protect transaction data may be compromised due to advances in computer capabilities, new discoveries in cryptography or other developments. Data breaches can also occur as a result of non-technical issues. Our servers are also vulnerable to computer viruses, physical or electronic break-ins and similar disruptions, including “denial- of-service” type attacks. We may need to expend significant resources to protect against security breaches or to address problems caused by breaches. Security breaches, including any breach of our systems or unauthorized release of consumers’ personal information, could damage our reputation and expose us to litigation and possible liability. In addition, many of the third parties who provide products, services or support to us could also experience any of the above cyber risks or security breaches, which could impact our customers and our business and could result in a loss of customers, suppliers or revenues. In addition, federal and some state regulators have implemented, or are considering implementing, rules and standards to address cybersecurity risks and many U.S. states have already enacted laws requiring companies to notify individuals of data security breaches involving their personal data. These mandatory disclosures are costly to implement and may lead to widespread negative publicity, which may cause customers to lose confidence in the effectiveness of our data security measures. Risks Relating to Our Industry The CFPB authority over U.S. consumer lending could have a significant impact on our U.S. business. The CFPB regulates U.S. consumer financial products and services, including consumer loans offered by us. The CFPB has regulatory, supervisory and enforcement powers over providers of consumer financial products and services. The CFPB has examined our lending products, services and practices, and we expect the CFPB will continue to examine us. CFPB examiners have the authority to inspect our books and records and probe our business practices, and its examination includes review of marketing activities; loan application and origination activities; payment processing activities and sustained use by consumers; collections, accounts in default and consumer reporting activities as well as third-party relationships. As a result of these examinations of us or other parties, we could be required to change our products, services or practices, or we could be subject to monetary penalties, which could materially adversely affect us. The CFPB also has broad authority to prohibit unfair, deceptive or abusive acts or practices and to investigate and penalize financial institutions. In addition to assessing financial penalties, the CFPB can require remediation of practices, pursue administrative proceedings or litigation and obtain cease and desist orders (which can include orders for restitution or rescission or reformation of contracts). Also, if a company has violated Title X of the Dodd-Frank Act or related CFPB 32


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    regulations, the Dodd-Frank Act empowers state attorneys general and state regulators to bring civil actions to remedy violations. If the CFPB or state attorneys general or state regulators believe that we have violated any laws or regulations, they could exercise their enforcement powers which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows. The CFPB's Final Payday Rule, if implemented in its current form, could negatively affect our U.S. consumer lending business. On July 7, 2020, the CFPB issued the 2020 Final Rule, which rescinded part of the 2017 Final CFPB Payday Rule requiring enhanced underwriting and an "ability-to-repay" analysis; but kept intact the payment provisions around debiting consumer accounts. The 2017 Final CFPB Payday Rule is currently stayed as a result of an industry legal challenge and the effective date of the payment provisions is unknown. In light of this industry challenge, we cannot predict when it will ultimately go into effect or quantify its potential effect on us. If the payment provisions of the 2017 Final CFPB Payday Rule become effective in the current form, we will need to make changes to our payment processes and customer notifications in our U.S. consumer lending business. If we are not able to make all of these changes successfully, the payment provisions of the 2017 Final CFPB Payday Rule could have a material adverse impact on our business, prospects, results of operations, financial condition and cash flows. Refer to Business—Regulatory Environment and Compliance—U.S. Regulations—U.S. Federal Regulations— CFPB Rules." Following the Seila Law Supreme Court decision, President Biden requested and received the CFPB director's resignation and replaced her with an Acting Director. President Biden's nomination for the CFPB's next director (once confirmed by the Senate, which is anticipated) is expected to enhance the CFPB's supervisory and enforcement regime. Our industry is highly regulated. Existing and new laws and regulations could have a material adverse effect on our results of operations or financial condition and failure to comply with these laws and regulations could subject us to various fines, civil penalties and other relief. In the U.S. and Canada, our business is subject to a variety of statutes and regulations enacted at the federal, state, provincial and municipal levels. Accordingly, regulatory requirements, and the actions we must take to comply with regulations, vary considerably by jurisdiction. Managing this complex regulatory environment requires considerable compliance efforts. It is costly to operate in this environment, and it is possible that those costs will increase materially over time. This complexity also increases the risks that we will fail to comply with regulations which could have a material adverse effect on our results of operations or financial condition. These regulations affect our business in many ways, and include regulations relating to: • the terms of loans (such as interest rates, fees, durations, repayment terms, maximum loan amounts, renewals and extensions and repayment plans), the number and frequency of loans and reporting and use of state-wide databases; • underwriting requirements; • collection and servicing activity, including initiation of payments from consumer accounts; • the establishment and operation of CSOs or CABs; • licensing, reporting and document retention; • unfair, deceptive and abusive acts and practices and discrimination; • disclosures, notices, advertising and marketing; • loans to members of the military and their dependents; • requirements governing electronic payments, transactions, signatures and disclosures; • check cashing; • money transmission; • currency and suspicious activity recording and reporting; • privacy and use of personally identifiable information and consumer data, including credit reports; • anti-money laundering and counter-terrorist financing; • posting of fees and charges; and • repossession practices in certain jurisdictions where we operate as a title lender. These regulations affect the entire life cycle of our customer relationships and compliance with the regulations affects our loan volume, revenues, delinquencies and other aspects of our business, including our results of operations. We expect that regulation of our industry will continue and that laws and regulations currently proposed, or other future laws and regulations, will be enacted and will adversely affect our pricing, product mix, compliance costs or other business activities in a way that is detrimental to our results of operations or financial condition. In recent years, California, Ohio and Virginia adopted lending laws that had a significant adverse impact on our business. For a description of these significant impacts, see Item 1, “Business—Regulatory Environment and Compliance—U.S. Regulations— 33


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    U.S. State and Local Regulations—Recent and Potential Future Changes in the Law” for additional details. We may not be able to implement a strategy to replace our products in these states, or, if we do, that those replacement products will be free from legal attack. Failing to successfully manage product transitions would have a material adverse effect on our results of operations or financial condition. Several municipalities have passed laws that regulate aspects of our business, such as zoning and occupancy regulations to limit consumer lending storefronts. Similarly, nearly 50 Texas municipalities have enacted ordinances that regulate products offered under our CAB programs, including loan sizes and repayment terms. The Texas ordinances have forced us to make substantial changes to the loan products we offer and have resulted in litigation initiated by the City of Austin challenging the terms of our modified loan products. See Item 1, "Business—Regulatory Environment and Compliance—U.S. Regulations— State" and Note 8, “Commitments and Contingencies.” If additional local laws are passed that affect our business, this could materially restrict our business operations, increase our compliance costs or increase the risks associated with our regulatory environment. There are a range of penalties that governmental entities could impose if we fail to comply with the various laws and regulations that apply to us, including: • ordering corrective actions, including changes to compliance systems, product terms and other business operations; • imposing fines or other monetary penalties, which could be substantial; • ordering restitution, damages or other amounts to customers, including multiples of the amounts charged; • requiring disgorgement of revenues or profits from certain activities; • imposing cease and desist orders, including orders requiring affirmative relief, targeting specific business activities; • subjecting our operations to monitoring or additional regulatory examinations during a remediation period; • revoking licenses required to operate in particular jurisdictions; and/or • ordering the closure of one or more stores. Accordingly, if we fail to comply with applicable laws and regulations, it could have a material adverse effect on our results of operations or financial condition. Litigation, including class actions, and administrative proceedings against us or our industry could have a material adverse effect on our results of operations, cash flows or financial condition. We have been the subject of administrative proceedings and lawsuits, as well as class actions, in the past, and may be involved in future proceedings, lawsuits or other claims. See Item 1, "Business—Regulatory Environment and Compliance— U.S. Regulations—U.S. and State" and Note 8, “Commitments and Contingencies” for a description of material litigation. Other companies in our industry have also been subject to litigation, class action lawsuits and administrative proceedings regarding the offering of consumer loans and the resolution of those matters could adversely affect our business. We anticipate that lawsuits and enforcement proceedings involving our industry, and potentially involving us, will continue to be brought. We may incur significant expenses associated with the defense or settlement of lawsuits. The adverse resolution of legal or regulatory proceedings could force us to refund fees and interest collected, refund the principal amount of advances, pay damages or monetary penalties or modify or terminate our operations in particular jurisdictions. The defense of such legal proceedings, even if successful, is expensive and requires significant time and attention from our management. Settlement of proceedings may also result in significant cash payouts, foregoing future revenues and modifications to our operations. Additionally, an adverse judgment or settlement could result in the termination, non-renewal, suspension or denial of a license required for us to do business in a particular jurisdiction (or multiple jurisdictions). A sufficiently serious violation of law in one jurisdiction or with respect to one product could have adverse licensing consequences in other jurisdictions and/or with respect to other products. Thus, legal and enforcement proceedings could have a material adverse effect on our business, future results of operations, financial condition or our ability to service our debt obligations. Judicial decisions or new legislation could potentially render our arbitration agreements unenforceable. We include arbitration provisions in our customer loan agreements. Arbitration provisions require that disputes with be resolved through individual arbitration rather than in court. Thus, our arbitration provisions, if enforced, have the effect of shielding us from class action liability. The effectiveness of arbitration provisions depends on whether courts will enforce these provisions. A number of courts, including the California and Nevada Supreme Courts, have concluded that arbitration agreements with class action waivers are unenforceable, particularly where a small dollar amount is in controversy on an individual basis. If our arbitration provisions are found to be unenforceable, our costs to litigate and settle customer disputes could increase and we could face class action lawsuits, with a potential material adverse effect on our results of operations or financial condition. 34


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    The profitability of our bank-originated products could be adversely affected by the originating lenders. We do not originate nor control the pricing or functionality of Unsecured Installment loans originated by a bank. We have an agreement with a third party bank that has licensed our technology and underwriting services and makes all key decisions regarding the underwriting, product features and pricing. We generate revenues from this product through marketing and technology licensing fees, as well as through our participating interest. If the bank changed its pricing, underwriting or marketing of the installment loan product in a way that decreases revenues or increases losses, then the profitability of each loan could be reduced, which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows. If our relationship with the bank ended, we may not be able to find another suitable bank and new arrangements, if any, may result in significantly increased costs to us. Any inability to find another bank would adversely affect our ability to continue to facilitate the bank-originated Unsecured Installment product, which in turn could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows. Risk Factor Relating to our Investment in Katapult Our operating results may be adversely affected by our investment in Katapult. As of December 31, 2020, we own approximately 47.7% of Katapult, excluding unexercised options, or approximately 40% on a fully diluted basis. We apply the equity method of accounting to certain shares of common stock and interests that qualify as in-substance common stock. We recognize our share of Katapult's income or losses on a two-month lag related to the equity method investment. For the other Katapult shares we currently own, we use the historical cost minus impairment approach to account for the investment, which we remeasure upon (i) the indication of an impairment for (ii) the existence of an observable price change in an orderly transaction for the identical or similar security. In December 2020, we announced that we were in a position to benefit from Katapult's announced definitive merger agreement with FinServ. The announcement resulted in a material increase in our stock price. If the proposed merger is not completed or if the benefits we expect to realize from a completed merger fail to meet our expectations based on the market value of FSRV shares, the market price of our common stock may decrease materially and may prevent you from being able to sell your shares at or above the price you paid for them. Remeasurement of either (i) shares accounted for using the historical cost minus impairment approach prior to the occurrence of the merger or (ii) retained shares after the merger accounted for at fair value could cause additional volatility to our results of operations and may negatively affect our results. Additionally, we cannot provide assurance that our investment will (i) increase or maintain its value, or (ii) that we will not incur losses from the holding of such investments. We did not recognize an impairment or fair value adjustment during the year ended December 31, 2020. General Risk Factors We may fail to meet our publicly announced guidance or other expectations about our business and future operating results which would cause our stock price to decline. We may provide guidance about our business and future operating results. In developing this guidance, we make certain assumptions and judgments about our future performance, which are difficult to predict. Furthermore, analysts and investors may develop and publish their own projections of our business, which may form a consensus about our future performance. The assumptions used or judgments applied to our operations to project future operating and financial results may be inaccurate and could result in a material reduction in the price of our common stock, which we have experienced in the past. Our business results may also vary significantly from our guidance or our analyst’s consensus due to a number of factors which are outside of our control and which could adversely affect our operations and financial results. Furthermore, if we make downward revisions of previously announced guidance, or if our publicly announced guidance of future operating results fails to meet expectations of securities analysts, investors or other interested parties, the price of our common stock could decline. The market price of our common stock may be volatile. The stock market is highly volatile. As a result, the market price and trading volume for our stock may also be highly volatile, and investors may experience a decrease in the value of their shares, which may be unrelated to our operating performance or prospects. Factors that could cause the market price of our common stock to fluctuate significantly include: • our operating and financial performance and prospects and the performance of competitors; • our quarterly or annual earnings or those of competitors; 35


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    • conditions that impact demand for our products and services; • our ability to accurately forecast our financial results; • changes in earnings estimates or recommendations by securities or research analysts who track our common stock; • market and industry perception of our level of success in pursuing our growth strategy; • strategic actions by us or our competitors, such as acquisitions or restructurings; • changes in laws and regulations; • changes in accounting standards, policies, guidance, interpretations or principles; • arrival or departure of members of senior management or other key personnel; • the number of shares that are publicly traded; • sales of common stock by us, our investors or members of our management team; • unfavorable or misleading information published by securities or industry analysts; • factors affecting the industry in which we operate, including competition, innovation, regulation and the economy; and • changes in general market, economic and political conditions, including those resulting from natural disasters, health emergencies (such as COVID-19), telecommunications failures, cyber-attacks, civil unrest, acts of war, terrorist attacks or other catastrophic events. Any of these factors may result in large and sudden changes in the trading volume and market price of our common stock and may prevent you from being able to sell your shares at or above the price you paid for them. Following periods of volatility, stockholders may file securities class action lawsuits. Securities class action lawsuits are costly to defend and divert management’s attention and, if adversely determined, could involve substantial damages that may not be covered by insurance. The original founders of the company ("Founders") own a significant percentage of our outstanding common stock and their interests may conflict with ours or yours in the future. At December 31, 2020, the Founders owned 48% of our outstanding common stock and each is a member of our Board of Directors. Accordingly, the Founders collectively can exert control over many aspects of our company, including the election of directors. The Founders interests may not in all cases be aligned with your interests. Provisions in our charter documents could discourage a takeover that stockholders may consider favorable. Certain provisions in our governing documents could make a merger, tender offer or proxy contest involving us difficult, even if such events would be beneficial to your interests. Among other things, these provisions: • permit our Board of Directors to set the number of directors and fill vacancies and newly-created directorships; • authorize “blank check” preferred stock that our Board of Directors could use to implement a stockholder rights plan; • provide that our Board of Directors is authorized to amend or repeal any provision of our bylaws; • restrict the forum for certain litigation against us to Delaware; • establish advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings; • require that actions to be taken by our stockholders be taken only at an annual or special meeting of our stockholders, and