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You should consider carefully the risks and uncertainties described below, together with the financial and other information contained in this Annual Report on Form 10-K, before you decide to purchase shares of our common stock.
−Removed: The risks and uncertainties described below are not the only ones we face.
−Removed: Additional risks and uncertainties that we are unaware of, or that we currently believe are not material or important, may also become material or important factors that adversely affect our business.
−Removed: If any of the following risks or others not specified below materialize, our business, financial condition and results of operations could be materially and adversely affected.
+Added: If any of the following risks materialize, our business, financial condition and results of operations could be materially and adversely affected.
In that case, the trading price of our common stock could decline and you could lose all or part of your investment in our common stock.
Risks Related to Our Emergence from Bankruptcy
−Removed: We recently emerged from the Prepackaged Chapter 11 Case, which could adversely affect our business and
−Removed: relationships, and subject us to risks and uncertainties.
+Added: We emerged from the Prepackaged Chapter 11 Case in January 2025, which consumed a substantial portion of time and attention of our management and could continue to subject us to risks and uncertainties.
As previously disclosed, on November 13, 2024, Vroom, Inc.
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We emerged from the Prepackaged Chapter 11 Case on January 14, 2025.
−Removed: Even though we have emerged from bankruptcy, our Prepackaged Chapter 11 Case could have a material adverse effect on our business, financial condition, results of operations and liquidity.
−Removed: For example, it could adversely affect our business and relationships with customers, vendors, contractors, employees or suppliers including the following:
−Removed: • our ability to attract, motivate, and/or retain management and key personnel may be
−Removed: adversely affected;
−Removed: • our employees may be more easily attracted to other employment opportunities;
−Removed: • competitors may take business away from us, and our ability to retain customers may be
−Removed: negatively impacted;
−Removed: • third parties may not be willing to do business with us at all or on acceptable terms.
−Removed: Furthermore, we may not realize any or all of the intended benefits of the Prepackaged Chapter 11 Case, the benefits may not be on the terms or in the manner we expect, and the costs incurred may exceed the intended benefits.
+Added: We may not realize any or all of the intended benefits of the Prepackaged Chapter 11 Case, the benefits may not be on the terms or in the manner we expect, and the costs incurred may exceed the intended benefits.
The occurrence of one or more of these events could have a material and adverse effect on our operations, financial condition and reputation, and we cannot assure you that having been subject to bankruptcy proceedings will not adversely affect our operations in the future.
−Removed: Additionally, other risks we face, as described in this Annual Report on Form 10-K, may be exacerbated by the impacts of our emergence from bankruptcy.
As a result of the Prepackaged Chapter 11 Case, our historical financial information will not be indicative of our future performance .
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This will make it difficult for shareholders to assess our performance in relation to prior periods.
−Removed: The Prepackaged Chapter 11 Case, our emergence from it, and its impact has consumed and may
−Removed: continue to consume a substantial portion of the time and attention of our management, which may have an
−Removed: adverse effect on our business and results of operations, and we may experience increased levels of employee attrition.
−Removed: Management has spent a significant amount of time and effort focusing on the Prepackaged Chapter 11 Case and our emergence from it, and our management will be required to spend a significant amount of time and effort to refocus on our business operations.
−Removed: Our new capital structure and its known and unknown consequences may also require our management’s time and attention.
−Removed: This diversion of attention has affected, and may continue to materially
−Removed: adversely affect the conduct of our business, and, as a result, our financial condition and results of operations.
−Removed: Furthermore, even though we have emerged from the Prepackaged Chapter 11 Case, we may experience employee attrition, and our employees may face uncertainty.
−Removed: A loss of key personnel or material erosion of employee morale could adversely affect our business and results of operations.
−Removed: The loss of services of members of our senior management team could impair our ability to execute our strategy and implement operational initiatives, which would be likely to have a material adverse effect on our financial condition, liquidity and results of operations.
−Removed: In addition, our vendors and employees may have lost or may lose confidence in our ability to operate our reorganized business successfully.
Risks Related to Our Financial Condition, Results of Operations, Liquidity and Indebtedness
There are risks associated with the discontinuance of our ecommerce operations and wind-down of our used vehicle dealership business.
−Removed: On January 22, 2024, we announced the Value Maximization Plan, pursuant to which we discontinued our ecommerce operations and wound down our used vehicle dealership business in order to preserve cash and maximize stakeholder value through our remaining businesses (the "Ecommerce Wind-Down").
−Removed: As a result, we have incurred costs including severance costs, inventory liquidation costs, contract and lease termination costs and non-cash asset impairments.
−Removed: We incurred total cash charges of approximately $15.8 million for severance and other personnel-related costs, and approximately $13.9 million in contract and lease termination costs in relation to the Value Maximization Plan.
−Removed: We may incur additional charges in connection with the Vroom Ecommerce Wind-Down.
−Removed: The purpose of the Value Maximization Plan was to wind-down our ecommerce operations, which were not profitable and had significant cash burn, in order to preserve cash and enable us to maximize stakeholder value through our remaining businesses, UACC and CarStory.
+Added: On January 22, 2024, we announced the Value Maximization Plan, pursuant to which we discontinued our ecommerce operations and wound down our used vehicle dealership business to preserve cash and maximize stakeholder value through our remaining businesses, UACC and CarStory (the "Ecommerce Wind-Down").
+Added: As a result, we incurred costs including severance costs, inventory liquidation costs, contract and lease termination costs, and non-cash asset impairments.
+Added: The purpose of the Value Maximization Plan was to wind-down our ecommerce operations, which were not profitable and had significant cash burn, in order to preserve cash and enable us to maximize stakeholder value through our remaining UACC and CarStory businesses.
As of December 31, 2025, we had cash and cash equivalents of approximately $10.4 million.
−Removed: Given our Ecommerce Wind-Down expenses, including employee severance costs, our ongoing operating expenses and recent losses at UACC, there can be no assurance that we will succeed in achieving profitability and creating meaningful stakeholder value.
−Removed: Additionally, the Ecommerce Wind-Down involves further risks, including:
−Removed: • the ongoing cost of retaining (as was realized in connection with the payment of retention bonuses during the year ended December 31, 2024) and, in some cases, the inability to retain qualified personnel necessary to achieve our goals for UACC and CarStory;
−Removed: • potential disruption of the operations of the rest of our businesses and diversion of management’s attention from such businesses and operations;
+Added: Given our ongoing operating expenses and recent losses at UACC, there can be no assurance that we will succeed in achieving profitability and creating meaningful stakeholder value.
+Added: Additionally, the Ecommerce Wind-Down involves continued risks, including:
• exposure to unknown, contingent or other liabilities, including litigation arising in connection with the Ecommerce Wind-Down;
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• unintended negative consequences from changes to our business.
−Removed: If any of these or other factors impair our ability to successfully implement the Value Maximization Plan, we may not realize its intended benefits and we may not be able to realize other business opportunities as we may be required to spend additional time and incur additional expense relating to the Value Maximization Plan that otherwise would be used
−Removed: on the development, expansion and profitability of our other businesses, any of which could adversely impact our business, operational results, financial position and cash flows.
+Added: If any of these or other factors impair our ability to successfully implement our Long-Term Strategic Plan, we may not realize its intended benefits or other business opportunities, as we could be required to spend additional time and incur additional expense that otherwise would be used on the development, expansion and profitability of UACC and CarStory.
We may not generate sufficient liquidity to operate our business.
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The Warehouse Credit Facilities were not impacted by the Prepackaged Chapter 11 Case and remain outstanding.
−Removed: If we are unable to maintain the Warehouse Credit Facilities that expire on varying dates in 2025 absent renewal, on favorable terms or at all, or if they are terminated or expire and are not renewed or we are unable to find a satisfactory replacement, we may be unable to fund our finance receivables, and our business, operational results, financial position and cash flows would be materially adversely affected.
−Removed: In addition, in April 2024, UACC sold approximately $262.5 million of rated asset-backed securities in an auto loan securitization transaction from a securitization trust, established and sponsored by UACC for proceeds of $261.3 million.
+Added: If we are unable to maintain the Warehouse Credit Facilities that expire on varying dates in 2026 and 2027 absent renewal, on favorable terms or at all, or if they are terminated or expire and are not renewed or we are unable to find a satisfactory replacement, we may be unable to fund our finance receivables, and our business, operational results, financial position and cash flows would be materially adversely affected.
+Added: In addition, in March 2025, UACC sold approximately $307.8 million of rated asset-backed securities in an auto loan securitization transaction from a securitization trust, established and sponsored by UACC for proceeds of $306.5 million.
The trust is collateralized by finance receivables with an aggregate principal balance of $382.1 million.
−Removed: These finance receivables are serviced by UACC.
−Removed: As a result of market conditions, UACC retained the Class E non-investment grade securities and residual interests, which will require us to account for the 2024-1 securitization as secured borrowings and remain on balance sheet pending the sale of such retained interests.
−Removed: In May 2024, UACC sold approximately $37.5 million of Class E non-investment grade securities that were initially retained for proceeds of $35.9 million.
+Added: These finance receivables are serviced by UACC and UACC receives an “at market” servicing fee.
+Added: The Company retained the residual interests, which required the Company to account for the 2025-1 securitization as secured borrowings and the assets and liabilities of the trust remain on the balance sheet.
Our revenue growth may be adversely affected by factors including our inability to maintain, grow and develop the UACC and CarStory businesses;
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and increasing competition.
−Removed: Our historical revenue growth is not indicative of our future performance, particularly given the Ecommerce Wind-Down.
+Added: Our historical revenue growth is not indicative of our future performance, particularly given the Ecommerce Wind-Down and application of fresh start accounting.
We have not invested in growing CarStory's customer base since Vroom acquired CarStory, resulting in CarStory's revenue being concentrated in a small number of customers.
+Added: An increasing number of consumers conduct online research using AI tools, which has resulted in decreased website traffic and negatively impacted CarStory’s revenue.
+Added: We may not be able to adapt effectively and competitively to meet this shift.
If we are unable to maintain, grow and develop the UACC and CarStory businesses and generate sufficient revenue and achieve profitability, our business, financial condition and results of operations will be materially and adversely affected.
Additionally, our cash needs may increase in the future as we focus on growing and developing the UACC and CarStory businesses.
−Removed: Our future capital requirements will depend on many factors, including the impacts of our emergence from the Prepackaged Chapter 11 Case, our ability to realize the benefits of the Long-Term Strategic Plan, available advance rates on and the amendment and renewal of the Warehouse Credit Facilities, the ability to meet (or continue to meet, as the case may be) the requirements of Nasdaq for listing on the Nasdaq Stock Market LLC or any other exchange, the ability to complete additional securitization transactions on terms favorable to us, future credit losses, the ability to obtain the necessary financing to meet obligations and repay liabilities arising from business operations when they come due, the ability to generate and maintain sufficient cash, and the ability to generate profitable operations in the future.
+Added: Our future capital requirements will depend on many factors, including our ability to realize the benefits of the Long-Term Strategic Plan, available advance rates on and the amendment and renewal of the Warehouse Credit Facilities, the ability to meet (or continue to meet, as the case may be) the requirements of Nasdaq for listing on the Nasdaq Stock Market LLC or any other exchange, the ability to complete additional securitization transactions on terms favorable to us, future credit losses, the ability to obtain the necessary financing to meet obligations and repay liabilities arising from business operations when they come due, the ability to generate and maintain sufficient cash, and the ability to generate profitable operations in the future.
There can be no assurance that our liquidity will be sufficient to achieve the objectives of our Long-Term Strategic Plan, grow and develop UACC and CarStory, operate our business, or comply with the terms of our indebtedness.
−Removed: See "—UACC may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow its business" and “—Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could materially adversely affect our business, financial condition and results of operations and impair our ability to satisfy our debt obligations.”
+Added: See "—UACC may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow its business" and “—Our indebtedness and liabilities could limit the cash flow
+Added: available for our operations, expose us to risks that could materially adversely affect our business, financial condition and results of operations and impair our ability to satisfy our debt obligations.”
We have a history of losses and we may not achieve or maintain profitability in the future.
−Removed: Vroom has not been profitable since its inception in 2012 and had an accumulated deficit of approximately $2,125.8 million as of December 31, 2024.
−Removed: We incurred net losses of $165.1 million and $364.6 million for the years ended December 31, 2024 and 2023, respectively, which includes $26.9 million and $279.5 million, respectively, related to net loss from discontinued operations.
−Removed: We may continue to incur significant losses in the future for a number of reasons, including increased losses on UACC's portfolio, our inability to maintain, grow and maximize the value of the
−Removed: UACC and CarStory businesses;
+Added: Vroom has not been profitable since its inception in 2012 and had an accumulated deficit of approximately $53.1 million as of December 31, 2025 after adopting fresh start accounting.
+Added: We incurred net losses of $(53.1) million and $(165.1) million for the years ended December 31, 2025 and 2024, respectively, which includes $1.0 million and $(26.9) million, respectively, related to net income (loss) from discontinued operations.
+Added: We may continue to incur significant losses in the future for a number of reasons, including increased losses on UACC's portfolio, our inability to maintain, grow and maximize the value of the UACC and CarStory businesses;
weakness in the automotive retail industry generally;
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As of December 31, 2025, UACC had $393.2 million of securitization debt funded by cashflows on receivables within the securitization trusts and $318.7 million in outstanding borrowings related to the Warehouse Credit Facilities.
−Removed: Following emergence from the Prepackaged Chapter 11 Case on January 14, 2025, we do not hold any long-term debt at the Vroom, Inc.
−Removed: Our UACC indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things:
+Added: In January 2026, Vroom Automotive LLC ("Vroom Automotive"), a subsidiary of the Company, issued Series A preferred units and Series B preferred units (collectively, the "Vroom Automotive Preferred Units") for aggregate gross proceeds of $22.5 million.
+Added: The Vroom Automotive Preferred Units are entitled to receive quarterly preferential distributions at a variable rate tied to SOFR.
+Added: These distribution obligations require Vroom Automotive to have sufficient cash flow to make quarterly payments, and the variable rate structure exposes us to interest rate risk, which could have a material adverse effect on our liquidity and financial condition.
+Added: Our UACC indebtedness and the Vroom Automotive Preferred Units distribution obligations could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things:
• increasing our vulnerability to adverse economic and industry conditions;
• limiting our ability to obtain additional financing;
−Removed: • requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes;
+Added: • requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness and preferred unit distributions, which will reduce the amount of cash available for other purposes;
• limiting our flexibility to plan for, or react to, changes in our business;
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Impairment may result from, among other things, significant changes in the manner of use of the acquired assets, negative industry or economic trends and/or significant underperformance relative to historic or projected operating results.
−Removed: See Notes 7 and 12 to the Company’s Consolidated Financial Statements.
+Added: See Note 12 to the Company’s Consolidated Financial Statements.
We may experience seasonal and other fluctuations in our quarterly results of operations, which may not fully reflect the underlying performance of our business.
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Vehicle sales historically have exhibited seasonality, with an increase in sales early in the year that reaches its highest point late in the first quarter and early in the second quarter, which then levels off through the rest of the year with the lowest level of sales in the fourth quarter.
−Removed: This seasonality historically corresponds with the timing of income tax
−Removed: refunds, which can provide a primary source of funds for customers’ payments on used vehicle purchases.
+Added: This seasonality historically corresponds with the timing of income tax refunds, which can provide a primary source of funds for customers’ payments on used vehicle purchases.
Consistent with market trends, UACC generally experiences increased funding activity during the first quarter through tax season.
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The geographic concentration of UACC’s borrowers or dealerships creates an exposure to local and regional downturns or severe weather or catastrophic occurrences that may materially and adversely affect our business, financial condition and results of operations.
−Removed: Changes in demographics and population, local and regional downturns or severe weather conditions and other catastrophic occurrences in any of the states where UACC has a high concentration of borrowers or dealership partners could result in payment delays and increased risk of losses and could materially and adversely affect our revenues and results of operations.
−Removed: During the year ended December 31, 2024, 41.03 % of UACC's originations were located in UACC's three largest states (measured by aggregate financed amount).
+Added: Changes in demographics and population, local and regional downturns, or severe weather conditions and other catastrophic occurrences in any of the states where UACC has a high concentration of borrowers or dealership partners could result in payment delays and increased risk of losses, which could materially and adversely affect our revenues and results of operations.
+Added: During the year ended December 31, 2025, 40.7 % of UACC's originations were in UACC's three
+Added: largest states (measured by aggregate financed amount).
While we believe that we have a diverse geographic presence, we expect that these three states will continue to generate significant amounts of our loans due to economic, demographic, regulatory, competitive and other conditions in these states.
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In particular, we are highly dependent on the services of our leadership team to the development of our business, future vision, and strategic direction, including as we realign our business in accordance with the Long-Term Strategic Plan.
−Removed: During the year ended December 31, 2024, we had a number of transitions occur on our senior leadership team, including with respect to our Chief Financial Officer and Chief Legal Officer roles.
+Added: During the year ended December 31, 2025, we had a transition occur on our senior leadership team with respect to our Chief Financial Officer role.
Additionally, as a result of the Value Maximization Plan, our business relies more heavily on the performance of UACC and CarStory, and therefore on the key personnel from those subsidiaries.
Our future performance will depend, in part, on the successful transition of these positions and any other key management positions that may experience turnover in the future.
−Removed: We heavily rely on
−Removed: the continued service and performance of our senior management team, which provides leadership, contributes to the core areas of our business and helps us to efficiently execute our business, including with respect to strategic initiatives such as our Long-Term Strategic Plan and our emergence from bankruptcy.
+Added: We heavily rely on the continued service and performance of our senior management team, which provides leadership, contributes to the core areas of our business, and helps us to efficiently execute our business, including with respect to strategic initiatives such as our Long-Term Strategic Plan.
If members of our senior management team, including our executive leadership, become unavailable, including due to personal circumstances or if they become ill, or if we are otherwise unable to retain them, we may not be able to manage our business effectively and, as a result, our business and operating results could be harmed.
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If we are unable to make meaningful equity awards to our employees or directors, or otherwise fail to attract, integrate, adequately compensate, or retain the qualified and highly skilled personnel required to fulfill our current or future needs, our business and future growth prospects could be harmed.
−Removed: Furthermore, in light of the reduction in headcount as part of our Value Maximization Plan and the impact of the Prepackaged Chapter 11 Case and our emergence from bankruptcy, we may find it difficult to maintain valuable aspects of our culture, to prevent a negative effect on employee morale or attrition beyond our planned reduction in headcount, and to attract competent personnel who are willing to embrace our culture in the future.
Our executive officers and other employees are at-will employees, which means they may terminate their employment relationship with us at any time, and their knowledge of our business and industry would be extremely difficult to replace.
−Removed: We may not be able to retain the services of any members of our senior management or other key employees, particularly in light of the Ecommerce Wind-Down.
+Added: We may not be able to retain the services of any members of our senior management or other key employees.
If we do not succeed in retaining and motivating existing employees or attracting well-qualified employees in the future, our business, financial condition and results of operations could be materially and adversely affected.
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We are subject to various litigation matters from time to time, the outcome of which could have a material adverse effect on our business, financial condition, and results of operations.
−Removed: Claims arising out of actual or alleged violations of law could be asserted against us by individuals, either individually or through class actions, by governmental entities in civil or criminal investigations and proceedings or by other entities.
+Added: Claims arising out of actual or alleged violations of law could be asserted against us by individuals, either individually or through class actions, by governmental entities in
+Added: civil or criminal investigations and proceedings, or by other entities.
These claims could be asserted under a variety of laws, including, but not limited to, consumer finance laws, consumer protection laws, intellectual property laws, privacy laws, labor and employment laws, securities laws, and employee benefit laws.
These actions could expose us to adverse publicity and to substantial monetary damages and legal defense costs, injunctive relief and criminal and civil fines and penalties, including, but not limited to, suspension or revocation of licenses to conduct business.
−Removed: For example, a consolidated class action is pending in the U.S.
−Removed: District Court for the Southern District of New York asserting claims on behalf of a putative class of Company stockholders against us, certain of our officers, and certain of our directors, among others, alleging violations of the federal securities laws.
−Removed: We also are a party to certain stockholder derivative suits in which the Company is named as a nominal defendant in suits that various individual stockholders seek to bring on behalf of the Company against certain of our current and former directors and officers.
−Removed: These suits are pending in the U.S.
−Removed: District Court for the Southern District of New York and the U.S.
−Removed: District Court for the District of Delaware and are based on the same general course of conduct alleged in the consolidated securities class action.
−Removed: We believe these lawsuits are without merit and intend to vigorously contest these claims.
−Removed: Further, the Company expects that the claims asserted in all six of the above derivative suits will be dismissed because the claims were released by the January 8, 2025 order of the U.S.
−Removed: Bankruptcy Court for the Southern District of Texas confirming the Company's plan of reorganization.
−Removed: In January 2022, the Company received a non-public civil investigative demand from the Federal Trade Commission (“FTC”), seeking the production of information related to certain of the Company's business practices and the Company responded to those information requests.
−Removed: On February 23, 2024, the FTC notified the Company that it has reason to believe that the Company violated Section 5(a) of the Federal Trade Commission Act, 15 U.S.C.
−Removed: the FTC's Mail, Internet, or Telephone Order Merchandise Rule, 16 C.F.R.
−Removed: the FTC’s Used Motor Vehicle Trade Regulation Rule,16 C.F.R.
−Removed: and the FTC’s Pre-Sale Availability Rule, 16 C.F.R.
−Removed: On May 6, 2024, Vroom, Inc., Vroom Automotive, LLC and the FTC reached an agreement to resolve the FTC’s allegations without any admission of wrongdoing by either Vroom entity, subject to final approval by the FTC and the court.
−Removed: Under the agreement, the Company agreed to pay a total of $1 million in customer redress and abide permanently by an injunction.
−Removed: The FTC issued its final approval of the agreement on July 2, 2024, and a mutually agreed upon order reflecting the agreement was entered by the Court on July 10, 2024.
−Removed: The case is captioned Federal Trade Commission v.
−Removed: et al., Case No.
−Removed: 4:24-cv-02496.
−Removed: In addition, in April 2022, the Attorney General of Texas filed a lawsuit on behalf of the State of Texas in the District Court of Travis County, Texas against the Company, alleging violation of the Texas Deceptive Trade Practices − Consumer Protection Act and Texas Business and Commerce Code § 17.41 et seq.
−Removed: In December 2023, Vroom, Inc., Vroom Automotive, LLC and the Attorney General of the State of Texas reached a final agreement to resolve all claims in the petition, without any admission of wrongdoing by either Vroom entity.
−Removed: Under the agreement, the Company agreed to pay a total of $2 million in civil penalties and $1 million in attorneys' fees, with the first half due in September 2024 and the remaining half due in September 2025, and abide permanently by an injunction of certain operational practices that were previously implemented.
−Removed: The agreement was approved by the District Court of Travis County on December 13, 2023.
−Removed: It is not possible to predict with certainty what, if any, future litigation we may become involved in, nor the final resolution of such litigation.
−Removed: The impact of any such litigation on our businesses and financial stability, however, could be material.
See Part I, Item 3.
−Removed: “Legal Proceedings” for more information about these matters and the other legal proceedings to which we are subject.
+Added: “Legal Proceedings” for more information about legal proceedings to which we are subject.
Risks Related to the UACC Business
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In addition, UACC has entered into arrangements to sell automotive finance receivables that it purchases, through securitizations, and we expect UACC to enter into additional securitizations in the future, subject to market conditions.
−Removed: If UACC is not able to sell receivables under these current or future arrangements for a variety of reasons, including increased credit losses or because it has reached its capacity under the arrangements, its financing partners exercise termination rights before it reaches capacity, general economic or credit market conditions, market disruption or it reaches the scheduled expiration date of the commitment, and it is not able to enter into new arrangements on similar terms, it may not have adequate liquidity and our business, financial condition and results of operations may be adversely affected.
−Removed: For example, as a result of market conditions at the time, which led to unfavorable pricing, we retained the non-investment grade securities and residual interests in UACC's 2023-1 securitization, requiring that the transaction remain on balance sheet pending the sale of the additional retained interests.
−Removed: Although we subsequently sold the non-investment grade securities, we continue to hold the residual interests.
−Removed: There can be no assurance that these residual interests will be sold and off-balance sheet treatment will be achieved in the future for this transaction.
−Removed: Furthermore, if we are unable to sell the residual interests, we could be subject to credit risk and be forced to incur unexpected asset write-offs and bad-debt expense.
+Added: If UACC is not able to sell receivables under these current or future arrangements for a variety of reasons, including increased credit losses or because it has reached its capacity under the arrangements, its financing partners exercise termination rights before it reaches capacity, general economic or credit market conditions, market disruption, or it reaches the scheduled expiration date of the commitment, and if UACC is not able to enter into new arrangements on similar terms, it may not have adequate liquidity and our business, financial condition and results of operations may be adversely affected.
In addition, as a result of high interest rates, the current inflationary environment and vehicle depreciation in the used automotive industry, UACC has been experiencing higher loss severity.
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In addition, the value of any securities that UACC may retain in its securitizations, including securities retained to comply with applicable risk retention rules, might be reduced or, in some cases, eliminated as a result of an adverse change in economic conditions, the financial markets, or credit performance.
−Removed: For example, o n March 1, 2024, UACC's BB-rated securities from the 2022-2 securitization transaction were downgraded by one ratings agency to a CCC rating.
−Removed: On September 19, 2024, these same securities were subsequently downgraded to a CC rating.
UACC's other rated securities may also be downgraded or put on negative credit watch.
In addition, as a result of higher interest rates, the current inflationary environment and vehicle depreciation in the used automotive industry, UACC is experiencing higher portfolio losses.
−Removed: The increased losses could lead to reduced servicing income if UACC elects to waive monthly servicing fees going forward as it did in the first quarter of 2023 on the 2022-2 securitization transaction.
−Removed: The waiver of monthly servicing fees on the 2022-2 securitization transaction resulted in consolidation of the related finance receivables and securitization debt on Vroom’s financial statements.
+Added: The increased losses could lead to reduced servicing income if UACC elects to waive monthly servicing fees.
If it is not possible or economical for UACC to securitize its automotive finance receivables in the future, it would need to seek alternative financing to support its operations and to meet its existing debt obligations, which may be less efficient and more expensive than raising capital via securitizations and may have a material adverse effect on our results of operations, financial condition, and liquidity.
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UACC is currently experiencing increasing credit losses on its finance receivables, which has negatively impacted the fair value of our financial receivables and increased the losses recognized during 2024 and 2025.
−Removed: Increasing credit losses negatively impacted our business during 2023 and 2024 and we expect these credit losses to continue to negatively impact our business during 2025.
+Added: We expect these credit losses to continue to negatively impact our business during 2026.
Due to the Ecommerce Wind-Down, UACC has become our largest business, and our results of operations and financial condition are increasingly vulnerable to adverse developments in UACC's business.
−Removed: Until UACC sells automotive finance receivables, and to the extent it retains interests in those receivables after it sells them, whether pursuant to securitization transactions or otherwise, UACC is exposed to the risk that certain customers will be unable or unwilling to repay their retail installment sales contracts according to their terms and that the vehicle collateral securing the payment of those retail installment sales contracts may not be sufficient to ensure full repayment.
+Added: Until UACC sells automotive finance receivables, and to the extent it retains interests in those receivables after it sells them, whether pursuant to securitization transactions or otherwise, UACC is exposed to the risk that certain accountholders will be unable or unwilling to repay their retail installment sales contracts according to their terms and that the vehicle collateral securing the payment of those retail installment sales contracts may not be sufficient to ensure full repayment.
Additionally, higher energy prices (including the price of gasoline) and other consumer prices, unstable real estate values, reset of adjustable-rate mortgages to higher interest rates, geopolitical tensions around the world, interest rate increases, regional bank failures, inflation, the impact of tariffs, and other factors can affect consumer confidence and disposable income.
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In addition, caps on interest rates by individual states may limit UACC's ability to offset rising interest rates against automotive financing rates it offers to dealers.
−Removed: UACC makes various assumptions and judgments about the automotive finance receivables it originates or purchases and may establish a valuation allowance and value beneficial ownership interests based on a number of
+Added: UACC makes various assumptions and judgments about the automotive finance receivables it originates or purchases and may establish a valuation allowance and value beneficial ownership interests based on a number of factors.
Although management may establish a valuation allowance and value beneficial ownership interests based on analysis it believes is appropriate, this may not be adequate, particularly in periods of increased industry-wide vehicle depreciation rates.
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If it relies on systems that fail to effectively forecast loss rates on receivables it originates or purchases, those receivables may suffer higher losses than expected.
−Removed: UACC’s credit scoring systems were developed prior to the onset of the COVID-19 pandemic and, accordingly, were not designed to take into account the effect of the economic, financial and social disruptions resulting from the pandemic, including the associated stimulus programs.
+Added: UACC’s credit scoring systems that were in place before the launch of its redeveloped credit-scoring model in September 2025, were developed prior to the onset of the COVID-19 pandemic and, accordingly, were not designed to take into account the effect of the economic, financial and social disruptions resulting from the pandemic, including the associated stimulus programs.
Additionally, as noted above, we believe that the impact of the pandemic on the economy and individuals led to loss and delinquency expectations that may not accurately predict the performance of UACC's receivables.
4 unchanged sentences
UACC is dependent upon establishing and maintaining relationships with a large number of manufacturer-franchised and independent motor vehicle dealers to supply it with automobile contracts.
−Removed: During the years ended December 31, 2020 through 2024, no single dealer accounted for 1% or more of the automobile contracts UACC purchased, other than Vroom, through our former ecommerce business.
+Added: During the years ended December 31, 2020 through 2025, no single dealer accounted for 1% or more of the automobile contracts UACC purchased, other than Vroom through the Company's former ecommerce business.
The agreements UACC has with dealers to purchase automobile contracts do not require dealers to submit a minimum number of automobile contracts for purchase.
17 unchanged sentences
The terms of those facilities generally mature within two years and we typically renew those facilities in the ordinary course.
−Removed: UACC currently has four Warehouse Credit Facilities, all of which have terms expiring between July 2025 and June 2026.
−Removed: See Note 10, Warehouse Credit Facilities and Consolidated VIEs, to the Condensed Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K and "UACC may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow its business." We have commenced discussions with our lenders under the Warehouse Credit Facilities regarding amended facilities that would extend the terms beyond the current expiration dates and have finalized a renewal agreement with one such lender.
−Removed: Failure to secure sufficient warehouse borrowing capacity beyond the expiration of the remaining facilities in 2025 would have a material adverse effect on our ability to finance UACC’s lending operations and our results of operations and liquidity.
+Added: UACC currently has three Warehouse Credit Facilities, expiring in June 2026, August 2026 and April 2027, respectively.
+Added: See Note 10, Warehouse Credit Facilities and Consolidated VIEs, to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K and "UACC may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow its business." We have commenced discussions with certain of our lenders under the Warehouse Credit Facilities regarding amended facilities that would extend the terms beyond the current expiration dates.
+Added: Failure to secure sufficient warehouse borrowing capacity beyond the expiration of the facilities in 2026 and 2027 would have a material adverse effect on our ability to finance UACC’s lending operations and our results of operations and liquidity.
We cannot guarantee that the Warehouse Credit Facilities will continue to be available beyond their current maturity dates, on acceptable terms, or at all, or that UACC will be able to obtain additional financing on acceptable terms or at all.
The availability of additional financing will depend on a variety of factors such as market conditions, the general availability of credit, the losses incurred in UACC's loan portfolio, UACC’s financial position, its results of operations, and the capacity for additional borrowing under its existing financing arrangements.
−Removed: If UACC’s various financing alternatives were to become limited or unavailable, it may be unable to maintain or grow origination volume at the level that we anticipate and our financial condition and results of operations would be materially adversely affected.
+Added: Certain events in our industry or in industries adjacent to ours could make it more difficult for UACC to obtain financing.
+Added: For example, in September 2025, an unrelated subprime auto lender declared bankruptcy.
+Added: Subsequently, federal authorities alleged that the bankruptcy was due to fraudulent activity.
+Added: If UACC’s various financing alternatives were to become limited or unavailable, it may be unable to
+Added: maintain or grow origination volume at the level that we anticipate and our financial condition and results of operations would be materially adversely affected.
Risks Related to Cybersecurity and Privacy
An actual or perceived failure to maintain the security of personal information and other customer data that we collect, store, process, and use could harm our business, financial condition and results of operations.
−Removed: We and certain of our third-party providers collect, maintain and process data about current and prospective customers, employees, business partners and others, including personally identifiable information, as well as proprietary information belonging to our business such as trade secrets (collectively, "Confidential Information").
+Added: We and certain of our third-party providers collect, maintain and process data about current and prospective customers, employees, business partners and others, including personal information, as well as proprietary information belonging to our business such as trade secrets (collectively, "Confidential Information").
We rely on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business (collectively, "IT Systems").
1 unchanged sentence
For example, we rely on encryption, storage, and processing technology developed by third parties to securely transmit, operate on and store such information.
−Removed: Successful cyberattacks that disrupt or result in unauthorized access to third party IT Systems can materially impact our operation and financial results.
−Removed: Due to the volume and sensitivity of the personal information and data we and these third parties manage and expect to manage in the future, as well as the nature of our customer base, the security features of our information systems are critical.
+Added: Successful cyberattacks that disrupt or result in unauthorized access to our or third-party IT Systems can materially impact our operation and financial results.
+Added: Due to the volume and sensitivity of the personal information and data we and these third parties manage and expect to manage in the future, as well as the nature of our customer base, the security features of our IT systems are critical.
Any failure or perceived failure by us or by third parties who access our IT Systems and/or Confidential Information to maintain the security of personal and other data that is provided to us by customers, employees and vendors could harm our reputation and brand and expose us to a risk of loss or litigation and possible liability, any of which could adversely affect our business, financial condition, and results of operations.
3 unchanged sentences
The scope and interpretation of these laws continue to evolve and may be inconsistent across jurisdictions.
−Removed: New laws also may be
+Added: New laws also may be enacted.
See "—Failure to comply with federal, state and local laws and regulations relating to privacy, data protection and consumer protection, or the expansion of current or the enactment of new laws or regulations relating to privacy, data protection and consumer protection, as well as our actual or perceived failure to protect such information could harm our reputation and could adversely affect our business, financial condition and results of operations." Further, we are subject to contractual requirements and others’ privacy policies that govern how we use and protect personal information and other data.
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Our technology infrastructure may be subject to increased risk of slowdown or interruption as a result of integration with third-party services, including cloud services, and/or failures by such third parties, which are beyond our control.
−Removed: Remote and hybrid working arrangements at our company (and at many third-party providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.
+Added: Remote and hybrid working arrangements at our company (and at many
+Added: third-party providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.
Additionally, any integration of artificial intelligence in our or any service providers’ operations, products or services is expected to pose new or unknown cybersecurity risks and challenges.
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We strive to comply with applicable laws, policies, legal obligations and industry codes of conduct relating to privacy and data protection, to the extent possible.
−Removed: However, it is possible that these obligations may be interpreted and applied in new ways or in a manner that is
−Removed: inconsistent from one jurisdiction to another and may conflict with other rules or our practices.
−Removed: Additionally, new regulations could be enacted with which we are not familiar.
+Added: However, the application and interpretation of such requirements are constantly evolving and are subject to change, creating a complex compliance environment.
+Added: In some cases, these requirements may be either unclear in their interpretation and application, or they may have inconsistent or conflicting requirements with each other.
+Added: Further, there has been a substantial increase in legislative activity and regulatory focus on data privacy and security in the United States, including in relation to cybersecurity incidents.
+Added: In addition, some such requirements place restrictions on our ability to process personal information across our business or across country borders.
Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to customers or other third parties, our privacy-related legal obligations or any compromise of security that results in the unauthorized release or transfer of sensitive information, which may include personally identifiable information or other customer data, may result in governmental enforcement actions, litigation or public statements against us by consumer advocacy groups or others and could cause customers, vendors and third-party business partners to lose trust in us, which could have a material adverse effect on our business, financial condition and results of operations.
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Any future such litigation against us could be costly and time-consuming to defend.
−Removed: In particular, the TCPA imposes significant restrictions on the ability to make telephone calls or send text messages to mobile telephone numbers without the prior consent of the person being contacted.
+Added: In particular, the TCPA imposes significant restrictions on the ability to make telephone calls or send text
+Added: messages to mobile telephone numbers without the prior consent of the person being contacted.
Federal or state regulatory authorities or private litigants may claim that the notices and disclosures we provide, form of consents we obtain or our outreach practices are not adequate or violate applicable law.
5 unchanged sentences
We expect that industry standards, laws and regulations will continue to develop regarding privacy, data protection, information security and artificial intelligence in many jurisdictions.
−Removed: In recent years, certain states have adopted or modified data privacy and security laws and regulations that may apply to our business.
−Removed: For example, the California Consumer Privacy Act (“CCPA”) requires businesses that process personal information of California residents to, among other things:
−Removed: provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information;
−Removed: receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt-out of certain disclosures of their personal information;
−Removed: and enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf.
−Removed: The enactment of the CCPA is prompting a wave of similar legislative developments in other states in the United States, which creates a patchwork of overlapping but different state laws.
−Removed: Similar laws have been proposed in many other states and at the federal level as well.
−Removed: Complying with these evolving obligations is costly.
−Removed: For instance, expanding definitions and interpretations of what constitutes “personal data” (or the equivalent) within the United States may increase our compliance costs and legal liability.
−Removed: Even though we believe we and our vendors are generally in compliance with applicable laws, rules and regulations relating to privacy and data security, these laws are in some cases relatively new and the interpretation and application of these laws are uncertain.
−Removed: A significant data breach or any failure, or perceived failure, by us to comply with any federal, state or local privacy or consumer protection-related laws, regulations or other principles or orders to which we may be subject or other legal obligations relating to privacy or consumer protection could adversely affect our reputation, brand and business, and may result in claims, investigations, proceedings or actions against us by governmental entities or others or other penalties or liabilities or require us to change our operations and/or cease using certain data sets.
−Removed: Depending on the nature of the information compromised, we may also have obligations to notify users, law enforcement or payment companies about the incident and may need to provide some form of remedy, such as
−Removed: refunds, for the individuals affected by the incident.
+Added: For example, the California Consumer Privacy Act, and related laws in other jurisdictions require us to adhere to certain disclosure restrictions and deletion obligations with respect to the Personal Information of their residents, and allow for penalties for violations and, in some cases, a private right of action.
+Added: These laws also impose transparency and other obligations with respect to personal information of their respective residents and provide residents with similar rights with respect to their personal information.
+Added: We have invested, and continue to invest, human and technology resources in our efforts to comply with such requirements that may be time-intensive and costly.
+Added: It is possible that new laws, regulations and other requirements, or amendments to or changes in interpretations of existing laws, regulations and other requirements, may require us to incur significant costs, implement new processes, or change our processing of information and business operations, which could ultimately hinder our ability to grow our business by extracting value from our data assets.
+Added: In addition, any failure or perceived failure by us to comply with laws, regulations and other requirements relating to the privacy, security and processing of information could result in legal claims or proceedings (including class actions), regulatory investigations or enforcement actions.
+Added: We could incur significant costs in investigating and defending such claims and, if found liable, pay significant damages or fines or be required to make changes to our business.
+Added: These proceedings and any subsequent adverse outcomes may subject us to significant negative publicity and an erosion of trust.
If any of these events were to occur, our business, results of operations, and financial condition could be materially adversely affected.
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The automobile financing business is large and highly competitive.
−Removed: UACC competes with a number of national, regional and local finance companies, banks, credit unions, fintech companies, and captive finance companies.
+Added: UACC competes with several national, regional, local and captive finance companies, banks, credit unions, and fintech companies.
Many of these companies are much larger and have greater financial resources than UACC, including greater access to capital markets for debt instruments or access to lower cost deposit bases.
These funding sources may be unavailable to UACC.
−Removed: Many of these companies also have long-standing relationships with automobile dealers and may provide other financing to dealers, including floor plan financing for the dealers' purchases of automobiles from manufacturers and auctions, which we do not offer.
+Added: Many of these companies also have long-standing relationships with automobile dealers and may provide other financing to dealers, including floor plan financing for the dealers' purchases of automobiles from auctions, which we do not offer.
There can be no assurance that we will be able to continue to compete successfully and, as a result, we may not be able to purchase automobile contracts from dealers at a price acceptable to us, which could result in reductions in our revenues or the cash flows available to us.
1 unchanged sentence
In addition, the automotive data and service business is large and very competitive.
−Removed: CarStory competes with a number of companies in the automotive industry, including valuation services, VIN data providers, website marketplaces, inventory aggregators, and retail e-commerce platforms.
−Removed: Some of these companies are significantly larger with well-established sales and marketing teams.
+Added: CarStory competes with a number of companies in the automotive industry, including valuation services, VIN data providers, website marketplaces, inventory aggregators, and retail ecommerce platforms.
+Added: Many of these companies are significantly larger with well-established sales and marketing teams.
We compete with other companies to attract customers to our marketplace and dealers to our digital solutions.
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The global economy often experiences periods of instability, and this volatility may lead to high unemployment and a lack of available credit, which may in turn lead to increased delinquencies, defaults, repossessions and losses on motor vehicle contracts financed through UACC and could materially and adversely affect our business, financial condition and results of operations.
+Added: For example, in 2025, the non-prime automotive financing industry faced challenges relating to increasing delinquencies and defaults, lowered recoveries, and other factors, leading some of UACC’s competitors to cease new loan originations, file bankruptcy, or otherwise significantly alter their operations.
Purchases of new and used vehicles are typically discretionary for consumers and have been, and may continue to be, affected by negative trends in the economy and other factors, including inflation and fluctuating interest rates, the impact of tariffs (as described further below), the cost of energy and gasoline, the availability and cost of consumer credit, reductions in consumer confidence and fears of recession, stock market volatility, increases or changes in regulation and unemployment levels.
2 unchanged sentences
Additionally, increased environmental regulation has made, and may in the future make, used vehicles more expensive and less desirable for consumers.
−Removed: Our business may be impacted by the imposition of tariffs and other trade barriers, which may make it more costly for automobile manufacturers and sellers to export and import vehicles and raw materials, and increase the price consumers in the U.S.
+Added: Our business may be impacted by the imposition of tariffs and other trade barriers, which make it more costly for automobile manufacturers and sellers to export and import vehicles and raw materials, and increase the price consumers in the U.S.
pay for vehicles.
1 unchanged sentence
government has renegotiated or terminated certain existing bilateral or multi-lateral trade agreements.
−Removed: In addition, the new Presidential administration recently announced (and in some cases, partially delayed or rescinded) new tariffs on imports to the United States from various countries, including those from the European Union, Japan, China, Canada and Mexico, and some countries have announced plans to impose retaliatory tariffs.
−Removed: Such significant tariffs on imports could have a major impact on the United States automotive industry, which depends heavily on cross border trade.
−Removed: Should tariffs be implemented and sustained for an extended period of time, they would have a significant adverse effect, including financial, on the automotive industry.
−Removed: Further, any additional tariffs in the United States or retaliatory tariffs imposed by other governments would exacerbate the impact, as could the uncertainty regarding whether tariffs will be implemented or sustained.
−Removed: Steps taken by governments to implement tariffs on raw materials (including steel), automobiles, parts, and other products and materials have the potential to disrupt existing supply chains and impose additional costs on businesses in the automotive industry in the United States and globally.
−Removed: While negotiations regarding tariffs are ongoing, if the resulting environment of retaliatory
−Removed: trade or other practices of additional trade restrictions or barriers increase automobile prices in the U.S., this could lead to decreased consumer demand for automobiles, and in turn, decreased demand for motor vehicle contracts financed through UACC, which would negatively impact our results of operations, cash flows, and financial condition.
+Added: In addition, the Presidential administration has implemented significant tariffs on imports to the United States from various countries, including those from the European Union, Japan, China, Canada and Mexico.
+Added: While the U.S.
+Added: has reached trade agreements with certain countries that reduced tariff rates on some automotive goods, tariffs on imports from other countries, including Canada and Mexico, remain elevated.
+Added: Such significant tariffs and other restrictions have had, and may continue to have, a major impact on the United States automotive industry, which depends heavily on cross border trade.
+Added: These tariffs have had a significant adverse effect, including financial, on the automotive industry.
+Added: Further, any additional tariffs in the United States or retaliatory tariffs imposed by other governments could exacerbate the impact, as could the uncertainty regarding the magnitude or duration of these measures.
+Added: Steps taken by governments to implement tariffs on raw materials (including steel), automobiles, parts, and other products and materials have disrupted existing supply chains and imposed additional costs on businesses in the automotive industry in the United States and globally.
+Added: While negotiations regarding tariffs are ongoing and changing rapidly, the resulting environment of retaliatory trade or other practices of additional trade restrictions or barriers increase automobile prices in the U.S.
+Added: and caused volatility, which has led to, and could continue to lead to, further decreased consumer demand for automobiles, and in turn, decreased demand for motor vehicle contracts financed through UACC, which would negatively impact our results of operations, cash flows, and financial condition.
Risks Related to Laws and Regulations
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In our prior ecommerce business, we have been subject to audits, requests for information, investigations and other inquiries from our regulators related to customer complaints.
