What changed in this filing

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Item 9A. Controls and Procedures

2026-03-16 compared with 2025-03-12 · 936 added, 915 removed, 1557 unchanged (54% of the section changed)

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Directors, Executive Officers and Corporate Governance.

Except as described elsewhere in this report, there

are no family relationships among any of our directors, director nominees or executive officers.

There are no arrangements or understandings

between any of our directors or executive officers and any other person pursuant to which any person was selected as a director or executive

There are no material proceedings in which any of our directors, executive officers or affiliates of the Company, any owner of

record or beneficially of more than five percent of any class of voting securities of the Company, or any associate of any such director,

executive officer, affiliate of the Company, or security holder is a party adverse to the Company or has a material interest adverse to

The names of the Company’s directors, their principal occupations,

and certain other information regarding them are set forth below.

Bradley, Jr ., 65, has been the

Company’s Chief Executive Officer since January 1992, a director since the Company’s formation in March 1991, and was elected

Chairman of the Board in July 2001.

Bradley, Jr ., 66, has been the Company’s

Chief Executive Officer since January 1992, a director since the Company’s formation in March 1991, and was elected Chairman of

the Board in July 2001.

Prior to that he was President of the Company from March 1991 to December 2022.

From April 1989 to

November 1990, he served as Chief Operating Officer of Barnard and Company, a private investment firm.

From September 1987 to March 1989,

Bradley was an associate of The Harding Group, a private investment banking firm.

Having been with the Company since its inception,

Bradley brings comprehensive knowledge of the Company’s business, structure, history and culture to the Board and the Chairman

From April 1989 to November 1990,

he served as Chief Operating Officer of Barnard and Company, a private investment firm.

From September 1987 to March 1989, Mr.

was an associate of The Harding Group, a private investment banking firm.

Having been with the Company since its inception, Mr.

brings comprehensive knowledge of the Company’s business, structure, history and culture to the Board and the Chairman position.

Carnahan, 72, was appointed as a director

of the Company on February 18, 2026 by the Company’s Board of Directors.

Carnahan has served as a Senior Advisor to FTI Consulting,

Inc., a global business advisory firm, since April 2023, having previously served as a Senior Managing Director from May 2014 through

Carnahan previously served as a Partner at KPMG LLP (“KPMG”) from 1982 to 2007, where he led the firm’s

structured finance practice and assisted in the issuance of more than $2 trillion in structured finance transactions, and served as National

Director of KPMG’s Advisory Services overseeing major audit and consulting engagements nationwide.

Carnahan is a Certified Public

Accountant with a focus on financial institutions.

He has served as acting Chief Financial Officer of a publicly traded mortgage company

and as President of a national mortgage lender.

Carnahan is a Trustee on the Board of PennyMac Investment Trust since 2009.

brings to the Board more than 40 years of accounting, consulting, regulatory compliance, and executive leadership experience in the financial

institutions sector.

Deckoff , 60, has been a director

of the Company since August 2022.

Deckoff has been the Managing Principal of Black Diamond, Capital Management, L.L.C., (“Black

Deckoff has been the Managing Principal of Black Diamond, Capital Management, L.L.C.

Diamond”), a privately held alternative asset management firm, since its founding in 1995.

In that capacity, he is responsible

for all portfolio management and business operations.

In that capacity, he is responsible for

all portfolio management and business operations.

Prior to 1995, Mr.

Deckoff was a Senior Vice President of Kidder, Peabody &

Deckoff was a Senior Vice President of Kidder, Peabody & Co.

(“Kidder”) and head of its Structured Finance Group.

Prior to joining Kidder, Mr.

Deckoff was a Managing Director

in the Structured Finance Group at Bear Stearns & Co., Inc.

Deckoff was a Managing Director in

the Structured Finance Group at Bear Stearns & Co., Inc.

(“Bear Stearns”).

Before joining Bear Stearns, Mr.

worked in the Structured Finance Department of Chemical Securities, Inc.

Deckoff worked

in the Structured Finance Department of Chemical Securities, Inc.

and the Fixed Income Research Department at Drexel Burnham Lambert.

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Deckoff brings to the Board his extensive financial experience and expertise.

Grasso , 78, has been a director

of the Company since October 2019.

Grasso , 79, has been a director of

the Company since October 2019.

Grasso was the founder and majority owner of PFC Corporation (“PFC”) until his retirement

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Grounds served on the board of MGM Resorts International,

a hospitality and entertainment company, from 2013 to 2021 and of Remark Holdings Inc., a technology company, from 2013 to 2019.

Grounds joined the Board of PointsBet Holdings Limited, an Australian sports wagering operator and iGaming provider, in December 2022.

a publicly traded hospitality and entertainment company, from 2013 to 2021 and of Remark Holdings Inc., a technology company, from 2013

Grounds served on the Board of PointsBet Holdings Limited, an Australian sports wagering operator and iGaming provider from

December 2022 to October 2025.

In June 2023, Mr.

Grounds was appointed to the Board of the GCGRA, the national gaming regulator of the UAE.

During his career he has

held senior executive positions in major real estate private equity investment, development and construction entities.

Grounds brings

to the Board experience as a director of publicly-traded companies, and skills in investment and general management.

Rayhill , 62, has been a director

of the Company since August 2006.

Rayhill has been a practicing attorney in New York State since 1988 and the managing attorney of

the Law Office of Brian Rayhill since 2017.

Grounds was appointed to the Board of the GCGRA, the national gaming regulator of the

During his career he has held senior executive positions in major real estate private equity investment, development and construction

Grounds brings to the Board experience as a director of publicly-traded companies, and skills in investment and general

Rayhill , 63, has been a director of

the Company since August 2006.

Rayhill has been a practicing attorney in New York State since 1988 and the managing attorney of the

Law Office of Brian Rayhill since 2017.

As an experienced advocate, counselor and litigator, Mr.

Rayhill brings legal knowledge and

perspective to the Company’s Board.

Roberts , 87, has been a director

of the Company since its formation in March 1991.

From 1981 until his retirement at the end of 2020, he was the President of Monmouth

Capital Corp., an investment firm that specializes in management buyouts.

Having spent decades in the business of finance, Mr.

brings to the Company’s Board his perspective and judgment regarding means of financing its business.

Rayhill brings legal knowledge and perspective

to the Company’s Board.

Roberts , 88, was a director of the

Company since its formation in March 1991 until his resignation on January 30, 2026.

From 1981 until his retirement at the end of 2020,

he was the President of Monmouth Capital Corp., an investment firm that specialized in management buyouts.

Walker III , 63, has been a director

of the Company since August 2022.

Walker is President and Senior Managing Director of Black Diamond Capital Management, where he

oversees general management, drives strategic growth, and identifies new investment opportunities.

A co-founder of Black Diamond in 1996,

Walker rejoined the firm as President in September 2023, bringing extensive leadership and investment experience.

Prior to his return

to Black Diamond, Mr.

Walker is President and Senior Managing Director of Black Diamond Capital Management, where he oversees

general management, drives strategic growth, and identifies new investment opportunities.

A co-founder of Black Diamond in 1996, Mr.

rejoined the firm as President in September 2023, bringing extensive leadership and investment experience.

Prior to his return to Black

Walker served as Managing Partner of Vinson Ventures, LLC, a boutique investment firm.

From 2008 until 2017, Mr.

Walker was a Managing Partner at Fir Tree Partners, where he co-founded the firm’s distressed real estate funds and chaired the

Risk Committee.

Following his tenure at Fir Tree, he was a Strategic Partner at Jadian Capital, an alternative investment firm from 2017

Throughout his career, Mr.

a Managing Partner at Fir Tree Partners, where he co-founded the firm’s distressed real estate funds and chaired the Risk Committee.

Following his tenure at Fir Tree, he was a Strategic Partner at Jadian Capital, an alternative investment firm from 2017 to 2021.

his career, Mr.

Walker has held numerous board positions.

Since November 2017, he has been a board member of Starwood

Real Estate Trust, a private real estate investment firm.

In June 2023, he joined the board of Emeco, an Australian mining equipment

rental company.

He previously served on the Board of Clarus Corporation, a global company catering to outdoor and consumer enthusiast

Walker began his career in investment banking at Kidder Peabody and Bear Stearns.

Walker brings to the Board his extensive

investment management experience.

Since November 2017, he has been a board member of Starwood Real Estate Trust,

a private real estate investment firm.

In June 2023, Mr.

Walker joined the board of Emeco, an Australian mining equipment rental company.

He was previously on the board of Clarus Corporation, a global company catering to outdoor and consumer enthusiast markets.

began his career in investment banking at Kidder Peabody and Bear Stearns.

Walker brings to the Board his extensive investment management

Washer , 64, has been a director

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with a wealth of experience in promotion and marketing of services.

Wood , 66, has been a director

of the Company since July 2001.

Wood , 67, has been a director of

the Company since July 2001.

Wood was President of Carclo Technical Plastics (“Carclo”), a manufacturer of custom injection

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Executive Officers

The information regarding the Company’s

executive officers set forth in Part I of this report under the caption “Information about Our Executive Officers” is incorporated

herein by reference.

The information regarding the Company’s executive

officers set forth in Part I of this report under the caption “Information about Our Executive Officers” is incorporated herein

by reference.

Section 16(a) Beneficial Ownership Reporting Compliance

Directors, executive officers and holders of in excess

of 10% of the Company’s common stock are required to file reports concerning their transactions in and holdings of equity securities of

Based on a review of reports filed by each such person, and inquiry of each regarding holdings and transactions,

the Company believes that all reports required with respect to the year 2025 were timely filed, except that:

(A) one Form 4 was filed

for Steve Schween on May 21, 2025 with respect to a transaction on May 1, 2025 (B) one Form 3 was filed for Noel Jackson on May 30, 2025

with respect to Ms.

Jackson becoming an executive officer on May 2, 2025 and (C) one Form 4 was filed for Teri Robinson on February 3,

2026 with respect to a transaction on July 21, 2025.

Code of Ethics

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Financial Officers, which applies to the Company’s chief executive officer, chief financial officer, controller and others.

the Code of Ethics may be obtained at no charge by written request to the Corporate Secretary at the Company’s principal executive offices.

of the Code of Ethics may be obtained at no charge by written request to the Corporate Secretary at the Company’s principal executive

Audit and Other Committees

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The charters are available on the Company’s website, https://ir.consumerportfolio.com/corporate-governance.

The Board of Directors has concluded that each member of these three committees (and every director other than Mr.

Bradley, the Company’s

chief executive officer), is independent in accordance with the director independence standards prescribed by Nasdaq, and has determined

that none of them have a material relationship with the Company that would impair their independence from management or otherwise compromise

Each member of these three committees is independent in accordance with the director independence standards prescribed by Nasdaq, and

none of them have a material relationship with the Company that would impair their independence from management or otherwise compromise

the ability to act as an independent director.

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Washer, and Mr.

The Board has determined that each Audit Committee member is independent as defined

under Nasdaq Listing Rules and Rule 10A-3(b)(1) of the Exchange Act.

The Audit Committee is empowered by the Board

of Directors to review the financial books and records of the Company in consultation with the Company’s accounting and auditing staff

and its independent auditors and to review with the accounting staff and independent auditors any questions that may arise with respect

to accounting and auditing policy and procedure.

The Board of Directors has further determined

Wood has the qualifications and experience necessary to serve as an "audit committee financial expert" as such term

is defined in Item 407 of Regulation S-K promulgated by the SEC.

Each Audit Committee member is independent as defined under Nasdaq Listing Rules and

Rule 10A-3(b)(1) of the Exchange Act.

The Audit Committee is empowered by the Board of Directors to review the financial books and records

of the Company in consultation with the Company’s accounting and auditing staff and its independent auditors and to review with

the accounting staff and independent auditors any questions that may arise with respect to accounting and auditing policy and procedure.

The Board of Directors has determined that

Wood has the qualifications and experience necessary to serve as an “audit committee financial expert” as such term is defined

in Item 407 of Regulation S-K promulgated by the SEC.

Wood, as president of Carclo, was responsible for the preparation

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is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the applicable exchange listing standards.

A copy of our insider trading policy is filed as Exhibit 19 to this Annual Report on Form 10-K for the fiscal year ended December 31,

In addition, with regard to the Company’s trading in its own securities, it is the Company’s policy to comply with the

federal securities laws and the applicable exchange listing standards.

A copy of our insider trading policy is filed as Exhibit 19 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

In addition, with regard to the Company’s trading in its own securities, it is the Company’s policy to comply with the federal

securities laws and the applicable exchange listing standards.

Executive Compensation.

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Grounds, and Mr.

During fiscal year 2025, the Compensation Committee consisted of Mr.

(chairman), Mr.

Grounds, and Mr.

During fiscal year 2025, Mr.

Roberts served on the Compensation Committee until his

resignation as director of the Company on January 30, 2026.

None of the members of the Compensation Committee is a present or past

employee or officer of the Company or its subsidiaries.

During the fiscal year 2025, none of our executive officers served on the

board of directors or compensation committee of another company that had an executive officer who served on our Board or our

Compensation Committee.

As discussed below under the heading “Certain Transactions – Other Transactions” to which

discussion the reader is directed, Mr.

Roberts sold 100,000 shares to the Company on September 15, 2025, and 100,000 shares to the

Company on December 4, 2025 as part of the Company’s stock repurchase program.

Compensation Committee Report

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Based on such review and discussions

and relying thereon, the Compensation Committee has recommended to the Company’s Board of Directors that the Compensation Discussion and

Analysis set forth below be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

and relying thereon, the Compensation Committee has recommended to the Company’s Board of Directors that the Compensation Discussion

and Analysis set forth below be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

THE COMPENSATION COMMITTEE

Wood (chairman) William

Grounds William B.

Grounds Louis M.

Compensation Discussion

2025 Say-on-Pay Advisory Vote Outcome

The Compensation Committee annually considers

the results of the most recent advisory vote by shareholders to approve executive officer compensation.

The Compensation Committee annually considers the

results of the most recent advisory vote by shareholders to approve executive officer compensation.

In the 2025 advisory vote, a majority

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The Company’s objectives with respect to compensation

The significant objectives are to cause compensation (i) to be sufficient in total amount to provide reasonable

assurance of retaining key executives, (ii) to include a significant contingent component, so as to provide strong incentives to meet

designated Company objectives, and (iii) to include a significant component tied to the price of the common stock, so as to align management’s

The significant objectives are to cause compensation (i) to be sufficient in total amount to provide reasonable assurance

of retaining key executives, (ii) to include a significant contingent component, so as to provide strong incentives to meet designated

Company objectives, and (iii) to include a significant component tied to the price of the common stock, so as to align management’s

incentives with shareholder interests.

The Compensation Committee ("Committee") of the Company’s Board of Directors

is charged with administering the Company’s compensation plans to meet those objectives.

To the extent that elements

of compensation would not advance such objectives, or would do so less effectively than would other elements, the Committee seeks to

avoid paying compensation in those forms.

The Compensation Committee (“Committee”) of the Company’s Board of Directors is

charged with administering the Company’s compensation plans to meet those objectives.

