# Atlanticus Holdings Corp: Form 10-Q/A for the period ended Mar 31, 2023

- Company: [Atlanticus Holdings Corp](/companies/atlc.md) (CIK 1464343)
- Form: 10-Q/A
- Filed: 2023-11-09
- Accepted by EDGAR: Nov 8, 2023, 21:54 ET
- Period: 2023-03-31
- Accession: 0001437749-23-031048
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1464343/000143774923031048/atlc20230331_10qa.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1464343/000143774923031048/

## Controls and procedures

As filed, 6,475 characters.

### Evaluation of disclosure controls and procedures

On August 7, 2023, the Company’s management, including the principal executive officer and principal financial officer, in consultation with the Company’s independent registered public accounting firm, BDO USA, P.C. (“BDO”), determined that it was necessary for the Company to amend its prior disclosure in regards to Item 9A Controls and Procedures in the Form 10-K filed by the Company on March 15, 2023 (the “Form 10-K”). As part of the preparation of the Company’s June 30, 2023 interim financial statements, the Company’s management determined that they did not implement effective review controls and retain sufficient documentary evidence to support the precision of review over the development of cash flow forecasts used in the calculation of the fair value estimate of loans, interest and fees receivable at fair value. Thus, these controls were not operating effectively. This deficiency represents a material weakness in the Company’s internal control over financial reporting at March 31, 2023 and December 31, 2022. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. As a result, Management’s Report on Internal Control Over Financial Reporting included in Item 9A of the Company’s Form 10-K and BDO’s opinion relating to the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 included in the Form 10-K should no longer be relied upon.

The material weakness described above did not result in a misstatement to the Company’s annual or interim consolidated financial statements.

Management, with the participation and supervision of our principal executive officer and our principal financial officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Act) as of March 31, 2023, the end of the period covered by the Original Form 10-Q and this Amendment. The Company’s disclosure controls and procedures are designed to ensure that information the Company is required to disclose in reports that it files or submits under the Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were not effective as of March 31, 2023 because of the material weakness described above.

Notwithstanding this material weakness, management has concluded that no material misstatements exist in the consolidated financial statements as filed in the Original Form 10-Q and such financial statements present fairly, in all material respects, our financial position as of March 31, 2023 and December 31, 2022, and the results of operations and cash flows for the three months ended March 31, 2023 and March 31, 2022, in conformity with accounting principles generally accepted in the United States. Accordingly, there are no changes to the Company’s previously-reported consolidated financial statements.

### Remediation Plan

The Company’s management is committed to maintaining a strong internal control environment. In response to the material weakness identified above, management, with the oversight of the Audit Committee of the Board of Directors, evaluated the material weakness described above and designed a remediation plan to enhance the Company’s internal control environment. To remediate the material weakness, the Company’s management performed an evaluation of the relevant controls, and implemented procedures to enhance documentation, and retain incremental evidence that supports the effectiveness of controls related to the development and review of cash flow forecasts used in the calculation of the fair value estimate of loans, interest and fees receivable, at fair value. These enhanced procedures were implemented as of June 30, 2023, and will be monitored for effectiveness.

### Changes in internal control over financial reporting

There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Act) during the quarter ended March 31, 2023, that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

### Inherent limitation on the effectiveness of internal controls

The Company’s management, including its principal executive officer and principal financial officer, do not expect that the Company’s disclosure controls and procedures or the Company’s internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Filed Nov 9, 2023.
Source: SEC EDGAR, the filing index for accession 0001437749-23-031048. Last ingested by Listed: Nov 5, 2026, 18:13 ET. No prices; not investment advice.