Nicholas Financial : Acquisition/Asset Disposal - Form 8-K

Item 2.01 Completion of Acquisition or Disposition of Assets

As previously disclosed by Nicholas Financial, Inc. (the "Company") in a Form 8-K filed with the Securities and Exchange Commission (the "SEC") on November 17, 2023 (the "November 8-K"), 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"), pursuant to which the Company and Nicholas agreed to sell, and Westlake agreed to purchase 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"). A copy of the Purchase Agreement is included as Exhibit 2.1 to this Form 8-K by incorporation by reference.

As also previously disclosed by the Company in the November 8-K, 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. In connection with entering into the Purchase Agreement, the Company ceased new originations, and WPM continued to service the Receivables for Nicholas until the closing of the transactions contemplated by the Purchase Agreement.

On April 26, 2024 the transactions contemplated by the Purchase Agreement closed with an aggregate purchase price of $65,617,598, pursuant to the terms of the Purchase Agreement. After adjustments to the gross aggregate purchase price, the Company received net cash proceeds of $40,633,835 and, pursuant to the Purchase Agreement, retained $25,894,206 in principal and interest cash payments collected by the Company prior to the closing that otherwise would have been paid to Westlake.