1068199--3/2/2006--COMPUCREDIT

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Our Cash Flows Are Dependent Upon the Cash Flows Received on the Receivables Underlying Our Securitizations and From Our Other Credit Products We may not successfully evaluate the creditworthiness of our customers and may not price our credit products so as to remain profitable. An economic slowdown could increase credit losses and/or decrease our growth. Because a significant portion of our reported income is based on management s estimates of the future performance of securitized receivables, differences between actual and expected performance of the receivables may cause fluctuations in net income. Increases in expected losses and delinquencies may prevent us from continuing to securitize receivables in the future on similar terms. Increased utilization of existing credit lines by cardholders would require us to establish additional securitization facilities or curtail credit lines. Increases beyond expected losses and delinquencies may cause us to incur losses on our retained interests. Our portfolio of receivables is not diversified and originates from customers whose creditworthiness is considered sub-prime. Seasonal consumer spending may result in fluctuations in our net income. Increases in interest rates will increase our cost of funds and may reduce the payment performance of our customers. Due to the lack of historical experience with Internet customers, we may not be able to successfully target these customers or evaluate their creditworthiness. We Are Substantially Dependent Upon Securitizations and Other Borrowed Funds in Order to Fund the Receivables That We Originate or Purchase. Our growth is dependent on our ability to add new securitization facilities. As our securitization facilities mature, they will be required to accumulate cash that therefore will not be available for operations. We may be unable to obtain capital from third parties needed to fund our existing securitizations or may be forced to rely on more expensive funding sources. The timing and volume of securitizations may cause fluctuations in quarterly income. The performance of our competitors may impact the costs of our securitization. We may be required to pay to investors in our securitizations an amount equal to the amount of securitized receivables if representations and warranties made to us by sellers of the receivables are inaccurate. Our Financial Performance Is, in Part, a Function of the Aggregate Amount of Receivables That Are Outstanding. Intense competition for customers may cause us to lose receivables to competitors. We may be unable to sustain and manage our growth. Our decisions regarding marketing can have a significant impact on our growth. Our operating expenses and our ability to effectively service our accounts are dependent on our ability to estimate the future size and general growth rate of the portfolio. We Operate in a Heavily Regulated Industry. Enforcement actions or inquiries by regulatory authorities under consumer protection laws and regulations may result in changes to our business practices, may make collection of account balances more difficult or may expose us to the risk of fines and litigation. Required changes in minimum payment levels could impact our business adversely. Adverse regulatory action with respect to issuing banks would adversely impact our business. Changes to consumer protection laws or changes in their interpretation may impede collection efforts or otherwise adversely impact our business practices. Changes in law may increase our credit losses and administrative expenses, restrict the amount of interest and other charges imposed on the credit card accounts or limit our ability to make changes to existing accounts. Recent changes in bankruptcy laws may have an adverse impact on our performance. The Retail Micro-Loans segment of our business operates in an increasingly hostile regulatory environment. Negative publicity may impair acceptance of our products. We Routinely Explore Various Opportunities to Grow Our Business, to Make Investments and to Purchase and Sell Assets. Other Risks of Our Business Unless we obtain a bank charter, we cannot issue credit cards other than through agreements with banks. We may not be able to purchase charged-off receivables at sufficiently favorable prices or terms for our Jefferson Capital operations to be successful. The analytical model we use to project credit quality may prove to be inaccurate. Because we outsource account-processing functions that are integral to our business, any disruption or termination of that outsourcing relationship could harm our business. We rely on Visionary Systems, Inc. for software design and support, and any disruption of our relationship with Visionary Systems would negatively impact our business. If we obtain a bank charter, any changes in applicable state or federal laws could adversely affect our business. If we ever consolidate the entities that hold our receivables, the changes to our financial statements are likely to be significant. Internet security breaches could damage our reputation and business. We recently entered the automobile lending business. Risks Relating to an Investment in Our Common Stock The price of our common stock may fluctuate significantly, and this may make it difficult for you to resell your shares of our common stock when you want or at prices you find attractive. Future sales of our common stock or equity-related securities in the public market, including sales of our common stock pursuant to share lending agreements or in short sales transactions by purchasers of convertible notes securities, could adversely affect the trading price of our common stock and our ability to raise funds in new stock offerings. We have the ability to issue preferred shares without shareholder approval. Our executive officers, directors and parties related to them, in the aggregate, control a majority of our voting stock and may have the ability to control matters requiring shareholder approval. We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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1068199--3/2/2006--COMPUCREDIT_CORP