To the extent that elements of compensation

would not advance such objectives, or would do so less effectively than would other elements, the Committee seeks to avoid paying compensation

in those forms.

Role of the Compensation

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Establishing annual individual performance objectives for the other executive officers and evaluating their performance against such objectives (the Committee reviews these performance evaluations);

Making recommendations, from time to time, for special stock option and restricted stock grants ( e.g ., for motivational or retention purposes) to other executive officers.

The other executive officers do not have a role

in determining their own compensation, other than to discuss their annual individual performance objectives and results achieved with

the chief executive officer.

Making recommendations, from time to time, for special stock option grants ( e.g ., for motivational or retention purposes) to other executive officers.

The other executive officers do not have a role in

determining their own compensation, other than to discuss their annual individual performance objectives and results achieved with the

Chief Executive Officer.

Our Overall Approach

The Committee has put into place a compensation

system consisting of three key components:

base salary, an annual cash bonus pursuant to an incentive plan, and long-term equity incentives

in the form of stock options.

The table below provides comparative information

regarding the components of our year 2024 executive compensation program.

We are applying the same elements in our executive compensation

program for the year 2025.

The Committee has put into place a compensation system

consisting of three key components:

base salary, an annual cash bonus pursuant to an incentive plan, and long-term equity incentives in

the form of stock options.

The table below provides comparative information regarding

the components of our year 2025 executive compensation program.

Objectives and Basis

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Target long-term incentive award size designed to retain executives through long-term vesting and the potential for wealth accumulation, contingent on benefit to the shareholders

The Committee has from time to time considered

providing additional elements of executive compensation.

It has considered elements such as restricted stock awards, restricted stock

units, compensation contingent on a change in control, defined benefit pension plans, deferred cash compensation, and supplemental retirement

plans (supplemental in the sense that they exceed the limits for tax advantaged treatment).

To date, the Committee has elected not to

pay compensation in such forms, having determined that the Company’s objectives are better met by one or more of the elements of compensation

that it does pay.

Regarding restricted stock and restricted stock

units, the Committee has noted that any form of equity equivalent to or closely tied to common stock does serve to meet the objective

of aligning officers’ personal interest with that of the shareholders generally.

The Committee believes, however, that the objective is

better met by grants of stock options than by grants of share equivalents, because recipients of the grants will face the same degree

of variance in results at a lesser cost to the Company, when option grants are compared to grants of restricted stock units.

unlike restricted stock, option grants will not provide a reward to the holder absent an improvement over time in the Company’s

The Committee has elected not to provide material perquisites as compensation, having determined that cash is a better medium

The Committee has from time to time considered providing

additional elements of executive compensation.

It has considered elements such as restricted stock awards, restricted stock units, compensation

contingent on a change in control, defined benefit pension plans, deferred cash compensation, and supplemental retirement plans (supplemental

in the sense that they exceed the limits for tax advantaged treatment).

To date, the Committee has elected not to pay compensation in

such forms, having determined that the Company’s objectives are better met by one or more of the elements of compensation that it

Regarding restricted stock and restricted stock units,

the Committee has noted that any form of equity equivalent to or closely tied to common stock does serve to meet the objective of aligning

officers’ personal interest with that of the shareholders generally.

The Committee believes, however, that the objective is better

met by grants of stock options than by grants of share equivalents, because recipients of the grants will face the same degree of variance

in results at a lesser cost to the Company, when option grants are compared to grants of restricted stock units.

Further, unlike restricted

stock, option grants will not provide a reward to the holder absent an improvement over time in the Company’s stock price.

The Committee

has elected not to provide material perquisites as compensation, having determined that cash is a better medium of exchange.

Regarding compensation that would be payable contingent

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Regarding defined benefit pension

plans, deferred cash compensation and supplemental retirement plans, the Committee believes that the Company’s retention objective is

better met by straight cash payments, whether in the form of base salary or in the form of bonus compensation.

plans, deferred cash compensation and supplemental retirement plans, the Committee believes that the Company’s retention objective

is better met by straight cash payments, whether in the form of base salary or in the form of bonus compensation.

In particular with respect

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considers an executive’s base salary to be the most critical component.

Acting primarily on the basis of recommendations of the Chief

Executive Officer, the Committee adjusts other officers’ base salaries annually, with the adjustment generally consisting of a 2% to 10%

increase from the prior year’s rate.

Where exceptional circumstances apply, such as recruitment of a new executive officer, a promotion

to executive officer status or a special need to retain an individual officer, the chief executive officer may recommend, and the Committee

may approve, a larger increase.

The Company’s general approach in setting

the annual compensation of its named executive officers is to set those officers’ base compensation by reference to their base rates

Acting primarily on the basis of recommendations of the

Chief Executive Officer, the Committee adjusts other officers’ base salaries annually, with the adjustment generally consisting

of a 2% to 10% increase from the prior year’s rate.

Where exceptional circumstances apply, such as recruitment of a new executive

officer, a promotion to executive officer status or a special need to retain an individual officer, the Chief Executive Officer may recommend,

and the Committee may approve, a larger increase.

The Company’s general approach in setting the

annual compensation of its named executive officers is to set those officers’ base compensation by reference to their base rates

for the preceding year.

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The Committee considered whether to adjust officers’ base compensation

for 2024, and determined to increase the base rate for the President and Chief Financial Officer by 4%.

The Annual Incentive

Bonus (Executive Management Bonus Plan) Element

To encourage executive officers and key management

personnel to exercise their best efforts and management skills toward causing the Company to meet its overall objective, and toward achieving

designated specific individual objectives, the Company has implemented an Executive Management Bonus Plan, with annual payouts.

the Company’s bonus plan as applied to the year ended December 2024, the Company’s president is eligible to receive a cash bonus

of up to 170% of his base salary and the executive vice presidents are eligible to receive a cash bonus of up to 140% of their base salaries.

The chief executive officer is eligible to receive a cash bonus of up to 600% of his base salary.

The Committee is expected to evaluate

each named executive officer’s performance and determine the amount of the Executive Management Bonus Plan award earned by the

end of June 2025.

for 2025, and determined not to increase the base rate for the Chief Executive Officer.

The Committee increased the base rate for the

Chief Financial Officer by 12%.

The Annual Incentive Bonus

(Executive Management Bonus Plan) Element

The salary and cash bonus of the named executive officers

are determined by the Compensation Committee.

To encourage executive officers and key management personnel to exercise their best efforts

and management skills toward causing the Company to meet its overall objectives, and toward achieving individual and department performance

objectives and designated specific individual objectives, the Company has implemented an Executive Management Bonus Plan (the “EMB

Plan”), with annual payouts.

The compensation appearing in the Summary Compensation Table below under the caption “Non-Equity

Incentive Plan Compensation” is paid pursuant the EMB Plan.

The EMB Plan is administered by the Compensation Committee.

things, the Compensation Committee selects participants in the EMB Plan from among the Company’s executive officers and determines

the performance goals, target amounts and other terms and conditions of awards under the EMB Plan.

With respect to officers other than

the Chief Executive Officer, determinations of base salary and of criteria relating to the EMB Plan are based in part on evaluations of

such officers prepared by the Chief Executive Officer, which are furnished to and discussed with the Compensation Committee.

Under the Company’s bonus plan as applied to

the year ended December 2025 the Company’s President was eligible to receive a cash bonus of up to 170% of his base salary and the

Chief Financial Officer and Executive Vice President was eligible to receive a cash bonus of up to 140% of his base salary.

Executive Officer was eligible to receive a cash bonus of up to 720% of his base salary.

The implementation of this element for the named

executive officers for the year 2025 is discussed below.

The Long-Term Incentive

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stock options under the Company’s stock option plans.

Such awards are designed to assist in the retention of key executives and management

personnel and to create an incentive to create shareholder value over a sustained period of time.

The Company believes that stock options

are a valuable tool in compensating and retaining employees.

Because the exercise price of all options granted is equal to or above the

fair market value of the Company’s common stock on the date of grant, the option holders may realize value only if the stock price

appreciates from the price on the date the options were granted.

This design is intended to focus executives on the enhancement of shareholder

value over the long term.

During the year ended December 31, 2024, the

Committee did not grant stock options to the Company’s executive officers.

Such awards are designed to assist in the retention of key executives and

management personnel and to create an incentive to create shareholder value over a sustained period of time.

The Company believes that

stock options are a valuable tool in compensating and retaining employees.

Because the exercise price of all options granted is equal

to or above the fair market value of the Company’s common stock on the date of grant, the option holders may realize value only

if the stock price appreciates from the price on the date the options were granted.

This design is intended to focus executives on the

enhancement of shareholder value over the long term.

During the year ended December 31, 2025, the Committee

granted stock options to the Company’s named executive officers.

All such grants were awarded on September 9, 2025, and all carry

exercise prices equal to the market price for Company Common Stock at the date of grant.

The terms of such options are described below,

under the caption “Grants of Plan-Based Awards in 2025.” The numbers of shares made subject to each of the option grants were

based on various factors relating to the responsibilities of the individual officers and to the extent of previous grants to such individuals.

Other Elements

The Company also maintains certain broad-based

employee benefit plans, such as medical and dental insurance, and a qualified defined contribution retirement savings plan (401(k) plan),

in which executive officers are permitted to participate.

Such officers participate on the same terms as non-executive personnel who meet

applicable eligibility criteria, and are subject to any legal limitations on the amounts that may be contributed or the benefits that

may be payable under the plans.

The Company does not maintain any form of defined benefit pension or retirement plan in which

executive officers may participate, nor does it maintain any form of supplemental retirement savings or supplemental deferred compensation

The Company also maintains certain broad-based employee

benefit plans, such as medical and dental insurance, and a qualified defined contribution retirement savings plan (401(k) plan), in which

executive officers are permitted to participate.

Such officers participate on the same terms as non-executive personnel who meet applicable

eligibility criteria, and are subject to any legal limitations on the amounts that may be contributed or the benefits that may be payable

under the plans.

The Company does not maintain any form of defined benefit pension or retirement plan in which executive officers may

participate, nor does it maintain any form of supplemental retirement savings or supplemental deferred compensation plan.

Exercise of Discretion

In exercising its discretion as to the level of

executive compensation and its components, the Committee considers a number of factors.

Members of the Committee conduct informal surveys

of compensation paid to comparable executives within and without the consumer finance industry.

The Committee finds these data useful

primarily in evaluating the overall level of compensation paid or to be paid to the Company’s executive officers.

Financial factors

considered include earnings, revenue, originations, and budget attainment.

Operational factors considered include individual and group

management goals;

indicators of the performance and credit quality of the Company’s servicing portfolio, including levels of delinquencies

and charge-offs;

In exercising its discretion as to the level of executive

compensation and its components, the Committee considers a number of factors.

Members of the Committee conduct informal surveys of compensation

paid to comparable executives within and without the consumer finance industry.

The Committee finds these data useful primarily in evaluating

the overall level of compensation paid or to be paid to the Company’s executive officers.

Financial factors considered may include

earnings, revenue, originations, and budget attainment.

Operational factors considered include individual and group management goals;

indicators of the performance and credit quality of the Company’s servicing portfolio, including levels of delinquencies and charge-offs;

and indicators of successful management of personnel, including employee stability.

All of such factors are assessed

with reference to the judgment of the Committee as to the degree of difficulty of achieving desired outcomes.

With respect to payment

of annual bonuses and grants of stock options, the Committee also takes note of factors relating to the degree of the Company’s success

over the most recent year.

Specific Objectives

and Evaluation

In 2024, the Committee

designated specific objectives with respect to the chief executive officer to be accomplished within the year 2024, and fixed weights

to be associated with each such objective.

The chief executive officer proposed to the Committee specific annual objectives with respect

to each other executive officer of the Company, which the Committee approved.

The Committee anticipates determining the amount of the

Executive Management Bonus Plan award earned by each named executive officer by the end of June 2025.

All of such factors are assessed with reference to

the judgment of the Committee as to the degree of difficulty of achieving desired outcomes.

With respect to payment of annual bonuses

and grants of stock options, the Committee also takes note of factors relating to the degree of the Company’s success over the most

Specific Objectives and

In 2025, the Committee designated specific objectives

with respect to the Chief Executive Officer to be accomplished within the year 2025, and fixed weights to be associated with each such

The Chief Executive Officer proposed to the Committee specific annual objectives with respect to each other executive officer

of the Company, which the Committee approved.

The Executive Management Bonus Plan award earned by each named executive officer is anticipated

to be determinable by the end of March 2026.

Grants of Options

The Committee did not award stock options to the

Company’s officers in 2024.

Committee does not have a policy or practice on when to grant option awards.

The Committee does

not have a policy or practice of taking into account material nonpublic information when determining the timing and

terms of option awards, however if a public announcement of material information is anticipated, the grant date of such options may

be deferred at the discretion of the Committee, until after the release

of such information.

not time the disclosure of material nonpublic information for the purpose of affecting the value of executive

compensation.

The Compensation Committee’s award of stock

options to the Company’s officers in September 2025 included option grants to the Chief Executive Officer and the other named executive

In determining the appropriate level of such grant, the Compensation Committee considered the long-term performance of the Chief

Executive Officer and the desirability of providing significant incentive for future performance, as well as the desirability of ensuring

that officer’s continued retention by the Company, and the various factors noted above with respect to option grants generally.

These grants and the Committee’s administration of the long-term incentive element of compensation are discussed in below, under

the heading “Grants of Plan-Based Awards in 2025 – Equity Incentives.”

The Committee does not have a policy or practice on

when to grant option awards.

The Committee does not have a policy or practice of taking into account material nonpublic information when

determining the timing and terms of option awards, however if a public announcement of material information is anticipated, the grant

date of such options may be deferred at the discretion of the Committee, until after the release of such information.

The Company does

not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.

Stock Ownership, Hedging and Pledging

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equity compensation plans, or would be merely hortatory, in which case it could be expected to have little effect.

We’ve also noted

We have also noted

that the multiyear vesting terms of the equity incentives granted under our plans have the effect of aligning our executives’ individual

personal financial incentives with the future price performance of the Company’s stock.

As part of our comprehensive compliance policy,

we remind all Company executive officers of the mandatory legal prohibition on selling short company shares and the implications of the

SEC’s short-swing profit rule.

We also prohibit Company executive officers from entering into transactions that would have the

effect of causing those individuals to benefit from a decline in the price of the Company stock, such as the purchase of “put”

We prohibit such “hedging” transactions but we do not find it appropriate to prohibit our executive officers from

pledging their shares of Company stock as security for a loan.

We believe that the beneficial incentives of owning Company stock remain

substantially the same with or without such a pledge.

As part of our comprehensive compliance policy, we

remind all Company executive officers of the mandatory legal prohibition on selling short Company shares and the implications of the SEC’s

short-swing profit rule.

We also prohibit Company executive officers from entering into transactions that would have the effect of causing

those individuals to benefit from a decline in the price of the Company stock, such as the purchase of “put” options.

such “hedging” transactions but we do not find it appropriate to prohibit our executive officers from pledging their shares

of Company stock as security for a loan.

