On July 18, 2022, the Company announced its plan to close eleven branches and a consolidate its workforce, impacting approximately 44 employees.

The Company then announced on a Form 8-K filed on November 3, 2022 a change in its operating strategy and restructuring plan with the goal of reducing operating expenses and freeing up capital. As part of this plan, the Company shifted from a decentralized business model to a regionalized business model and entered into a loan servicing agreement with Westlake Portfolio Management, LLC ("WPM").

While the Company intended to continue Contract purchase and origination activities, albeit on a much smaller scale, its servicing, collections and recovery operations were outsourced to WPM. As of March 31, 2024, the Company has ceased originations of Direct Loans and Contract purchases.

As part of this restructuring plan, the Company announced the closure of its branches and planned to continue operating from its corporate headquarters in Clearwater, Florida. Consistent with this significant reduction in footprint, the Company reduced its workforce to approximately 7 employees as of March 31, 2024.

The Company anticipates that execution of its evolving restructuring plan will free up capital and permit the Company to allocate excess capital to increase shareholder returns, whether by acquiring loan portfolios or businesses or by investing outside of the Company’s traditional business.

On November 13, 2023, the Company and Nicholas Financial, Inc., a Florida corporation (“Nicholas”) and an indirect wholly-owned subsidiary of the Company, entered into a Master Asset Purchase Agreement (the “Purchase Agreement”) with Westlake Services, LLC dba Westlake Financial, a California limited liability company (“Westlake Financial”), pursuant to which the Company and Nicholas agreed to sell, and Westlake Financial agreed to purchase from the Company and Nicholas, substantially all of the Company’s and Nicholas’ assets, consisting of Nicholas’ motor vehicle retail installment sale contracts and unsecured consumer loan contracts (collectively, the “Contracts”) and the accounts receivable related to such Contracts (collectively, the “Receivables”).

Westlake is an affiliate of Westlake Portfolio Management, LLC, a California limited liability company (“WPM”), and Nicholas entered into a Loan Servicing Agreement (the “Servicing Agreement”) with WPM on November 3, 2022, pursuant to which WPM commenced servicing of the Receivables under the Contracts in December 2022 and has continued such servicing to date. In connection with entering into the Purchase Agreement, the Company has ceased new loans originations, and WPM is expected to continue to service such Receivables for Nicholas until the closing of the transaction contemplated by the Purchase Agreement. In addition to other customary closing conditions, the closing under the Purchase Agreement has been subject to the approval of the shareholders of the Company. The Company received shareholder approval for the closing of the transaction contemplated by the Purchase Agreement on April 15, 2024.

Following the closing of the transaction contemplated by the Purchase Agreement, the Company intends to explore strategic alternatives for the use of the net proceeds of the asset sale and to seek to maximize the value of deferred tax assets available to the Company.

Costs related to the restructuring plan are summarized as follows:


	(In thousands)
	Total Cost Estimated		Total Incurred as of March 31, 2024		Remaining cost		Incurred for the Fiscal Year ended March 31, 2024
Branch Closures	$	3,315	$	3,315	$	—	$	112
Severance		598		598		—		28
Cease-use of contractual services		1,047		1,047		—		298
Professional fees		1,239		1,026		213		766
Other		34		34		—		17
Total restructuring cost	$	6,233	$	6,020	$	213	$	1,221