What changed in this filing

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Item 1A. Risk Factors

2025-03-12 compared with 2024-03-15 · 58 added, 81 removed, 632 unchanged (18% of the section changed)

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of this report, and also under the caption “Cautionary Note Regarding Forward-Looking Statements.” One reason for our expectation

is that we have had positive net income in each of the twelve fiscal years ended December 31, 2023, although not in every quarter within

is that we have had positive net income in each of the thirteen fiscal years ended December 31, 2024, although not in every quarter within

Our Results of Operations Will Depend on Our Ability

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Our current short-term funding capacity is $535 million, comprising

two credit facilities, each with a maximum credit limit of $200 million.

Both warehouse credit facilities have a revolving period during

which we may receive advances secured by contributed automobile contracts, followed by an amortization period during which no further

advances may be made, but prior to which outstanding advances are due and payable.

See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Liquidity”.

two credit facilities.

Both warehouse credit facilities have a revolving period during which we may receive advances secured by contributed

automobile contracts, followed by an amortization period during which no further advances may be made, but prior to which outstanding

advances are due and payable.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations –

Liquidity and Capital Resources – Liquidity”.

Our access to financing sources

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the amount of a loss in the event of default.

Additionally, higher gasoline prices, declining stock market values, unstable real estate

values, increasing unemployment levels, general availability of consumer credit, changes in vehicle ownership trends and other factors

that impact consumer confidence or disposable income could increase loss frequency and decrease demand for automobiles as well as weaken

collateral values on certain types of automobiles.

In addition, during an economic slowdown or recession, our servicing costs may increase

without a corresponding increase in our revenue.

No assurance can be given that the underwriting criteria and collection methods we employ

will afford adequate protection against these risks.

Any sustained period of increased delinquencies, defaults, repossessions or losses

or increased servicing costs could adversely affect our financial position, liquidity, results of operation and our ability to enter into

future financing transactions.

Additionally, higher gasoline prices, the introductions of trade tariffs, declining stock

market values, unstable real estate values, increasing unemployment levels, general availability of consumer credit, changes in vehicle

ownership trends and other factors that impact consumer confidence or disposable income could increase loss frequency and decrease demand

for automobiles as well as weaken collateral values on certain types of automobiles.

In addition, during an economic slowdown or recession,

our servicing costs may increase without a corresponding increase in our revenue.

No assurance can be given that the underwriting criteria

and collection methods we employ will afford adequate protection against these risks.

Any sustained period of increased delinquencies,

defaults, repossessions or losses or increased servicing costs could adversely affect our financial position, liquidity, results of operation

and our ability to enter into future financing transactions.

We sell repossessed automobiles

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increased interest rates multiple times in 2022 and 2023.

As a result, we have experienced increased interest expense in 2023.

rates on risk-free debt continue to increase, or if our spread above risk-free rates continue to increase, or both, we would expect a

continued increase in interest expense.

If interest rates in general should continue to rise, our expenses would likewise continue rise,

which could have a material adverse effect on our financial position, liquidity, results of operation and our ability to enter into future

financing transactions.

As a result, we experienced increased interest expense in 2023.

Federal Reserve lowered short term interest rates.

The pace and direction of additional interest rate changes remain uncertain.

rates on risk-free debt increase, or if our spread above risk-free rates increase, or both, we would expect an increase in interest expense.

If interest rates in general should rise, our expenses would likewise rise, which could have a material adverse effect on our financial

position, liquidity, results of operation and our ability to enter into future financing transactions.

If We Are Unable to Compete Successfully with our Competitors,

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originations, accounting and collection systems to service our portfolio of automobile contracts.

Such systems are vulnerable to damage

or interruption from natural disasters, power loss, telecommunication failures, terrorist attacks, computer viruses and other events.

A significant number of our systems are not redundant, and our disaster recovery planning is not sufficient for every eventuality.

systems are also subject to break-ins, sabotage and intentional acts of vandalism by internal employees and contractors as well as third

Despite any precautions we may take, such problems could result in interruptions in our services, which could harm our reputation

and financial condition.

We do not carry business interruption insurance sufficient to compensate us for losses that may result from interruptions

in our service as a result of system failures.

Such systems problems could materially and adversely affect our results of operations,

financial conditions and cash flows.

We also rely on third-party service

providers to facilitate certain aspects of our business.

Our systems and the systems of our third-party service providers are vulnerable

to damage or interruption from natural disasters, power loss, telecommunication failures, terrorist attacks, cyberattacks, computer viruses

and other events.

A significant number of our systems are not redundant, and our disaster recovery planning is not sufficient for every

Our systems are also subject to break-ins, sabotage and intentional acts of vandalism by internal employees and contractors

as well as third parties.

Our third-party service providers face similar threats.

Despite any precautions we may take, such problems could

result in interruptions in our services, litigation, and regulatory exposure, which could harm our reputation and financial condition.

We do not carry business interruption insurance sufficient to compensate us for losses that may result from interruptions in our service

as a result of system failures.

Such systems problems could materially and adversely affect our results of operations, financial conditions

and cash flows.