We believe that the beneficial incentives of owning Company stock remain substantially the same

with or without such a pledge.

Summary of Compensation

The following table summarizes all compensation

earned during the three fiscal years ended December 31, 2024 by the Company’s chief executive officer, its chief financial officer, and

the other three most highly compensated individuals (such five individuals, the “named executive officers”) who were serving

in such position or as executive officers at any time in 2024.

It lists their names, their principal positions in which they served in

those years, and each component of compensation paid with respect to those years.

Summary Compensation Table

The following table summarizes all compensation earned

during the two fiscal years ended December 31, 2025 by the Company’s “named executive officers” as determined by SEC

It lists their names, the principal positions in which they served in those years, and each component of compensation paid with

respect to those years.

Summary Compensation Table For 2025 and 2024

Name and Principal Position

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Chief Executive Officer

& Chief Operating Officer

President & Chief Operating Officer

Danny Bharwani

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Chief Financial Officer

Executive Vice President

- Sales & Originations

Christopher Terry

Executive Vice President

- Risk, Systems & IT

Terry qualified as a named executive officer pursuant to Item 402 of Regulation S-K beginning for the year 2024.

The amount of the Non-Equity Incentive Plan Compensation

award for 2024 is expected to be determined by the end of June 2025.

Such amount, when finally determined, will be disclosed in a

filing under Item 5.02(f) of Form 8-K.

Represents the dollar value accrued for financial accounting purposes in connection with the grant of such options, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 and SFAS 123R.

The amount of the Non-Equity Incentive Plan Compensation award for 2025 is expected to be determined by the end of March 2026.

Such amount, when finally determined, will be disclosed in a filing under Item 5.02(f) of Form 8-K.

Value was estimated using a Black-Scholes model for 2025.

For the options granted on January 24, 2022, (comprising 750,000 options granted to Mr.

Bradley), the weighted average fair value per option was $5.8558, based on assumptions of 4.11 years expected life, expected volatility of 75.26%, and a risk-free rate of 1.43%.

For the options granted on June 24, 2022, (comprising all of the other options granted to named executive officers in 2022), the weighted average fair value per option was $4.98, based on assumptions of 4.11 years expected life, expected volatility of 75.15%, and a risk-free rate of 3.13%.

For 2024, includes premiums paid by the Company for group life insurance and employer matching contributions under the Company’s defined contribution plan.

Additionally, the amounts include a (i) cash-out of accrued vacation time of $38,269, $26,423 and $22,269 to Messrs.

Bradley, Lavin, and Bharwani and (ii) a car allowance of $16,077 and $20,260 for Messrs.

Lavin and Bharwani and (iii) gym membership fees of $2,316 for Mr.

Grants of Plan-Based Awards in Last Fiscal

In the year ended December 31, 2024, we did not

grant any options, stock awards, or stock appreciation rights to any of our named executive officers.

Our named executive officers are eligible for

awards under our Executive Management Bonus Plan, which are expected to be determined by the end of June 2025.

For the options granted on September 9, 2025, the weighted average fair value per option was $3.80, based on assumptions of 4.11 years expected life, expected volatility of 53.94%, and a risk-free rate of 4.10%.

Grants of Plan-Based Awards in 2025

Equity Incentives

In the year ended December 31, 2025, we granted

options to our named executive officers on September 9, 2025 as noted in the tables above and below.

The grant of options vest in 25%

increments on the first, second, third and fourth anniversaries of the grant date.

Our named executive officers are also eligible for

awards under our Executive Management Bonus Plan, which are expected to be determined by the end of March 2026.

The table below provides

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Grants of Plan-Based Awards

Estimated future payouts under non-equity incentive plan awards

Estimated possible payouts under

non-equity incentive plan awards

Number of Shares Underlying Options

The “target” and “maximum”

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Lavin, is eligible to receive a cash bonus of up to 170% of his base

The other named executive officers, as executive vice presidents, are eligible to receive a cash bonus of up to 140% of their

base salaries.

The actual payout to each individual named in the table above has not been determined as of the date of this report.

The Company’s Chief Financial Officer is eligible to receive a cash bonus of up to 140% of his base salary.

The actual payout

to each individual named in the table above has not been determined as of the date of this report.

Outstanding Equity Awards at Fiscal Year-end

The following table sets forth as of December 31,

31, 2024 the number of unexercised options held by each of the named executive officers, the number of shares subject to then exercisable

and unexercisable options held by such persons and the exercise price and expiration date of each such option.

referred to in the table was granted at an option price per share no less than the fair market value per share on the date of grant.

2025 the number of shares subject to then exercisable and unexercisable options held by such persons and the exercise price and expiration

date of each such option.

Each option referred to in the table was granted at an option price per share no less than the fair

market value per share on the date of grant.

None of such individuals holds a stock award;

accordingly, only information concerning option awards is presented.

accordingly, only information concerning option

awards is presented.

Number of securities underlying unexercised options (exercisable)(1)

Number of securities underlying unexercised options (unexercisable)

Option exercise price

Option expiration date

Danny Bharwani

Christopher Terry

Becomes exercisable on August 3, 2025.

Becomes exercisable as to increments of one-half of the unexercisable portion on January 24, 2025 and 2026.

Becomes exercisable as to increments of one-half of the unexercisable portion on June 24, 2025 and 2026.

The original grant of options vested in 25% increments on the first, second, third and fourth anniversaries of the grant date.

Becomes exercisable as to the unexercisable portion on January 24, 2026.

Becomes exercisable as to the unexercisable portion on June 24, 2026.

Becomes exercisable as to cumulative increments of 25% of the unexercisable portion on September 9, 2026, 2027, 2028, and 2029.

Option Exercises in Last Fiscal Year

All of the five named executive officers exercised

All of the three named executive officers exercised

stock options during 2025.

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Option Exercises and Stock Vested

Number of shares acquired realized on exercise

Value realized on exercise(1)

Number of shares acquired on exercise

The value realized is the difference between the fair market value of the Company’s common

stock on the date of exercise (the closing price reported by Nasdaq) and the exercise price of the option.

Executive Management Bonus Plan (Non-equity

Incentive Plan)

The salary and cash bonus of the named

executive officers are determined by the Compensation Committee.

The compensation appearing in the Summary Compensation Table above

under the caption "Non-Equity Incentive Plan Compensation" is paid pursuant to an Executive Management Bonus Plan (the

The EMB Plan is administered by the Compensation Committee.

Among other things, the Compensation Committee

selects participants in the EMB Plan from among the Company’s executive officers and determines the performance goals, target

amounts and other terms and conditions of awards under the EMB Plan.

With respect to officers other than the chief executive

officer, determinations of base salary and of criteria relating to the EMB Plan are based in part on evaluations of such officers

prepared by the Chief Executive Officer, which are furnished to and discussed with the Compensation Committee.

The value realized is the difference between the fair market value of the Company’s common stock on the date of exercise (the closing price reported by Nasdaq) and the exercise price of the option.

Pension Plans

The Company’s officers do not participate in any

pension or retirement plan, other than a tax-qualified defined contribution plan (commonly known as a 401(k) plan).

Potential Payments Upon Termination or Change

The Company’s officers do not participate in

any pension or retirement plan, other than a tax-qualified defined contribution plan (commonly known as a 401(k) plan).

Potential Payments Upon Termination or Change of

This section provides information regarding payments

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than in connection with a change of control of the Company.

Benefits Triggered by Change of Control or

Termination after Change of Control

Benefits Triggered by Change of Control or Termination

after Change of Control

Our stock option plans provide that each employee

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from the Company and without approval of the Board, resulting in that person’s having beneficial ownership of greater than 25% of

Under our stock option plans, the Compensation

Committee may exercise its discretion to provide for acceleration under other circumstances than those described above with respect to

any particular stock option or class of stock options.

The committee would expect to exercise its discretion with the intention of preserving

the value of the stock option award.

Under our stock option plans, the Compensation Committee

may exercise its discretion to provide for acceleration under other circumstances than those described above with respect to any particular

stock option or class of stock options.

The committee would expect to exercise its discretion with the intention of preserving the value

of the stock option award.

To date, such discretion has not been exercised.

A “Qualifying Termination” is a termination

of the holder’s employment by the Company other than for cause, disability or death, or by the holder for “good reason”

A “Qualifying Termination” is a termination of

the holder’s employment by the Company other than for cause, disability or death, or by the holder for “good reason”

(principally relating to a material diminution in the holder’s authority, compensation or responsibilities, or a relocation of greater

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As of December 31, 2025, each of the named executive

officers would realize a benefit if unvested stock options were to become immediately exercisable upon a change in control, based on

the value of the shares underlying such options at the closing market price on December 31, 2024, which was $10.86 per share.

officers would realize a benefit if unvested stock options were to become immediately exercisable upon a change in control, based on the

value of the shares underlying such options at the closing market price on December 31, 2025, which was $9.33 per share.

The respective

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of the shareholders are served.

currently serves as both

the Chairman of the Board and our Chief Executive Officer, and is the only member of our Board who is not independent of the Company.

The Nominating Committee has determined that the remaining directors and director nominees are “independent” under applicable

independence standards of the Nasdaq Stock Market.

Our Board structure supports the independence of our directors.

Audit Committee, Compensation Committee and Nominating Committee are each composed solely of independent directors.

Our bylaws provide

that any two directors have the authority to call meetings of the Board, as do specified officers, including the president and the secretary.

To enhance the possible use of that authority by independent directors, the corporate secretary is under standing instructions to call

a meeting at the instance of any one director.

Our Board has chosen not to designate any individual formally as the lead independent

Each director retains his full oversight responsibility.

Our Board structure supports the independence

of our non-management directors.

Our Audit Committee, Compensation Committee and Nominating Committee are each composed solely of independent

Our bylaws provide that any two directors have the authority to call meetings of the Board of Directors, as do specified officers,

including the president and the secretary.

To enhance the possible use of that authority by independent directors, the corporate secretary

is under standing instructions to call a meeting at the instance of any one director.

The board believes that combining the Chairman

and Chief Executive Officer positions is currently the most effective leadership structure given Mr.

Bradley’s in-depth knowledge

of our business and industry and his demonstrated ability to formulate and implement strategic initiatives.

Bradley is continuously

involved in developing and implementing our strategies, working closely with the company’s other senior executives to seek continued

disciplined growth and excellence in operations.

currently serves as both the Chairman of the

Board and our Chief Executive Officer.

The Board believes that combining the Chairman and

Chief Executive Officer positions is currently the most effective leadership structure given Mr.

Bradley’s in-depth knowledge of

our business and industry and his demonstrated ability to formulate and implement strategic initiatives.

Bradley is continuously involved

in developing and implementing our strategies, working closely with the Company’s other senior executives to seek continued disciplined

growth and excellence in operations.

His close involvement in management places Mr.

Bradley in the best position to decide

which business issues require consideration by the independent directors of the board.

In addition, having a combined Chairman and Chief

Executive Officer enables us to speak with a unified voice to shareholders, customers and others concerned with our company.

believes that combining the Chief Executive and Chairman roles, as part of a governance structure that includes oversight of management

responsibilities by independent directors, provides the preferred system for meeting the requirement that the Company be managed in the

best interest of our shareholders.

Bradley in the best position to decide which business

issues require consideration by the independent directors of the Board.

In addition, having a combined Chairman and Chief Executive Officer

enables us to speak with a unified voice to shareholders, customers and others concerned with our Company.

The Board believes that combining

the Chief Executive Officer and Chairman roles, as part of a governance structure that includes oversight of management responsibilities

by independent directors, provides the preferred system for meeting the requirement that the Company be managed in the best interest of

our shareholders.

Risk Oversight

The board’s overall responsibility for

directing the management of the Company includes risk oversight.

The risk oversight function is performed at the board level, and by

the Audit and Compensation Committees.

The Board of Directors as a whole in its regular

meetings discusses and considers the risk inherent in the existing business of the Company and in proposed initiatives.

The Board’s overall responsibility for directing

the management of the Company includes risk oversight.

The risk oversight function is performed at the Board level, and by the Audit and

Compensation Committees.

The Board of Directors as a whole in its regular meetings

discusses and considers the risk inherent in the existing business of the Company and in proposed initiatives.

Because the Company’s

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of the Audit Committee and Compensation Committee.

The principal risk management function performed

by the Audit Committee is the ongoing assessment of the credit estimates and allowances periodically recorded in the Company’s

The principal risk management function performed by

the Audit Committee is the ongoing assessment of the credit estimates and allowances periodically recorded in the Company’s books.

The Audit Committee reviews that assessment regularly.

Other risk assessments performed by the Audit Committee include assessments

of contingent liabilities, and of other reserves and allowances.

Other risk assessments performed by the Audit Committee include assessments of

contingent liabilities, and of other reserves and allowances.

The principal risk management functions performed

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with adequate allowances in the Company’s financial statements.

Chief Executive Officer Pay Ratio

The Dodd-Frank Reform and Consumer Protection

Act includes a mandate that public companies disclose the ratio of the compensation of their chief executive officer to their median

employee (“CEO Pay Ratio”).

The CEO Pay Ratio for 2024 is not calculable at this time because Mr.

Bradley’s 2024 Non-Equity

Incentive Plan Compensation award has not yet been determined.

The 2024 Non-Equity Incentive Plan Compensation award is expected to be

determined by the end of June 2025.

Such amount, when finally determined, and the CEO Pay Ratio for 2024, will be disclosed in a filing

under Item 5.02(f) of Form 8-K.

Director Compensation

Throughout 2024, we paid our non-employee directors a retainer of

$6,000 per month, with an additional fee of $700 per month for service on a board committee ($1,200 for a committee chairman).

directors also received per diem fees of $1,000 for attendance in person at meetings of the Board of Directors, or $500 for attendance

by telephone.

Throughout 2025, we paid our non-employee directors

a retainer of $6,000 per month, with an additional fee of $700 per month for service on a Board committee ($1,200 for a committee chairman).

Non-employee directors also received per diem fees of $1,000 for attendance in person at meetings of the Board of Directors, or

$500 for attendance by telephone.

No per diem fees are paid for attendance at committee meetings.

The following table summarizes compensation received

by our directors for the year 2024:

The following table summarizes

compensation received by our directors for the year 2025:

Name of Director(1)

or Paid in Cash (2)

As of December 31, 2025, Mr.

Bradley held 1,627,500 vested stock options and 562,500 unvested stock options;

Grasso held 70,000 vested stock options;

Grounds held 30,000 vested stock options;

Rayhill held 120,000 vested stock options;

Roberts held 60,000 vested stock options;

Washer held 60,000 vested stock options;

Wood held 120,000 vested stock options.

This column reports cash compensation earned in 2025 for Board and committee service.

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The table below sets forth the number and percentage

of shares of our common stock (our only class of voting securities) owned beneficially as of March 10, 2025 (the latest practicable date)

by (i) each person known to us to own beneficially more than 5% of the outstanding common stock, (ii) each director and each named executive

officer, and (iii) all of our directors and executive officers, as a group.

