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Item 7. Management’s Discussion and Analysis

2026-03-26 compared with 2025-03-11 · 1076 added, 939 removed, 1155 unchanged (64% of the section changed)

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Recent Events

Issuance of Preferred Stock Units

On January 16, 2026, Vroom Automotive, LLC, a Delaware limited liability company and an indirect subsidiary of Vroom Inc.

issued to SPE Holdings 2026-1, a Delaware statutory trust (“SPE Holdings”), 15,000 newly issued Series A preferred units and 7,500 newly issued Series B preferred units (collectively, the "Vroom Automotive Preferred Units") for aggregate gross proceeds of $22.5 million, pursuant to a Preferred Unit Purchase Agreement.

The Vroom Automotive Preferred Units will be entitled to receive a quarterly preferential distribution, equal to the liquidation preference of such Vroom Automotive Preferred Units multiplied by a variable distribution rate, which will reset on each quarterly distribution date in an amount equal to the ninety (90) day average of the Secured Overnight Financing Rate (SOFR) plus a spread of 8.25% for Series A Preferred Units and 9% for Series B Preferred Units.

The Series B Preferred Units are convertible into common units of Vroom Automotive at the option of the Counterparty at any time.

The Series A Preferred Units are not convertible.

Issuance of Related Party Notes

On November 25, 2025, we entered into a Note Purchase Agreement with Robert J.

Mylod, Jr., pursuant to which the Company issued Senior Secured Delayed Draw Notes due 2026 (the “Delayed Draw Notes”) in a maximum aggregate principal commitment amount of $10.5 million, which matures on November 25, 2026.

As of December 31, 2025, the Company drew $10.5 million against the Delayed Draw Notes.

On August 29, 2025, we issued $10.0 million aggregate principal amount of 5.00% Convertible Notes due 2030 (the “2030 Notes”).

The 2030 Notes were issued pursuant to a Note Purchase Agreement with Annox Capital, LLC and Robert J.

Mylod, Jr., the Managing Partner of Annox Capital, LLC and the Independent Executive Chair of the board of directors of the Company.

Recapitalization of Balance Sheet Debt:

the Prepackaged Chapter 11 Case

On November 12, 2024, in connection with the Prepackaged Chapter 11 Case (as defined below), we entered into a Restructuring Support Agreement (together with all exhibits and schedules thereto, the “RSA”) with creditors holding the overwhelming majority of the aggregate outstanding principal amount of the 0.75% unsecured Convertible Senior Notes due 2026 (the “Notes”), issued pursuant to an indenture (the “Indenture”), between the Company and U.S.

Bank National Association, as trustee, and the largest shareholder.

The RSA contemplated a comprehensive restructuring of the Company’s debt obligations and capital structure to be implemented through a prepackaged plan of reorganization (the “Plan”) to be implemented through the filing of the Prepackaged Chapter 11 Case.

On November 13, 2024, we commenced a voluntary proceeding (the "Prepackaged Chapter 11 Case") under Chapter 11 of the United States Code, 11 U.S.C.

§§ 101-1532, as amended from time to (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) under the name “In re Vroom, Inc.” None of our subsidiaries were debtors in the Chapter 11 proceedings.

On January 14, 2025 (the “Effective Date”), the conditions to the effectiveness of the Plan were satisfied or waived and the Plan became effective.

§§ 101-1532, as amended from time to time in the United States Bankruptcy Court for the Southern District of Texas under the name “In re Vroom, Inc.” None of our subsidiaries were debtors in the Chapter 11 proceedings.

On January 14, 2025 (the “Effective Date”), the conditions to the effectiveness of the prepackaged plan of reorganization (the “Plan”) were satisfied or waived and the Plan became effective.

We emerged from the Prepackaged Chapter 11 Case on January 14, 2025.

On February 20, 2025, our Common Stock was listed for trading on the Nasdaq Global Market.

In connection with the Prepackaged Chapter 11 Case, the ordinary course operations of Vroom, Inc.’s subsidiaries continued with minimal impact.

We emerged without any remaining Notes or long-term debt at the Vroom, Inc.

level, but still maintain UACC’s Warehouse Credit Facilities (as defined below), securitization debt, financing of beneficial interest in securitizations, and junior subordinated debentures.

We emerged without any remaining Convertible Notes due 2026 (the “2026 Notes”).

The Prepackaged Chapter 11 Case was intended to address the impact of the 2026 Notes and their upcoming maturity, or any potential acceleration, while providing the potential for our stockholders to retain value in their investment, limiting disruption to our ongoing ordinary course operations, emerging as a public company without any long-term debt at the Vroom, Inc.

level, and maximizing the ability to utilize a substantial portion of our net operating losses.

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 as we may not realize all of the intended benefits of the Prepackaged Chapter 11 Case, the benefits may not be on the terms, in the manner, or during the time period we expect, and the costs incurred may exceed the intended benefits.

Additionally, other risks we face, as described in this Annual Report on Form 10-K, may be exacerbated by the impact of our emergence from bankruptcy.

All of these factors could limit our ability to pursue growth strategies for our business in the near- to mid-term.

See “Liquidity and Capital Resources” for more information on our 2026 Notes and the restructuring of our debt obligations as a result of the Prepackaged Chapter 11 Case, and Part I, Item 1A Risk Factors for risks associated with the Prepackaged Chapter 11 Case and our ability to realize its intended benefits.

Conversion of Common Stock

Immediately prior to the Effective Date, there were 1,822,577 outstanding shares of our common stock, $0.001 par value per share (the “Common Stock”).

Immediately prior to the Effective Date, there were 1,822,577 outstanding shares of our common stock, $0.001 par value per share.

We adopted an Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to, among other changes to our prior amended and restated certificate of incorporation, effect an automatic conversion of the common stock at a ratio of 1-for-5.

As a result of the automatic conversion and the issuance of shares of Common Stock pursuant to the Plan, there were approximately 5,163,109 outstanding shares of newly issued Common Stock as of the Effective Date (the “New Common Stock”).

As a result of the automatic conversion and the issuance of shares of common stock pursuant to the Plan, there were approximately 5,163,109 outstanding shares of newly issued common stock as of the Effective Date (the “Common Stock”).

Issuance of Warrants

On the Effective Date, the Company entered into a warrant agreement (the “Warrant Agreement”) with Equiniti Trust Company LLC, as warrant agent.

In accordance with the Plan and pursuant to the Warrant Agreement, on the Effective Date, the Company issued warrants (the “Warrants”) to purchase an aggregate of 364,516 shares of the New

Common Stock, at an exercise price of $60.95 per share, to stockholders of the Company in accordance with the Prepackaged Chapter 11 Case.

On the Effective Date, we entered into a warrant agreement (the “Warrant Agreement”) with Equiniti Trust Company LLC, as warrant agent.

In accordance with the Plan and pursuant to the Warrant Agreement, on the Effective Date, we issued warrants (the “Warrants”) to purchase an aggregate of 364,516 shares of the Common Stock, at an exercise price of $60.95 per share, to our stockholders in accordance with the Prepackaged Chapter 11 Case.

Each Warrant was immediately exercisable upon the issuance date and will expire five years from the issuance date.

2020 Incentive Award Plan

Pursuant to the Plan, our existing 2020 Incentive Award Plan (as amended from time to time, the “2020 Plan”), was amended to increase the number of shares reserved for issuance under the 2020 Plan to account for the proposed post-emergence management incentive program, which accounts for 15% of the fully-diluted shares of New Common Stock as of immediately following the Effective Date, inclusive of the Warrants, the management incentive program and the converted existing equity awards:

10% will be allocated for awards of restricted stock units and 5% will be allocated for awards of stock options.

On July 7, 2025, the Warrants commenced trading on the OTCQX Best Market under the symbol “VRMWW”.

Going Concern

As described above, we filed the Prepackaged Chapter 11 Case to implement the transactions described herein.

As of January 14, 2025 we emerged from bankruptcy and continue to operate as a viable going concern.

On the Effective Date, we emerged from the Prepackaged Chapter 11 Case and continue to operate as a viable going concern.

The accompanying audited consolidated financial statements have been prepared on the basis that we will continue to operate as a going concern, which contemplates that we will be able to realize assets and settle liabilities and commitments in the normal course of business for twelve months following the issuance date.

Nasdaq Notice of Delisting

On November 21, 2024, we received a notice from the Nasdaq Listing Qualifications Department that Nasdaq had determined to delist our Common Stock.

Nasdaq reached its decision that we were no longer suitable for listing pursuant to Nasdaq Listing Rules 5101, 5110(b), and IM-5101-1, as a result of our filing of the Prepackaged Chapter 11 Case on November 13, 2024.

On November 28, 2024, we requested a hearing before a Nasdaq Hearing Panel to appeal Nasdaq’s delisting determination.

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.

Following our 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.

After ongoing discussions with the Nasdaq Listing Qualifications staff, on February 20, 2025, our New Common Stock was relisted for trading on the Nasdaq Global Market.

Value Maximization Plan

On January 22, 2024, we announced that our Board had approved the Value Maximization Plan, pursuant to which we commenced the Ecommerce Wind-Down in order to preserve liquidity and enable us to maximize stakeholder value through our remaining businesses.

We ceased transacting through vroom.com, completed transactions for customers who had previously contracted with us to purchase or sell a vehicle, halted purchases of additional vehicles, sold our used vehicle inventory through wholesale channels, paid off our 2022 Vehicle Floorplan Facility, and conducted a reduction-in-force commensurate with the reduced operations.

On March 29, 2024, we substantially completed the Ecommerce Wind-Down.

We continue to take other actions to maximize stakeholder value by seeking to monetize our legacy ecommerce platform, reduce our outstanding commitments and preserve our liquidity.

The UACC and CarStory businesses continue to serve their third-party customers, with their operations substantially unaffected by the Ecommerce Wind-Down.

As a result of the Value Maximization Plan, we incurred total cash charges during 2024 of approximately $15.8 million for severance and other personnel-related costs and approximately $13.9 million in contract and lease termination costs.

As part of a planned reduction-in-force under the Value Maximization Plan, approximately 800 employees were

impacted, resulting in a reduction of approximately 93% of the employees not engaged in UACC’s or CarStory’s ongoing operations.

Vroom owns United Auto Credit Corporation, a leading automotive finance company that offers vehicle financing to consumers through third-party dealers under the UACC brand, and the CarStory business, a leader in AI-powered analytics and digital services supporting the automotive industry.

UACC, which Vroom acquired in February 2022, is an indirect lender that offers vehicle financing to consumers through third-party dealers under the UACC brand, focusing primarily on the non-prime market.

UACC is an indirect lender that offers vehicle financing to consumers through a network of motor vehicle dealers under the UACC brand, focusing primarily on the non-prime market.

Our non-prime credit programs aim to broaden access to vehicle ownership for individuals who would not otherwise qualify for financing.

UACC’s financing is intended to help consumers build credit and ultimately be eligible for more traditional sources of financing.

Prior to the Ecommerce Wind-Down, UACC also offered vehicle financing to Vroom’s customers through its ecommerce platform.

UACC, which has been engaged in automotive finance since 1996, currently offers financing services to a nationwide network of thousands of independent motor vehicle dealers and manufacturer-franchised dealers in 49 states, and we seek to optimize that network over time.

UACC enables these dealers to finance their customers' purchases of automobiles, medium and light duty trucks and vans with competitive financing terms.

UACC enables these dealers to finance their customers' purchases of

automobiles, medium and light duty trucks and vans with competitive financing terms.

The credit programs offered by UACC are primarily designed to serve consumers who have limited access to traditional motor vehicle financing.

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Because UACC focuses primarily on the non-prime market, it generally sustains a higher level of delinquencies and credit losses than that experienced by traditional motor vehicle financing sources.

As of December 31, 2024, UACC serviced a portfolio of approximately 78,000 retail installment sales contracts with an aggregate principal outstanding balance of $1.0 billion.

As of December 31, 2025, UACC serviced a portfolio of approximately 76,000 retail installment sales contracts with an aggregate principal outstanding balance of approximately $950.0 million.

CarStory offers AI-powered analytics and digital services to dealers, automotive financial services companies and others in the automotive industry, which use CarStory’s solutions to enhance their customer experience and drive increased vehicle purchases.

Leveraging computer vision and AI, CarStory has curated a comprehensive used vehicle information database, including over 256 million vehicle identification numbers ("VINs"), 203 million window stickers, 4.2 billion vehicle photos and 411 million sales cycles, along with price and price elasticity models.