−Removed: As we encountered operational challenges in keeping up with our rapid growth from 2020 through the first quarter of 2022, we experienced an increase in customer complaints, leading to an increase in such regulatory inquiries.
+Added: As we encountered operational challenges in keeping up with our rapid growth from 2020 through the first quarter of 2022, we experienced an increase in customer complaints,
+Added: leading to an increase in such regulatory inquiries.
We endeavored to promptly respond to any such inquiries and cooperate with our regulators.
−Removed: However, we have incurred fines in certain states and in April 2022, the Attorney General of Texas filed a lawsuit on behalf of the State of Texas in the District Court of Travis County, Texas against the Company, alleging violation of the Texas Deceptive Trade Practices − Consumer Protection Act and Texas Business and Commerce Code § 17.41 et seq.
+Added: However, we have incurred fines in certain states and in April 2022, the Attorney General of Texas filed a lawsuit on behalf of the State of Texas in the District Court of Travis County, Texas against Vroom, Inc.
+Added: and Vroom Automotive, LLC, alleging violation of the Texas Deceptive Trade Practices − Consumer Protection Act and Texas Business and Commerce Code § 17.41 et seq.
In December 2023, Vroom, Inc., Vroom Automotive, LLC and the Attorney General of the State of Texas reached a final agreement to resolve all claims in the petition, without any admission of wrongdoing by either Vroom entity.
−Removed: Under the agreement, the Company will pay a total of $2 million in civil penalties and $1 million in attorneys' fees, with the first half due in September 2024 and the remaining half due in September 2025, and abide permanently by an injunction of certain operational practices that were previously implemented.
−Removed: The agreement was approved by the District Court of Travis County on December 13, 2023.
−Removed: See Part II, Item 1 – “Legal Proceedings.”
−Removed: In addition, In January 2022, the Company received a non-public civil investigative demand from the Federal Trade Commission (“FTC”), seeking the production of information related to certain of the Company's business practices and the Company responded to those information requests.
−Removed: On February 23, 2024, the FTC notified the Company that it has reason to believe that the Company violated Section 5(a) of the Federal Trade Commission Act, 15 U.S.C.
−Removed: the FTC's Mail, Internet, or Telephone Order Merchandise Rule, 16 C.F.R.
−Removed: the FTC’s Used Motor Vehicle Trade Regulation Rule,16 C.F.R.
−Removed: and the FTC’s Pre-Sale Availability Rule, 16 C.F.R.
−Removed: The FTC advised the Company that it is authorized to negotiate a stipulated order and the Company intends to work cooperatively with the FTC towards a resolution.
−Removed: Because the matter is at an early stage and the outcome of any complex legal proceeding is inherently unpredictable and subject to significant uncertainties, the Company cannot determine at present whether any potential liability would have a material adverse effect on the Company’s financial condition, cash flows, or results of operations.
−Removed: In relation to our prior ecommerce business, we have been licensed as a dealer in the states of Texas, Florida, Arizona, California, Ohio and Wisconsin.
−Removed: We also have a motor vehicle sales finance license in Texas in connection with our Texas dealer license, a retail installment seller license in Florida in connection with our Florida dealer license, a retail installment seller license in Pennsylvania, and filed the required notice in Arizona in connection with our Arizona dealer license.
−Removed: As a result of the Ecommerce Wind-Down, we are terminating the foregoing licenses once all transactions, including title and registration transactions on behalf of our customers, are completed in the relevant jurisdiction.
+Added: Pursuant to the agreement, which the court approved on December 13, 2023, the Company paid $2 million in civil penalties and $1 million in attorneys' fees, and agreed to abide permanently by an injunction of certain operational practices that were previously implemented.
+Added: In relation to our prior ecommerce business, we were licensed as a dealer in the states of Texas, Florida, Arizona, California, Ohio and Wisconsin.
+Added: We also held a motor vehicle sales finance license in Texas in connection with our Texas dealer license, a retail installment seller license in Florida in connection with our Florida dealer license, a retail installment seller license in Pennsylvania, and filed the required notice in Arizona in connection with our Arizona dealer license.
+Added: As a result of the Ecommerce Wind-Down, we have terminated nearly all such licenses.
UACC's financing operations are subject to U.S.
federal, state, and local laws and regulations regarding contract origination, acquiring motor vehicle installment sales contracts from retail sellers, furnishing data to credit reporting agencies, servicing, debt collection practices, and securitization transactions.
−Removed: Certain states require UACC to have a sales
−Removed: finance license, consumer credit license, or similar applicable license.
+Added: Certain states require UACC to have a sales finance license, consumer credit license, or similar applicable license.
UACC has obtained licenses in all states where licensing is required.
1 unchanged sentence
Any failure to renew or maintain or any revocation of any of UACC's licenses would materially and adversely affect our business, financial condition and results of operations.
+Added: Further, any statutory or other financial penalties imposed on UACC by a regulator for violations of federal, state or local laws or regulations could materially impact our financial condition and results of operations.
+Added: On November 14, 2024, the Massachusetts Office of Consumer Affairs and Business Regulation, Division of Banks, commenced a routine compliance examination of UACC that is ongoing and in its final stages.
+Added: In connection therewith, the Division of Banks indicated that it intends to issue findings of compliance violations and impose penalties, but the extent and scope are still unknown until UACC receives a written report of preliminary findings and has the opportunity to respond.
In addition to these laws and regulations that apply specifically to the sale and financing of used vehicles, our facilities and business operations are subject to laws and regulations and executive orders relating to environmental protection, occupational health and safety, and other broadly applicable legal obligations.
9 unchanged sentences
These regulations and laws and executive orders may involve taxes, tariffs, privacy and data security, artificial intelligence, anti-spam, pricing, content protection, electronic contracts and communications, mobile communications, consumer protection, information reporting requirements, the design and operation of websites and internet neutrality.
−Removed: Since January 2025, President Trump has signed numerous executive orders, including some revoking executive orders and actions from the previous administration.
+Added: Since January 2025, President Trump has signed numerous executive
+Added: orders, including some revoking executive orders and actions from the previous administration.
It is not clear how existing and changing laws governing issues such as property ownership, sales and other taxes and consumer privacy apply to the internet as the vast majority of these laws were adopted prior to the advent of the internet and do not contemplate or address the unique issues raised by the internet or ecommerce.
6 unchanged sentences
We provide suggested offer pricing to our dealer partners as part of the CarStory platform using data science and proprietary algorithms based on a number of factors, including mechanical soundness, consumer desirability, vehicle history, market prices and relative value as prospective inventory.
−Removed: We also may leverage the CarStory Real Market Price for vehicle valuations in UACC's underwriting and servicing.
−Removed: If we are unable to provide accurate and competitive pricing through the CarStory Real Market Price, our revenue, gross margins and results of operations would be affected, which could have an adverse effect on our business, financial condition and results of operations.
+Added: We also leverage the CarStory Real Market Price for certain vehicle valuations in UACC's underwriting and servicing.
+Added: If we are unable to provide accurate and competitive pricing through the CarStory Real Market Price, particularly as it relates to any expanded use of the CarStory Real Market Price at UACC, our revenue, gross margins and results of operations would be affected, which could have an adverse effect on our business, financial condition and results of operations.
Our platform utilizes open-source software, and any defects or security vulnerabilities in the open-source software could negatively affect our business.
11 unchanged sentences
Our brand, reputation and ability to attract customers depend on the reliable performance of our platform and the supporting systems, technology and infrastructure.
−Removed: We may experience significant interruptions to our systems in the future.
+Added: We may experience significant interruptions to our systems in the
Interruptions in these systems, whether due to system failures or lack of upgrades, programming or configuration errors, computer viruses or physical or electronic break-ins, could affect the availability of our inventory on our platform and prevent or inhibit the ability of customers to access our platform.
10 unchanged sentences
Any errors, defects, disruptions, or other performance or reliability problems with our platform could interrupt our dealer's access to data that drives our originations, which could harm our business, and financial condition and results of operations.
−Removed: Our CarStory business relies on artificial intelligence to facilitate the automotive retail experience.
+Added: Our CarStory business relies on artificial intelligence to facilitate the automotive retail experience, and we intend to expand our use of artificial intelligence in connection with UACC.
If our use of artificial intelligence results in inaccurate data, regulatory scrutiny, privacy concerns or is otherwise unsuccessful, it could adversely affect our business, results of operations, and financial condition.
3 unchanged sentences
Certain of these AI Tools are proprietary to CarStory, and certain are third party AI Tools that CarStory has obtained a right to use from the applicable provider.
−Removed: Pursuant to our Value Maximization Plan, we are shifting focus in part to our CarStory business and expect to expand our use and offerings of our AI Tools.
−Removed: We intend to leverage our CarStory data and technology, including our AI Tools, to enhance operations at UACC.
−Removed: As with many technological innovations, there are significant risks involved in developing, maintaining and utilizing AI Tools and no assurance can be provided that CarStory’s use of AI Tools will enhance our products or services, be commercially viable, or continue to be successful.
−Removed: If the models underlying our AI Tools are inadequately or incorrectly designed, improperly trained or used, or the data used to train them is incomplete, inadequate or biased in some way, our use of AI Tools may inadvertently reduce our efficiency or cause unintentional or unexpected outputs that are incorrect, insufficient, do not match our business goals, do not comply with our policies or standards, adversely affect our financial condition, business and reputation.
−Removed: Further if we are deemed to not have sufficient rights to use such data to train our AI Tools, then we may be subject to litigation by the owners of the content or other materials that comprise such data, similar to the litigation that is currently pending in various U.S.
+Added: We expect to expand our use and offerings of AI Tools, both in connection with CarStory’s business and to continue enhancing operations at UACC.
+Added: As with many technological innovations, there are significant risks involved in developing, maintaining and utilizing AI Tools and no assurance can be provided that CarStory’s or UACC's use of AI Tools will enhance our products or services, be commercially viable, or continue to be successful.
+Added: If the models underlying the AI Tools are inadequately or incorrectly designed, improperly trained or used, or the data used to train them is incomplete, inadequate, inaccurate, biased, or otherwise poor data quality, our use of AI Tools may inadvertently reduce our efficiency or cause unintentional or unexpected outputs that are incorrect, insufficient, do not match our business goals, do not comply with our policies or standards, adversely affect our financial condition, business and reputation.
+Added: Further if we are deemed to not have sufficient rights to use such data to train the AI Tools, then we may be subject to litigation by the owners of the content or other materials that comprise such data, similar to the litigation that is currently pending in various U.S.
courts against other developers of AI Tools, and which has an uncertain outcome.
The market for AI Tools is complex and rapidly evolving, and we face significant competition from other companies as well as an evolving regulatory landscape.
−Removed: To the extent AI development and utilization from our industry competitors prove to be successful, or more successful, than our approach, the demand for our CarStory platform, and thus our business, could be adversely affected.
+Added: To the extent AI development and utilization from our industry competitors prove to be successful, or more successful than our approach, the demand for our CarStory platform or UACC services, and thus our business, could be adversely affected.
Our efforts to continuously improve our AI Tools, including the introduction of new products or capabilities or changes to existing products or capabilities, may result in new or enhanced governmental or regulatory scrutiny, litigation, privacy or ethical concerns, or other complications that could adversely affect our business, reputation, or financial results.
For example, the use of datasets to develop AI models, the content generated by AI systems, or the application of AI systems may be found to be insufficient, biased, or harmful, or violate current or future laws and regulations or deviate from consumers’ expectations of privacy.
−Removed: In addition, market acceptance of AI technologies is uncertain, especially in the automotive retail industry.