Except as otherwise indicated, and subject to applicable community

property and similar laws, each of the persons named has sole voting and investment power with respect to the shares shown as beneficially

owned by such persons.

of shares of our common stock (our only class of voting securities) owned beneficially as of March 4, 2026 by (i) each person known to

us to own beneficially more than 5% of the outstanding common stock, (ii) each director and each named executive officer, and (iii) all

of our directors and executive officers, as a group.

Except as otherwise indicated, and subject to applicable community property and similar

laws, each of the persons named has sole voting and investment power with respect to the shares shown as beneficially owned by such persons.

Percent of class is calculated by reference to 21,760,275 shares outstanding on March 4, 2026.

Except as otherwise

noted, each person named in the table has a mailing address at 3800 Howard Hughes Parkway, Suite 1400, Las Vegas, Nevada 89169.

Except as otherwise noted, each person

named in the table has a mailing address at 3800 Howard Hughes Parkway, Suite 1400, Las Vegas, Nevada 89169.

Name and Address of Beneficial Owner

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Percent of Class

5,127,165 (2)

Danny Bharwani

Christopher Terry

All directors and executive officers combined (21 persons)

17,081,795 (3)

Black Diamond Capital Management, L.L.C.

2187 Atlantic Street, 9 th Floor, Stamford, CT 06902

5,127,165 (2)

Black Diamond Capital Management I, LLLP 5330 Yacht Haven Grande, Suite 100, Box 35, St.

Virgin Islands 00802

Dimensional Fund Advisors LP, Building One, 6300 Bee Cave Road, Austin, Texas, 78746

1,623,488 (4)

*Less than 1%

Includes certain shares that may be acquired within 60 days after

March 10, 2025 from the Company upon exercise of options, as follows:

Includes certain shares that may be acquired within 60 days after March 4, 2026 from the Company upon exercise of options, for each individual, as follows:

Bradley, 1,815,000 shares;

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Rayhill, 120,000 shares;

Roberts, 60,000 shares;

Washer, 60,000 shares;

Wood, 165,000

Wood, 120,000 shares;

Bharwani, 225,000 shares;

Lavin, 397,500 shares.

Robinson, 275,000 shares;

Terry, 255,000 shares.

Bradley’s shares, 1,685,878 are pledged to secure loan(s) to him.

The calculation of beneficial ownership also includes, in

the case of the executive officers, an approximate number of shares each executive officer could be deemed to hold through

contributions made to the Company’s Employee 401(k) Plan (the "401(k) Plan").

The 401(k) Plan provides an option for all

participating employees to purchase stock in the Company indirectly by buying units in a mutual fund.

Each "unit" in the

mutual fund represents an interest in Company stock, cash and cash equivalents.

The calculation of beneficial ownership also includes, in the case of the executive officers, an approximate number of shares each executive officer could be deemed to hold through contributions made to the Company’s Employee 401(k) Plan (the “401(k) Plan”).

The 401(k) Plan provides an option for all participating employees to purchase stock in the Company indirectly by buying units in a mutual fund.

Each “unit” in the mutual fund represents an interest in Company stock, cash and cash equivalents.

These shares are held directly by certain Black Diamond investment vehicles (“Black Diamond vehicles”).

Black Diamond Capital Management, L.L.C.

("Black Diamond") exercises investment discretion on behalf of investment advisory affiliates that serve as investment advisers to the Black Diamond vehicles.

Black Diamond Capital Management I, LLLP (“Black Diamond”) exercises investment discretion on behalf of investment advisory affiliates that serve as investment advisers to the Black Diamond vehicles.

Deckoff is the Managing Principal of Black Diamond.

Deckoff disclaims beneficial ownership over the shares, except to the extent of his pecuniary interest therein.

Includes a total of 4,587,440 shares that are not outstanding as of the date

of this report, but which may be acquired within 60 days after March 10, 2025 upon exercise of options, and includes an estimate

of 401(k) Plan shares.

Includes a total of 3,890,131 shares that are not outstanding as of the date of this report, but which may be acquired within 60 days after March 4, 2026 upon exercise of options, and includes an estimate of 401(k) Plan shares.

3,686 shares are pledged as security by an executive officer.

Based on a report on Schedule 13G/A filed by the named person on February 9, 2024.

Equity Compensation Plan Information

Securities Authorized for Issuance under Equity

Compensation Plans

The table below presents inform a tion regarding

securities authorized for issuance under equity compensation plans, including the CPS 2006 Long-Term Equity Incentive Plan, as of December

securities authorized for issuance under equity compensation plans, including the CPS 2025 Equity Incentive Plan (the “2025 Equity

Plan”), as of December 31, 2025.

Plan Category

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Plans not approved by shareholders

Certain Relationships and Related

Transactions, and Director Independence

Certain Relationships and Related Transactions,

and Director Independence

Subordinated Notes.

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fixed at the time of purchase of each note.

The interest rate on Ms.

Robinson’s notes ranges from 4.9% to 8.9%.

Executive officer Steve Schween purchased such

subordinated notes from the Company before he became an executive officer.

The interest rates on Ms.

Robinson’s notes in 2024 range from 4.9% to 8.9%.

aggregate amount of principal outstanding on Ms.

Robinson’s notes in 2025 was $1,070,269.

The amount of principal outstanding on

Robinson’s notes as of March 4, 2026 was $126,781.

In 2025, the Company paid $1,040,936 of principal on Ms.

notes, which includes principal paid more than once due to the renewal of matured notes during the year.

In 2025, the Company paid $24,891

of interest at rates fixed at the time of purchase of each note.

The interest rates on Ms.

Robinson’s notes in 2025 range from 5.4%

Executive officer Steve Schween purchased such subordinated

notes from the Company before he became an executive officer.

The largest aggregate amount of principal outstanding on Mr.

Schween’s note in 2024 was $665,460.

The amount of principal outstanding as of March 10, 2025 was $665,460.

In 2024, the Company

paid $148,013 in interest at a rate fixed at the time of purchase of the note.

The interest rate on the note is 12.25%.

Noel Jackson, the Company’s

Vice President of Servicing, is the sister of Mr.

Bradley, the Company’s chief executive officer and chairman of the board.

fiscal year 2024, Ms.

Jackson received annual compensation of a base salary of $181,000 and is also eligible for an award under the Executive

Management Bonus Plan described above.

Jackson’s employment with the Company was authorized by the Board of Directors and her

base salary and Executive Management Bonus Plan award is reviewed and approved by the Compensation Committee on an annual basis.

note in each of 2024 and 2025 was $665,460.

The amount of principal outstanding as of March 10, 2025 and March 4, 2026 was $665,460.

2024 and 2025, no principal was paid on the note.

In 2024 and 2025 the Company paid $148,013 and $166,869, respectively, in interest at

a rate fixed at the time of purchase of the note.

The interest rate on the note in 2024 and 2025 was 12.25%.

Noel Jackson, an executive

officer and the Company’s Senior Vice President of Servicing, is the sister of Mr.

Bradley, the Company’s Chief Executive

Officer and chairman of the board.

For fiscal year 2024 and 2025, Ms.

Jackson received annual compensation of a base salary of $181,000

for 2024 and a base salary of $201,000 for 2025 and is also eligible for an award under the Executive Management Bonus Plan described

above which was approved by the Compensation Committee for 2024 and 2025.

Jackson’s employment with the Company was authorized

by the Board of Directors and her base salary and Executive Management Bonus Plan award is reviewed and approved by the Compensation Committee

on an annual basis.

Consulting Engagement.

Carnahan was appointed

as director on February 18, 2026, and has been a senior advisor to FTI Consulting, Inc.

(“FTI”) since 2023.

The Company previously

engaged FTI to provide consulting services to the Company.

During the fiscal year ended December 31, 2024 and December 31, 2025, the

Company paid FTI approximately $127,000 and $173,000, respectively, for such services.

The Company’s engagement with FTI ended

in September 2025.

Beginning in October 2025, the Company engaged Carnahan Black Pearl LLC (“Black Pearl”), of which Mr.

Carnahan is the sole member, to perform similar services.

Other Transactions .

On June 14, 2024,

and as part of the Company’s stock repurchase program, the Company purchased directly from the Company’s chief executive officer,

Bradley, Jr., 50,000 shares of CPS common stock at the previous day’s market closing price of $8.98.

On June 14, 2024, and as

part of the Company’s stock repurchase program, the Company purchased directly from the Company’s chief executive officer,

Bradley, Jr., 50,000 shares of Company common stock at the previous day’s market closing price of $8.98.

The dollar amount

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On September 10, 2024, the Company purchased

an additional 70,000 shares of CPS common stock at the market closing price of $9.85 per share from Mr.

an additional 70,000 shares of Company common stock at the market closing price of $9.85 per share from Mr.

Bradley, and Mr.

interest in the transaction was $689,500.

On September 15, 2025, as part of the Company’s stock repurchase program, the Company

purchased directly from the Company’s director, William B.

Roberts, 100,000 shares of Company common stock at that day’s closing

price of $8.62.

The dollar amount involved in the transaction and Mr.

Robert’s interest in the transaction was $862,000.

4, 2025, the Company purchased an additional 100,000 shares of Company common stock at that day’s closing price of $8.69 per share

Roberts, and Mr.

Robert’s interest in the transaction was $869,000.

Policy on Related Party Transactions and Director

Independence.

It is the Company’s policy that transactions with related parties having a control or fiduciary relationship with the

Company who personally benefit from such transactions may take place only if approved by the Audit Committee or by the members of the

Company’s Board of Directors who are disinterested with respect to the transaction, and independent in accordance with the standards for

director independence prescribed by Nasdaq.

It is the Company’s policy that transactions with related parties having a control or fiduciary relationship with

the Company who personally benefit from such transactions may take place only if approved by the Audit Committee or by the members of

the Company’s Board of Directors who are disinterested with respect to the transaction, and independent in accordance with the standards

for director independence prescribed by Nasdaq.

Such policy is maintained in writing in the charter of the Audit Committee.

The Audit Committee

has given general approval to executive officer purchases of subordinated notes that are on terms and rates then available to the public,

including the purchases by Ms.

Committee has given general approval to executive officer purchases of subordinated notes that are on terms and rates then available to

the public, including the purchases by Ms.

The transactions with Mr.

Schween were not subject to approval because they were entered into

Schween were not subject to approval because they were

entered into before Mr.

Schween was an executive officer.

The repurchases by the Company from Mr.

Bradley were made pursuant to the Company’s stock

repurchase program but were not preapproved.

Bradley were made pursuant to the Company’s

stock repurchase program but were not preapproved.

The Audit Committee subsequently ratified the Company’s transactions with Mr.

The repurchases by the Company from Mr.

Roberts on December 4, 2025 were made pursuant to the Company’s stock repurchase

program but were not preapproved.

The Audit Committee subsequently ratified the Company’s December 4 transaction with Mr.

The nine directors of the Company are Charles

Bradley, Jr., Stephen H.

Bradley, Jr., Scott W.

Carnahan, Stephen H.

Deckoff, Louis M.

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Grounds, Brian J.

Rayhill, William B.

Roberts, James E.

Rayhill, James E.

Walker III, Gregory

Washer, and Daniel S.

Wood, of whom Messrs.

Rayhill, Grasso, Washer, and Wood compose the Audit Committee.

The Board of Directors

has concluded that other than Mr.

Bradley (who is the Company’s chief executive officer), each of the other eight directors is independent

in accordance with the director independence standards prescribed by Nasdaq, and has determined that none of them has a material relationship

with the Company that would impair his independence from management or otherwise compromise his ability to act as an independent director.

Washer, and Mr.

Wood are independent

in accordance with the director independence standards prescribed by Nasdaq, and none of them has a material relationship with the Company

that would impair his independence from management or otherwise compromise his ability to act as an independent director.

Principal Accounting Fees and Services

Fees Paid to Auditors

The following table sets forth the fees accrued

or paid to the Company’s independent registered public accounting firms for the years ended December 31, 2024 and 2023.

has served as the Company’s independent registered public accounting firm since February 2009, and has reported on the Company’s

financial statements for the years ended December 31, 2008 through 2024.

The following table sets forth the fees accrued or

paid to the Company’s independent registered public accounting firms for the years ended December 31, 2025 and 2024.

Crowe has served

as the Company’s independent registered public accounting firm since February 2009, and has reported on the Company’s financial

statements for the years ended December 31, 2008 through 2025.

Audit and Non-Audit Fees

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All Other Fees

Audit fees relate to professional services rendered in connection with the audit of the Company’s annual financial statements and

internal control over financial reporting, quarterly review of financial statements included in the Company’s Quarterly Reports

on Form 10-Q, and audit services provided in connection with other statutory and regulatory filings.

Audit-related fees comprise fees for professional services that are reasonably related to the performance of the audit or review of the

Company’s financial statements.

The 2023 and 2024 tax fees represent services rendered in connection with preparation of state and federal tax returns for the Company

and its subsidiaries.

Audit fees relate to professional services rendered in connection with the audit of the Company’s annual financial statements and internal control over financial reporting, quarterly review of financial statements included in the Company’s Quarterly Reports on Form 10-Q, and audit services provided in connection with other statutory and regulatory filings.

Audit-related fees comprise fees for professional services that are reasonably related to the performance of the audit or review of the Company’s financial statements.

The 2024 and 2025 tax fees represent services rendered in connection with preparation of state and federal tax returns for the Company and its subsidiaries.

Audit Committee Supervision of Principal Accountant

The Audit Committee acts pursuant to a written

charter adopted by the Board of Directors.

Pursuant to the charter, the Audit Committee pre-approves the audit and permitted non-audit

The Audit Committee acts pursuant to a written charter

adopted by the Board of Directors.

Pursuant to the Audit Committee Charter, the Audit Committee pre-approves the audit and permitted non-audit

fees to be paid to the independent auditor, and authorizes on behalf of the Company the payment of such fees, or refuses such authorization.

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In the fiscal years ended December 31, 2025 and December

31, 2023, all services for which audit fees or audit related fees were paid were preapproved by the Audit Committee as a whole, or pursuant

31, 2024, all services for which audit fees or non-audit fees were paid were preapproved by the Audit Committee as a whole, or pursuant

to such delegated authority.

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Consolidated Balance Sheet.

The exhibits listed below are filed as part of

this report, whether filed herewith or incorporated by reference to an exhibit filed with the report identified in the parentheses following

the description of such exhibit.

Unless otherwise indicated, each such identified report was filed by or with respect to the registrant.

The exhibits listed below

are filed as part of this report, whether filed herewith or incorporated by reference to an exhibit filed with the report identified

in the parentheses following the description of such exhibit.

Unless otherwise indicated, each such identified report was filed by or

with respect to the registrant.

Exhibit Number

(“**” indicates compensatory plan or agreement.)

Restated Articles of Incorporation (Exhibit 3.1 to Form 10-K filed

March 31, 2009)

Certificate of Designation re Series B Preferred (Exhibit 3.1.1 to Form 8-K filed by the registrant on December 30, 2010)

Amended and Restated Bylaws (Exhibit 3.2 to Form 8-K filed December 3, 2021)

Instruments defining the rights of holders of long-term debt of certain consolidated subsidiaries of the registrant are omitted pursuant to the exclusion set forth in subdivisions (b)(iv)(iii)(A) and (b)(v) of Item 601 of Regulation S-K (17 CFR 229.601).

