Jefferson Capital (JCAP) risk factors, FY2025 10-K

Risks Related to our Business

1. 01A deterioration in the economic or inflationary environment in the countries in which we operate could have an adverse effect on our business and results of operations
2. 02We may not be able to continually replace our nonperforming loans with additional portfolios sufficient to operate efficiently and profitably, and/or we may not be able to purchase nonperforming loans at appropriate prices
3. 03We may not be able to collect sufficient amounts on our nonperforming loans to fund our operations
4. 04Our collections may decrease if certain types of insolvency proceedings and bankruptcy filings involving liquidations increase
5. 05We outsource and offshore certain activities related to our business to third parties. Any disruption or failure of these third parties to provide these services could adversely affect our business operations, financial condition and reputation
6. 06Disruptions at our co-sourced operation in Mumbai could adversely impact our business
7. 07Goodwill impairment charges could negatively impact our net income and stockholders’ equity
8. 08Our loss contingency accruals may not be adequate to cover actual losses
9. 09of a legal proceeding or claim could adversely impact our business, financial condition, results of operations, or liquidity
10. 10Our expected collections from the Conn’s and Bluestem Portfolio Purchases may not be realized, or our expenses from the FTE that were formerly employed by Conn’s may be higher than we anticipated, which may adversely impact our financial results

Risks Related to Our International Operations

1. 11Our international operations expose us to risks, which could harm our business, financial condition and results of operations
2. 12We may experience losses on portfolios consisting of new asset classes of receivables or receivables in new geographies due to our lack of collection experience with these receivables, which could harm our business, financial condition and results of operations
3. 13Compliance with complex and evolving international and U.S. laws and regulations that apply to our international operations could increase our cost of doing business in international jurisdictions
4. 14obligations, and effective tax rate

Risks Related to Government Regulation and Litigation

1. 15Our ability to collect and enforce our nonperforming and performing loans may be limited under federal, state and international laws, regulations and policies
2. 16Failure to comply with government regulation of the collections industry could result in penalties, fines, litigation, damage to our reputation or the suspension or termination of our ability to conduct our business
3. 17certain jurisdictions, subject us to increased regulation, increase our costs or adversely affect our ability to purchase, own and/or collect our receivables
4. 18Investigations, reviews or enforcement actions by governmental authorities may result in changes to our business practices; negatively impact our deployment volume; make collection of receivables more difficult; or expose us to the risk of fines, penalties, restitution payments and litigation
5. 19Changes in tax provisions or exposures to additional tax liabilities could have an adverse tax effect on our financial condition
6. 20Recent changes in U.S. trade policy could have an adverse effect on our business, financial condition and results of operations

Risks Related to Information Technology, Cybersecurity and Intellectual Property

1. 21The regulation of data privacy in the United States and globally, or an inability to effectively manage our data governance structures, could have an adverse effect on our business, financial condition and results of operations by increasing our compliance costs or decreasing our competitiveness
2. 22We are dependent on our data gathering systems and proprietary consumer profiles, and if access to such data was lost or became public, our business could be materially and adversely affected
3. 23We and our third-party providers are exposed to cybersecurity risks and incidents which could damage our reputation and adversely impact our business and financial results
4. 24The underperformance or failure of our information technology infrastructure, networks or communication systems could result in a loss in productivity, loss of competitive advantage and business disruption
5. 25We may not be able to adequately protect the intellectual property rights upon which we rely and, as a result, any lack of protection may diminish our competitive advantage
6. 26our business, financial condition and results of operations
7. 27Our use of machine learning and AI technologies could adversely affect our products and services, harm our reputation, or cause us to incur liability resulting from harm to individuals or violation of laws and regulations or contracts to which we are a party

Risks Related to Our Financial Condition and Indebtedness

1. 28We expect to use leverage in executing our business strategy, which may have adverse consequences
2. 29We may not be able to generate sufficient cash flow or complete alternative financing plans, including raising additional capital, to meet our debt service obligations
3. 30The agreements governing our indebtedness include provisions that may restrict our financial and business operations
4. 31Adverse changes in our credit ratings could have a negative impact on our business, financial condition and results of operations

Risks Related to Ownership of Our Common Stock

1. 32The JCF Stockholders control us, and their interests may conflict with ours or yours in the future, including with respect to matters that involve corporate opportunities
2. 33In addition, our amended and restated certificate of incorporation provides that the JCF Stockholders have the right to designate four nominees for election to our board of directors, which number shall decline in the future in proportion to any declines in the JCF Stockholders’ ownership in us
3. 34An active, liquid trading market for our common stock may not be sustained, which may limit your ability to sell your shares
4. 35There can be no assurance that we will continue to declare cash dividends or repurchase our shares at all or in any particular amounts
5. 36We are an emerging growth company and our compliance with the reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors
6. 37If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our shares or if our results of operations do not meet their expectations, our stock price and trading volume could decline
7. 38The number of shares of our common stock eligible for future sale could adversely affect the market price of our stock
8. 39Our anti-takeover provisions may delay or prevent a change of control, which could adversely affect the price of our common stock
9. 40Certain anti-takeover provisions under Delaware law also apply to our company. In general, Section 203 of the Delaware
10. 41We are a holding company and rely on dividends, distributions, and other payments, advances, and transfers of funds from our subsidiaries to meet our obligations