not by written consent; and • establish certain limitations on convening special stockholder meetings. These provisions may delay or prevent attempts by our stockholders to replace members of our management by making it more difficult for stockholders to replace members of our Board of Directors. These provisions also may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our stockholders receiving a premium over the market price for their common stock. We believe these provisions will protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers or investors aiming to effect changes in management to negotiate with our Board of Directors and by providing our Board of Directors with more time to assess any proposal. However, such anti-takeover provisions could also depress the price of our common stock by acting to delay or prevent a change in control. Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. The choice of forum provision in our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes with stockholders. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees and may discourage many types of lawsuits. 36


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    ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES As of December 31, 2020, we leased 210 stores in the U.S. and 202 stores in Canada. We lease our principal executive offices, which are located in Wichita, Kansas, a FinTech office in Chicago, Illinois, administrative offices in Canada and centralized collections facilities in the U.S. and Canada. See Note 12, "Leases" of the Notes to Consolidated Financial Statements for additional information on our operating leases with real estate entities that are related to us through common ownership. ITEM 3. LEGAL PROCEEDINGS See Note 8, "Commitments and Contingencies" of the Notes to Consolidated Financial Statements for a summary of our legal proceedings and claims. ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 37


  • Page 50

    PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The principal market for our common stock is the NYSE and our shares of common stock are listed under the symbol "CURO." As of March 3, 2021, there were approximately 120 stockholders of record of our common stock. Holders of record do not include an indeterminate number of beneficial holders whose shares may be held through brokerage accounts and clearing agencies. Our Board of Directors approved a quarterly dividend program in 2020 for $0.055 per share ($0.22 annualized). Our Board of Directors has discretion to determine whether to pay dividends in the future based on a variety of factors, including our earnings, cash flow generation, financial condition, results of operations, the terms of our indebtedness and other contractual restrictions, capital requirements, business prospects and other factors our Board of Directors may deem relevant. In January 2021, the Board of Directors approved a similar dividend program for 2021. In December 2020, the Company repurchased a total of 155,153 shares at an average price of $8.44 due to the net-share- settlement of employee tax arrangements under our stock-based compensation plans. See Note 11, "Share-Based Compensation" of the Notes to Consolidated Financial Statements for additional details on our stock-based compensation plans. There were no shares purchased under publicly announced plans or programs during the three months ended December 31, 2020. ITEM 6. SELECTED FINANCIAL DATA This summary should be read in conjunction with our audited Consolidated Financial Statements and related Notes included in Item 8 of this 2020 Form 10-K. Additional information about the non-GAAP financial measures used below can be found in "— Supplemental Non-GAAP Financial Information." On February 25, 2019, we placed our U.K. operations into administration, which resulted in treatment of the U.K. segment as discontinued operations for all periods presented below. Refer to Note 22, "Discontinued Operations" of Item 8. Financial Statements and Supplementary Data for additional details. Year Ended December 31, (in thousands, except per share data) 2020 2019 2018 2017 2016 Selected Statement of Operations Data: Revenue $ 847,396 $ 1,141,797 $ 1,045,073 $ 924,137 $ 794,876 Gross Margin 308,359 378,616 325,470 335,165 282,967 Net income from continuing operations 74,448 103,898 16,459 60,609 75,644 Adjusted Net Income 74,328 130,059 92,346 86,839 75,611 Basic Earnings per Share from continuing operations $ 1.82 $ 2.33 $ 0.36 $ 1.58 $ 2.00 Diluted Earnings per Share from continuing operations $ 1.77 $ 2.26 $ 0.34 $ 1.54 $ 1.95 Adjusted Diluted Earnings per Share $ 1.77 $ 2.83 $ 1.93 $ 2.21 $ 1.95 EBITDA 170,550 230,848 120,837 203,137 199,644 Adjusted EBITDA 187,363 261,132 219,823 234,744 196,509 Gross Margin Percentage 36.4% 33.2% 31.1% 36.3% 35.6% Basic Weighted Average Shares 40,886 44,685 45,815 38,351 37,908 Diluted Weighted Average Shares 42,091 45,974 47,965 39,277 38,803 Selected Balance Sheet Data: Gross Loans Receivable $ 553,722 $ 665,828 $ 571,531 $ 413,247 $ 273,203 Less: allowance for loan losses (86,162) (106,835) (73,997) (64,127) (36,889) Loans receivable, net $ 467,560 $ 558,993 $ 497,534 $ 349,120 $ 236,314 Total assets of continuing operations $ 1,182,986 $ 1,081,895 $ 884,756 $ 802,089 $ 727,440 Debt 819,661 790,544 804,140 706,225 477,136 38

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