Restated Articles of Incorporation (Incorporated by reference herein from Exhibit 3.1 to the Form 10-K filed March 31, 2009)

Certificate of Designation re Series B Preferred (Incorporated by reference herein from Exhibit 3.1.1 to the Form 8-K filed by the registrant on December 30, 2010)

Amended and Restated Bylaws (Incorporated by reference herein from Exhibit 3.2 to the Form 8-K filed December 3, 2021)

Instruments defining the rights of holders of long-term debt of certain consolidated subsidiaries of the registrant are omitted pursuant to the exclusion set forth in subdivisions (b)(4)(iii)(A) and (b)(4)(v) of Item 601 of Regulation S-K (17 CFR 229.601).

The registrant agrees to provide copies of such instruments to the United States Securities and Exchange Commission upon request.

Form of Indenture re Renewable Unsecured Subordinated Notes

(“RUS Notes”).

(Exhibit 4.1 to Form S-1, no.

Form of RUS Notes (Exhibit 4.2 to Form S-1, no.

Form of Indenture re Renewable Unsecured Subordinated Notes (“RUS Notes”).

(Incorporated by reference herein from Exhibit 4.1 to Form S-1, no.

Form of RUS Notes (Incorporated by reference herein from Exhibit 4.2 to Form S-1, no.

Supplement No.

1 dated December 7, 2010 to Indenture re RUS Notes (Exhibit 4.3 to Form S-1, no.

1 dated December 7, 2010 to Indenture re RUS Notes (Incorporated by reference herein from Exhibit 4.3 to Form S-1, no.

Supplement No.

2 dated January 22, 2014 to Indenture re RUS Notes (Exhibit 4.4 to Form S-1, no.

2 dated January 22, 2014 to Indenture re RUS Notes (Incorporated by reference herein from Exhibit 4.4 to Form S-1, no.

Supplement No.

3 dated June 14, 2023 to Indenture re RUS Notes (Exhibit 4.5 to Form S-3, no.

1997 Long-Term Incentive Stock Plan (“1997 Plan”) (Exhibit 10.20 to Form S-2, no.

333-121913) **

Form of Option Agreement under 1997 Plan (Exhibit 10.2.1 to Form 10-K

filed March 13, 2006) **

2006 Long-Term Equity Incentive Plan as amended May 18, 2015 (Incorporated by reference to pages A-1 through A-10 of the definitive proxy statement filed by the registrant on April 27, 2015)**

Form of Option Agreement under the 2006 Long-Term Equity Incentive Plan (Exhibit 10.14.1 to registrant’s Form 10-K filed March 9, 2007)**

Form of Option Agreement under the 2006 Long-Term Equity Incentive Plan (Exhibit 99.(D)(2) to registrant’s Schedule TO filed November 12, 2009)**

Form of Option Agreement under the 2006 Long-Term Equity Incentive Plan (Exhibit 99.(D)(3) to registrant’s Schedule TO filed November 12, 2009)**

Registrant’s Code of Ethics for Senior Financial Officers (Exhibit 14 to Form 10-K filed March 13, 2006)

Insider Trading Policy (filed herewith)

3 dated June 14, 2023 to Indenture re RUS Notes (Incorporated

by reference herein from Exhibit 4.5 to Form S-3, no.

Purchase Agreement dated October 17, 2025, between registrant and Page Eleven Funding LLC (filed herewith)

Loan and Security Agreement dated October 17, 2025, amongst registrant, Page Eleven Funding LLC, Computershare Trust Company, N.A., and Capital One, National Association* (filed herewith)

Servicing Agreement dated November 24, 2015, amongst registrant, Page Nine Funding LLC, Ares Agent Services, L.P., and Credit Suisse AG, New York Branch* (filed herewith)

Security Agreement dated November 24, 2015, between Page Nine Funding LLC and Credit Suisse AG, New York Branch (filed herewith)

Amendments to Revolving Credit Agreement and Servicing Agreement dated November 21, 2017, amongst registrant, Page Nine Funding LLC, Credit Suisse AG, New York Branch, Mountcliff Funding LLC, Ares Commercial Finance, LP, Ares Centre Street Partnership, L.P., Ares Cactus Private Backed Fund, L.P., Ares Agent Services, L.P., and Wells Fargo Bank, National Association (filed herewith)

Amendments to Revolving Credit Agreement, Servicing Agreement, and Backup Servicing Agreement dated December 20, 2019, amongst registrant, Page Nine Funding LLC, Credit Suisse AG, New York Branch, Credit Suisse AG, Cayman Island Branch, Mountcliff Funding LLC, Ares Agent Services, L.P., Sonoran Cactus Private Asset Backed Fund, LLC, Glenlake Loan Fund, LLC, Ares Loan Origination LP, Ares Multi-Credit Fund LLC, Dearborn Park Asset-Backed Fund LLC, Ares Commercial Finance LP, and Wells Fargo Bank, National Association* (filed herewith)

Omnibus Amendment to Revolving Credit Agreement, Custodial Agreement, and Receivables Purchase Agreement, dated April 30, 2025, amongst registrant, Page Nine Funding LLC, Ares Agent Services, L.P., APC Holdings II, L.P., Sonoran Cactus Private Asset Backed Fund, LLC, Glenlake Loan Fund II, LLC, Ares Multi-Credit Fund LLC, Ares Credit Strategies Insurance Dedicated Fund Series Interests of Sali Multi-Series Fund, L.P., Ares Diversified Credit Strategies Fund (s), L.P., and Computershare Trust Company, National Association* (filed herewith)

Amendment to Servicing Agreement dated August 15, 2022, amongst registrant, Page Nine Funding LLC, Ares Agent Services, L.P., Southern Atlantic Re Inc., Capitol Life Insurance Company, American Family Life Assurance Company of Columbus, RSUI Indemnity Company, Transatlantic Reinsurance Company, Allianz Life Insurance Company of North America, Compsource Mutual Insurance Company, The Lincoln National Life Insurance Company, Massachusetts Mutual Life Insurance Company, Sonoran Cactus Private Asset Backed Fund, LLC (Pool III), Ares Commercial Finance LP, and APC Holdings II, L.P.* (filed herewith)

Amended and Restated Credit Agreement dated November 1, 2024, amongst registrant, Page Eight Funding LLC, Citibank, N.A., CAFCO, LLC, Charta, LLC, Ciesco, LLC, CRC Funding, LLC, ABF Auto Holdings 2024-1, LLC, and Oaktree Diversified Income Fund, Inc.* (filed herewith)

Amended and Restated Sale and Servicing Agreement dated November 1, 2024, amongst registrant, Page Eight Funding LLC, Citibank, N.A., and Computershare Trust Company, National Association* (filed herewith)

Amended and Restated Security Agreement dated November 1, 2024, between Page Eight Funding LLC and Citibank, N.A.

(filed herewith)

Amendment to Amended and Restated Credit Agreement dated December 16, 2024, amongst registrant, Page Eight Funding LLC, Citibank, N.A., CAFCO, LLC, Charta, LLC, Ciesco, LLC, CRC Funding, LLC, ABF Auto Holdings 2024-1, LLC, and Oaktree Diversified Income Fund Inc.* (filed herewith)

Omnibus Amendments to Amended and Restated Credit Agreement and Amended and Restated Sale and Servicing Agreement, dated February 19, 2025, amongst registrant, Page Eight Funding LLC, Citibank, N.A., CAFCO, LLC, Charta, LLC, Ciesco, LLC, CRC Funding, LLC, ABF Auto Holdings 2024-1, LLC, Oaktree Diversified Income Fund Inc., and Computershare Trust Company, National Association* (filed herewith)

Amendment to Amended and Restated Credit Agreement dated October 8, 2025, amongst registrant, Page Eight Funding LLC, Citibank, N.A., CAFCO, LLC, Charta, LLC, Ciesco, LLC, CRC Funding, LLC, ABF Auto Holdings 2024-1, LLC, and Oaktree Diversified Income Fund Inc.* (filed herewith)

Auto Receivables Trust 2025-D Purchase Agreement dated October 23, 2025, between registrant and CPS Receivables Five LLC* (filed herewith)

Auto Receivables Trust 2025-C Purchase Agreement dated July 28, 2025, between registrant and CPS Receivables Five LLC* (filed herewith)

Auto Receivables Trust 2025-B Purchase Agreement dated May 12, 2025, between registrant and CPS Receivables Five LLC* (filed herewith)

Auto Receivables Trust 2025-A Purchase Agreement

dated January 22, 2025, between registrant and CPS Receivables Five LLC* (filed herewith)

2025 Equity Incentive Plan (Incorporated by reference

herein from Exhibit 10.1 to the Form 8-K filed November 25, 2025) #

Form of Option Agreement 2025 (Incorporated by

reference herein from Exhibit 10.2 of the Form 8-K filed November 25, 2025) #

2006 Long-Term Equity Incentive Plan as amended May 18, 2015 (Incorporated by reference herein from pages A-1 through A-10 of the definitive proxy statement filed on April 27, 2015) #

Form of Option Agreement under the 2006 Long-Term Equity Incentive Plan (Incorporated by reference herein from Exhibit 10.14.1 to the Form 10-K filed March 9, 2007) #

Form of Option Agreement under the 2006 Long-Term Equity Incentive Plan (Incorporated by reference herein from Exhibit 99.(D)(2) to the Schedule TO filed November 12, 2009) #

Form of Option Agreement under the 2006 Long-Term Equity Incentive Plan (Incorporated by reference herein from Exhibit 99.(D)(3) to the Schedule TO filed November 12, 2009) #

Registrant’s Code of Ethics for Senior Financial Officers (Incorporated by reference herein from Exhibit 14 to the Form 10-K filed March 13, 2006)

Insider Trading Policy (Incorporated by reference herein from Exhibit 19 to the Form 10-K filed March 12, 2025)

List of subsidiaries of the registrant (filed herewith)

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Section 1350 certification (filed herewith)

Policy Relating to Recovery of Erroneously Awarded Compensation (Exhibit 97 to Form 10-K filed March 15, 2024)

Policy Relating to Recovery of Erroneously Awarded Compensation (Incorporated by reference herein from Exhibit 97 to the Form 10-K filed March 15, 2024)

Inline XBRL Instance Document

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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Form 10-K Summary

________________________________

Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K.

# Compensatory Plan or Arrangement.

Form 10-K Summar y

Pursuant to the requirements of Section 13 or 15(d)

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March 16, 2026

/s/ SCOTT CARNAHAN

Scott Carahan, Director

March 16, 2026

/s/ STEPHEN H.

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March 16, 2026

/s/ WILLIAM B.

Roberts, Director

March 12, 2025

Walker, Director

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Las Vegas, Nevada

on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated

balance sheets of Consumer Portfolio Services, Inc.

and Subsidiaries (the "Company") as of December 31, 2024 and 2023, the related

consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-

year period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").

have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal

Control – Integrated Framework:

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”

In our opinion, the financial statements

referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and

the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024 in conformity

Opinions on the Financial

Statements and Internal Control over Financial Reporting

We have audited the accompanying

consolidated balance sheets of Consumer Portfolio Services, Inc.

and Subsidiaries (the "Company") as of December 31, 2025 and

2024, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the

years in the three-year period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements").

We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established

in Internal Control – Integrated Framework:

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission

In our opinion, the financial

statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and

2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025 in conformity

with accounting principles generally accepted in the United States of America.

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Basis for Opinions

The Company’s management is

responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment

The Company’s management

is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment

of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal

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We are a public accounting firm registered with

the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the

Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in

accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and

We conducted our audits in accordance

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financial reporting was maintained in all material respects.

Our audits of the financial statements

included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,

and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts

and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates

made by management, as well as evaluating the overall presentation of the financial statements.

Our audit of internal control over financial

reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness

exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also

included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable

basis for our opinions.

Definition and Limitations of Internal

Control Over Financial Reporting

Our audits of the financial statements included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that

respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as

evaluating the overall presentation of the financial statements.

Our audit of internal control

over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material

weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide

a reasonable basis for our opinions.

Definition and Limitations

of Internal Control Over Financial Reporting

A company’s internal control

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Accounting for Loans at Fair Value

As described in Notes 1 and 12 to

the consolidated financial statements, the Company carries all finance receivables acquired after 2017 at fair value on a recurring basis.

The Company had $3.3 billion in finance receivables that are carried at fair value, all of which are classified as level 3 fair values

as they contain one or more inputs which are unobservable and significant to the fair value measurement.

With assistance from an outside

valuation expert, the Company used a level 3 fair value methodology for the fair value of finance receivables.

The significant assumptions

used by the Company to calculate the fair value of these financial receivables include the magnitude and timing of net charge-offs and

the rate of amortization of the portfolio of finance receivables.

As described in Notes 1 and 12

to the consolidated financial statements, the Company carries all finance receivables acquired after 2017 at fair value on a recurring

The Company had $3.7 billion in finance receivables that are carried at fair value, all of which are classified as level 3 fair

values as they contain one or more inputs which are unobservable and significant to the fair value measurement.

With assistance from an

outside valuation expert, the Company used a level 3 fair value methodology for the fair value of finance receivables.

The significant

assumptions used by the Company to calculate the fair value of these financial receivables include the magnitude and timing of net charge-offs

and the rate of amortization of the portfolio of finance receivables.

These significant assumptions were based on the factors that market

participants use in pricing similar receivables and are based on the best information available in the circumstances.

We identified the valuation of finance

receivables carried at fair value as a critical audit matter as this estimate requires subjective auditor judgment.

Our principal considerations

in making this determination are (i) there was significant judgment and estimation by the Company in determining the assumptions to estimate

fair value, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures related to the fair

value of these finance receivables, and (ii) the audit effort involved professionals with specialized skill and knowledge to assist in

evaluating the audit evidence obtained from these procedures.

Testing the design and operating effectiveness

of controls over the application of the assumptions used to support the estimate of loans at fair value included addressing:

completeness and accuracy of data

of management’s judgments and significant assumptions over inputs

Substantively testing management's process, including

evaluating management’s judgments and assumptions, for developing the estimate of loans at fair value included:

an auditor employed valuation specialist to assist in testing the Company’s estimate of fair value of the finance receivables.

included evaluation of certain management significant assumptions and, evaluating the appropriateness of the methodology including a recalculation

of the model.

the completeness and accuracy of the underlying data used in the fair value of finance receivables estimate.

We identified

the valuation of finance receivables carried at fair value as a critical audit matter as this estimate requires subjective auditor judgment.

Our principal considerations in making this determination are (i) there was significant judgment and estimation by the Company in determining

the assumptions to estimate fair value, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing

procedures related to the fair value of these finance receivables, and (ii) the audit effort involved professionals with specialized

skill and knowledge to assist in evaluating the audit evidence obtained from these procedures.