A Breach in the Security of Our Systems Could Result in the Disclosure

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not be able to anticipate, detect or recognize threats to our systems or to implement effective preventive measures against all security

breaches, especially because the techniques used change frequently or are not recognized until launched, and because cyberattacks can

originate from a wide variety of sources, including third parties outside the Company such as persons who are associated with external

service providers or who are or may be involved in organized crime or linked to terrorist organizations.

breaches, especially because the techniques used change frequently, or are not recognized until launched, because of the rising use of

artificial intelligence, and because cyberattacks can originate from a wide variety of sources, including third parties outside the Company

such as persons who are associated with external service providers or who are or may be involved in organized crime or linked to terrorist

organizations.

Such persons may also attempt

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These risks may increase in

the future as we continue to increase our mobile-payment and other internet-based product offerings and expands our use of web or cloud-based

the future as we continue to increase our mobile-payment and other internet-based product offerings and expand our use of web or cloud-based

products and applications.

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information, or damage to our computers or systems, and could result in violations of applicable privacy and other laws, financial loss

to us or to our customers, customer dissatisfaction, significant litigation exposure and harm to our reputation, any or all of which could

have a material adverse effect on us.

to us or to our customers, customer dissatisfaction, significant litigation and regulatory exposure and harm to our reputation, any or

all of which could have a material adverse effect on us.

Because We Are Subject to Many Restrictions in Our Existing Credit

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reduce our income and book value.

We May Have Rescission

Liability in Connection With Sales of Our Subordinated Renewable Notes to Certain Purchasers.

We filed a registration

statement on Form S-3 with respect to various securities, including our renewable unsecured subordinated notes, on May 28, 2015, and filed

amendments to the registration statement on June 26, 2015, and July 27, 2015 (such registration statement, as so amended, the “Former

Registration Statement”).

The Former Registration Statement was declared effective on August 26, 2015 (the “Former Registration

Statement Effective Date”).

Rule 415(a)(5) under the Securities Act of 1933, as amended (the “Securities Act”), provides

that a shelf registration statement such as the Former Registration Statement expires three years after the official effective date.

Former Registration Statement expired on August 26, 2018;

however, the Company continued to conduct offers and sales and renewals after

Additionally, with respect to the Former Registration Statement, the Company failed to file certain prospectus supplements

relating to certain sales.

Lastly, offers and sales of Renewable Notes and renewals of outstanding notes were made for amounts beyond

the amount of securities covered by the registration statement.

These activities may result in certain of these purchasers having a statutory

right to rescind their purchases.

As a result, we could be required to repurchase some or all of such notes at the original sale price

plus statutory interest, less the amount of any income received by the purchasers.

As of March 1, 2024, there were approximately $3 million

of such notes outstanding and sold within the preceding twelve months.

That figure includes renewals of previously sold notes, but excludes

notes that we have repaid, and excludes notes that we sold or renewed pursuant to the registration statement filed in on June 15, 2023,

subsequently amended on August 7, 2023 and November 20, 2023, and declared effective on November 30, 2023.

Our results of operations,

financial condition and cash flows could be materially and adversely affected if a substantial number of purchasers of such notes were

to successfully assert rescission rights or if we were to be assessed substantial penalties by regulatory authorities.

If holders of sufficient

amounts of such notes were to demand rescission and to prevail in that demand, the adverse effect on our liquidity could be material,

which could in turn impair our ability to conduct our business as otherwise planned.

Risks Related to General Factors

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adverse effect on the ability of obligors to make timely payments to us.

Finally, and depending on the extent to which

a pandemic or other public health emergency adversely affects the United States economy, it may also have the effect of heightening many

of the other risks described in this “Risk Factors” section, such as those related to our business or operations, the ability

or willingness of our customers to make timely payments, and risks of geographic concentrations.

Depending on the extent to which a pandemic or

other public health emergency adversely affects the United States economy, it may also have the effect of heightening many of the other

risks described in this “Risk Factors” section, such as those related to our business or operations, the ability or willingness

of our customers to make timely payments, and risks of geographic concentrations.

Our Results of Operations May Be Impaired as a Result of Natural

Our automobile contracts are

geographically concentrated in the states of California and Texas.

geographically concentrated in the states of California, Florida, and Texas.

Such states may be particularly susceptible to natural disasters:

in the case of California, and hurricanes and flooding in Texas.

Natural disasters, in those states or others, could cause a material

number of our vehicle purchasers to lose their jobs, or could damage or destroy vehicles that secure our automobile contracts.

case, such events could result in our receiving reduced collections on our automobile contracts, and could thus result in reductions in

our revenues or the cash flows available to us.

earthquake in the case of California, and hurricanes and flooding in Florida and Texas.

Natural disasters, in those states or others,

could cause a material number of our vehicle purchasers to lose their jobs, or could damage or destroy vehicles that secure our automobile

In either case, such events could result in our receiving reduced collections on our automobile contracts, and could thus result

in reductions in our revenues or the cash flows available to us.

Effect of Social, Economic and Other Factors on Losses.

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As of December

31, 2023, our directors and executive officers collectively owned 13.2 million shares of our common stock, or approximately 62%.

31, 2024, our directors and executive officers collectively owned 13.0 million shares of our common stock, or approximately 61% of total

shares outstanding.

We Do Not Intend to Pay Dividends on Our Common Stock.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors