350557--1/13/2009--STEN

related topics

{condition, economic, financial}

{customer, product, revenue}

{acquisition, growth, future}

{competitive, industry, competition}

{financial, litigation, operation}

{loan, real, estate}

{debt, indebtedness, cash}

{control, financial, internal}

{personnel, key, retain}

RISKS RELATED TO OUR CONSOLIDATED BUSINESSES The diversity of our current and future businesses may divert management attention from each of our businesses, intensify the risks of our businesses, and result in poor consolidated financial performance. If we cannot successfully develop a new business, integrate it into our existing businesses, and realize the anticipated benefits of the new business, our financial condition and operating results may suffer. Our historical financial results may not be indicative of future results because of our change in strategic direction. Our subsidiaries own nearly all of our assets and earn nearly all of our total operating revenues and our ability to repay our indebtedness depends upon the performance of these subsidiaries and their ability to make distributions to us. We are dependent on management and key personnel to succeed. Our management has limited experience in the automobile finance business, the payday lending business, or the retail used car business. Material weaknesses in our internal controls could have a material adverse effect on us. RISKS RELATED TO OUR AUTO FINANCE BUSINESS The future growth of our auto finance business depends significantly on the availability of capital resources and if such capital is not timely available to us on terms acceptable to us, our auto finance business may suffer. Our automobile finance business would be harmed if we cannot maintain and expand relationships with independent dealers. Because we loan money to borrowers with impaired credit or limited credit histories, we may have a higher risk of loan delinquencies and defaults. The used car dealer inventory financing program we offer exposes us to losses that are generally greater than similar types of inventory financing. The automobile finance business is highly competitive. The automobile finance industry is highly regulated by federal, state and local laws. Adverse economic conditions, particularly in Arizona, could adversely affect our auto finance business. Our automobile finance business is subject to seasonality that may cause our quarterly operating results to fluctuate materially. Fluctuations in interest rates could adversely affect our net interest income and the profitability of our lending activities. Potential legislative initiatives and future regulatory requirements could affect our automobile lending business. Defaults by consumers on their automobile loans and the resulting repossessions of their vehicles may expose us to risk of increased default by our dealer-partners who guaranty the consumer installment notes, or potential disputes, and liability relating to the vehicle repossessions. Negative public opinion could damage our reputation and adversely impact our earnings. RISKS RELATED TO THE BUY HERE/PAY HERE USED AUTOMOTIVE RETAIL AND FINANCE INDUSTRY Our automotive retail and finance business may experience a higher risk of delinquency and default than traditional lenders because we loan money to credit-impaired borrowers. A reduction in the availability or access to sources of inventory could be limited. The used automotive retailing industry is highly competitive and fragmented. An economic slowdown will have adverse consequences for the used automotive industry and may have greater consequences for the non-prime segment of the industry. The used automotive retail industry operates in a highly regulated environment. Our business is geographically concentrated and therefore, our results of operations may be adversely affected by unfavorable conditions in our local markets. RISKS RELATING TO OUR CONTRACT MANUFACTURING BUSINESS Our contract manufacturing business is dependent on a major customer. Our contract manufacturing business depends upon raw materials and fluctuations in the cost of raw materials may adversely affect our contract manufacturing business.

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350557--1/13/2009--STEN_CORP