Testing the design and operating

effectiveness of controls over the application of the assumptions used to support the estimate of loans at fair value included addressing:

· The completeness and accuracy of data,

· Third-party model review,

· Review of management’s judgments and significant assumptions over inputs.

Substantively testing management's

process, including evaluating management’s judgments and assumptions, for developing the estimate of loans at fair value included:

· Using an auditor employed valuation specialist to assist in testing the Company’s

estimate of fair value of the finance receivables.

Testing included evaluation of certain management significant assumptions and evaluating

the appropriateness of the methodology including a recalculation of the model.

· Testing the completeness and accuracy of the underlying data used in the fair value

of finance receivables estimate.

We have served as the Company’s auditor since 2008.

Dallas, Texas

Angeles, California

March 16, 2026

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Finance receivables measured at fair value

Finance receivables

Allowance for finance credit losses

Finance receivables, net

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authorized 75,000,000 shares;

21,432,698 and 21,174,856 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively

21,842,457 and 21,432,698 shares issued and

outstanding at December 31, 2025 and December 31, 2024, respectively

Retained earnings

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Depreciation and amortization

Total operating expenses

Total expenses

Income before income tax expense (benefit)

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

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Other comprehensive income (loss);

change in funded status of pension plan, net of $ 681 , $ 422 and $ 513 in tax for 2024, 2023 and 2022, respectively

change in funded status of pension plan, net of ($ 433 ),

$ 681 and $ 422 in tax for 2025, 2024 and 2023, respectively

Comprehensive income

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Net advances (repayments) of warehouse lines of credit

Net advances (repayments) of residual interest financing debt

Proceeds from issuance of residual interest financing debt

Repayment of residual interest financing debt

Repayment of securitization trust debt

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vehicle dealers ("Dealers") located throughout the United States.

Customers located in Texas, Ohio, California, Illinois, Florida,

Customers located in Ohio, Texas, Illinois, California, Florida,

and Georgia represented 7.8 %, 7.0 %, 5.9 %, 5.3 %, 5.3 %, and 5.0 %.

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Statements include the accounts of Consumer Portfolio Services, Inc.

and its wholly-owned subsidiaries, certain of which are special

purpose subsidiaries (“SPS”), formed to accommodate the structures under which we purchase and securitize our contracts.

The Consolidated Financial Statements also include the accounts of CPS Leasing, Inc., an 80% owned subsidiary.

All significant intercompany

balances and transactions have been eliminated in consolidation.

and its wholly-owned subsidiaries, certain of which are special purpose

subsidiaries ( " SPS " ),

formed to accommodate the structures under which we purchase and securitize our contracts.

The Consolidated Financial Statements also

include the accounts of CPS Leasing, Inc., an 80% owned subsidiary.

All significant intercompany balances and transactions have been eliminated

in consolidation.

Cash and Cash Equivalents

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the minimum amounts required by our financial covenants.

Finance Receivables

Finance receivables, which

we have the intent and ability to hold for the foreseeable future or until maturity or payoff, are presented at cost.

All finance receivable

contracts are held for investment.

Interest income is accrued on the unpaid principal balance.

Origination fees, net of certain direct

origination costs, are deferred and recognized in interest income using the interest method without anticipating prepayments.

payments received on finance receivables are restricted to certain securitized pools, and the related contracts cannot be resold.

receivables are charged off pursuant to the controlling documents of certain securitized pools, generally as described below under Charge

Management may authorize an extension of payment terms if collection appears likely during the next calendar month.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our portfolio of finance receivables

consists of small-balance homogeneous contracts that are collectively evaluated for impairment on a portfolio basis.

We report delinquency

on a contractual basis.

Once a Contract becomes greater than 90 days delinquent, we do not recognize additional interest income until

the obligor under the Contract makes sufficient payments to be less than 90 days delinquent.

Any payments received on a Contract

that is greater than 90 days delinquent are first applied to accrued interest and then to principal reduction.

Finance Receivables Measured at Fair Value

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value, an adjustment would be required.

For the twelve-month period ended December 31, 2024 include a $ 21 .0 million positive mark to the

The twelve-month period ended December 31, 2025, includes a $ 6.5 million positive mark to the

carrying value of the portion of the receivables portfolio accounted for at fair value.

The Company recorded a $ 12 .0 positive mark to

for the twelve-month period ended December 31, 2023.

The Company recorded a $ 21 .0 positive mark for

the twelve-month period ended December 31, 2024.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Anticipated credit losses

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Rather we recognize the costs of acquisition as expenses in the period incurred.

Allowance for Finance Credit Losses

In order to estimate an appropriate

allowance for losses likely incurred on finance receivables, we use a loss allowance methodology commonly referred to as “ static

pooling,” which stratifies the finance receivable portfolio into separately identified pools based on their period of origination,

then uses historical performance of seasoned pools to estimate future losses on current pools.

Historical loss experience is adjusted

as necessary for current economic conditions.

We consider our portfolio of finance receivables to be relatively homogenous and consequently

we analyze credit performance primarily in the aggregate rather than stratification by any particular credit quality indicator.

analytical and formula driven techniques, we estimate an allowance for finance credit losses, which we believe is adequate for current

expected credit losses that can be reasonably estimated in our portfolio of finance receivable contracts.

Net losses incurred on finance

receivables are charged to the allowance.

We evaluate the adequacy of the allowance by examining current delinquencies, the characteristics

of the portfolio, the value of the underlying collateral and historical loss trends.

As conditions change, our level of provisioning

and/or allowance may change.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Finance Receivables, net

Finance receivables, which

we have the intent and ability to hold for the foreseeable future or until maturity or payoff, are presented at cost.

All finance receivable

contracts are held for investment.

Interest income is accrued on the unpaid principal balance.

Origination fees, net of certain direct

origination costs, are deferred and recognized in interest income using the interest method without anticipating prepayments.

payments received on finance receivables are restricted to certain securitized pools, and the related contracts cannot be resold.

receivables are charged off pursuant to the controlling documents of certain securitized pools, generally as described below under Charge

Management may authorize an extension of payment terms if collection appears likely during the next calendar month.

Our portfolio of finance receivables

consists of small-balance homogeneous contracts that are collectively evaluated for impairment on a portfolio basis.

We report delinquency

on a contractual basis.

Once a Contract becomes greater than 90 days delinquent, we do not recognize additional interest income until

the obligor under the Contract makes sufficient payments to be less than 90 days delinquent.

Any payments received on a Contract

that is greater than 90 days delinquent are first applied to accrued interest and then to principal reduction.

Charge Off Policy

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charged off no later than the end of the month that the Contract becomes five scheduled payments past due.

Contract Acquisition Fees and Origination Costs

Upon purchase of a Contract

from a Dealer, we generally either charge or advance the Dealer an acquisition fee.

Dealer acquisition fees and deferred origination costs

are applied to the recorded value of finance receivables and are accreted into earnings as an adjustment to the yield over the estimated

life of the Contract using the interest method.

However, for receivables measured at fair value, we do not record acquisition fees as

an amortizing asset related to the receivables, nor do we capitalize costs of acquiring the receivables.

Rather we recognize the costs

of acquisition as expenses in the period incurred.

Repossessed and Other Assets

Repossession Policy

If a Contract obligor fails

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on the specific circumstances.

At the time the vehicle is repossessed we stop accruing interest on the Contract, and reclassify the remaining

Contract balance to the line item "Other Assets" on our Consolidated Balance Sheet at its estimated fair value less costs to

Treatment of Securitizations

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to us by the Dealer.

One or more investors (the “Noteholders”) purchase

the Notes issued by the Trust;

One or more investors (the " Noteholders " )

purchase the Notes issued by the Trust;

the proceeds from the sale of the Notes are then used to purchase the contracts from us.

We may retain

or sell subordinated Notes issued by the Trust.

In addition, we have provided "Credit Enhancement" for the benefit of the Noteholders

in three forms:

(1) an initial cash deposit to a bank account (a "Spread Account") held by the Trust, (2) overcollateralization

of the Notes, where the principal balance of the Notes issued is less than the principal balance of the contracts, and (3) in the form

of subordinated Notes.

The agreements governing the securitization transactions (collectively referred to as the "Securitization

Agreements") require that the initial level of Credit Enhancement be supplemented by a portion of collections from the contracts

until the level of Credit Enhancement reaches specified levels, which are then maintained.

The specified levels are generally computed

as a percentage of the principal amount remaining unpaid under the related contracts.

The specified levels at which the Credit Enhancement

is to be maintained will vary depending on the performance of the portfolios of contracts held by the Trusts and on other conditions.

Such levels have increased and decreased from time to time based on performance of the various portfolios, and have also varied from

one Trust to another.

retain or sell subordinated Notes issued by the Trust.

In addition, we have provided " Credit

Enhancement " for the benefit of the Noteholders in three forms:

an initial cash deposit to a bank account (a " Spread Account " )

held by the Trust, (2) overcollateralization of the Notes, where the principal balance of the Notes issued is less than the principal

balance of the contracts, and (3) in the form of subordinated Notes.

The agreements governing the securitization transactions (collectively

referred to as the " Securitization Agreements " )

require that the initial level of Credit Enhancement be supplemented by a portion of collections from the contracts until the level of

Credit Enhancement reaches specified levels, which are then maintained.

The specified levels are generally computed as a percentage of

the principal amount remaining unpaid under the related contracts.

The specified levels at which the Credit Enhancement is to be maintained

will vary depending on the performance of the portfolios of contracts held by the Trusts and on other conditions.

Such levels have increased

and decreased from time to time based on performance of the various portfolios, and have also varied from one Trust to another.

CONSUMER PORTFOLIO SERVICES, INC.

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trust debt on our Consolidated Balance Sheet.

We receive periodic base servicing

fees for the servicing and collection of the contracts.

In addition, we are entitled to the cash flows from the Trusts that represent

collections on the contracts in excess of the amounts required to pay principal and interest on the Notes, the base servicing fees, and

certain other fees (such as trustee and custodial fees).

Required principal payments on the Notes are generally defined as the payments

sufficient to keep the principal balance of the Notes equal to the aggregate principal balance of the related contracts (excluding those

contracts that have been charged off), or a pre-determined percentage of such balance.

Where that percentage is less than 100%, the related

Securitization Agreements require accelerated payment of principal until the principal balance of the Notes is reduced to the specified

Such accelerated principal payment is said to create " overcollateralization "

of the Notes.

We receive periodic base

servicing fees for the servicing and collection of the contracts.

In addition, we are entitled to the cash flows from the Trusts that

represent collections on the contracts in excess of the amounts required to pay principal and interest on the Notes, the base servicing

fees, and certain other fees (such as trustee and custodial fees).

Required principal payments on the Notes are generally defined as

the payments sufficient to keep the principal balance of the Notes equal to the aggregate principal balance of the related contracts

(excluding those contracts that have been charged off), or a pre-determined percentage of such balance.

Where that percentage is less

than 100%, the related Securitization Agreements require accelerated payment of principal until the principal balance of the Notes is

reduced to the specified percentage.

Such accelerated principal payment is said to create “overcollateralization” of the Notes.

If the amount of cash required

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accompanying Consolidated Balance Sheets, represent fees earned but not yet remitted to us by the trustee.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Furniture and Equipment

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disposed of are reported at the lower of carrying amount or fair value less costs to sell.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the primary components

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Third-party portfolio

Direct mail revenues

Sales tax refunds

Other income for the period

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Earnings Per Share

Earnings per share were calculated

using the weighted average number of shares outstanding for the related period.

The following table illustrates the computation of basic

and diluted earnings per share:

Earnings per share were calculated using the weighted

average number of shares outstanding for the related period.

The following table illustrates the computation of basic and diluted earnings

Schedule of computation of earnings per share

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Financial Covenants

Certain of our securitization

transactions, our warehouse credit facilities and our residual interest financing contain various financial covenants requiring minimum

financial ratios and results.

Such covenants include maintaining minimum levels of liquidity and net worth and not exceeding maximum leverage

As of December 31, 2024, we were in compliance with all such covenants.

In addition, certain of our debt agreements other than

our term securitizations contain cross-default provisions.

Such cross-default provisions would allow the respective creditors to declare

a default if an event of default occurred with respect to other indebtedness of ours, but only if such other event of default were to

be accompanied by acceleration of such other indebtedness.

Our warehouse credit facilities

and our residual interest financing contain various financial covenants requiring minimum financial ratios.

Such covenants include maintaining

minimum levels of liquidity and net worth and not exceeding maximum leverage levels.

As of December 31, 2025, we were in compliance with

all such covenants.

In addition, certain of our debt agreements other than our term securitizations contain cross-default provisions.

Such cross-default provisions would allow the respective creditors to declare a default if an event of default occurred with respect to

other indebtedness of ours, but only if such other event of default were to be accompanied by acceleration of such other indebtedness.

Provision for Contingent Liabilities

We are routinely involved

in various legal proceedings resulting from our consumer finance activities and practices, both continuing and discontinued.

counsel has advised us on such matters where, based on information available at the time of this report, there is an indication that it

is both probable that a liability has been incurred and the amount of the loss can be reasonably determined.

are routinely involved in various legal proceedings resulting from our consumer finance activities and practices, both continuing and

discontinued.

Our legal counsel has advised us on such matters where, based on information available at the time of this report, there

is an indication that it is both probable that a liability has been incurred and the amount of the loss can be reasonably determined.

As of December 31, 2025, there are no such legal proceedings pending and therefore we do not have a legal contingency recorded as a liability.

Accounting Pronouncements Recently Adopted

In In December of 2023, the FASB issued ASU 2023-09, Income

Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires disaggregated information in the rate reconciliation

and income taxes paid disclosures.

CONSUMER PORTFOLIO SERVICES, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We have recorded a liability

as of December 31, 2024, which represents our estimate of the immaterial aggregate probable incurred losses for legal contingencies.

amount of losses that may ultimately be incurred, over and above such losses as are probable, cannot be estimated with certainty.

Accounting Pronouncements Recently Adopted

In November of 2023, the

FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The amendments in

this ASU became effective for the Company beginning with this Annual Report on Form 10-K for the year ended December 31, 2024, and we

have adopted using the retrospective transition method.

The adoption did not have a material impact on the Company’s consolidated

financial statements.

See Note 13 for additional information on the adoption of ASU 2023-07.

The amendments in this ASU became effective for

the Company beginning with this Annual Report on Form 10-K for the year ended December 31, 2025, and we have adopted using the prospective

transition method.

See Note 9 for disclosures reflecting the adoption of ASU 2023-09.

We do not believe that any other accounting pronouncements

issued, but not yet effective, are applicable or would have a material impact on our consolidated financial statements or disclosures,

(2) Restricted Cash

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These cash reserves, which are included in restricted cash, were $ 74.9 million and $ 62.3 million as of December 31, 2025, and 2024, respectively.

(3) Finance Receivables

(3) Finance Receivables, net

Our portfolio of finance receivables,

consists of small-balance homogeneous contracts comprising a single segment and class that is collectively evaluated for impairment on

a portfolio basis according to delinquency status.

net consists of small-balance homogeneous contracts comprising a single segment and class that is collectively evaluated for impairment

on a portfolio basis according to delinquency status.

