Nicholas Financial : Costs Associated with Exit/Disposal - Form 8-K

Item 2.05 Costs Associated with Exit or Disposal Activities.

In connection with the entry by Nicholas Financial, Inc. (the "Company") and Nicholas Financial, Inc., a Florida corporation

("Nicholas") and an indirect wholly-owned subsidiary of the Company, into the Master Asset Purchase Agreement disclosed in Item 1.01 of Form 8-K reported on November 17, 2023, which disclosure is incorporated herein by reference, the Company determined on November 14, 2023 to reduce the Company's workforce by approximately 63% of its full-time employees and close the Company's central business operations hub located in Rock Hill, South Carolina.

The expected total charges associated with the reduction in force and closure of central business operations hub are between $0.2 million and $0.4 million, consisting of cash expenditures between $0.2 million and $0.4 million, and approximately $0.1 million of non-cash impairment charges associated with lease obligations.

The Company expects that the majority of lease terminations and employee-related charges will be recorded in the third quarter of Fiscal Year 2024.

The above estimates of charges and timelines could change as the Company's plans evolve and become finalized.

Forward-Looking Statements

This Current Report on Form 8-K contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended (the "PSLRA"). These statements, which are not statements of historical fact, may contain estimates, assumptions, projections and/or expectations regarding the Company's annualized future cost savings and expenses associated with the announced reduction in force and real estate footprint reduction. Forward-looking statements are often identified by words or phrases such as "anticipate," "estimate," "plan," "expect," "believe," "intend," "foresee," or the negative of these terms or other similar variations thereof.

These forward-looking statements are not guarantees of future performance and are subject to a number of factors and uncertainties that could cause the Company's actual results and experiences to differ materially from the anticipated results and expectations expressed in the forward-looking statements.

Among the factors that may cause actual results and expectations to differ from anticipated results and expectations expressed in forward-looking statements include the possibility that assumptions underlying the Company's expected benefits and the estimates of annualized future cost savings and expenses associated with the reduction in force and real estate footprint reduction prove inaccurate, that the reduction in force and/or real estate footprint reduction results in less costs savings than projected, that the Company incurs greater than estimated expenses in connection with the reduction in force and/or real estate footprint reduction, and that the Company's business, financial condition or operating results are adversely affected by the reduction in force and/or real estate footprint reduction. The forward-looking statements contained in this Form 8-K are also subject to other risks and uncertainties, including those described in the Company's Annual Report on Form 10-K for our fiscal year ended March 31, 2023, Quarterly Reports on Form 10-Q issued in fiscal year 2024 and other filings with the SEC.

Shareholders of the Company are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. The Company does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after the date of this filing, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.