−Removed: The rapid evolution of AI will require the application of resources to develop, test, maintain and improve our products and services to help ensure that our AI Tools are, and remain, accurate and efficient.
−Removed: The continuous development, testing, maintenance and deployment of our AI Tools may also increase the cost profile of our offerings due to the nature of the computing costs involved in such systems, and may involve unforeseen difficulties including material performance problems, undetected defects or errors.
−Removed: We may encounter technical obstacles, and it is possible that we may discover additional problems that may prevent our proprietary AI Tools from operating properly, which could adversely affect our business, customer relationships and reputation.
See “—Any actual or perceived failure to comply with evolving regulatory frameworks around the development and use of AI could adversely affect our business, results of operations, and financial condition.”
+Added: The rapid evolution of AI will require the application of resources to develop, test, maintain and improve our products and services to help ensure that the AI Tools are, and remain, accurate and efficient.
+Added: The continuous development, testing, maintenance and deployment of AI Tools may also increase the cost profile of our offerings due to the nature of the computing costs involved in such systems, and may involve unforeseen difficulties including material performance problems, undetected defects or errors.
+Added: We may encounter technical obstacles, and it is possible that we may discover additional problems that may prevent our proprietary AI Tools from operating properly, which could adversely affect our business, customer relationships and reputation.
+Added: For instance, the models underlying AI Tools can experience decay (also known as “model drift”) in which their performance and accuracy decrease over time without further human intervention to correct such decay.
+Added: Additionally, we may not be successful in our ongoing development and maintenance of these technologies in the face of novel and evolving technical, reputational, and market factors.
Any actual or perceived failure to comply with the evolving regulatory frameworks around the development and use of AI could adversely affect our business, results of operations, and financial condition.
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Both in the United States and internationally, the development and use of AI Tools are the subject of evolving regulation by various governmental and regulatory agencies, and changes in laws, rules, directives and regulations governing the use of AI Tools may adversely affect the ability of our business to use or rely on AI Tools.
−Removed: As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or perception of their requirements may have on our business.
−Removed: Already, there are some existing legal regimes that regulate certain aspects of AI, and new laws regulating AI Tools have either entered into force in the United States and the EU in 2024 or are expected to enter into force in 2025.
−Removed: the United States, there has already been significant change at the federal level regarding the regulation of AI technologies.
−Removed: The Trump administration has rescinded an executive order relating to the safe and secure development of AI that was previously implemented by the Biden administration.
−Removed: The Trump administration then issued a new executive order that, among other things, requires certain agencies to develop and submit to the president action plans to “sustain and enhance America’s global AI dominance,” and to specifically review and, if possible, rescind rulemaking taken pursuant to the rescinded Biden executive order.
−Removed: Thus, the Trump administration may continue to rescind other existing federal orders and/or administrative policies relating to AI, or may implement new executive orders and/or rule making relating to AI in the future.
+Added: Additionally, existing laws and regulations may be enjoined in judicial proceedings from being enforced or may be interpreted in ways that would affect the operation of our AI Tools, or could be rescinded or amended as new administrations take differing approaches to evolving AI Tools.
+Added: As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet completely determine the impact future laws, regulations, standards, or market perception of their requirements may have on our business.
+Added: Already, certain existing legal regimes (e.g.
+Added: relating to data privacy) that regulate certain aspects of AI, and new laws regulating AI Tools have either entered into force in the United States and the EU in 2025 or are expected to enter into force in 2026.
+Added: For example, the California Privacy Protection Agency’s new regulations under the CCPA regarding the use of automated decision-making went into effect on January 1, 2026.
+Added: California also enacted several laws in 2024 and 2025 that further regulate use of AI and provide consumers with additional protections around companies’ use of AI, such as requiring companies to disclose certain uses of generative AI.
+Added: Other states in the U.S.
+Added: have also passed AI-focused legislation, such as Colorado’s Artificial Intelligence Act, which will require developers and deployers of “high-risk” AI systems to implement certain safeguards against algorithmic discrimination, Utah’s Artificial Intelligence Policy Act, which establishes disclosure requirements and accountability measures for the use of generative AI in certain consumer interactions, and Texas’s Responsible AI Governance Act, which prohibits specified harmful uses of AI, including behavioral manipulation and unlawful discrimination.
+Added: Such additional regulations, and uncertainty around whether they will survive legal challenges or how they will be enforced, may impact our ability to develop, use, procure and commercialize AI in the future.
+Added: The current government administration’s approach to investment in and regulation of AI has and is expected to continue to deviate from that of the previous administration and we will need to adapt to any changes that may result from such approach, including as the result of new or changing executive orders.
+Added: For instance, the federal government may seek to preempt state laws when they seek to govern certain topics involving AI, as evidenced by the current administration’s “Ensuring a National Policy Framework for Artificial Intelligence” Executive Order signed on December 11, 2025.
+Added: This order calls for federal standards and legislation that would preempt conflicting state AI regulations and create a federal litigation task force focused on challenging state AI laws in court.
+Added: The current administration may continue to implement new or rescind existing federal orders and/or administrative policies relating to AI Technologies.
Any such changes at the federal level could require us to expend significant resources to modify our products, services, or operations to ensure compliance or remain competitive.
−Removed: Further, U.S.
−Removed: legislation related to AI has been introduced at the federal level and has passed at the state level.
−Removed: For example, California enacted seventeen new laws in 2024 that further regulate use of AI and provide consumers with additional protections around companies’ use of AI, such as requiring companies to disclose certain uses of generative AI.
−Removed: Other states have also passed AI-focused legislation, such as Colorado’s Artificial Intelligence Act, which will require developers and deployers of “high-risk” AI systems to implement certain safeguards against algorithmic discrimination, and Utah’s Artificial Intelligence Policy Act, which establishes disclosure requirements and accountability measures for the use of generative AI in certain consumer interactions.
−Removed: Such additional regulations may impact our ability to develop, use, procure and commercialize AI in the future.
Any of the foregoing, together with developing guidance and/or decisions in this area, may affect our ability to use AI Tools, require additional compliance measures and changes to our operations and processes regarding AI Tools, prevent us from being able to utilize third party AI Tools, and result in increased compliance costs, and potential increases in the risk of civil claims against us.
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It is possible that further new laws and regulations will be adopted in the United States and in other non-U.S.
−Removed: jurisdictions, or that existing laws and regulations, including competition and antitrust laws, may be interpreted in ways that would limit our ability to use AI Tools for our business, or require us to change the way we use AI Tools in a manner that negatively affects the performance of our products, services, and business and the way in which we use AI Tools.
+Added: jurisdictions, or that existing laws and regulations, including competition and antitrust laws, may be interpreted or enforced
+Added: in ways that would limit our ability to use AI Tools for our business, or require us to change the way we use AI Tools in a manner that negatively affects the performance of our products, services, and business and the way in which we use AI Tools.
We may need to expend resources to adjust our products or services in certain jurisdictions if the laws, regulations, or decisions are not consistent across jurisdictions.
−Removed: Further, the cost to comply with such laws, regulations, or decisions and/or guidance interpreting existing laws, could be significant and would increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI Tools).
+Added: Further, the cost to comply with such laws, regulations, or decisions and/or guidance interpreting existing laws, or to adjust our business plans based on changes to how such laws are enforced, including adapting to loosened regulation to remain competitive, could be significant and would increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI Tools).
Such an increase in operating expenses, as well as any actual or perceived failure to comply with such laws and regulations, could adversely affect our business, financial condition and results of operations.
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The protection of intellectual property, technology and confidential information is crucial to the success of our businesses.
−Removed: Moreover, we will work to preserve the value of our Vroom® intellectual property rights where appropriate following the Ecommerce Wind-Down.
We rely on a combination of trademark, trade secret, patent and copyright law, as well as contractual restrictions, to protect our intellectual property (including our brand, technology and confidential information).
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Any litigation to enforce our intellectual property rights or defend ourselves against claims of infringement of third-party intellectual property rights, regardless of merit, could be costly, divert attention of management and may not ultimately be resolved in our favor.
−Removed: Moreover, if we are unable to successfully defend against claims that we have infringed the
−Removed: intellectual property rights of others, we may be prevented from using certain intellectual property and may be liable for damages, which in turn could materially adversely affect our business, financial condition or results of operations.
+Added: Moreover, if we are unable to successfully defend against claims that we have infringed the intellectual property rights of others, we may be prevented from using certain intellectual property and may be liable for damages, which in turn could materially adversely affect our business, financial condition or results of operations.
Even if we were to prevail, the time and resources necessary to resolve such disputes could be costly, time-consuming and divert the attention of management from our business operations.
A number of aspects of intellectual property protection in the field of AI and machine learning are currently under development, and there is uncertainty and ongoing litigation in different jurisdictions as to the degree and extent of protection warranted for AI and machine learning systems and relevant system input and outputs.
−Removed: If we fail to obtain protection for the intellectual property rights concerning our AI Tools, or later have our intellectual property rights invalidated or otherwise diminished, our competitors may be able to take advantage of our research and development efforts to develop competing products.
+Added: The law is also uncertain across jurisdictions regarding the copyright ownership of content that is produced in whole or in part by generative AI Tools.
+Added: If we fail to obtain protection for the intellectual property rights concerning our proprietary AI Tools, or later have our intellectual property rights invalidated or otherwise diminished, our competitors may be able to take advantage of our research and development efforts to develop competing products, which could adversely affect our business, reputation and financial condition.
Given the long history of development of AI Tools, other parties may have (or in the future may obtain) patents or other proprietary rights that would prevent, limit or interfere with our ability to make, use or sell our own AI Tools.
−Removed: We are currently the registrant of the vroom.com, texasdirectauto.com, carstory.com, vast.com and unitedautocredit.net internet domain names and various other related domain names.
−Removed: The regulation of domain names in the United States is subject to change.
+Added: We may use AI tools, including tools provided by third parties, to develop or assist in the development of our own software code.
+Added: While use of such tools makes our development process more efficient, AI Tools have sometimes generated content that is “substantially similar” to proprietary or open source code on which the AI Tool was trained.
+Added: If the AI Tools we use generate code that is too similar to other proprietary code, or to software processes that are protected by patent, we could be subject to intellectual property infringement claims.
+Added: We may also not be able to anticipate and detect security vulnerabilities in such AI generated software code.
+Added: If our tools generate code that is too similar to open source code, we risk losing protection of our own proprietary code that is commingled with such code.
+Added: Finally, to the extent we use third-party AI Tools to develop software code, the terms of use of these tools may state that the third-party provider retains rights in the generated code.
+Added: We are currently the registrant of the vroom.com, carstory.com, vast.com and unitedautocredit.net internet domain names and various other related domain names.
+Added: The regulation of domain names in the United States is subject
Regulatory bodies could establish additional top-level domains, appoint additional domain name registrars or modify the requirements for holding domain names.
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Furthermore, our trade secrets, know-how and other proprietary materials may be revealed to the public or our competitors or independently developed by our competitors and, as a result, may no longer provide protection for the related intellectual property.
−Removed: Our CarStory business has a number of patents and we may obtain additional patents in the future.
+Added: Our CarStory business has a number of patents, Vroom, Inc.
+Added: has one patent and one pending patent application, and we may obtain additional patents in the future.
We may fail to apply for patents on important products, methods and technologies in a timely fashion or at all, or we may fail to apply for patents in potentially relevant jurisdictions.
