QC : 2021 Audited Annual Financial Statements

QC HOLDINGS, INC.

2021 Consolidated Financial Statements

GRANT THORNTON LLP

1201 Walnut Street, Suite 2200 Kansas City, MO 64106

• D +1 816 412 2400

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors QC Holdings, Inc.

Opinion

We have audited the consolidated financial statements of QC Holdings, Inc. (a Kansas Corporation) and subsidiaries (collectively, the "Company"), which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of QC Holdings, Inc. and subsidiaries as of December 31, 2021 and 2020, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for opinion

We conducted our audits of the consolidated financial statements in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of management for the financial statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date the financial statements are issued.

GT.COM

Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd (GTIL). GTIL and each of its member firms are separate legal entities and are not a worldwide partnership.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with US GAAS, we:

• x Exercise professional judgment and maintain professional skepticism throughout the audit.

• x Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

• x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.

• x Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

• x Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Kansas City, Missouri April 22, 2022

QC HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

December 31, 2021

December 31, 2020

ASSETS

Current assets:

Cash and cash equivalents ............................................................................................ Restricted cash .............................................................................................................. Loans receivable, less allowance for losses of $6,568 and $6,142 at December 31, 2021 and 2020, respectively ....................................... Prepaid expenses and other current assets .....................................................................

$

14,120 $ 12,174

1,150 951

36,072 30,662

3,788 6,654

Total current assets ..................................................................................................

55,130 50,441

Non-current loans receivable, less allowance for losses of $279 and $287 at December 31, 2021 and 2020, respectively ................................................

1,741 1,683

Property and equipment, net ............................................................................................. Right-of-use asset, net ....................................................................................................... Goodwill and intangible assets, net .................................................................................... Deferred income taxes ...................................................................................................... Other assets, net ................................................................................................................

6,874 9,557

21,324 22,102

5,337 3,716

282 1

2,258 317

Total assets ..............................................................................................................

$

92,946

$

87,817

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable ......................................................................................................... Accrued expenses and other current liabilities .............................................................. Accrued compensation and benefits ............................................................................. Deferred revenue ......................................................................................................... Lease liability ............................................................................................................... Debt due within one year .............................................................................................

$

451 $ 263

5,618 3,424

5,310 7,492

596 355

4,124 4,222

13,700 7,928

Total current liabilities .............................................................................................

29,799 23,684

Lease liability .................................................................................................................... Long-term debt, less current portion ................................................................................. Other non-current liabilities ..............................................................................................

19,152 19,869

8,250 7,500

- 527

Total liabilities .........................................................................................................

57,201

51,580

Commitments and contingencies .......................................................................................

Stockholders' equity:

Common stock, $0.01 par value: 75,000,000 shares authorized; 20,700,250 shares issued, 17,720,534 outstanding and 2,979,716 in treasury at December 31, 2021; 20,700,250 shares issued, 17,333,034 outstanding and 3,367,216 in treasury at December 31, 2020 ......

207 207

Additional paid-in capital ............................................................................................. Retained earnings ......................................................................................................... Treasury stock, at cost .................................................................................................. Accumulated other comprehensive income ..................................................................

59,251 59,143

1,754 2,373

(25,542)

(25,542)

Total stockholders' equity ........................................................................................

75 35,745

56 36,237

Total liabilities and stockholders' equity ..............................................................

$

92,946

$

87,817

See accompanying notes to consolidated financial statements.

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