WESTERN CAPITAL RESOURCES, INC. files 10-Q in a filing on Wednesday, May 15.

oPQH Wireless, Inc. (PQH) (100%) – operates 201 cellular retail stores as of March 31, 2019 (116 100% owned plus 85 through majority owned subsidiaries), as an exclusive dealer of the Cricket brand.

oJ & P Park Acquisitions, Inc. (JPPA) (100%) – an online and direct marketing distribution retailer of 1) live plants, seeds, holiday gifts and garden accessories selling its products under Park Seed, Jackson & Perkins, and Wayside Gardens brand names and 2) home improvement and restoration products operating under the Van Dyke’s Restorers brand, as well as a seed wholesaler under the Park Wholesale brand.

oJ & P Real Estate, LLC (JPRE) (100%) – owns real estate utilized as JPPA’s distribution and warehouse facility and the corporate offices of JPPA.

oWyoming Financial Lenders, Inc. (WFL) (100%) – owns and operates 38 ‘payday’ stores in six states (Iowa, Kansas, Nebraska, North Dakota, Wisconsin and Wyoming) as of March 31, 2019 providing sub-prime short-term uncollateralized non-recourse ‘cash advance’ or ‘payday’ loans typically ranging from $100 to $500 with a maturity of generally two to four weeks, sub-prime short-term uncollateralized non-recourse installment loans typically ranging from $300 to $800 with a maturity of six months, check cashing and other money services to individuals.

oExpress Pawn, Inc. (EPI) (100%) – owns and operates retail pawn stores (three as of March 31, 2019) in Nebraska and Iowa providing collateralized non-recourse pawn loans and retail sales of merchandise obtained from forfeited pawn loans or purchased from customers.

The Company’s Consumer Finance segment activities are highly regulated under numerous federal, state, and local laws, regulations and rules, which are subject to change. New laws, regulations or rules could be enacted or issued, interpretations of existing laws, regulations or rules may change and enforcement action by regulatory agencies may intensify. Over the past several years, consumer advocacy groups and certain media reports have advocated governmental and regulatory action to prohibit or severely restrict sub-prime lending activities of the kind conducted by the Company. After several years of research, debate, and public hearings, in October 2017 the U.S. Consumer Financial Protection Bureau (CFPB) adopted a new rule for payday lending. The rule, originally scheduled to go into effect in August 2019, would impose significant restrictions on the industry, and it is expected that a large number of lenders would be forced to close their stores. The CFPB’s studies projected a reduction in the number of lenders by 50%, while industry studies forecast a much higher attrition rate if the rule is implemented as originally adopted.

A portion of accounts receivable are unsettled credit card sales from the prior one to five business days. This makes up 40% and 57% of the net accounts receivable balance at March 31, 2019 and December 31, 2018, respectively.

The Company is party to a Credit Agreement with a financial institution entered into on April 22, 2016 and subject to subsequent amendments. The Credit Agreement provides the Company with a revolving line of credit facility in an aggregate amount up to $3,000,000, with a maturity date of April 21, 2020 and an acquisition loan facility in an aggregate amount of up to $9,000,000, with a maturity date of April 21, 2020. The revolver and the acquisition loan facility bear interest at a floating per annum rate equal to one-month LIBOR plus 3.50%, adjusted on a monthly basis. Funds advanced under the acquisition loan facility mature five years from the date of advance. At March 31, 2019, the entire $12,000,000 of credit was available under the credit facilities. See Note 16 for additional terms and conditions related to the Credit Agreement.

The provision for income taxes for continuing operations is 20.9% and 121.3% of income before the provision for income taxes for the three month period ended March 31, 2019 and 2018, respectively. The significant difference in rate is the result of the impact of net income attributable to noncontrolling interests not being subjected to income tax at the corporate level. Rather the ‘passthrough’ taxable income is taxed to the noncontrolling interests at an individual level.

Our Consumer Finance segment revenues decreased $0.16 million, or 5.8%, for the quarter ended March 31, 2019 compared to the quarter ended March 31, 2018. This segment and the industry continues to experience declines in loan and check cashing activity. Due to legislative changes and decreased loan volume, we closed two installment loan centers during the quarter. The decline in volume is having a direct impact on operating results. Our net income period over period decreased 29.6%.

Provision for income tax expense for continuing operations for the quarter ended March 31, 2019 was $0.34 million compared to income tax benefit of ($0.08) million for the quarter ended March 31, 2018 for an effective rate of 20.9% and 121.3%, respectively.

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