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Patent and Trademark Office and various foreign governmental patent agencies require compliance with a number of procedural requirements to complete the patent application process and to maintain issued patents, and noncompliance or non-payment could result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in a relevant jurisdiction.
−Removed: Our agreements with employees and consultants may not effectively prevent unauthorized use of our intellectual property, and we may be subject to claims asserting that our employees or, consultants have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property.
+Added: Our agreements with employees, consultants, and third parties may not effectively prevent unauthorized use of our intellectual property, and we may be subject to claims asserting misappropriation of trade secrets or other confidential or sensitive information or ownership of what we regard as our own intellectual property.
As part of our efforts to protect our intellectual property, technology and confidential information, we require employees and contractors who may be involved in the creation or development of intellectual property to enter into confidentiality and assignment of inventions agreements, and we also require certain third parties to enter into nondisclosure agreements.
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These agreements may not effectively grant all necessary rights to any inventions that may have been developed by our employees and consultants.
−Removed: In addition, while these agreements will give us contractual remedies upon unauthorized use or disclosure of our intellectual property or confidential information, these agreements may not effectively prevent unauthorized use or disclosure of our confidential information, intellectual property or technology and we may not be able to detect such unauthorized activity.
+Added: In addition, while these agreements provide us with contractual remedies upon unauthorized use or disclosure of our intellectual property or confidential information, such agreements may not effectively prevent such unauthorized use or disclosure, and we may not be able to detect such unauthorized activity.
+Added: Moreover, the assignment of intellectual property rights pursuant to such agreements may not be self-executing or the assignment agreement may be breached, and we may be forced to bring claims against third parties or defend claims that they may bring against us to determine the ownership of what we regard as our intellectual property.
Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these individuals have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer.
−Removed: Litigation may be necessary to defend against these claims, which could be costly and time-consuming.
+Added: Litigation may be necessary to defend against these claims or to enforce our own intellectual property rights, which could be costly and time-consuming.
If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel.
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If alternate technology cannot be obtained or developed, we may not be able to offer certain functionality as part of our products and services, which could adversely affect our business, financial condition and results of operations.
−Removed: We may be subject to claims asserting that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property.
−Removed: Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these individuals have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer.
−Removed: Litigation may be necessary to defend against these claims.
−Removed: If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel.
−Removed: Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.
−Removed: In addition, while it is our policy to require our employees and contractors who may be involved in the creation or development of intellectual property on our behalf to execute agreements assigning such intellectual property to us, we may be unsuccessful in having all such employees and contractors execute such an agreement.
−Removed: The assignment of intellectual property may not be self-executing or the assignment agreement may be breached, and we may be forced to bring claims against third parties or defend claims that they may bring against us to determine the ownership of what we regard as our intellectual property.
Risks Related to Ownership of Our Common Stock
Trading in our securities is highly speculative and poses substantial risks, and our securities were subject to dilution following effectiveness of the Plan.
−Removed: In connection with the Prepackaged Chapter 11 Case and our emergence from bankruptcy, trade creditors and all other general unsecured creditors were unimpaired.
−Removed: Upon the Company’s emergence from the Prepackaged Chapter 11 Case, our former noteholders received, among other things, their pro rata share of 92.94% of the common stock in the reorganized company, and the holders of the existing common stock of the Company received their pro rata share of 7.06% of the common stock in the reorganized Company and their pro rata share of the new warrants exercisable upon
−Removed: the Company reaching certain benchmarks pursuant to the terms of the proposed new warrants.
−Removed: In addition, 15% of the our common stock outstanding as of immediately following the effectiveness of the Plan was reserved for issuance as awards under a post-restructuring management incentive plan consisting of 10% restricted stock units and 5% options.
+Added: In connection with the Prepackaged Chapter 11 Case and our emergence from bankruptcy, trade creditors and all other general unsecured creditors of Vroom, Inc.
+Added: were unimpaired.
+Added: Upon the Company’s emergence from the Prepackaged Chapter 11 Case, our former noteholders received, among other things, their pro rata share of 92.94% of the Common Stock in the reorganized company, and the holders of the existing common stock of the Company received their pro rata share of 7.06% of the Common Stock in the reorganized Company and their pro rata share of the new Warrants exercisable upon the Company reaching certain benchmarks pursuant to the terms of the proposed new Warrants.
+Added: In addition, 15% of our Common Stock outstanding as of immediately following the effectiveness of the Plan was reserved for issuance as awards under a post-restructuring management incentive plan consisting of 10% restricted stock units and 5% options.
Issuances of Common Stock (or securities convertible into or exercisable for Common Stock) under the Plan, any equity awards or management incentive plan and any exercises of the Warrants or conversion rights for shares of Common Stock diluted the voting power of the outstanding common stock, and may adversely affect the trading price of our Common Stock in the future.
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An inactive market may also impair our ability to raise capital by selling our Common Stock, and it may impair our ability to attract and motivate our employees through equity incentive awards and our ability to acquire other companies by using our Common Stock as consideration.
−Removed: In addition, the Company is exploring potential listing of the warrants on a national stock exchange.
−Removed: However, there is no guarantee that the Company will succeed in doing so or that, if it does, an active trading market for the warrants will develop.
Many factors, some of which are outside our control, may cause the market price of our Common Stock to fluctuate significantly, including those described in this “Risk Factors” section as well as the following:
−Removed: • the reorganization of our capital structure and related risks following our emergence from the Prepackaged Chapter 11 Case;
−Removed: • our operating and financial performance and prospects, including as a result of operational changes and initiatives resulting from the Value Maximization Plan and our emergence of bankruptcy;
−Removed: • the discontinuation of our ecommerce operations and wind-down of our used vehicle dealership business and our ability to reduce the related costs;
−Removed: • the listing status of our common stock on a national securities exchange;
• our ability to grow and develop the UACC and CarStory businesses;
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• our ability to achieve the benefits of any cost saving measures or of our bankruptcy;
+Added: • the listing status of our Common Stock and Warrants on a national securities exchange;
• future announcements concerning our businesses or our competitors’ businesses;
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• changes in senior management or key personnel and the impact of reductions in our workforce;
−Removed: • issuances, exchanges or sales, or expected issuances, exchanges or sales of our capital stock;
+Added: • issuances, exchanges or sales, or expected issuances, exchanges or sales of our capital stock, including upon exercise of our outstanding Warrants or conversion of our 2030 Notes;
• changes in our dividend policy;
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As a result, volatility in the market price of our Common Stock may prevent investors from being able to sell their Common Stock at or above the price which they paid for them.
−Removed: These broad market and industry factors may materially reduce the market price of our common stock, regardless of our operating performance.
+Added: These broad market and industry factors may materially
+Added: reduce the market price of our Common Stock, regardless of our operating performance.
In addition, price volatility may be greater if the public float and trading volume of our Common Stock is low.
+Added: As of December 31, 2025, we had 364,281 Warrants outstanding, each exercisable for one share of Common Stock at an exercise price of $60.95 per share, which expire on January 14, 2030.
+Added: In addition, we had $10.0 million aggregate principal amount of 2030 Notes outstanding, which are convertible into up to 285,714 shares of Common Stock under certain circumstances.
+Added: The Warrants commenced trading on the OTCQX Best Market under the symbol "VRMWW" on July 7, 2025.
+Added: The exercise of the Warrants or conversion of the 2030 Notes would dilute existing stockholders and could adversely affect the market price of our Common Stock.
+Added: Furthermore, the sale or potential sale of shares issuable upon exercise of the Warrants or conversion of the 2030 Notes could create downward pressure on the trading price of our Common Stock.
As a result, you may suffer a loss on your investment.
Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, may negatively impact the market price of our Common Stock.
−Removed: We have experienced significant declines in the market price of our common stock, and it could continue to decline in the future, including as a result of the execution and implementation of our Value Maximization Plan or our emergence from bankruptcy as a result of the Prepackaged Chapter 11 Case.
−Removed: Accordingly, any trading in our common stock following our emergence from bankruptcy will be highly speculative and pose substantial risks to purchasers of our common stock.
+Added: We have experienced significant declines in the market price of our common stock, and it could continue to decline in the future, including as a result of the execution and implementation of our Long-Term Strategic Plan.
+Added: Accordingly, any trading in our Common Stock will be highly speculative and pose substantial risks to purchasers of our Common Stock.
Further declines in our stock price could, among other things, make it more difficult to raise or restructure capital on terms acceptable to us, or at all, and make it difficult for our investors to sell their shares of Common Stock.
In addition, companies that experience volatility in the market price of their securities often are the subject of securities class action litigation.
−Removed: For example, a consolidated class action is pending in the U.S.
−Removed: District Court for the Southern District of New York against us, certain of our officers, and certain of our directors, among others, alleging violations of the federal securities laws.
−Removed: See Part II, Item 1 “Legal Proceedings.”
We do not intend to pay dividends on our common stock for the foreseeable future.
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As a result, we do not anticipate declaring or paying any cash dividends on our Common Stock in the foreseeable future.
−Removed: Any decision to declare and pay dividends in the future will be made at the discretion of our board of
−Removed: directors and will depend on, among other things, our business prospects, results of operations, financial condition, cash requirements and availability, industry trends and other factors that our board of directors may deem relevant.
+Added: Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors and will depend on, among other things, our business prospects, results of operations, financial condition, cash requirements and availability, industry trends and other factors that our board of directors may deem relevant.
Any such decision also will be subject to compliance with contractual restrictions and covenants in the agreements governing our current indebtedness.
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On January 14, 2025, we entered into a warrant agreement (the “Warrant Agreement”) with Equiniti Trust Company LLC, as warrant agent.
−Removed: In accordance with the Prepackaged Chapter 11 Case and pursuant to the Warrant Agreement, on January 14, 2025, the Company issued warrants to purchase an aggregate of 364,516 shares of the Company’s common stock at an exercise price of $60.95 per share, to our stockholders.
+Added: In accordance with the Prepackaged Chapter 11 Case and pursuant to the Warrant Agreement, on January 14, 2025, the Company issued warrants ("Warrants") to purchase an aggregate of 364,516 shares of the Company’s Common Stock at an exercise price of $60.95 per share, to our stockholders.
Each Warrant was immediately exercisable upon the issuance date and will expire five years from the issuance date.
+Added: On July 7, 2025, the Warrants commenced trading on the OTCQX Best Market under the symbol “VRMWW”.
We have filed registration statements on Form S-8 to register shares of our Common Stock issued or reserved for issuance under our equity incentive compensation plans.
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We may be unable to satisfy a Nasdaq listing rule or that of another national securities exchange.
−Removed: On November 21, 2024, in connection with our commencement of the Prepackaged Chapter 11 Case, we received written notice from Nasdaq notifying us that Nasdaq had determined to delist the Company’s common stock.
−Removed: On November 28, 2024, we appealed that decision and requested a hearing before a Nasdaq Hearing Panel to appeal Nasdaq’s delisting determination.
−Removed: During the pendency of our appeal, on December 2, 2024, our common stock was suspended from trading on Nasdaq and was quoted on an over-the-counter market.
−Removed: Following the Company’s emergence from the Prepackaged Chapter 11 Case on January 14, 2025, all previously issued and outstanding equity interests in Vroom were cancelled and extinguished, all trading of our common stock ceased on the over-the-counter market, and Nasdaq issued a Moot Letter to cancel the hearing and close the matter.
−Removed: On February 20, 2025, our newly issued common stock was relisted for trading on the Nasdaq Global Market.
−Removed: We are exploring the potential listing of our warrants on a national stock exchange.
−Removed: There can also be no assurance that we will continue to meet Nasdaq listing requirements, or those of any other national securities exchange.
+Added: On February 20, 2025, our newly issued Common Stock was listed for trading on the Nasdaq Global Market under the ticker symbol "VRM".
+Added: On July 7, 2025, our Warrants commenced trading on the OTCQX Best Market under the symbol “VRMWW”.
+Added: There can be no assurance that we will continue to meet Nasdaq listing requirements, or those of any other national securities exchange.
If we are unable to remain listed on a national securities exchange, we and our stockholders could face significant material adverse consequences, including limited availability of market quotations and analyst coverage for our Common Stock, and reduced liquidity for the trading of our securities.
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These rules and regulations and changes in laws, regulations and standards relating to corporate governance and public disclosure, which have created uncertainty for public companies, have and will continue to increase our legal and financial compliance costs and make some activities more time consuming and costly.
−Removed: These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their
−Removed: application in practice may evolve over time as new guidance is provided by regulatory and governing bodies and new laws, regulations, or executive orders are issued.
+Added: These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies and new laws, regulations, or executive orders are issued.
This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.
Our investment in compliance with existing and evolving regulatory requirements has and will continue to result in increased administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities, which could have a material adverse effect on our businesses, financial condition and results of operations.
−Removed: In addition, the need to continue to develop the corporate infrastructure demanded of a public company may also divert management’s attention from implementing our business strategy, including our Value Maximization Plan and our Prepackaged Chapter 11 Case, which could prevent us from improving our businesses, financial condition and results of operations.
+Added: In addition, the need to continue to develop the corporate infrastructure demanded of a public company may also divert management’s attention from implementing our business strategy, which could prevent us from improving our businesses, financial condition and results of operations.
If we do not continue to develop and implement the right processes and tools to manage our changing enterprise and maintain our culture, our ability to compete successfully and achieve our business objectives could be impaired, which could negatively impact our business, financial condition and results of operations.
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The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, expenses and related disclosures.
−Removed: On an ongoing basis, we evaluate our estimates, including, among others, those related to income taxes, the realizability of inventory, stock-based compensation, revenue-related reserves, as well as impairment of goodwill and long-lived assets.
+Added: On an ongoing basis, we evaluate our estimates, including, among others, those related to the fair value of finance receivables, income taxes, stock-based compensation, as well as impairment of long-lived assets.
+Added: In connection with our emergence from the Prepackaged Chapter 11 Case, we adopted fresh start accounting in accordance with ASC 852, which required us to make significant estimates and assumptions regarding the fair value of our assets and liabilities, including finance receivables, intangible assets, and the allocation of our reorganization value.
+Added: These fair value estimates were based on assumptions and judgments that are inherently uncertain, and actual results may differ materially from these estimates.
Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in the price of our Common Stock.
The implementation of new accounting requirements or other changes to GAAP could have a material adverse effect on our reported results of operations and financial condition.
−Removed: Increased scrutiny and changing expectations from investors, consumers, employees, regulators, and others regarding our environmental, social and governance practices and reporting could cause us to incur additional costs, devote additional resources and expose us to additional risks, which could adversely impact our reputation, customer attraction and retention, access to capital and employee recruitment and retention.
−Removed: Expectations are shifting related to companies' environmental, social and governance (“ESG”) practices and reporting.
+Added: We are subject to scrutiny and changing expectations from investors, consumers, employees, regulators, and others regarding environmental, social and governance matters.
+Added: Expectations are shifting related to companies' environmental, social and governance (“ESG”) practices and reporting, including regarding climate, human capital, and other matters.
Stakeholders’ expectations continue to evolve;
moreover, they are not uniform, and at times are conflicting.
−Removed: Addressing these expectations comes with inherent costs and complexity, and any failure to successfully navigate these expectations may adversely impact our brand, reputation, customer retention, or other aspects of our business.
+Added: Addressing these expectations comes with inherent costs
+Added: and complexity, and any failure to successfully navigate these expectations may adversely impact our brand, reputation, customer retention, or other aspects of our business.
Any efforts to improve our ESG profile or respond to stakeholder expectations can be costly and may not have the desired effect.
Our ability to achieve any ESG objective is subject to numerous risks, many of which are outside of our control.
−Removed: Examples of such risks include:
−Removed: • the availability and cost of low- or non-carbon-based energy sources;
−Removed: • the evolving regulatory requirements affecting ESG standards or disclosures;
−Removed: • evolving methodologies, standards, and data availability and quality, as well as stakeholder perceptions;
−Removed: • the availability of suppliers that can meet sustainability, human capital and other ESG standards;
−Removed: • our ability to recruit, develop and retain talent in our labor markets;
−Removed: • the success of our organic growth and acquisitions or dispositions of businesses or operations.
+Added: Examples of such risks include evolving methodologies, standards and data availability and quality, along with stakeholder perceptions on such matters, which may impact our customer, employee, and other stakeholder relations.
If we fail, or are perceived to be failing, to meet the standards included in any sustainability disclosure or the expectations of our various stakeholders, it could negatively impact our reputation, customer attraction and retention, access to capital and employee retention.
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Our failure to comply with any applicable rules or regulations could lead to penalties and adversely impact our reputation, customer attraction and retention, access to capital and employee retention.
+Added: Some of our stakeholders may be subject to similar expectations, which may result in additional or augmented risks on such matters.
We may need to seek or raise additional debt or equity capital to pursue our business objectives and respond to business opportunities, challenges or unforeseen circumstances.
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Our amended and restated certificate of incorporation further provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts are the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
−Removed: The choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees.
+Added: The choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which
+Added: may discourage such lawsuits against us and our directors, officers and other employees.
Alternatively, if a court were to find the choice of forum provisions contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition and results of operations.
27 unchanged sentences
federal income tax, as well as income tax in certain states.
−Removed: Our provision for income taxes and cash tax liability in the future could be adversely affected by numerous factors including, changes in tax laws, regulations, accounting principles or interpretations thereof, which could materially and adversely impact our cash flows and our business, financial condition and results of operations in future periods.
−Removed: Increases in our effective tax rate could also materially affect our net results.
+Added: Our provision for income taxes and cash tax liability in the future could be adversely affected by numerous factors including, changes in tax laws, regulations, accounting principles or interpretations thereof, which could materially and adversely impact our cash flows and our business, prospects, financial condition and results of operations in future periods.
+Added: Increases in our effective tax
+Added: rate could also materially affect our net results.
In addition, the U.S.
−Removed: government may enact significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate and the imposition of minimum taxes, which may have a material adverse effect on our customers, our business, results of operations and financial condition.
−Removed: The likelihood of these changes being enacted or implemented is unclear.
−Removed: We are currently unable to predict whether such changes will occur and, if so, the ultimate impact on our business.
+Added: government may enact significant changes to the taxation of business entities including, among others, changes in the corporate income tax rate and the imposition of minimum taxes, which may have a material impact on our customers, our business, results of operations and financial condition.
+Added: For example, the One Big Beautiful Bill Act (“OBBBA”), enacted on July 4, 2025, revised certain key business tax provisions, including the reinstatement of bonus depreciation deductions for acquisitions of qualified property, the restoration of EBITDA-based business interest expense limitation, the expansion of rules related to deductibility of executive compensation, and the implementation of changes relating to the computation of certain taxes in respect of non-U.S.
+Added: The long-term effects on the results of operations and cash flows remain uncertain and could be significant.
+Added: We cannot predict whether the U.S.
+Added: Congress or any state or local governmental body, will enact new tax legislation (including increases to tax rates), whether the U.S.
+Added: Internal Revenue Service (the “IRS”) or any other tax authority will issue new regulations or other guidance, nor can we predict what effect such legislation or regulations might have.
Further, we are subject to the examination of our income and other tax returns by the IRS and state and local tax authorities, which could have an impact on our business, financial condition and results of operations.
Our tax attributes and future tax deductions may be reduced or significantly limited as a result of the consummation of the Plan and any restructuring or reorganization in connection therewith.
−Removed: Generally, any discharge of our debt obligations as a result of the Prepackaged Chapter 11 Case for an amount less than the debt’s adjusted issue price may give rise to cancellation of indebtedness income, which will reduce our tax attributes.
+Added: Generally, any discharge of our debt obligations as a result of the Prepackaged Chapter 11 Case for an amount less than the debt’s adjusted issue price may give rise to cancellation of indebtedness income.
+Added: Under Section 108 of the Code, a taxpayer is required to exclude cancellation of indebtedness income from gross income if the debtor is under the jurisdiction of a court in a case under Chapter 11 of the Bankruptcy Code and the discharge of debt occurs pursuant to that proceeding.
+Added: As a consequence of such an exclusion, we are required to reduce certain of our tax attributes.
Certain tax attributes otherwise available and of value to us may be reduced, in most cases by the principal amount of the indebtedness forgiven.
3 unchanged sentences
(iv) capital loss carryovers;
−Removed: (v) tax basis in assets (but not below the amount of liabilities to which the taxpayer remains subject
−Removed: immediately after the indebtedness forgiven);
+Added: (v) tax basis in assets (but not below the amount of liabilities to which the taxpayer remains subject immediately after the indebtedness forgiven);
(vi) passive activity loss and credit carryovers;
1 unchanged sentence
Loss of these tax attributes may have an adverse effect on our prospective cash flow.
−Removed: To the extent that U.S.
+Added: To the extent, if any, that U.S.
federal NOL carryforwards, other losses and credits generated by us prior to emergence from bankruptcy are available as deductions after emergence, our ability to utilize such deductions may be limited by Section 382 of the Code.
11 unchanged sentences
For example, a significant natural disaster, such as an earthquake, fire, flood or hurricane could have an adverse effect on our businesses, financial condition and operating results, and our insurance coverage may be insufficient to compensate us for losses that may occur.
−Removed: Global climate change is resulting in certain types of natural disasters occurring more frequently or with more intense effects.
−Removed: We may not have sufficient protection or recovery plans in some circumstances.
+Added: Global climate change is resulting in certain types of natural disasters occurring more frequently or with more intense effects, as well as chronic physical changes that may have similar impacts.
+Added: We may not have sufficient protection or recovery plans
+Added: in some circumstances.
As we rely heavily on our computer and communications systems and the internet to conduct our businesses and provide high-quality customer service, any disruptions could negatively affect our ability to run our businesses, which could have an adverse effect on our businesses, financial condition, and operating results.
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and potential retaliatory action by governments against companies, cannot be predicted.
+Added: For example, recent escalations of conflict may cause oil and gasoline inflation, reduce consumer purchasing power, and increase default rates within the UACC portfolio, while heightening the risk of cyberattacks.
We may incur expenses or delays relating to such events outside of our control, which could have a material adverse impact on our business, operating results and financial condition.
46 unchanged sentences
Stockholder activism could disrupt our business, cause us to incur significant expenses, hinder execution of our business strategy, and impact our stock price.
−Removed: We may in the future be subject to stockholder activism, which can arise in a variety of predictable or unpredictable situations, and can result in substantial costs and divert management’s and our Board of Director’s attention and resources from our businesses.
+Added: We may in the future be subject to stockholder activism, which can arise in a variety of predictable or unpredictable situations, and can result in substantial costs and divert management’s and our Board of Director’s attention
+Added: and resources from our businesses.
Additionally, stockholder activism could give rise to perceived uncertainties as to our long-term businesses, financial forecasts, future operations and strategic planning, harm our reputation, adversely affect our relationships with our business partners, and make it more difficult to attract and retain qualified personnel.
2 unchanged sentences
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.