Our contract purchase guidelines are designed to produce a homogenous portfolio.

key terms such as interest rate, length of contract, monthly payment and amount financed, there is relatively little variation from the

average for the portfolio.

For key terms such as interest rate, length of contract, monthly payment and amount financed, there is relatively little variation from

the average for the portfolio.

We report delinquency on a contractual basis.

Once a contract becomes greater than 90 days delinquent, we do

not recognize additional interest income until the obligor under the contract makes sufficient payments to be less than 90 days delinquent.

Any payments received on a contract that is greater than 90 days delinquent are first applied to accrued interest and then to principal

Once a contract becomes greater than 90 days delinquent,

we do not recognize additional interest income until the obligor under the contract makes sufficient payments to be less than 90 days

Any payments received on a contract that is greater than 90 days delinquent are first applied to accrued interest and then

to principal reduction.

In January 2018 the Company

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recorded separately on the Company’s Balance Sheet and are excluded from all tables in this footnote.

The following table presents the components of

finance receivables, net of unearned interest:

Schedule of finance receivables

Finance receivables

(In thousands)

Automobile finance receivables, net of unearned interest

Unearned acquisition fees, discounts and deferred origination costs, net

Finance receivables

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We consider an automobile

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(In thousands)

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Finance receivables totaling

$ 271,000 and $ 1.1 million at December 31, 2024 and 2023, respectively, have been placed on non-accrual status as a result of their delinquency

$ 20,000 and $ 271,000 on December 31, 2025, and 2024, respectively, have been placed on non-accrual status as a result of their delinquency

Allowance for Credit Losses

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Management estimates the allowance

using relevant available information, from internal and external sources, relating to past events, current conditions and, reasonable

and supportable forecasts.

using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and

supportable forecasts.

We believe our historical credit loss experience provides the best basis for the estimation of expected credit

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of origination, to forecast expected losses for less seasoned quarterly vintage pools.

We measure the weighted average

monthly incremental change in cumulative net losses for the vintage pools in the relevant historical period.

For the pools in the relevant

historical period, we consider each pool’s performance from its inception through the end of the current period.

We then apply the

results of the historical analysis to less seasoned vintage pools beginning with each vintage pool’s most recent actual cumulative

net loss experience and extrapolating from that point based on the historical data.

We believe the pattern and magnitude of losses on

older vintages allows us to establish a reasonable and supportable forecast of less seasoned vintages.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our contract purchase guidelines

are designed to produce a homogenous portfolio.

For key credit characteristics of individual contracts such as obligor credit history,

job stability, residence stability and ability to pay, there is relatively little variation from the average for the portfolio.

for key structural characteristics such as loan-to-value, length of contract, monthly payment and amount financed, there is relatively

little variation from the average for the portfolio.

Consequently, we do not believe there are significant differences in risk characteristics

between various segments of our portfolio.

Our methodology incorporates

historical pools that are sufficiently seasoned to capture the magnitude and trends of losses within those vintage pools.

the historical period encompasses a substantial volume of receivables over periods that include fluctuations in the competitive landscape,

the Company’s rates of growth, size of our managed portfolio and fluctuations in economic growth and unemployment.

In consideration of the depth

and breadth of the historical period, and the homogeneity of our portfolio, we generally do not adjust historical loss information for

differences in risk characteristics such as credit or structural composition of segments of the portfolio or for changes in environmental

conditions such as changes in unemployment rates, collateral values or other factors.

Throughout our history we have observed how events

such as extreme weather, political unrest, and other qualitative factors have influenced the performance of our portfolio.

Consequently,

we have considered how such qualitative factors may affect future credit losses and have incorporated our judgement of the effect of those

factors into our estimates.

The following table presents

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For our receivables originated prior to January

2018, we maintain an allowance for credit losses on automobile contracts held on our balance sheet, which reflects our estimates of probable

credit losses that can be reasonably estimated.

The Company recorded a reduction to provision for credit losses on finance receivables

in the amount of $ 5.3 million, $ 22.3 million, and $ 28.1 million for the years ended December 31, 2024, 2023, and 2022, respectively.

reserve decrease was primarily due to a decrease in lifetime expected credit losses resulting from better than expected credit performance

for these receivables.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2018, we recorded a reduction to provision for credit losses on finance receivables in the amount of $ 2.9 million, $ 5.3 million, and $ 22.3

million for the years ended December 31, 2025, 2024, and 2023, respectively.

The reserve decrease was primarily due to a decrease in lifetime

expected credit losses resulting from better-than-expected credit performance for these receivables.

The following table presents

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Applied against repos in inventory (net)

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(4) Furniture and Equipment

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accumulated depreciation and amortization

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Depreciation expense totaled $ 881,000 , $ 862,000 ,

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(Dollars in thousands)

September 2026

December 2026

November 2027

September 2028

December 2028

November 2030

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November 2031

February 2033

_________________________

(1) The Final Scheduled Payment Date represents final legal maturity of the securitization trust debt.

Securitization trust debt is expected to become due and to be paid prior to those dates, based on amortization of the finance receivables

pledged to the Trusts.

Expected payments, which will depend on the performance of such receivables, as to which there can be no assurance,

are $ 987.8 million in 2025, $ 696.4 million in 2026, $ 470.5 million in 2027, $ 275.1 million in 2028, $ 126.6 million in 2029, and $ 38 .0

million in 2030.

(2) Includes repossessed assets that are included in Other Assets on our Consolidated Balance Sheets.

Final Scheduled Payment Date represents final legal maturity of the securitization trust

Securitization trust debt is expected to become due and to be paid prior to those dates,

based on amortization of the finance receivables pledged to the Trusts.

Expected payments,

which will depend on the performance of such receivables, as to which there can be no assurance,

are $1,168.0 million in 2026, $825.5 million in 2027, $498.4 million in 2028, $294.8 million

in 2029, $156.3 million in 2030, and $43.6 million in 2031.

(2) Includes repossessed assets that are included in Other Assets on our

Consolidated Balance Sheets.

CONSUMER PORTFOLIO SERVICES, INC.

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The terms of the various securitization

agreements related to the issuance of the securitization trust debt require that certain delinquency and credit loss criteria be met with

respect to the collateral pool, and require that we maintain minimum levels of liquidity and net worth and not exceed maximum leverage

We were in compliance with all such covenants as of December 31, 2024.

agreements related to the issuance of the securitization trust debt, prior to 2024, require that certain credit loss criteria be met with

respect to the collateral pool.

We were in compliance with all such criteria as of December 31, 2025.

We are responsible for the

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Amount Outstanding at

Subordinate Lender

(In thousands)

Interest Rate

Warehouse line of

Lender Interest Rate

Warehouse lines of credit

2.85% over CP yield rate (Minimum 3.60%) 6.80% and 7.52% at December 31, 2025 and December 31 2024, respectively

6.40% over SOFR yield rate (Minimum 7.15%) 11.09% at December 31, 2024

Warehouse line of

6.40% over SOFR yield rate (Minimum 7.15%) 10.40% and 11.09% at December 31, 2025 and December 31, 2024, respectively

Warehouse lines of credit

4.50% over a commercial paper rate (Minimum 7.50%) 8.25% and 8.90% at December 31 2025, and December 31 2024, respectively

Residual interest

Subordinated renewable

Warehouse lines of credit

2.75% over SOFR yield rate (Minimum 3.00%) 6.50% at December 31, 2025

6.40% over SOFR yield rate (Minimum 6.65%) 10.27% at December 31, 2025

Residual interest financing

Subordinated renewable notes

Weighted average rate of 8.98 % and 9.24 % at December 31, 2025 and December 31, 2024, respectively

Weighted average maturity of December 2026 and February 2026 at

December 31, 2024 and December 31, 2023, respectively

Weighted average maturity of November 2027 and December 2026 at December 31, 2025 and December 31,

2024, respectively

CONSUMER PORTFOLIO SERVICES, INC.

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Debt issuance costs of $ 3.9

million and $ 599,000 as of December 31, 2024 and December 31, 2023, respectively, have been excluded from the table above.

issuance costs are presented as a direct deduction to the carrying amount of the Warehouse lines of credit and residual interest financing

on our Consolidated Balance Sheets.

million and $ 5.1 million as of December 31, 2025, and December 31, 2024, respectively, have been excluded from the table above.

debt issuance costs are presented as a direct deduction to the carrying amount of the Warehouse lines of credit and residual interest

financing on our Consolidated Balance Sheets.

On May 11, 2012, we entered

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July 15, 2022, we renewed our two-year revolving credit agreement with Citibank, N.A., and doubled the capacity from $100 million to $200

The facility is structured to allow us to fund a portion of the purchase price of automobile contracts by borrowing from a credit

facility to our consolidated subsidiary Page Eight Funding, LLC.

The facility provides for effective advances up to 95.00% of eligible

finance receivables.

The Class A loans under the facility generally accrue interest during the revolving period at a per annum rate equal

to the CP Cost of Funds Rate plus 2.85% per annum, with a minimum rate of 3.60% per annum and during the amortization period at a per

annum rate equal to the CP Cost of Funds Rate plus 3.85% per annum, with a minimum rate of 4.60% per annum.

In July 2024, this facility

was amended to extend the revolving period to July 2026 and to include an amortization period through July 2027 for any receivables pledged

to the facility at the end of the revolving period.

In November 2024, we closed a revolving credit agreement with Oaktree Capital Management,

which was subordinate to our credit agreement with Citibank, N.A., and with a $25 million credit capacity.

The facility provides effective

advances up to 10.00% of eligible finance receivables.

The Class B loans under the facility generally accrue interest during the revolving

period at a per annum rate equal to the Adjusted Term SOFR plus 6.40% per annum, with a minimum rate of 7.15% per annum and during the

amortization period at a per annum rate equal to the Adjusted Term SOFR plus 7.40% per annum, with a minimum rate of 8.15% per annum.

In December 2024, we increased the capacity to $ 335 million.

The facility provides for effective advances up to 95.00% of eligible finance receivables.

The Class A loans under the facility

generally accrue interest during the revolving period at a per annum rate equal to the CP Cost of Funds Rate plus 2.85% per annum, with

a minimum rate of 3.60% per annum and during the amortization period at a per annum rate equal to the CP Cost of Funds Rate plus 3.85%

per annum, with a minimum rate of 4.60% per annum.

In July 2024, this facility was amended to extend the revolving period to July 2026

and to include an amortization period through July 2027 for any receivables pledged to the facility at the end of the revolving period.

In November 2024, we closed a revolving credit agreement with Oaktree Capital Management, which is subordinate to our credit agreement

with Citibank, N.A., and has a $35 million credit capacity.

The facility provides effective advances up to 10.00% of eligible finance

The Class B loans under the facility generally accrue interest during the revolving period at a per annum rate equal to the

Adjusted Term SOFR plus 6.40% per annum, with a minimum rate of 7.15% per annum and during the amortization period at a per annum rate

equal to the Adjusted Term SOFR plus 7.40% per annum, with a minimum rate of 8.15% per annum.

In December 2024, we increased the capacity

to $ 335 million.

At December 31, 2025, there was $ 197.1 million outstanding under this facility.

On February 2, 2022, we renewed

our two-year revolving credit agreement with Ares Agent Services, L.P.

The facility is structured to allow us to fund a portion of the

purchase price of automobile contracts by borrowing from a credit facility to our consolidated subsidiary Page Nine Funding, LLC.

facility provides for effective advances up to 85.25% of eligible finance receivables.

The loans under the facility accrue interest at

a commercial paper rate plus 4.50% per annum, with a minimum rate of 7.50% per annum.

In June 2022, we increased the capacity of our credit

agreement with Ares Agent Services, L.P.

from $100 million to $200 million.

This facility was most recently renewed in March 2024, extending

the revolving period to March 2026 followed by an amortization period through March 2028 for any receivables pledged to the facility at

the end of the revolving period.

On November 24, 2015, we entered

into a $ 100 million one-year warehouse credit line with affiliates of Credit Suisse Group and Ares Management LP.

In June 2022, we increased

the capacity of the credit agreement from $100 million to $200 million.

This facility was most recently renewed, with Ares Management

LP, in March 2024, extending the revolving period to March 2026 followed by an amortization period through March 2028 for any receivables

pledged to the facility at the end of the revolving period.

The facility is structured to allow us to fund a portion of the purchase price

of automobile contracts by borrowing from a credit facility to our consolidated subsidiary Page Nine Funding, LLC.

The facility provides

for effective advances up to 85.25% of eligible finance receivables.

The loans under the facility accrue interest at a commercial paper

rate plus 4.50% per annum, with a minimum rate of 7.50% per annum.

At December 31, 2025 there was $ 11.8 million outstanding under this

On October 17, 2025, we entered

into a $ 167.5 million two-year warehouse credit line with Capital One, N.A as the Class A Lender and Oaktree Asset-Backed Income Private

Placement Fund Inc., as the Class B Lenders.

The facility is structured to allow us to fund a portion of the purchase price of automobile

contracts by borrowing from a credit facility to our consolidated subsidiary Page Eleven Funding, LLC.

The facility provides for effective

advances up to 95.50% of eligible finance receivables.

The Class A loans under the facility generally accrue interest during the revolving

period at a per annum rate equal to the Term SOFR plus 2.75% per annum, with a minimum rate of 3.00% per annum and during the amortization

period at a per annum rate equal to the Term SOFR plus 3.75% per annum, with a minimum rate of 4.00% per annum.

The Class B loans under

the facility generally accrue interest during the revolving period at a per annum rate equal to the Term SOFR plus 6.40% per annum, with

a minimum rate of 6.65% per annum and during the amortization period at a per annum rate equal to the Term SOFR plus 7.40% per annum,

with a minimum rate of 7.65% per annum.

At December 31, 2025, there was $ 118.3 million outstanding under this facility.

The total outstanding debt

on our two warehouse lines of credit was $ 415.2 million as of December 31, 2024, compared to $ 234.6 million outstanding as of December

on our three warehouse lines of credit was $ 327.2 million as of December 31, 2025, compared to $ 415.2 million outstanding as of December

On June 30, 2021, we completed

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At December 31, 2025, there was $ 31.2 million outstanding under this facility,

compared to $ 50 .0 million outstanding as of December 31, 2024.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On March 22, 2024, we completed

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At December 31, 2025, there was $ 49.8 million outstanding

under this facility, compared to $ 50 .0 million outstanding as of December 31, 2024.

On March 20, 2025, we completed

a $ 65 million securitization of residual interests from previously issued securitizations.

In the transaction, a qualified institutional

buyer purchased $ 65 .0 million of asset-backed notes secured by an 80% interest in a CPS affiliate that owns the residual interests in

five CPS securitizations issued from October 2023 through September 2024.

The sold notes (“2025-1 Notes”), issued by CPS Auto

Securitization Trust 2025-1, consist of a single class with a coupon of 11.00%.

At December 31, 2025, there was $ 63.5 million outstanding

under this facility.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The agreed valuation of the

collateral for the 2021-1 and 2024-1 Notes are the sum of the amounts on deposit in the underlying spread accounts for each related securitization

and the over-collateralization of each related securitization, which is the difference between the outstanding principal balances of the

related receivables less the principal balance of the outstanding notes issued in the related securitization.

On each monthly payment

date, the 2021-1 and 2024-1 Notes are entitled to interest at the coupon rate and, if necessary, a principal payment necessary to maintain

a specified minimum collateral ratio.

collateral for the 2021-1, 2024-1, and 2025-1 Notes are the sum of the amounts on deposit in the underlying spread accounts for each related

securitization and the over-collateralization of each related securitization, which is the difference between the outstanding principal

balances of the related receivables less the principal balance of the outstanding notes issued in the related securitization.

monthly payment date, the 2021-1, 2024-1, and 2025-1 Notes are entitled to interest at the coupon rate and, if necessary, a principal

payment necessary to maintain a specified minimum collateral ratio.

Unamortized debt issuance

costs of $ 824,000 and $ 125,000 as of December 31, 2024 and December 31, 2023, respectively, have been excluded from the amount reported

costs of $ 1.5 million and $ 824,000 as of December 31, 2025, and December 31, 2024, respectively, have been excluded from the amount reported

above for residual interest financing.

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shares of our common stock at an average price of $ 9.20 .

In April 2024 our board of directors authorized the repurchase of an additional $ 10

In July 2025 our board of directors authorized the repurchase of an additional $ 5

million of our common stock.

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Company or its subsidiaries.

In June 2008, May 2012, April 2013, May 2015, July 2018 and again in November 2021, the shareholders of the

Company approved an amendment to the 2006 Plan to increase the maximum number of shares that may be subject to awards under the 2006 Plan

to 5,000,000, 7,200,000, 12,200,000, 17,200,000, 19,200,000 and 22,200,000 , respectively, in each case plus shares authorized under prior

plans and not issued.

Options that have been granted under the 2006 Plan and a previous plan approved in 1997 have been granted at an

exercise price equal to (or greater than) the stock’s fair value at the date of the grant, with terms generally of 7-10 years and

vesting generally over 4-5 years.

There were no stock options

granted during the years ended December 31, 2024 and 2023.

The per share weighted-average fair value of stock options granted during the

year ended December 31 2022 was $ 5.42 .

The maximum number of shares that may be subject to awards under the 2025 Plan is 3,000,000 plus shares authorized

under prior plans and not issued.

Options that have been granted under prior plans have been granted at an exercise price equal to (or

greater than) the stock’s fair value at the date of the grant, with terms generally of 7-10 years and vesting generally over 4-5

The per share weighted-average

fair value of stock options granted during the years ended December 31, 2025, was $ 3.41 .

That fair value was estimated using a binomial option pricing model using the weighted average assumptions noted in the following table.

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of our stock over the period that equals the expected life of the option.

Volatility assumptions ranged from 75 %

Volatility assumption is 54 %

The risk-free interest rate is based on the yield on a U.S.

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The dividend yield is estimated to be zero based on our intention not to issue dividends for the foreseeable future.

were no stock options granted during the year ended December 31, 2024 and 2023.

Schedule of assumptions for stock options

Year Ended December 31,

Expected life (years)

1 unchanged sentence

Expected dividend yield

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December

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At December 31, 2025, and

2023, options outstanding had intrinsic values of $ 33.3

million and $ 36.1

million , respectively.

At December 31, 2024 and 2023, options exercisable had intrinsic values of $ 31.2

million and $ 31.2

million , respectively.

2024, options outstanding had intrinsic values of $ 19.4 million and $ 33.3 million , respectively.

At December 31, 2025, and 2024, options

exercisable had intrinsic values of $ 17.8 million and $ 31.2 million , respectively.

The total intrinsic value of options exercised was

million and $ 14.5

million for the years ended December 31, 2024 and 2023, respectively.

New shares were issued for all options exercised during

the year ended December 2024 for a total price of $ 6.9

$ 8.4 million and $ 8.2 million for the years ended December 31, 2025, and 2024, respectively.

New shares were issued for all options exercised

during the year ended December 2025 and cash of $ 4.7 million was received.

At December 31, 2025, there were a total of

4,501,000 additional shares available for grant under the 2025 Plan.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock option activity for

the year ended December 31, 2024 for stock options under the 2006 and 1997 plans is as follows:

the year ended December 31, 2025 is as follows:

Schedule of option activity

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$8.00 - $8.99.

$10.00 - $10.99

We did not issue any stock options with an exercise

price above or below the market price of the stock on the grant date for the years ended December 31, 2025, 2024 and 2023.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(8) Interest Income and Interest Expense

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Interest expense

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(9) Income Taxes

Income taxes consist of the following:

Components of income tax expense (benefit) from

continuing operations were as follows:

Schedule of income taxes expenses

3 unchanged sentences

Current state tax expense .

Total current

Deferred federal tax expense

Deferred state tax expense.

Total deferred

Income tax expense

The Company does not have pretax income from continuing

foreign operations or foreign tax expense.

The following table provides a reconciliation of tax computed

at the US statutory federal tax rate and the recorded tax expense (in dollars and percentages) for the year ended December 31, 2025, under

the provisions of ASU No.

Reconciliation of income tax

Year Ended December 31,

(In thousands)

Expense at federal tax rate

State taxes, net of federal income tax effect (2)

Non-deductible expenses

Executive compensation expense, net (3)

Meals and Entertainment

Total non-deductible expenses

Other adjustments

________________________

(1) Percentages

may not add due to rounding.

(2) State taxes in California, Florida, Illinois and Texas comprise the

majority (>50%) of the tax effect.

amount includes the federal income tax effect of the windfall/shortfall

adjustments related to the vesting of stock awards and IRC limitations on executive compensation.

CONSUMER PORTFOLIO SERVICES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Income tax expense for the

years ended December 31, 2024, 2023 and 2022 differs from the amount determined by applying the statutory federal rate to income before

income taxes as follows:

Schedule of reconciliation of income taxes

The following table provides

a reconciliation of tax computed at the statutory federal tax rate and the recorded tax expense (in percentages) for the years ended

December 31, 2024, and 2023, prior to the adoption of ASU No.

Reconciliation of income tax

Year Ended December 31,

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Non-deductible expenses

Net operating loss carryback

Effect of change in tax rate

Accounting method change

Income tax expense

Income tax payments during the year, net of refunds, are

comprised of the following:

Schedule of income tax payments

Year Ended December 31,

(In thousands)

Income Taxes Paid

Income taxes paid (net of refunds) exceeded 5 percent of

total income taxes paid (net of refunds) in the following jurisdictions:

Schedule of state income taxes paid

Year Ended December 31,

(In thousands)

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The tax effected cumulative

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Deferred Tax Assets:

Finance receivables

Accrued liabilities

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Net deferred tax asset

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We acquired certain net operating

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Although realization

is not assured, we believe that the realization of the recognized net deferred tax asset of $ 1 .0 million as of December 31, 2024 is more

likely than not based on forecasted future net earnings.

Our net deferred tax asset of $1.0 million consists of approximately $ 479,000

federal deferred tax assets and $ 530,000 of net state deferred tax assets.

is not assured, we believe that the realization of the recognized net deferred tax asset of $ 16,000 as of December 31, 2025, is more likely

than not based on forecasted future net earnings.

Our net deferred tax asset of $16,000 million consists of approximately $ 270,000 of

federal deferred tax liabilities and $ 286,000 of net state deferred tax assets.

As of December 31, 2025, we

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These state net operating losses begin to expire in

On July 4, 2025, the One Big

Beautiful Bill Act (OBBBA) was enacted into law.

The OBBBA includes significant provisions, such as the permanent extension of certain

expiring provisions of the Tax Cuts and Jobs Act and the restoration of favorable tax treatment for certain business tax provisions.

legislation has multiple effective dates, with certain provisions effective in 2025 and others being phased in through 2027.

Through December

31, 2025, the OBBBA had not materially impacted the Company’s income taxes;

however, the Company continues to evaluate the effect

the OBBBA will have on the Company’s consolidated financial condition and results of operations

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We recognize a tax position

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Balance Sheet.

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the supplemental balance

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Finance lease

Maturities of lease liabilities were as

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Maturities of lease liabilities were as follows:

Schedule of maturities of lease

4 unchanged sentences

Lease Liability

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the leases expense

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of each case.

Following our

filing of a complaint for a deficiency judgment in the Superior Court at Waterbury, Connecticut, the defendant filed a cross-claim on

October 16, 2019 alleging that our deficiency notices were not compliant with Connecticut law, and seeking relief on behalf of a class

of Connecticut obligors whose vehicles we had repossessed.

The complaint seeks primarily damages, injunctive relief, waiver of contract

deficiencies, and attorney fees and interest.

The defendant’s contract provided for resolution of disputes exclusively by arbitration,

and exclusively on an individual basis, not a class basis.

Nevertheless, in August 2021, the court denied our motion to compel arbitration,

without opinion.

In April 2024, a motion for certification of a class was filed.

Prior to the motion being ruled upon, summary judgment

was granted in our favor, disposing of the claims against CPS.

An appeal of the summary judgment ruling was filed on October 25, 2024

and a cross appeal of the denial of the motion to compel arbitration was filed on October 31, 2024.

There can be no assurance as to the outcomes of the matters described or referenced above.

We record at each measurement date, most recently

as of December 31, 2024, our best estimate of probable incurred losses for legal contingencies, including the matters identified above.

There can be no assurance as to the outcomes of the matters described above.

We record at each measurement date our best estimate of probable

incurred losses for legal contingencies, if any.

The amount of losses that may ultimately be incurred cannot be estimated with certainty.

However, based on such information as is available

to us, we believe that the range of reasonably possible losses for the legal proceedings and contingencies we face, including those described

or identified above, as of December 31, 2024 does not exceed $ 3.2 million.

However, based on such information as is available to us, the Company is not currently a party to any such material proceedings.

CONSUMER PORTFOLIO SERVICES, INC.

2 unchanged sentences

Accordingly, we believe that

the ultimate resolution of such legal proceedings and contingencies should not have a material adverse effect on our consolidated financial

We note, however, that in light of the uncertainties inherent in contested proceedings there can be no assurance that the ultimate

resolution of these matters will not be material to our operating results for a particular period, depending on, among other factors,

the size of the loss or liability imposed and the level of our income for that period.

the ultimate resolution of legal proceedings should not have a material adverse effect on our consolidated financial condition.

however, that in light of the uncertainties inherent in contested proceedings there can be no assurance that the ultimate resolution of

these matters will not be material to our operating results for a particular period, depending on, among other factors, the size of the

loss or liability imposed and the level of our income for that period.

(11) Employee Benefits

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The Plan benefits were frozen on June 30, 2001.

The following tables represents

The following tables represent

a reconciliation of the change in the plan’s benefit obligations, fair value of plan assets, and funded status at December 31,

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Our overall expected long-term

rate of return on assets is 6.75 %

per annum as of December 31, 2024.

The expected long-term rate of return is based on the weighted average of historical returns on individual

asset categories, which are described in more detail below.

rate of return on assets is 6.75% per annum as of December 31, 2025.

The expected long-term rate of return is based on the weighted average

of historical returns on individual asset categories, which are described in more detail below.

Schedule of components of net periodic benefit cost

21 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The estimated net gain

that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2025 is $ 703,000 .

The estimated net gain that

will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2025 is $ 518,000 .

The weighted average asset allocation of our pension

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Anticipated Contributions in 2026

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The fair value

13 unchanged sentences

Inflation Protected Bond

December 31, 2023

Investment Name:

(in thousands)

Company Common Stock

Large Cap Value

Mid Cap Index

Small Cap Growth

Small Cap Value

Large Cap Blend

International Growth

Inflation Protected Bond

________________________

(1) Company common stock is classified as level 1 and valued using quoted prices in active markets for identical assets.

(2) All other plan assets in stock, bond and money market funds are classified as level 2 and valued using significant observable inputs.

(3) There are no plan assets classified as level 3 in the fair value hierarchy as a result of having significant unobservable inputs.

(1) Company common stock is classified

as level 1 and valued using quoted prices in active markets for identical assets.

(2) All other plan assets in stock, bond and money market funds are classified

as level 2 and valued using significant observable inputs.

(3) There are no plan assets classified as level 3 in the fair value hierarchy

as a result of having significant unobservable inputs.

CONSUMER PORTFOLIO SERVICES, INC.

30 unchanged sentences

inputs reflect our own assumptions about the factors that market participants use in pricing similar receivables and are based on the

best information available in the circumstances.

best information available in these circumstances.

They include such inputs as estimates for the magnitude and timing of net charge-offs

10 unchanged sentences

Payments received on finance receivables at fair value

( 1,042,235 )

Net interest income accretion on fair value receivables

1 unchanged sentence

Balance at end of period

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below compares the fair values of these

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Finance receivables measured at fair value

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides certain qualitative

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(In thousands)

Discount rate

Finance receivables measured at fair value

Discount rate

Cumulative net losses

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Delinquency Status

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

There were no transfers in

or out of level 1 or level 2 assets and liabilities for 2025 and 2024.

We have no level 3 assets or liabilities that are measured at fair

value on a non-recurring basis.

We have no level 3 assets or liabilities that are measured at

fair value on a non-recurring basis.

The estimated fair values of financial assets

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Subordinated renewable notes

CONSUMER PORTFOLIO SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13) Business Segment Information

The company has identified

one reportable segment.

The company has one reportable

This determination is made by our Chief Executive Officer, who acts as the chief operating decision-maker (“CODM”),

2 unchanged sentences

financial statements, which reflect the financial results of our one reportable operating segment.

Although the Company operates

as one reportable segment, it serves a diverse network of 8,600 dealerships across 47 states, in which we provide financing to the dealer’s

less credit- worthy borrowers.

During the year ended December 31, 2024, no dealer accounted for as much as 2 % of the total number of automobile

contracts we purchased, and revenue generated from any individual borrower is deemed to be immaterial.

Within the Company’s

one reportable segment, it provides indirect vehicle financing to motor vehicle dealer’s less credit- worthy borrowers.

The Company’s

revenue primarily consists of interest income and is derived from the interest recorded on contracts the Company has purchased.

generated from any individual borrower is deemed to be immaterial.

14) Subsequent Events

15 unchanged sentences

of securities, not registered under the Securities Act of 1933, or any state securities law.

On March 4, 2026, we executed

a residual interest financing.

In the transaction, qualified institutional buyers purchased $50.0 million of asset-backed notes secured

by an 80% interest in a CPS majority owned affiliate (“MOA”) that owns the residual interests in four CPS securitizations

issued from January 2025 through October 2025.

The coupon on the notes is 8.75%.

The MOA interest includes 80% of the amounts on deposit

in the underlying spread accounts for each related securitization and 80% of the over-collateralization of each related securitization,

which is the difference between the outstanding principal balance of the related receivables less the outstanding principal balance of

the notes associated with the securitization.

On each monthly payment date, the notes will be paid interest at the coupon rate and, if

necessary, a principal payment to maintain a specified minimum collateral ratio.

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 9A. Controls and Procedures