CarStory receives data for over three and a half million unique VINs listed for sale every day, resulting in CarStory having data for an estimated 90% of U.S.

CarStory receives data for over 4.1 million unique VINs listed for sale every day, resulting in CarStory having data for an estimated 80% of U.S.

consumer vehicles.

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CarStory helps dealers optimize their pricing by leveraging data science models for retail pricing that provide predictive pricing for marketing, buying, selling and VIN-level features.

Unlike simple averages, we believe CarStory’s patented neural-net algorithm can provide a highly accurate market price (the “CarStory Real Market Price”) for vehicle valuations.

We believe that the CarStory Real Market Price accounts for factors that averages often miss, such as local market dynamics and dealer performance.

Unlike simple averages, we believe CarStory’s patented neural-net algorithm can provide a highly accurate market price (the “CarStory Real Market Price”) for vehicle valuations by accounting for factors that averages often miss, such as local market dynamics and dealer performance.

In addition to its data analytics and AI-based pricing solutions, CarStory creates and powers digital experiences for end consumers, including automotive marketplaces, vehicle market reports, and trade-in and appraisal products.

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Long-Term Strategic Plan

Since the announcement of the Value Maximization Plan in January 2024, we have been focused on building a long-term strategic plan leveraging our remaining assets to improve the profitability of the business and achieve three key

achieve pre-COVID Cumulative Net Losses (CNL) or lower, grow origination with pre-COVID CNL or lower, and lower operating cost.

In order to achieve these objectives, we are focused on four strategic initiatives:

• Build a world class lending program:

Focus on using advanced models and analytics to predict losses and drive profitable growth, bringing subprime CNL to pre-COVID levels.

Expand the near-prime program to enable UACC to become a more significant partner to dealers.

• Build a world class sales and marketing program:

Attract and retain the best dealers and drive deeper dealer engagement to enable growth.

Improve the Fast Lane, a portal built to provide the dealer with everything they need from application through contracting.

• Build operational excellence in originations:

Enhance systemic capabilities and decisioning for a more efficient process.

Integrate Vroom patent-pending AI agent into UACC's funding process to reduce costs, improve accuracy, and reduce fraud.

Build a pre-verification automated engine to improve dealer service, improve credit quality and increase capture rates.

• Build operational excellence in servicing:

Utilize data science, advanced analytics and technology to enable an improved approach to servicing effectiveness.

Utilize the native consumer mobile app, which was launched in September 2024, to improve customer engagement and communication and target more on-time payments.

Since announcing the Value Maximization Plan in January 2024, the Company has pivoted to executing a long-term strategic plan ("Long-Term Strategic Plan") that leverages our core assets, including Vroom and CarStory technology, to improve the profitability of the business through four strategic initiatives:

• Build a world class lending program by focusing on using advanced models and analytics to better predict losses and drive profitable growth at UACC.

We modernized our lending infrastructure by launching a proprietary automated underwriting decision engine in June 2025.

This technology greatly accelerates application processing.

In September 2025, we launched our redeveloped custom credit-scoring model, which we believe should better evaluate segments of risk and enhance our risk precision.

We expect to continue making improvements to our advanced models and analytics in furtherance of this initiative.

• Build a world class sales and marketing program by attracting and retaining the best dealers and driving deeper dealer engagement to enable growth.

In 2025, our technology teams made substantial progress towards modernizing our infrastructure to drive speed and scalability.

This included a complete overhaul of Fast Lane, UACC’s online dealer portal.

Launched in early 2026, this upgraded platform leverages direct dealer feedback to minimize friction, increase application volume, and streamline the user experience.

• Build operational excellence in originations by enhancing systemic capabilities and decisioning for a more efficient process.

In 2025, we drove operational efficiency by integrating Vroom’s patented AI agent into certain aspects of UACC’s funding process.

This integration helped automate verification and is intended to reduce fraud and lower the cost-per-funded contract.

• Build operational excellence in servicing by utilizing data science, advanced analytics and technology to enable an improved approach to servicing effectiveness.

We are transforming servicing effectiveness through a digital-first strategy.

The launch of our native mobile apps, for iOS and Android, in 2024 and redesigned website in 2025 drove digital adoption among accountholders.

These platforms empower accountholders with self-service options, reducing manual service burden.

We expect to continue making targeted improvements to the mobile app, website and other components of servicing based on our data science and advanced analytics.

We remain focused on returning the UACC business to profitability by improving cumulative net loss (“CNL”), origination cost per funded contract, servicing cost per contract, and fixed costs.

Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S.

GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance:

EBITDA and Adjusted EBITDA.

These non-GAAP financial measures have limitations as analytical tools in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with U.S.

Because of these limitations, these non-GAAP financial measures should be considered along with other operating and financial performance measures presented in accordance with U.S.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with U.S.

We have reconciled all non-GAAP financial measures with the most directly comparable U.S.

GAAP financial measures.

EBITDA and Adjusted EBITDA are supplemental performance measures that our management uses to assess our operating performance and the operating leverage in our business.

Because EBITDA and Adjusted EBITDA facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes.

EBITDA and Adjusted EBITDA

We calculate EBITDA as net loss before interest expense on corporate debt, interest income on cash and cash equivalents, income tax expense and depreciation and amortization expense.

We calculate Adjusted EBITDA as EBITDA adjusted to exclude stock compensation expense, severance expense related to the continuing operations, bankruptcy costs (which represent professional fees incurred related to the bankruptcy prior to filing of the petition), reorganization items, net (which relate to certain charges incurred during the bankruptcy proceedings, such as legal and professional fees incurred directly as a result of the bankruptcy proceeding, the write-off of deferred financing costs and discount on debt subject to compromise and other related charges), gain on debt extinguishment and long-lived asset impairment charges.

The following table presents a reconciliation of EBITDA and Adjusted EBITDA to net loss from continuing operations, which is the most directly comparable U.S.

GAAP measure:

GAAP, we believe certain non-GAAP financial measures are useful in evaluating our operating performance.

In the period from January 15, 2025, to December 31, 2025, we changed one of the measures that we review to evaluate our performance from Adjusted EBITDA to Adjusted net income (loss).

Adjusted net income (loss) is a supplemental performance measure that our management uses to assess our operating performance and the operating leverage in our business.

Adjusted net income (loss) facilitates internal comparisons of our historical operating performance on a more consistent basis, therefore we use this measure for business planning purposes.

Management believes Adjusted net income (loss) is a better indication of our profitability on a Non-GAAP basis as we no longer have significant depreciation and amortization expenses as a result of the fresh start accounting and we recorded our intangible assets at fair value upon emergence from the Prepackaged Chapter 11 Case.

Additionally, due to the elimination of our long-term debt in the Prepackaged Chapter 11 Case we have significantly lower interest expense.

Adjusted net income (loss) has limitations as an analytical tool because it does not reflect all of the amounts associated with our results of operations as determined in accordance with U.S.

Additionally, it may not be comparable to similarly titled measures of other companies.

Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for those comparative purposes.

Because of these limitations, this non-GAAP financial measure should be considered along with other operating and financial performance measures presented in accordance with U.S.

The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with U.S.

We have reconciled this non-GAAP financial measure with the most directly comparable U.S.

GAAP financial measure below.

Adjusted net loss

We calculate Adjusted net loss as net income (loss) from continuing operations adjusted for stock compensation expense, severance expense, bankruptcy costs (which represent professional fees incurred related to the bankruptcy prior to filing of the petition and post-emergence), reorganization items, net (which relate to certain charges incurred during the bankruptcy proceedings, such as legal and professional fees incurred directly as a result of the bankruptcy proceeding, the write-off of deferred financing costs and discount on debt subject to compromise and other related charges), operating lease right-of-use assets impairment and long-lived asset impairment charges.

The following table presents a reconciliation of Adjusted net loss to net income (loss) from continuing operations, which is the most directly comparable U.S.

GAAP measure (in thousands):

Non-GAAP Combined

Period from January 15 through December 31,

Period from January 1 through January 14,

(in thousands)

Net loss from continuing operations

Net income (loss) from continuing operations

Adjusted to exclude the following:

Interest expense on corporate debt

Interest income on cash and cash equivalents

Provision for income taxes

Depreciation and amortization

Stock compensation expense

Bankruptcy costs (prepetition filing)

Severance expense

Bankruptcy costs (prepetition filing and post-emergence)

Reorganization items, net

Gain on debt extinguishment

Impairment charges

Adjusted EBITDA

Adjusted net loss

Non-GAAP Combined Year Ended December 31, 2025

Our financial results for the periods from January 1, 2025 through January 14, 2025 and the year ended December 31, 2024 are referred to as those of the “Predecessor” periods.

Our financial results for the periods from January 15, 2025 through December 31, 2025 is referred to as those of the “Successor” periods.

Our results of operations as reported in our Consolidated Financial Statements for these periods are prepared in accordance with U.S.

Although U.S.

GAAP requires that we report our results for the period from January 1, 2025 through January 14, 2025 and the period from January 15, 2025 through December 31, 2025 separately, management views our operating results for the year ended December 31, 2025 by combining the results of the applicable Predecessor and Successor periods because such presentation provides the most meaningful comparison of our results to prior periods.

We believe we cannot adequately benchmark the operating results of the period from January 15, 2025 through December 31, 2025 against any of the previous periods reported in our Consolidated Financial Statements without combining it with the period from January 1, 2025 through January 14, 2025, and do not believe that reviewing the results of this period in isolation would be useful in identifying trends in or reaching conclusions regarding our overall operating performance.

Management believes that the key performance metrics for the Successor period when combined with the Predecessor period provide more meaningful comparisons to other periods and are useful in identifying current business trends.

Accordingly, in addition to presenting our results of operations as reported in our Consolidated Financial Statements in accordance with U.S.

GAAP, the tables and discussion below also present the combined results for the year ended December 31, 2025.

The combined results for the year ended December 31, 2025 represent the sum of the reported amounts for the Predecessor period from January 1, 2025 through January 14, 2025 and the Successor period from January 15, 2025 through December 31, 2025.

These combined results are not considered to be prepared in accordance with U.S.

GAAP and have not been prepared as pro forma results per applicable regulations.

The combined operating results do not reflect the actual results we would have achieved absent our emergence from the Prepackaged Chapter 11 Case and are not necessarily indicative of future results.

Accordingly, the results for the combined year ended December 31, 2025 (prepared on a Non-GAAP basis) and year ended December 31, 2024 (prepared on a GAAP basis) may not be comparable, particularly for statement of operations line items significantly impacted by the Reorganization transactions and the impact of fresh start accounting.

Key Factors and Trends Affecting our Operating Results

Our financial condition and results of operations have been, and will continue to be, affected by a number of factors and trends, including the following:

Prepackaged Chapter 11 Case

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.

For example, it could adversely affect our business and relationships with customers, vendors, contractors, employees or suppliers.

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, in the manner, or during the time period 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.

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.

All of these factors could limit our ability to pursue growth strategies for our business in the near- to mid-term.

Fresh Start Accounting

Upon emergence from the Prepackaged Chapter 11 Case, we adopted fresh start accounting in accordance with FASB Codification Topic 852, Reorganizations ("ASC 852") and became a new entity for financial reporting purposes.

As a result, the consolidated financial statements after the Effective Date are not comparable with the consolidated financial

statements on or before that date as indicated by the “black line” division in the financial statements and footnote tables, which emphasizes the lack of comparability between amounts presented.

References to “Successor” relate to our financial position and results of operations after the Effective Date.

References to “Predecessor” refer to our financial position and results of operations on or before the Effective Date.

For further information on comparability of Predecessor and Successor periods, see discussion within Results of Operations section below.

Ability to manage credit losses

UACC is currently experiencing higher losses on its finance receivables, which has negatively impacted the fair value of our finance receivables and the losses recognized for the year ended December 31, 2024.

We expect this trend to continue to negatively impact our business into 2025.

While credit losses are inherent in the automotive finance receivables business, several variables have negatively affected UACC’s recent loss and delinquency rates, including higher interest rates, the current inflationary environment and vehicle depreciation, which has negatively impacted the fair value of our finance receivables and the losses recognized for the year ended December 31, 2025.

While we expect long term improvements in our finance receivable portfolio, we expect some downward trends to continue to negatively impact our business into 2026.

UACC primarily operates in the non-prime sector of the market which tends to have more volatility.

In 2020 and 2021, COVID related stimulus and used vehicle appreciation resulted in significantly lower delinquencies and subsequent losses.

In late 2022 and 2023, delinquencies and loss rates rose as a result of the aforementioned factors and, in response, we implemented changes to our credit program, such as tightening credit, which is starting to return our delinquencies and expected portfolio performance on those vintages to normalized levels.

In late 2022 and 2023, delinquencies and loss rates rose as a result of the aforementioned factors and, in response, we implemented changes to tighten our credit program.

We initially saw some improvements with the 2023 and 2024 vintages as a result of these changes.

Subsequently, macroeconomic factors have negatively impacted these vintages.

This unfavorable loan performance continued on 2025 originations, resulting in us making further refinements to our credit program in order to improve performance.

We also intend to leverage CarStory data to improve VIN-level valuations to support underwriting decisions and servicing operations.

Certain advance rates available to UACC on borrowings from the Warehouse Credit Facilities have decreased as a result of the increasing credit losses in UACC's portfolio and overall rising interest rates.

Any future decreases on available advance rates may have an adverse impact on our liquidity.

Certain advance rates available to UACC on borrowings from the Warehouse Credit Facilities have decreased and any future decreases on available advance rates may have an adverse impact on our liquidity.

Enhance profitability at UACC

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Ability to continue to access capital

UACC has four Warehouse Credit Facilities, which are primarily used to finance the origination of finance receivables as well as to provide funding for general operating activities.

UACC has three senior secured warehouse credit facility agreements (the “Warehouse Credit Facilities”), which are primarily used to finance the origination of finance receivables as well as to provide funding for general operating activities.

UACC has also developed a securitization program that involves selling finance receivables to securitization trusts through the private issuance of asset-backed securities which are collateralized by the finance receivables.

There can be no assurance that UACC will be able to complete additional securitizations in the future, particularly if the securitization markets become constrained.

The success of UACC's business is highly dependent on the ability to continue to access capital through both its warehousing arrangements and securitization program.

As a result of fluctuating interest rates, the current inflationary environment and vehicle depreciation in the used automotive industry, UACC is experiencing higher loss severity.

Certain advance rates available to UACC on borrowings from UACC’s four senior secured warehouse credit facility agreements (the “Warehouse Credit Facilities”) have decreased as a result of the increasing credit losses in UACC's portfolio and overall rising interest rates.

Any future decreases on available advance rates may have an adverse impact on our liquidity.

On March 8, 2025, we renewed one of our Warehouse Credit Facilities, with $200 million of borrowing capacity, now expiring in June 2026.

The remaining Warehouse Credit Facilities, with aggregate borrowing capacity of $625 million, expire between July and September 2025.

We are in ongoing discussions with the remaining lenders to extend the terms beyond the current expiration dates and expect facilities to be amended and renewed at sufficient borrowing capacity.

However, there can be no assurance that adequate additional financing will be available to us on acceptable terms, or at all.

See Part I, Item 1A Risk Factors—We may not generate sufficient liquidity to operate our business, and, UACC may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow its business.

In addition, due to UACC's increased credit losses, UACC may not be able to securitize its loan portfolio on favorable terms, or may not be able to sell the subordinate notes or residual certificates issued in its securitizations at a favorable price or at all.

As a result of market conditions at the time, UACC retained the residual interests for the 2023-1 and 2024-1 securitization transactions.

Certain advance rates available to UACC on borrowings from UACC’s Warehouse Credit Facilities have decreased and any future decreases on available advance rates may have an adverse impact on our liquidity.

Events in our industry or in industries adjacent to ours could make it more difficult for UACC to obtain financing.

For example, in September 2025, an unrelated subprime auto lender declared bankruptcy.

Subsequently, federal authorities alleged that the bankruptcy was due to fraudulent activity.

We continue to evaluate our controls to ensure appropriate pledging of collateral balances continues to be effective.

As of December 31, 2025, we had three of our Warehouse Credit Facilities, with an aggregate borrowing capacity of $600 million, expiring in June 2026, August 2026 and April 2027, respectively.

We are in ongoing discussions with the warehouse lenders to extend the terms beyond the current expiration dates and expect facilities to be amended and renewed at sufficient borrowing capacity.

However, there can be no assurance that adequate additional financing will be

available to us on acceptable terms, or at all.

The remaining fourth Warehouse Credit Facility, which had a borrowing capacity of $200 million, expired on July 21, 2025, pursuant to its terms, and we elected not to renew this commitment on the basis that borrowing capacity from our other Warehouse Credit Facilities is sufficient to support our current operational needs.

See "Risk Factors—We may not generate sufficient liquidity to operate our business, UACC's securitizations may expose it to financing and other risks, and there can be no assurance that it will be able to access the securitization market in the future, which may require it to seek more costly financing, and, UACC may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow its business" in this Annual Report on Form 10-K for the year ended December 31, 2025.

Ability to optimize our dealer network to increase vehicle finance offerings

We intend to moderately grow our automotive financing business while focusing on achieving profitability.

UACC will seek to optimize its dealer network over time.

UACC intends to optimize its dealer network over time.

UACC provides funding that allows independent motor vehicle dealers and manufacturer-franchised dealers to finance vehicles for their customers.

Currently, UACC serves a nationwide network of thousands of dealers in 49 states.

UACC's credit programs are primarily designed to serve consumers in the non-prime market, who have limited access to traditional vehicle financing, although UACC intends to expand its offerings across a broader range of the credit spectrum going forward and has launched a pilot program for near-prime consumers.

UACC's credit programs are primarily designed to serve consumers in the non-prime market, who have limited access to traditional vehicle financing.

In mid-2024, we began indirectly offering competitive vehicle financing services to consumers with slightly higher, or “near-prime,” credit scores compared to our historical customer base.

The Near-Prime Program is still in its early stages and a small percentage of our portfolio.

We also intend to drive dealer and customer engagement through technology innovations.

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The United States and global economies have recently and are continuing to experience a sustained inflationary environment.

The Federal Reserve’s efforts to tame inflation have led to increased interest rates, which affects automotive finance rates and our borrowing rates, thereby reducing discretionary spending and making vehicle financing more costly and less accessible or desirable to many consumers.

While interest rate cuts were expected in 2024, only slight cuts were enacted in the latter half of the year.

Based on the January 2025 first policy meeting, the Federal Reserve interest rates remained unchanged.

We are not able to predict if, when, and to what degree rates may change in 2025 and the impact it may have on the economy.

In addition, the new Presidential administration has recently announced (and in some cases, partially delayed or rescinded) new tariffs on imports to the United States from European Union countries, Japan, Canada and Mexico, and such countries have announced plans to impose retaliatory tariffs.

Such significant tariffs on imports could have a major impact on the United States automotive industry, which depends heavily on cross border trade.

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.

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.

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.

While negotiations regarding tariffs are ongoing, if the resulting environment of retaliatory tariffs 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.

Moreover, geopolitical conflicts and war, including those in Europe and the Middle East, have increased global economic and political uncertainty, which has caused dramatic fluctuations in global financial markets.

A significant escalation or expansion of economic disruption could continue to impact consumer sentiment and spending, broaden inflationary costs, and could have a material adverse effect on our results of operations.

We will continue to actively monitor and develop responses to these disruptions, including the developing role that geopolitical, climate, and labor concerns are playing in trade relations, but depending on the duration and severity of such events, these trends could continue to negatively impact our business through 2025.

The Federal Reserve’s efforts to tame inflation have led to increased interest rates, which affects automotive finance rates and our borrowing rates, thereby reducing discretionary spending and impacting consumer sentiment and making vehicle financing more costly and less accessible or desirable to many consumers.

While interest rate cuts were expected in 2024, only slight cuts were enacted in the latter half of that year.

While additional cuts were made in 2025, based on the March 2026 meeting, the Federal Reserve officials voted to keep interest rates steady.

We are not able to predict if, when, and to what degree rates may change and the impact it may have on the economy and our business.

In addition, the current U.S.

Presidential administration has implemented significant tariffs on imports to the United States, including tariffs on automobiles, auto parts, steel, and aluminum.

While the U.S.

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.

Many countries have imposed retaliatory tariffs as well as other trade restrictions and retaliatory measures.

Such significant tariffs, restrictions or other retaliatory measures have had, and could continue to have a major impact on the United States automotive industry, which depends heavily on cross border trade.

Should additional tariffs be implemented and sustained by the United States and other countries for an extended period of time, they would have a significant adverse effect, including financial, on the automotive industry.

Further, any additional restrictions by the United States or other governments would exacerbate the impact, as could the uncertainty regarding the magnitude or duration of these measures.

Additionally, fragility in the supply chain exacerbated by tariffs and other industry concerns, such as restrictions related to rare earth minerals, increases the risk of production disruptions in the automotive industry.

Steps taken by governments to implement tariffs or other restrictions on raw materials (including steel, aluminum and rare earth minerals), 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.

While negotiations regarding tariffs and other restrictions are ongoing and changing rapidly, the resulting environment of tariffs and other trade restrictions or barriers have increased automobile prices in the U.S.

and caused volatility, this could lead to negative consumer sentiment and in turn, decreased consumer demand for automobiles, and in turn, decreased demand for motor vehicle contracts financed through UACC, which has negatively impacted and could continue to negatively impact our results of operations, cash flows, and financial condition.

Moreover, events in our industry or in industries adjacent to ours could make it more difficult for UACC to obtain financing.

For example, in September 2025, an unrelated subprime auto lender declared bankruptcy.

Subsequently, federal authorities alleged that the bankruptcy was due to fraudulent activity.

We continue to evaluate our controls to ensure appropriate pledging of collateral balances continues to be effective.

Further, geopolitical conflicts and war, including those in Europe and the Middle East, have increased global economic and political uncertainty, which has caused dramatic fluctuations in global financial markets.

Ongoing economic and political disruption, or a significant escalation or expansion of such disruption could continue to impact consumer sentiment and spending, broaden inflationary costs, and could have a material adverse effect on our results of operations.

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.

Results of Operations

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Corporate activities also include the runoff of legacy Vroom third party vehicle service and GAP policies sold prior to the Ecommerce Wind-Down.

Certain prior year amounts have been reclassified to conform to the current year presentation related to discontinued operations and new financial statement presentation as a result of the Ecommerce Wind-Down, and the Company’s 1-for-80 reverse stock split in February 2024.

The following table presents our consolidated results of operations for the periods indicated:

Non-GAAP Combined

Period from January 15 through December 31,

Period from January 1 through January 14,

(in thousands)

Interest income

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Servicing income

Warranties and GAP income (loss), net

Warranties and GAP income, net

CarStory revenue

Gain on debt extinguishment

Total noninterest income

9 unchanged sentences

Reorganization items, net

Loss from continuing operations before provision for income taxes

Income (loss) from continuing operations before provision for income taxes

Provision for income taxes from continuing operations

Net loss from continuing operations

Net loss from discontinued operations

Net income (loss) from continuing operations

Net income (loss) from discontinued operations

Net income (loss)

The UACC reportable segment represents UACC’s operations with its network of third-party dealership customers, including the purchases and servicing of vehicle retail installment sales contracts.

The segment also includes the runoff portfolio of retail installment sale contracts originated for Vroom or purchased from Vroom prior to the Ecommerce Wind-Down.

also includes the runoff portfolio of retail installment sale contracts originated for Vroom or purchased from Vroom prior to the Ecommerce Wind-Down.

The CarStory reportable segment represents sales of AI-powered analytics and digital services to automotive dealers, automotive financial services companies and others in the automotive industry.

Non-GAAP Combined Year Ended December 31, 2025 and 2024

The Successor Period and the Predecessor Periods are distinct reporting periods as a result of our emergence from the Prepackaged Chapter 11 Case on January 14, 2025.

References in these results of operations to the change and the percentage change combine the period from January 1, 2025, to January 14, 2025 (Predecessor) with the period from January 15, 2025 to December 31, 2025 (Successor) Period, which we refer to as the Year Ended December 31, 2025, in order to provide some comparability of such information to the Year Ended December 31, 2024.

See "Non-GAAP Financial Measures" above.

Year Ended December 31, 2025 and 2024

Non-GAAP Combined

Period from January 15 through December 31,

Period from January 1 through January 14,

(in thousands)

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Realized and unrealized losses, net of recoveries

Net interest income after losses and recoveries

Net interest income (loss) after losses and recoveries

Noninterest income:

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Total expenses

Adjusted EBITDA

Interest income on cash and cash equivalents

Provision for income taxes from continuing operations

Adjusted net loss

Stock compensation expense

Interest income

UACC acquires and services finance receivables from its network of third-party dealership customers and generates interest income, which consists of discount income and interest income.

UACC acquires and services finance receivables from its network of third-party dealership customers and generates interest income.

Prior to our Prepackaged Chapter 11 Case this consisted of discount income and interest income.

However, upon emergence and on the Effective Date, we made an accounting policy election to recognize discount income as a component of 'Realized and unrealized losses, net of recoveries' on a prospective basis.

Discount income represents the amortization of unearned discounts over the contractual life of the underlying finance receivables held for investment at fair value.

Discounts on the finance receivables held-for-sale are deferred until they are sold.

We also made an accounting policy election to elect the fair value option on all finance receivables and classify them as held for investment.

Discounts on the finance receivables held-for-sale were previously deferred until they were sold.

For securitization transactions that are accounted for as secured borrowings, we recognize interest income in accordance with the terms of the related retail installment sale contracts.

Interest income also includes the runoff portfolio of retail installment sale contracts originated for Vroom or purchased from Vroom prior to the Ecommerce Wind-Down.

For securitization transactions that are accounted as a sale of finance receivables in accordance with ASC Topic 860, Transfers and Servicing of Financial Assets ("ASC 860"), we recognize a gain on sale of finance receivables.

There were no securitizations which were accounted for as sales in the periods presented.

Interest income increased $23.0 million, or 12.7%, to $204.0 million for the year ended December 31, 2024 from $181.0 million for the year ended December 31, 2023.

This increase was primarily a result of new originations, which increased the average loan portfolio in 2024 to $857.2 million from $783.4 million in 2023.

The increase in interest income

was partially offset by lower discount income during the year ended December 31, 2024 as a result of a smaller balance of finances receivables held for investment measured at fair value, with discount being amortized, as compared to finance receivables held for sale with discount deferred until receivables are sold.

The average outstanding balance of finance receivables held for investment at fair value was $235.9 million in 2024, as compared to $438.3 million in 2023.

The average outstanding balance of finance receivables held for sale was $621.3 million in 2024, as compared to $345.0 million in 2023.

Interest income decreased $25.1 million, or 12.3%, to $178.9 million for the year ended December 31, 2025 from $204.0 million for the year ended December 31, 2024.

This decrease was primarily a result of the accounting policy change which resulted in lower discount income as well as lower finance receivable balances.

The loan portfolio decreased to $808.6 million as of December 31, 2025, from $822.0 million as of December 31, 2024.

Interest expense

Interest expense primarily includes interest expense on UACC's Warehouse Credit Facilities, interest expense incurred on securitization debt, and interest expense on financing of beneficial interests in securitizations.

Interest expense increased $17.5 million or 41.7% to $59.4 million for the year ended December 31, 2024 from $41.9 million for the year ended December 31, 2023.

The increase was a result of higher interest expense incurred on the Warehouse Credit Facilities, which increased $9.4 million to $29.3 million for the year ended December 31, 2024 from $19.9 million for the year ended December 31, 2023.

The increase is attributable to a higher average outstanding balance in 2024 of $367.2 million as compared to $254.5 million in 2023, due to financing the larger finance receivables portfolio.

The increase in interest expense is also partially attributable to higher interest expense incurred on securitization debt, which increased $8.1 million to $30.1 million for the year ended December 31, 2024 from $22.0 million for the year ended December 31, 2023, as a result of overall higher interest rates.

Interest expense decreased $6.7 million or 11.1% to $52.7 million for the year ended December 31, 2025 from $59.4 million for the year ended December 31, 2024.

The decrease was a result of lower interest expense incurred on the Warehouse Credit Facilities, which decreased $10.7 million to $18.6 million for the year ended December 31, 2025 from $29.3 million for the year ended December 31, 2024.

The decrease is attributable to a lower average outstanding balance in 2025 of $227.1 million as compared to $367.2 million in 2024, as well as a decrease in weighted average interest rate to 5.55% in 2025 from 6.32% in 2024.

The decrease in interest expense is partially offset by higher interest expense incurred on securitization debt, which increased $4.0 million to $34.1 million for the year ended December 31, 2025 from $30.1 million for the year ended December 31, 2024, as a result of a higher average outstanding balance in 2025 of $498.2 million as compared to $368.3 million in 2024.

Realized and unrealized losses, net of recoveries

Realized and unrealized losses, net of recoveries, primarily represents charge-offs of finance receivables held-for-sale, changes in the fair value of finance receivables for which the fair value option was selected under ASC 825, changes in the valuation allowance on the held-for-sale portfolio, changes in the fair value of securitization debt accounted in accordance with the measurement alternative under ASC 810-30, changes in the fair value of beneficial interest, as well as collection expenses related to servicing finance receivables.

Realized and unrealized losses, net of recoveries, increased $6.3 million or 6.8% to $98.6 million for the year ended December 31, 2024 from $92.4 million for the year ended December 31, 2023.

This increase was primarily driven by an increase in realized and unrealized losses on finance receivables as a result of a larger finance receivable portfolio, due to new originations as well as the consolidation of the 2022-2 securitization in the first quarter of 2023, which was previously off- balance sheet.

Upon emergence from the Prepackaged Chapter 11 Case, and application of fresh start accounting, we made an accounting policy election to report discount income as a component of "Realized and unrealized losses, net of recoveries".

We also made an accounting policy election to elect the fair value option for all finance receivables held for sale on a prospective basis.

Realized and unrealized losses, net of recoveries, represents changes in the fair value of finance receivables for which the fair value option was selected, changes in the fair value of securitization debt , changes in the fair value of beneficial interests, as well as collection expenses related to servicing finance receivables.

Prior to emergence from the Prepackaged Chapter 11 Case, realized and unrealized losses, net of recoveries also represented charge-offs of finance receivables held for sale and changes in the valuation allowance on the held for sale portfolio.

Realized and unrealized losses, net of recoveries, increased $5.9 million or 6.0% to $104.5 million for the year ended December 31, 2025 from $98.6 million for the year ended December 31, 2024, primarily driven by an increase in the number and severity of delinquencies as well as lower recoveries of finance receivables, partially offset by discount income being recognized as a component of realized and unrealized losses, net of recoveries.

Servicing income

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The Company estimates the revenue based on historical claims and cancellation data from its consumers, as well as other qualitative assumptions.

United Auto Credit GAP is a debt waiver product that provides protection for consumers who purchase the product by waiving the difference between the actual cash value of the consumer’s vehicle and the balance of the consumer’s finance receivable, subject to the terms and conditions of the United Auto Credit GAP, in the event of a total

loss resulting from collision or theft.

The total fees are earned over the contractual life of the related financial receivables on straight-line basis.

Warranties and GAP income remained flat for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

Other income increased $5.1 million or 159.7% to $8.3 million for the year ended December 31, 2024 from $3.2 million for the year ended December 31, 2023, primarily driven by higher income related to acquisition fees for originations of finance receivables at fair value, which is recognized in the period the finance receivables are originated.

Warranties and GAP income increased $5.7 million or 72.8% to $13.5 million for the year ended December 31, 2025 from $7.8 million for the year ended December 31, 2024, primarily as a result of lower cancellation and claim losses, along with funding more contracts with GAP and warranty products and charging higher fees in the current year period.

Other income decreased $0.4 million or 4.8% to $7.9 million for the year ended December 31, 2025 from $8.3 million for the year ended December 31, 2024, primarily driven by lower interest income on investments.

Compensation and benefits

Compensation and benefits increased $8.6 million or 12.6% to $76.4 million for the year ended December 31, 2024 from $67.8 million for the year ended December 31, 2023.

The increase was primarily a result of the following:

retention bonuses granted to retain key employees;

allocation of incremental data and technology departments' time to UACC as a result of a shift in focus of the business;

severance expense related to the termination of certain UACC employees;

and a decrease in deferred acquisition costs as a result of accounting for the origination of all new finance receivables at fair value, with acquisition costs being expensed in the period incurred rather than deferred.

Compensation and benefits decreased $14.3 million or 18.7% to $62.1 million for the year ended December 31, 2025 from $76.4 million for the year ended December 31, 2024.

The decrease was primarily a result of lower salary expense as a result of fewer employees as we continue right-sizing our workforce, a decrease in variable compensation, lower severance expense related to the termination of certain employees in the prior year period, and an increase in internal software capitalization as we continue to invest in building our technology assets.

Professional fees

Professional fees decreased $1.9 million or 35.0% to $3.5 million for the year ended December 31, 2024 from $5.4 million for the year ended December 31, 2023, primarily as a result of additional professional fees incurred during the first quarter of 2023 as a result of the completion of the 2023-1 securitization transaction, as the 2023-1 securitization debt is carried at fair value the associated debt issuance costs were expensed as incurred.

As the 2024-1 securitization debt is carried at amortized costs, the associated debt issuance costs are capitalized and amortized over the life of the debt.

Professional fees increased $3.8 million or 109.1% to $7.3 million for the year ended December 31, 2025 from $3.5 million for the year ended December 31, 2024, primarily as a result of an increase in legal and audit services.

Depreciation and amortization

Depreciation and amortization decreased $19.0 million or (83.5)% to $3.7 million for the year ended December 31, 2025 from $22.7 million for the year ended December 31, 2024, primarily as a result of lower intangible assets upon emergence from our Prepackaged Chapter 11 Case, leading to lower amortization expense in the current year period.

Impairment charges

Impairment charges increased $5.2 million for the year ended December 31, 2024 related to impairment of capitalized internal-use software that no longer has a planned future use of $2.7 million as well as lease impairment charges of $2.5 million.

Impairment charges decreased $1.7 million to $3.5 million for the year ended December 31, 2025 from $5.2 million for the year ended December 31, 2024.

In 2025 we had lease impairment charges of $3.5 million.

In 2024 we impaired capitalized internal-use software that no longer has a planned future use of $2.8 million as well as lease impairment charges of $2.4 million.

Other expenses

Other expenses increased $1.6 million or 21.1% to $9.5 million for the year ended December 31, 2024 from $7.8 million for the year ended December 31, 2023, primarily as a result of a loss on the repurchase of the non-investment grade securities related to the 2022-2 securitization transaction, a decrease in deferred acquisition costs as a result of accounting for the origination of all new finance receivables at fair value, with acquisition costs being expensed in the period incurred rather than deferred, and an increase in dealer incentives.

Adjusted EBITDA

Adjusted EBITDA loss increased $6.6 million to $29.8 million for the year ended December 31, 2024 from $23.2 million for the year ended December 31, 2023, primarily as a result of the $0.7 million decrease in net interest income after losses and recoveries and the $7.3 million increase in expenses after EBITDA adjustments, including compensation and benefits, professional fees, impairment charges, and other expenses, as discussed above, partially offset by a $1.4 million increase in non-interest income after EBITDA adjustments, as discussed above.

Other expenses decreased $1.9 million or 19.8% to $7.6 million for the year ended December 31, 2025 from $9.5 million for the year ended December 31, 2024, primarily as a result of changing the existing dealer incentives program and recording a loss on the repurchase of the non-investment grade securities related to the 2022-2 securitization transaction in the prior year period.

Adjusted net loss

Adjusted net loss decreased $11.4 million to $42.0 million for the year ended December 31, 2025 from $53.4 million for the year ended December 31, 2024, primarily due to lower compensation and benefit expense and lower depreciation and amortization expense, partially offset by higher realized and unrealized losses, net of recoveries and a decrease in interest income, as discussed above.

Non-GAAP Combined

Period from January 15 through December 31,

Period from January 1 through January 14,

(in thousands)

8 unchanged sentences

Total expenses

Adjusted EBITDA

Interest income on cash and cash equivalents

Provision for income taxes from continuing operations

Adjusted net income (loss)

Stock compensation expense

1 unchanged sentence

CarStory generates advertiser, publisher and other user service revenue by offering its AI-powered analytics and digital retailing services to dealers, automotive financial services companies and others in the automotive industry.

CarStory revenue decreased $0.8 million or 6.3% to $11.6 million for the year ended December 31, 2024 from $12.4 million for the year ended December 31, 2023, primarily as a result of a change in the scope of service and data provided to our customers.

CarStory revenue decreased $4.3 million or 36.7% to $7.3 million for the year ended December 31, 2025 from $11.6 million for the year ended December 31, 2024, primarily as a result of a change in the scope of service and data provided to our customers and the loss of a major customer.

Compensation and benefits

Compensation and benefits increased $1.3 million or 15.0% to $10.3 million for the year ended December 31, 2024 from $9.0 million for the year ended December 31, 2023.

The increase was primarily a result of retention bonuses granted to retain key employees.

Adjusted EBITDA

Adjusted EBITDA decreased $2.5 million or 73.2% to $0.9 million for the year ended December 31, 2024 as compared to $3.4 million for the year ended December 31, 2023 primarily as a result of the decrease in revenue and increase in expenses discussed above.

Compensation and benefits decreased $4.2 million or 41.0% to $6.1 million for the year ended December 31, 2025 from $10.3 million for the year ended December 31, 2024.

The decrease was primarily a result of an increase in the allocation of CarStory resources to UACC.

Depreciation and amortization

Depreciation and amortization decreased $5.7 million or 89.6% to $0.7 million for the year ended December 31, 2025 from $6.4 million for the year ended December 31, 2024, primarily as a result of lower intangible assets upon emergence from our Prepackaged Chapter 11 Case, leading to lower amortization expense in the current year period.

Adjusted net income (loss)

Adjusted net income (loss) increased $5.6 million or 113.9% to $0.7 million income for the year ended December 31, 2025 as compared to $4.9 million loss for the year ended December 31, 2024 primarily due to lower compensation and benefit expense and lower depreciation and amortization expense, partially offset by a decrease in revenue, as discussed above.

Non-GAAP Combined

Period from January 15 through December 31,

Period from January 1 through January 14,

(in thousands)

Interest income

Realized and unrealized losses, net of recoveries

Interest income (expense)

Realized and unrealized losses (gains), net of recoveries

Net interest income after losses and recoveries

Noninterest (loss) income:

Warranties and GAP loss, net

Gain on debt extinguishment

Warranties and GAP income (loss), net

Total noninterest (loss) income

3 unchanged sentences

Interest expense on corporate debt

Impairment expense

Other expenses

Total expenses

Provision for income taxes from continuing operations

Corporate activities do not constitute a reportable segment.

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See “Note 3—Revenue Recognition” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Warranties and GAP loss, net, increased $8.2 million to $10.4 million for the year ended December 31, 2024 from $2.2 million for the year ended December 31, 2023, primarily as a result of a revised estimate of proceeds we expect to recover.

Gain on debt extinguishment

Gain on debt extinguishment represents a gain of $37.9 million for the year ended December 31, 2023, related to the repurchase of $74.2 million in aggregate principal balance of the Notes, net of deferred issuance costs, for $36.5 million.

Other income primarily represents interest earned on cash and cash equivalents.

Other income decreased $3.6 million or 66.6% to $1.8 million for the year ended December 31, 2024 from $5.5 million for the year ended December 31, 2023, primarily driven by lower cash and cash equivalent balances and lower interest rates earned on cash and cash equivalents.

Warranties and GAP loss, net, changed $11.7 million to $1.3 million income for the year ended December 31, 2025 from $10.4 million loss for the year ended December 31, 2024, primarily as a result of a revised estimate of proceeds we expect to recover as a result of the Ecommerce Wind-Down that was recorded in the prior year period.

Other income increased $0.5 million to $2.3 million for the year ended December 31, 2025 from $1.8 million for the year ended December 31, 2024, primarily driven by a release of aged accruals, partially offset by lower interest earned on cash and cash equivalents.

Compensation and benefits

Compensation and benefits expense increased $0.7 million or 6.9% to $10.6 million for the year ended December 31, 2024 from $9.9 million for the year ended December 31, 2023, primarily as a result of severance expense related to the departure of certain executives and retention bonuses granted to retain key employees subsequent to the Ecommerce Wind-Down.

Compensation and benefits expense decreased $5.7 million or 54.1% to $4.9 million for the year ended December 31, 2025 from $10.6 million for the year ended December 31, 2024, primarily as a result of lower expense due to the departure of certain key executives and retention bonuses granted to retain key employees paid out in the prior year period subsequent to the Ecommerce Wind-Down.

Professional fees

Professional fees decreased $0.4 million or 5.0% to $8.4 million for the year ended December 31, 2024 from $8.8 million for the year ended December 31, 2023, primarily as a result of reduced audit, legal, and consulting fees as a result of the reduced size of the business, partially offset by legal fees associated with the bankruptcy planning prior to filing the Prepackaged Chapter 11 Case (post-filing professional fees incurred related to the bankruptcy are included in reorganization items, net).

Professional fees decreased $3.3 million or 38.9% to $5.1 million for the year ended December 31, 2025 from $8.4 million for the year ended December 31, 2024, primarily as a result of legal fees incurred in 2024 associated with the bankruptcy planning prior to filing the Prepackaged Chapter 11 Case (post-filing professional fees incurred related to the bankruptcy are included in reorganization items, net).

Software and IT costs

Software and IT costs decreased $2.5 million or 55.3% to $2.0 million for the year ended December 31, 2025 from $4.5 million for the year ended December 31, 2024, primarily as a result of more efficient targeted software use as well as renegotiating and right-sizing our Software and IT contracts.

Interest expense on corporate debt

Interest expense on corporate debt decreased $3.0 million or 87.0% to $0.4 million for the year ended December 31, 2025 from $3.4 million for the year ended December 31, 2024, primarily related to the extinguishment of our 2026 Notes that were converted to equity as part of our Prepackaged Chapter 11 Case.

Other expenses

Other expenses decreased $2.9 million or 30.9% to $6.4 million for the year ended December 31, 2024 from $9.3 million for the year ended December 31, 2023, primarily related to a decrease in public company related insurance costs as we renegotiated our insurance policies during the third quarter of 2023 and 2024 as a result of the reduced scale of the business.

Other expenses decreased $4.3 million or 67.4% to $2.1 million for the year ended December 31, 2025 from $6.4 million for the year ended December 31, 2024, primarily related to a decrease in public company related insurance costs as we renegotiated our insurance policies as a result of the reduced scale of the business.

Liquidity and Capital Resources

On January 14, 2025, we emerged from the Prepackaged Chapter 11 Case, as discussed above under "Recent Events".

On the Effective Date, each holder of the Notes received a pro rata share of 92.94% of the New Common Stock (subject to dilution) and all of the Company’s outstanding obligations under the Notes and the Indenture were deemed fully satisfied and discharged.

no longer has long-term debt, but UACC has securitization debt and its trust preferred securities.

On the Effective Date, each holder of the 2026 Notes received a pro rata share of 92.94% of the Common Stock (subject to dilution) and all of the Company’s outstanding obligations under the 2026 Notes and the Indenture were deemed fully satisfied and discharged.

As of December 31, 2025, we had cash and cash equivalents of $10.4 million and restricted cash of $55.9 million.

Restricted cash primarily includes restricted cash required under UACC's securitization transactions and Warehouse Credit Facilities of $55.8 million.

Prior to the Ecommerce Wind-Down, our primary source of liquidity was cash generated through financing activities.

Additionally, we had excess borrowing capacity of $28.2 million under UACC's Warehouse Credit Facilities as of December 31, 2024.

As a result of the liquidation of our vehicle inventory as part of the Ecommerce Wind-Down, we repaid all amounts outstanding under the 2022 Vehicle Floorplan Facility in full and the agreement has been terminated.

We expect to use our cash and cash equivalents to finance our future capital requirements and UACC’s Warehouse Credit Facilities to fund our finance receivables.

Certain advance rates available to UACC on borrowings from the Warehouse Credit Facilities have decreased as a result of the increased credit losses in UACC's portfolio.

Any future decreases on available advance rates may have an adverse impact on our liquidity.

Additionally, we had excess borrowing capacity of $11.3 million under UACC's Warehouse Credit Facilities as of December 31, 2025 and $27.0 million available under our Delayed Draw Facility (as defined below).

We have historically had negative cash flows and generated losses from operations and our primary source of liquidity has been cash generated through financing activities.

UACC relies on borrowings under the Warehouse Credit Facilities to finance the origination of finance receivables as well as to provide funding for general operating activities.

The terms of those facilities generally mature within two

years and we typically renew those facilities in the ordinary course.

On March 8, 2025, we renewed one of our Warehouse Credit Facilities, with $200 million of borrowing capacity, now expiring in June 2026.

The remaining Warehouse Credit Facilities, with aggregate borrowing capacity of $625 million, have terms expiring between July and September 2025.

See Note 10, Warehouse Credit Facilities and Consolidated VIEs, to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

We are having ongoing discussions with the remaining lenders under the Warehouse Credit Facilities regarding amended facilities that would extend the terms beyond the current expiration dates and expect facilities to be amended and renewed at sufficient borrowing capacity.

However, there can be no assurance that adequate additional financing will be available to us on acceptable terms, or at all.

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.

The terms of those facilities generally mature within one to two years and we typically renew those facilities in the ordinary course.

As of December 31, 2025, we had three Warehouse Credit Facilities, with an aggregate borrowing capacity of $600.0 million and outstanding borrowings of $318.7 million, expiring in June 2026, August 2026 and April 2027, respectively.

We are in ongoing discussions with the warehouse lenders to extend the terms beyond the current expiration dates and expect facilities to be amended and renewed at sufficient borrowing capacity.

However, there can be no assurance that adequate additional financing will be

available to us on acceptable terms, or at all.

On July 21, 2025, the remaining fourth Warehouse Credit Facility, which had a borrowing capacity of $200 million, expired pursuant to its terms and was not extended or renewed.

We believe that our borrowing capacity from our other Warehouse Credit Facilities is sufficient to support our current operational needs and therefore elected not to renew this commitment.

Refer to Note 10 — Warehouse Credit Facilities and Consolidated VIEs to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Failure to retain sufficient warehouse borrowing capacity would have a material adverse effect on our ability to finance UACC’s lending operations and our results of operations and liquidity.

On March 8, 2025, Vroom, Inc., UACC and its indirect subsidiary Darkwater Funding LLC, as co-borrowers, entered into a credit agreement with Mudrick Capital Management, L.P.

(“Lender”), who as of January 14, 2025 was a 76.5% shareholder of the Company, for a $25.0 million delayed draw term loan facility (“Delayed Draw Facility”).

The Delayed Draw Facility allows for multiple drawdowns by each co-borrower, subject to satisfaction of usual and customary conditions precedent.

The Delayed Draw Facility bears interest at a rate of Term SOFR +850 bps, payable quarterly in arrears, with a full payment-in-kind option.

Interest is also payable upon any payment of principal.

The co-borrowers’ obligations under the Delayed Draw Facility will be collateralized by asset backed residual certificates in certain UACC securitization trusts.

On October 9, 2025 the maximum facility amount was amended from $25.0 million to $35.0 million effective as of September 30, 2025.

The Delayed Draw Facility matures on December 31, 2026.

however, borrowings can be prepaid at any time, in whole or in part, without penalty or premium.

Once amounts are repaid they may not be reborrowed.

The Delayed Draw Facility includes certain usual and customary covenants with respect to the co-borrowers’ activities and the collateral.

As of December 31, 2025, we have drawn $8.0 million against the Delayed Draw Facility.

Refer to Note 20 — Related Party Transactions to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

On August 29, 2025, we issued $10.0 million aggregate principal amount of 2030 Notes to support our long-term business strategy.

The 2030 notes were issued pursuant to a Note Purchase Agreement with Annox Capital, LLC and Robert J.

Mylod, Jr., the Managing Partner of Annox Capital, LLC and the Independent Executive Chair of the board of directors of the Company.

Refer to Note 11 — Long Term Debt to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, for further discussion.

On November 25, 2025, Vroom, Inc.

entered into a Note Purchase Agreement with Robert J.

Mylod, Jr., the Independent Executive Chair of the board of directors of the Company.

Pursuant to the Note Purchase Agreement, the Company issued Senior Secured Delayed Draw Notes due 2026 (the “Delayed Draw Notes”) in a maximum aggregate principal commitment amount of $10.5 million, which matures on November 25, 2026.

As of December 31, 2025, the Company drew $10.5 million against the Delayed Draw Notes.

Refer to Note 20 — Related Party Transactions to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

On January 16, 2026, Vroom Automotive, LLC issued to SPE Holdings 15,000 newly issued Series A preferred units and 7,500 newly issued Series B preferred units for aggregate gross proceeds of $22.5 million.

Upon our emergence from bankruptcy on January 14, 2025, we continue to operate as a viable going concern.

Our future capital requirements will depend on many factors, including our ability to realize the intended benefits of the Value Maximization Plan, Prepackaged Chapter 11 Case, and our Long-Term Strategic Plan, available advance rates on and the amendment and renewal of the remaining Warehouse Credit Facilities, our ability to meet the requirements for continued listing on the Nasdaq Global Market, our ability to complete additional securitization transactions on favorable terms, and future credit losses.

We anticipate that our existing cash and cash equivalents, our credit agreement with Mudrick Capital Management, L.P., and UACC's Warehouse Credit Facilities will be sufficient to support our ongoing operations and obligations for at least the next twelve months from the issuance date of this Annual Report on Form 10-K.

Our future capital requirements will depend on many factors, including our ability to realize the intended benefits of the Prepackaged Chapter 11 Case and our Long-Term Strategic Plan, available advance rates on the Warehouse Credit Facilities, our ability to complete additional securitization transactions on favorable terms, and future credit losses.

We anticipate that our existing cash and cash equivalents, the delayed draw facility, the delayed draw notes, and UACC's Warehouse Credit Facilities will be sufficient to support our ongoing operations and obligations for at least the next twelve months from the issuance date of this Annual Report on Form 10-K.

Securitization Transactions

Subject to market conditions, we plan to sell finance receivables originated by UACC through asset-backed securitization transactions.

During the second quarter of 2024, UACC completed the 2024-1 securitization transaction, in which it sold approximately $300.0 million of rated asset-backed securities in an auto finance receivable securitization transaction from a securitization trust, established and sponsored by UACC for proceeds of $297.2 million.

The trust is collateralized by finance receivables with an aggregate principal balance of $380.1 million as of April 30, 2024.

These finance receivables are serviced by UACC.

As a result of market conditions, UACC retained the residual interests, which required us to account for the 2024-1 securitization as secured borrowings and remain on balance sheet pending the sale of such retained interests.

We also repurchased $4.2 million of the non-investment grade securities related to the 2022-2 securitization transaction for $4.8 million.

On February 5, 2026, UACC completed the 2026-1 securitization transaction, in which it issued approximately $225.0 million of rated asset-backed securities in an auto finance receivable securitization transaction from a securitization trust, established and sponsored by UACC for proceeds of $224.1 million.

The trust is collateralized by finance receivables with an aggregate principal balance of $274.9 million as of February 5, 2026.

These finance receivables are serviced by UACC and UACC receives an "at market" servicing fee.

UACC retained the residual interests, which required us to account for the 2026-1 securitization as secured borrowings and the assets and liabilities of the trust remain on balance sheet.

During the first quarter of 2025, UACC completed the 2025-1 securitization transaction, in which it issued approximately $307.8 million of rated asset-backed securities in an auto finance receivable 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 as of March 12, 2025.

These finance receivables

are serviced by UACC and UACC receives an "at market" servicing fee.

UACC retained the residual interests, which required us to account for the 2025-1 securitization as secured borrowings and the assets and liabilities of the trust remain on balance sheet.

Finance receivables are serviced by UACC.

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Refer to Note 4 — Variable Interest Entities and Securitizations to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, for further discussion.

UACC Risk Retention Financing Facility

Risk Retention Financing Facility

On May 3, 2023, UACC entered into a Risk Retention Financing Facility enabling it to finance a portion of the asset-backed securities issued in its securitization transactions and held by UACC pursuant to applicable risk retention rules.

Under this facility, UACC sells such retained interests and agrees to repurchase them at fair value on a future date.

In its initial transaction under this facility, UACC pledged $24.5 million of its retained beneficial interests as collateral, and received proceeds of $24.1 million, with expected repurchase dates ranging from March 2025 to September 2029.

As of December 31, 2025, UACC pledged $27.6 million of its retained beneficial interests as collateral, and the outstanding borrowings related to this risk retention financing facility were $19.8 million with expected repurchase dates ranging from June 2027 to October 2031.

The securitization trusts will distribute payments related to UACC's pledged beneficial interests in securitizations directly to the lenders, which will reduce the beneficial interests in securitizations and the related debt balance .

During the second quarter of 2024, UACC pledged an additional $15.8 million of its retained beneficial interest in the 2024-1 securitization transaction as collateral under the Risk Retention Financing Facility, and received proceeds of $15.6 million, with expected repurchase dates ranging from August 2026 to November 2030 at the initial closing date.

Warehouse Credit Facilities

UACC has four senior secured warehouse credit facility agreements the (“Warehouse Credit Facilities”) with banking institutions.

UACC has three senior secured warehouse credit facility agreements the (“Warehouse Credit Facilities”) with banking institutions.

The Warehouse Credit Facilities are collateralized by eligible finance receivables and available borrowings are computed based on a percentage of eligible finance receivables.

On March 8, 2025, we renewed one of our Warehouse Credit Facilities, with $200 million of borrowing capacity, now expiring June 2026.

The aggregate borrowing limit and significant terms of the agreement remained unchanged except for an increase in the minimum liquidity covenant.

The remaining Warehouse Credit Facilities, with aggregate borrowing capacity of $625 million, expire between July and September 2025.

We are in ongoing discussions with the remaining lenders to extend the terms beyond the current expiration dates and expect facilities to be amended and renewed at sufficient borrowing capacity.

The aggregate borrowing limit under the Warehouse Credit Facilities is $825.0 million with maturities between July 2025 and June 2026.

During the year ended December 31, 2025 we renewed three of our previous four Warehouse Credit Facilities.

The significant terms of the agreements remained unchanged except for certain reductions in advance rates and increases in minimum liquidity and tangible net worth requirements as well as a decrease of the aggregate borrowing limit under one of the facilities from $225.0 million to $200.0 million.

On July 21, 2025, the remaining Warehouse Credit Facility, which had a borrowing capacity of $200 million, expired pursuant to its terms and was not extended or renewed.

We believe that our borrowing capacity from our other Warehouse Credit Facilities is sufficient to support our current operational needs and therefore elected not to renew this commitment.

The remaining Warehouse Credit Facilities expire in June 2026, August 2026 and April 2027, respectively.

We are in ongoing discussions with the warehouse lenders to extend the terms beyond the current expiration dates and expect facilities to be amended and renewed at sufficient borrowing capacity.

However, there can be no assurance that adequate additional financing will be available to us on acceptable terms, or at all.

The aggregate borrowing limit under the Warehouse Credit Facilities as of December 31, 2025 was $600.0 million.

Our ability to utilize the Warehouse Credit Facilities is primarily conditioned on the satisfaction of certain legal, operating, administrative and financial covenants contained within the agreements.

These include covenants that require UACC to maintain a minimum tangible net worth, minimum liquidity levels, and specified leverage ratios.

Failure to satisfy these and or any other requirements contained within the agreements would restrict access to or cause us to be in default of the terms of the Warehouse Credit Facilities and could have a material adverse effect on our financial condition, results of operations and liquidity.

Certain breaches of covenants or events of default may also result in acceleration of the repayment of borrowings prior to the scheduled maturity.

As of December 31, 2025, outstanding borrowings related to the Warehouse Credit Facilities were $318.7 million and we were in compliance with all covenants under the terms of the Warehouse Credit Facilities.

Failure to satisfy these or any other requirements contained within the agreements would restrict access to the Warehouse Credit Facilities and could have a material adverse effect on our financial condition, results of operations and liquidity.

Certain breaches of covenants may also result in acceleration of the repayment of borrowings prior to the scheduled maturity.

Refer to Note 10 — Warehouse Credit Facilities of Consolidated VIEs to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, for further discussion.

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The following table summarizes our cash flows for the years ended December 31, 2025 and 2024:

Non-GAAP Combined

Period from January 15 through December 31,

Period from January 1 through January 14,

(in thousands)

Net cash used in operating activities from continuing operations

Net cash provided by investing activities from continuing operations

Net cash (used in) provided by financing activities from continuing operations

Net cash provided by (used in) operating activities from discontinued operations

Net cash provided by (used in) investing activities from discontinued operations

Net cash provided by (used in) operating activities from continuing operations

Net cash (used in) provided by investing activities from continuing operations

Net cash provided by (used in) financing activities from continuing operations

Net cash (used in) provided by operating activities from discontinued operations

Net cash provided by investing activities from discontinued operations

Net cash used in financing activities from discontinued operations

Net decrease in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of period

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Operating Activities

Net cash flows used in operating activities from continuing operations decreased by $306.2 million, from $482.0 million for the year ended December 31, 2023 to $175.8 million for the year ended December 31, 2024.

The decrease was primarily due to a $178.0 million decrease in originations of finance receivables held for sale, as a result of no longer originating loans for legacy Vroom customers after the Ecommerce Wind-Down, an increase in principal payments received on finance receivables held for sale of $80.9 million, a $31.1 million improvement in net loss from continuing operations after reconciling adjustments, and changes in working capital of $13.0 million.

Net cash flows provided by (used in) operating activities from continuing operations decreased by $247.6 million, from $175.8 million net cash used in operating activities for the year ended December 31, 2024 to $71.8 million net cash provided by operating activities for the year ended December 31, 2025.

The reduction of cash used in operating activities was primarily due to a $389.9 million decrease in originations of finance receivables held for sale.

As a result of emerging from the Prepackaged Chapter 11 Case and applying fresh start accounting, our finance receivables are originated and accounted for as held for investment at fair value and are classified as investing activities prospectively.

The increase in net cash flows provided by operating activities was also due to a $37.8 million improvement in net income (loss) from continuing operations after reconciling adjustments, offset by a decrease in principal payments received on finance receivables held for sale of $180.3 million.

Investing Activities

Net cash flows provided by investing activities from continuing operations decreased by $70.4 million, from $185.3 million for the year ended December 31, 2023 to $114.9 million for the year ended December 31, 2024.

The decrease is primarily due to a $58.8 million decrease in principal payments received on finance receivables at fair value as well as the consolidation of the 2022-2 securitization transaction which resulted in a cash inflow of $11.4 million during the year ended December 31, 2023.

Net cash flows (used in) provided by investing activities from continuing operations changed $220.7 million, from $114.9 million net cash provided by investing activities for the year ended December 31, 2024 to $105.8 million net cash used in investing activities for the year ended December 31, 2025.

The decrease in cash provided by investing activities was primarily due to a $419.7 million increase in originations of finance receivables held for investment, offset by a $203.8 million increase in principal payments received on finance receivables at fair value.

Financing Activities

Net cash flows provided by financing activities from continuing operations decreased $238.0 million, from $223.2 million for the year ended December 31, 2023 to $14.8 million used in financing activities for the year ended December 31, 2024.

The decrease was primarily related to a $251.0 million decrease in net cashflows related to our Warehouse Credit Facilities, as a result of fewer borrowings related to no longer originating loans for legacy Vroom customers and higher repayments following the 2024-1 securitization transaction, a $13.4 million decrease in net cashflows from financing of beneficial interests in securitizations, and a $9.0 million decrease in net cashflows from secured financing agreements.

These decreases were partially offset by $36.5 million in repurchases of the Notes during the year ended December 31, 2023.

Net cash flows provided by (used in) financing activities from continuing operations changed $38.8 million, from $14.8 million net cash used in financing activities for the year ended December 31, 2024 to $24.0 million net cash provided by financing activities for the year ended December 31, 2025.

The change was primarily related to a $20.1

million increase in net cash flows from the borrowings under our Warehouse Credit Facilities, $18.5 million received from the related party line of credit in 2025, and $10.0 million received in connection with the issuance of the related party note in 2025, offset by a $7.4 million decrease in net cash flows related to higher repayments of secured financing agreements.

Critical Accounting Policies and Estimates

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The critical accounting policies that reflect our more significant judgments and estimates used in the preparation of our consolidated financial statements include those described in Note 2—Summary of Significant Accounting Policies and Note 3—Revenue Recognition to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Fresh Start Accounting

We applied FASB Codification Topic 852, Reorganizations ("ASC 852") in preparing the consolidated financial statements starting on the Prepackaged Chapter 11 Case petition date.

ASC 852 requires the financial statements, for the periods subsequent to the petition date and up to and including the Effective Date, which includes the period of emergence from Chapter 11 to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business.

Accordingly, certain charges incurred during the bankruptcy proceedings, such as legal and professional fees incurred directly as a result of the bankruptcy proceeding, the write-off of deferred financing costs and discount on debt subject to compromise and other related charges are recorded as Reorganization items, net in the Consolidated Statements of Operations.

In connection with our emergence from the Prepackaged Chapter 11 Case and in accordance with ASC Topic 852, we qualified for and adopted fresh start accounting on the Effective Date.

We were required to adopt fresh start accounting because (i) the holders of existing voting shares of the Predecessor received less than 50% of the voting shares of the Successor Company, and (ii) the reorganization value of our assets immediately prior to confirmation of the Plan was less than the post-petition liabilities and allowed claims.

In accordance with ASC Topic 852, with the application of fresh start accounting, we allocated the reorganization value to our individual assets and liabilities (except for deferred income taxes) based on their estimated fair values in conformity with ASC Topic 805, Business Combinations.

The amount of deferred taxes was determined in accordance with ASC Topic 740, Income Taxes.

The Effective Date fair values of our assets and liabilities differed materially from their recorded values as reflected on the historical balance sheets.

Refer to Note 6 – Fresh Start Accounting to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.

The results of our analysis indicated that the principal assets requiring fair value adjustments on the Effective Date included finance receivables held for sale, identified intangible assets and leased assets.

The finance receivables held for sale include both finance receivables that are held in a collateralized financing entity ("CFE") and those that are not held in a CFE.

Finance Receivables at Fair Value

The valuation of finance receivables at fair value, for which the Company elected the fair value option in accordance with ASC 825 but are not related to consolidated CFEs, is derived from a model that estimates the present value of future cash flows.

Upon emergence from the Prepackaged Chapter 11 Case, and application of fresh start accounting, we made an accounting policy election to elect the fair value option for all finance receivables held for sale, net.

The finance receivables held for sale, net were reclassified to finance receivables at fair value.

The valuation of finance receivables at fair value, for which we elected the fair value option in accordance with ASC 825 but are not related to consolidated CFEs, is measured on a recurring basis and is derived from a model that estimates the present value of future cash flows.

We estimate the present value of these future cash flows using a valuation model consisting of developed estimates that rely on unobservable assumptions third-party market participants would use in determining fair value, including prepayment speed, default rate, recovery rate, as well as certain macroeconomics events we believe market participants would consider relevant.

All these assumptions are primarily based on historical performance.

All these assumptions are primarily

based on historical performance.

These valuation models are calculated by combining similarly priced loans and vintages to determine a stream of expected cash flows which are then discounted.

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The estimates for the aforementioned assumptions significantly affect the reported amount (and changes thereon) of our finance receivables at fair value on our consolidated balance sheets and consolidated statements of operations.

Financial assets and liabilities of CFEs

Upon emergence from the Prepackaged Chapter 11 Case, and application of fresh start accounting, we made an accounting policy election to apply the measurement alternative to the 2024-1 consolidated CFE.

All consolidated CFEs now apply the measurement alternative and the fair value of financial assets and liabilities of CFEs are measured on a recurring basis.

We are required to determine whether the fair value of the financial assets or the fair value of the financial liabilities of the CFEs are more observable, but in either case, the methodology results in the fair value of the financial assets of the securitization trust being equal to the fair value of their liabilities.

We determined that the fair value of the liabilities of the securitization CFEs are more observable, since market prices of their liabilities are based on non-binding quoted prices provided by broker dealers who make markets in similar financial instruments.

The assets of the securitization CFEs are not readily marketable, and their fair value measurement requires information that may be limited in availability.

In determining the fair value of the securitization debt, the broker dealers consider contractual cash payments and yields expected by market participants.

Broker dealers also incorporate common market pricing methods, including a spread measurement to the treasury curve or interest rate swap curve as well as underlying characteristics of the particular security including ratings, coupon, collateral type and seasoning or age of the security.

When we obtain prices from multiple broker dealers for the same security and have a consensus among them, we deem these fair values to be based on observable valuation inputs and classified as Level 2 of the fair value hierarchy.

Where a third-party broker dealer quote is not available, an internal model is utilized using unobservable inputs or if we have multiple quotes that are not within determined range, we classify the securitization debt as Level 3 of the fair value hierarchy.

The financial assets of the consolidated CFEs are an aggregate value derived from the fair value of the CFEs liabilities and the valuation of residual interests, which is derived from an internal valuation model and calculated in line with the valuation of finance receivables at fair value not related to consolidated CFEs discussed above.

We determined that finance receivables of CFEs in their entirety should be classified as Level 3 of the fair value hierarchy.

The estimates for the aforementioned assumptions significantly affect the reported amount (and changes thereon) of our financial assets and liabilities of CFEs on our consolidated balance sheets and consolidated statements of operations.

Intangible Assets

The identified intangible assets of $14.2 million upon emergence, which principally consists of technology, trade names and trademarks, and customer relationships were estimated based on either the cost approach, relief from royalty or multi-period excess earnings methods.

Significant assumptions for identified intangibles included royalty rates, discount rates, margins, attrition rates, revenue growth rates, and economic lives.

Such fair value measurement of intangible assets is considered Level 3 of the fair value hierarchy.

For the technology-based intangibles that were valued using the relief from royalty income approach, the royalty rate was estimated to be 5.0% and the discount rate 25%.

For the technology-based intangibles that were valued using the cost approach, the margin was estimated to be 8.5%.

For trade names and trademarks valued under the relief from royalty income approach, the royalty rate was estimated to be 0.5% and the discount rate 25%.

For customer related intangible assets that were valued using the multi-period excess earnings method, the attrition rate was estimated to be 10% and the discount rate 25%.

The estimates for the aforementioned assumptions significantly affect the reported amount of our intangible assets on our consolidated balance sheets and consolidated statements of operations.

Recently Issued and Adopted Accounting Pronouncements

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Report of Independent Registered Public Accounting Firm PCAOB ID 49

Report of Independent Registered Public Accounting Firm PCAOB ID 238

Consolidated Balance Sheets as of December 31, 2025 and 2024

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We have audited the accompanying consolidated balance sheet of Vroom, Inc.

(debtor-in-possession) and its subsidiaries (the Company) as of December 31, 2024, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the year then ended, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

and its subsidiaries (Successor) (the Company) as of December 31, 2025, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the period from January 15, 2025 through December 31, 2025, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the period from January 15, 2025 through December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis of Accounting

As discussed in Note 1, The Prepackaged Chapter 11 Case and Basis of Presentation , Note 2, Bankruptcy , and Note 6 to the consolidated financial statements, Vroom, Inc.

(the Debtor) filed a voluntary petition on November 13, 2024 with the United States Bankruptcy Court for the Southern District of Texas for relief under the provisions of Chapter 11 of the United States Code Bankruptcy Code.

The conditions to the effectiveness of the Debtor’s plan of reorganization were satisfied or waived and on January 14, 2025 the plan of reorganization became effective, and the Debtor emerged from bankruptcy.

In connection with its emergence from bankruptcy, the Company adopted fresh start accounting as of January 14, 2025.

Basis for Opinion

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We believe that our audit provides a reasonable basis for our opinion.

Discontinued Operations

As discussed in Note 1, Value Maximization Plan , and Note 5 to the consolidated financial statements, in 2024 the Board of Directors approved a value maximization plan, pursuant to which the Company discontinued its ecommerce operations and used vehicle dealership business.

Bankruptcy and Subsequent Event

As discussed in Note 1, The Prepackaged Chapter 11 Case and Conversion of Common Stock , Note 2, Bankruptcy , and Note 6 to the consolidated financial statements, Vroom, Inc.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Fair Value of Finance Receivables and Finance Receivables Held for Sale

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Fair Value of Finance Receivables

The Company’s finance receivables at fair value, that are not financial assets of consolidated collateralized financing entities, totaled $367,552 thousand at December 31, 2025.

In addition, the Company’s finance receivables held for sale, which are recorded at the lower of cost or fair value, totaled $318,192 thousand at December 31, 2024.

As discussed in Notes 2 and 16 to the consolidated financial statements, the Company estimates the fair value of finance receivable at fair value, that are not financial assets of consolidated financing entities, and finance receivables held for sale utilizing valuation models that include discounted cash flow models, incorporating key inputs including prepayment speeds, default rates, recovery rates and discount rates.

We identified the valuation of finance receivables at fair value and finance receivables held for sale as a critical audit matter due to the significant judgement required by management in determining assumptions, including the prepayment speed, default rate, recovery rate and discount rate.

Our audit procedures related to the valuation of finance receivables as of December 31, 2024 included the following procedures, amongst others:

As discussed in Notes 2 and 16 to the consolidated financial statements, the Company estimates the fair value of finance receivable that are not financial assets of consolidated collateralized financing entities utilizing valuation models that include discounted cash flow models, incorporating key inputs including prepayment speeds, default rates, recovery rates and discount rates.

We identified the valuation of finance receivables at fair value that are not financial assets of consolidated collateralized financing entities as a critical audit matter due to the significant judgement required by management in determining assumptions, including the prepayment speed, default rate, recovery rate and discount rate.

Our audit procedures related to the valuation of finance receivables that are not financial assets of consolidated collateralized financing entities as of December 31, 2025 included the following procedures, amongst others:

• We tested the data utilized in determining the assumptions related to prepayment speed, default rate and discount rate used in the valuation model for a selection of loans, obtaining and inspecting loan origination documents and supporting documentation for loan activity.

• We evaluated the appropriateness of the valuation assumptions and the valuation model by inquiry of the Company’s third-party valuation expert.

• With the assistance of our valuation specialists, we evaluated the reasonableness of the valuation methodology and significant assumptions used, including whether the significant assumptions were appropriate and consistent with available external market and industry data.

• We evaluated the consistency by which management has applied significant valuation assumptions related to prepayment speed, default rate, recovery rate and discount rate.

Long-lived Asset Impairment

As discussed in Note 2 to the consolidated financial statements, the Company determined a long-lived asset impairment evaluation triggering event existed as of December 31, 2024, indicating that the carrying amount of the United Auto Credit Corporation (UACC) asset group may not be recoverable.

The Company compared the sum of estimated undiscounted future cash flows attributable to the UACC asset group to the UACC asset group’s carrying value, and determined that, as the sum of the estimated undiscounted future cash flows exceeded the carrying value, no impairment charges were necessary as a result of the triggering event that existed as of December 31, 2024.

We identified the long-lived asset impairment analysis related to the UACC asset group as a critical audit matter due to the significant judgement required by management in determining the estimated undiscounted future cash flows, including assumptions related to the forecasted net interest income, the forecasted earnings before tax, and the estimated residual value.

Auditing management’s assumptions involved a high degree of auditor judgment and an increase in audit effort, including the use of valuation specialists, due to the impact management’s assumptions could have on the accounting estimate.

Our audit procedures related to the UACC asset group long-lived asset impairment analysis as of December 31, 2024, included the following procedures, amongst others:

• We evaluated the reasonableness of assumptions related to forecasted net interest income and forecasted earnings before tax used in the undiscounted future cash flows by comparing the forecasts to the UACC asset group’s historical results.

• With the assistance of our valuation specialists, we evaluated the reasonableness of the inputs into management’s estimate of the residual value of the UACC asset group, including whether the inputs into the estimated residual value were appropriate and consistent with available external market data.

We have served as the Company's auditor since 2024.

/s/ RSM US LLP

1 unchanged sentence

March 26, 2026

We have served as the Company’s auditor since 2024.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Vroom, Inc.

To the Stockholders and the Board of Directors of Vroom, Inc.

Opinion on the Financial Statements

We have audited the consolidated balance sheet of Vroom, Inc.

(debtor-in-possession) and its subsidiaries (the “Company”) as of December 31, 2023, and the related consolidated statements of operations, of changes in stockholders’ equity and of cash flows for the year then ended, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheet of Vroom, Inc.

and its subsidiaries (Predecessor) (the Company) as of December 31, 2024, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the period from January 1, 2025 through January 14, 2025 and for the year ended December 31, 2024, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the period from January 1, 2025 through January 14, 2025 and for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis of Accounting

As discussed in Note 1, The Prepackaged Chapter 11 Case and Basis of Presentation , Note 2, Bankruptcy , and Note 6 to the consolidated financial statements, Vroom, Inc.

The conditions to the effectiveness of the Debtor’s plan of reorganization were satisfied or waived and on January 14, 2025, the plan of reorganization became effective, and the Debtor emerged from bankruptcy.

In connection with its emergence from bankruptcy, the Company adopted fresh start accounting.

This matter is also described in the “Critical Audit Matter” section of our report.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

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

We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, in 2024, the Board of Directors approved a value maximization plan, pursuant to which the Company discontinued its ecommerce operations and wound down its used vehicle dealership business.

/s/ PricewaterhouseCoopers LLP

New York, New York

March 13, 2024, except for the effects of discontinued operations discussed in Note 5, the effects of the revision discussed in Note 20, the change in composition of reportable segments discussed in Note 17, and the change in the manner in which the Company accounts for segments discussed in Note 2 to the consolidated financial statements, as to which the date is March 11, 2025

We served as the Company's auditor from 2016 to 2024.

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Discontinued Operations

As discussed in Note 1, Description of Business and Organization , and Note 5 to the consolidated financial statements, in 2024 the Board of Directors approved a value maximization plan, pursuant to which the Company discontinued its ecommerce operations and used vehicle dealership business.

Critical Audit Matter

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Fair Value of Finance Receivables in Connection with the Application of Fresh Start Accounting

As discussed in Note 2, Note 6 and Note 16, in accordance with ASC Topic 852, with the application of fresh start accounting the Company allocates its equity value to its individual assets and liabilities based on their estimated fair values determined in conformity with ASC Topic 820, Fair Value.

Included in the fair value estimates are finance receivables of $825,012 thousand of which $437,568 thousand are not financial assets of consolidated collateralized financing entities.

The Company estimates the fair value of finance receivable at fair value that are not financial assets of consolidated collateralized financing entities utilizing valuation models that include discounted cash flow models, incorporating key inputs including prepayment speeds, default rates, recovery rates and discount rates.

Our audit procedures related to the valuation of finance receivables that are not financial assets of consolidated collateralized financing entities as the Company’s application of fresh start accounting included the following procedures, amongst others:

• We evaluated the consistency by which management has applied significant valuation assumptions related to prepayment speed, default rate, recovery rate and discount rate.

/s/ RSM US LLP

Los Angeles, California

March 26, 2026

We have served as the Company’s auditor since 2024.

CONSOLIDATED BALANCE SHEETS

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Finance receivables at fair value (including finance receivables of consolidated VIEs of $ 777.0 million and $ 467.3 million, respectively)

Finance receivables held for sale, net (including finance receivables of consolidated VIEs of $ 310.0 million and $ 457.2 million, respectively)

Finance receivables held for sale, net (including finance receivables of consolidated VIEs of $ 0.0 and $ 310.0 million, respectively)

Interest receivable (including interest receivables of consolidated VIEs of $ 12.4 million and $ 13.3 million, respectively)

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Assets from discontinued operations

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Warehouse credit facilities of consolidated VIEs

Long-term debt (including securitization debt of consolidated VIEs of $ 210.7 million at amortized cost and $ 142.6 million at fair value as of December 31, 2024 and $ 314.1 million at fair value as of December 31, 2023)

Related party line of credit (Note 20)

Long-term debt (including securitization debt of consolidated VIEs of $ 393.2 million at fair value as of December 31, 2025 and $ 210.7 million at amortized cost and $ 142.6 million at fair value as of December 31, 2024)

Related party note (Note 20)

Operating lease liabilities

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Commitments and contingencies (Note 13)

Stockholders’ (deficit) equity:

Stockholders’ equity (deficit):

Common stock, $ 0.001 par value;

500,000,000 shares authorized as of December 31, 2024 and December 31, 2023;

250,000,000 shares authorized as of December 31, 2025 and 500,000,000 shares authorized as of December 31, 2024;

5,199,641 and 1,822,532 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively

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Accumulated deficit

Total stockholders’ (deficit) equity

Total liabilities and stockholders’ (deficit) equity

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

See accompanying notes to these consolidated financial statements .

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CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

Period from January 15 through December 31,

Period from January 1 through January 14,

Interest income

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Realized and unrealized losses, net of recoveries

Net interest income after losses and recoveries

Net interest income (loss) after losses and recoveries

Noninterest income:

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CarStory revenue

Gain on debt extinguishment

Total noninterest income

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Reorganization items, net

Loss from continuing operations before provision for income taxes

(Loss) income from continuing operations before provision for income taxes

Provision for income taxes from continuing operations

Net loss from continuing operations

Net loss from discontinued operations

Net loss per share attributable to common stockholders, continuing operations, basic and diluted

Net loss per share attributable to common stockholders, discontinued operations, basic and diluted

Total net loss per share attributable to common stockholders, basic and diluted

Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted

Net income (loss) from continuing operations

Net income (loss) from discontinued operations

Net (loss) income

(Continued on following page)

CONSOLIDATED STATEMENTS OF OPERATIONS (continued)

(in thousands, except share and per share amounts)

Period from January 15 through December 31,

Period from January 1 through January 14,

Net (loss) income per share attributable to common stockholders, basic:

Continuing operations

Discontinued operations

Net (loss) income per share attributable to common stockholders, diluted:

Continuing operations

Discontinued operations

Weighted-average number of shares outstanding used to compute net (loss) income per share attributable to common stockholders:

See accompanying notes to these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

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Stockholders’

Paid-in Capital

Accumulated Deficit

Equity (Deficit)

Balance at December 31, 2022

Balance at December 31, 2023 (Predecessor)

Stock-based compensation

Vesting of restricted stock units

Issuance of common stock related to at-the-market offering, net of offering costs

Balance at December 31, 2023

Balance at December 31, 2024 (Predecessor)

Stock-based compensation

Vesting of restricted stock units

Balance at December 31, 2024

Elimination of Predecessor equity balances

Issuance of Successor equity

Issuance of stock warrants

Balance at January 14, 2025 (Predecessor)

Balance at January 15, 2025 (Successor)

Stock-based compensation

Vesting of restricted stock units

Balance at December 31, 2025 (Successor)

See accompanying notes to these consolidated financial statements .

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Period from January 15 through December 31,

Period from January 1 through January 14,

Operating activities

Net loss from continuing operations

Adjustments to reconcile net loss to net cash used in operating activities:

Net (loss) income from continuing operations

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Impairment charges

Profit share receivable

Gain on debt extinguishment

Depreciation and amortization

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Amortization of unearned discounts on finance receivables at fair value

Reorganization items

Non-cash reorganization items, net

Changes in operating assets and liabilities:

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Other liabilities

Net cash used in operating activities from continuing operations

Net cash provided by (used in) operating activities from discontinued operations

Net cash used in operating activities

Net cash provided by (used in) operating activities from continuing operations

Net cash (used in) provided by operating activities from discontinued operations

Net cash provided by (used in) operating activities

Investing activities

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Principal payments received on finance receivables, held for investment at fair value

Consolidation of VIEs

Principal payments received on beneficial interests

Purchase of property and equipment

Net cash provided by investing activities from continuing operations

Net cash provided by (used in) investing activities from discontinued operations

Net cash provided by investing activities

Net cash (used in) provided by investing activities from continuing operations

Net cash provided by investing activities from discontinued operations

Net cash (used in) provided by investing activities

Financing activities

Proceeds from borrowings under secured financing agreements, net of issuance costs

Proceeds from borrowings under secured financing agreements

Principal repayment under secured financing agreements

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Repayments of warehouse credit facilities

Repurchases of convertible senior notes

Proceeds from the issuance of common stock in at-the-market offering, net of offering costs

Proceeds from issuance of related party note

Proceeds from related party line of credit

Other financing activities

Net cash (used in) provided by financing activities from continuing operations

Net cash provided by (used in) financing activities from continuing operations

Net cash used in financing activities from discontinued operations

Net cash (used in) provided by financing activities

Net decrease in cash, cash equivalents and restricted cash

Net cash provided by (used in) financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at the beginning of period

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(Continued on following page)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

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Cash paid for interest

Cash paid for professional fees for services rendered in connection with the Chapter 11 proceedings

Cash paid for reorganization items, net

Cash paid for income taxes

Supplemental disclosure of non-cash investing and financing activities:

Finance receivables from consolidation of 2022-2 securitization transaction

Elimination of beneficial interest from the consolidation of 2022-2 securitization transaction

Securitization debt from consolidation of 2022-2 securitization transaction

Reclassification of finance receivables held for sale to finance receivables at fair value, net

See accompanying notes to these consolidated financial statements .

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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Vroom, Inc., through its wholly owned subsidiaries (collectively, the "Company”), is a leading automotive finance company that offers vehicle financing to consumers through third-party dealers and an artificial intelligence ("AI")-powered analytics and digital services platform supporting the automotive industry.

The Company was incorporated in Delaware on January 31, 2012 under the name BCM Partners III, Corp.

On June 25, 2013, the Company changed its name to Auto America, Inc.

and on July 9, 2015, the Company changed its name to Vroom, Inc.

In January 2021, the Company completed the acquisition of Vast Holdings, Inc.

(d/b/a CarStory).

On February 1, 2022 (the "Acquisition Date"), the Company completed the acquisition of Unitas Holdings Corp.

In February 2022, the Company completed the acquisition of Unitas Holdings Corp.

(now known as Vroom Finance Corporation), including its wholly owned subsidiaries United PanAm Financial Corp.

(now known as Vroom Automotive Financial Corporation) and United Auto Credit Corporation ("UACC").

The Company was incorporated in Delaware on January 31, 2012 under the name BCM Partners III, Corp.

On June 25, 2013, the Company changed its name to Auto America, Inc.

and on July 9, 2015, the Company changed its name to Vroom, Inc.

Value Maximization Plan

The Company was previously an end-to-end ecommerce platform to buy and sell used vehicles.

On January 22, 2024, the Company announced that its Board of Directors ("Board") had approved a Value Maximization Plan, pursuant to which the Company discontinued its ecommerce operations and wound down its used vehicle dealership business in order to preserve liquidity and enable the Company to maximize stakeholder value through its remaining businesses.

The Company ceased transacting through vroom.com, completed transactions for customers who had previously contracted with the Company to purchase or sell a vehicle, halted purchases of additional vehicles, sold its used vehicle inventory through wholesale channels, paid off its vehicle floorplan financing facility dated November 4, 2022 with Ally Bank and Ally Financial Inc.

(the "2022 Vehicle Floorplan Facility") and conducted a reduction-in-force commensurate with the reduced operations.

The Company previously operated an end-to-end ecommerce platform to buy and sell used vehicles through its subsidiary Vroom Automotive, LLC.

On January 22, 2024, the Company announced that its Board of Directors (“Board”) had approved a value maximization plan, pursuant to which the Company wound down its used vehicle dealership business in order to preserve liquidity and enable the Company to maximize stakeholder value through its remaining businesses (the “Value Maximization Plan”).

As of March 29, 2024, the Company substantially completed the wind-down of its ecommerce operations and used vehicle dealership business (the “Ecommerce Wind-Down”).

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The CarStory reportable segment represents sales of AI-powered analytics and digital services to automotive dealers, automotive financial services companies and others in the automotive industry.

Refer to Note 17 — Segment Information for further detail.

Refer to Note 17 — Segment Information for further details.

The Prepackaged Chapter 11 Case

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On November 13, 2024, the Company commenced a voluntary proceeding (the “Prepackaged Chapter 11 Case”) under Chapter 11 of the United States Code, 11 U.S.C.

§§ 101-1532, as amended from time to (the “Bankruptcy Code”) in

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) under the name “In re Vroom, Inc.” Case No.

§§ 101-1532, as amended from time to time (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) under the name “In re Vroom, Inc.” Case No.

24-90571 (CML).

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The Company emerged from the Prepackaged Chapter 11 Case on January 14, 2025 .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Conversion of Common Stock

Immediately prior to the Effective Date, there were 1,822,577 outstanding shares of the Company’s common stock, $ 0.001 par value per share (the “Common Stock”).

Immediately prior to the Effective Date, there were 1,822,577 outstanding shares of the Company’s common stock, $ 0.001 par value per share.

The Company has adopted an Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to, among other changes to the Company’s prior amended and restated certificate of incorporation, effect an automatic conversion of the common stock at a ratio of 1-for-5 .

Warrants to Purchase Common Stock

On the Effective Date, the Company entered into a warrant agreement (the “Warrant Agreement”) with Equiniti Trust Company LLC, as warrant agent.

In accordance with the Plan and pursuant to the Warrant Agreement, on the Effective Date, the Company issued warrants (the “Warrants”) to purchase an aggregate of 364,516 shares of the Common Stock, at an exercise price of $ 60.95 per share, to stockholders of the Predecessor in accordance with the Prepackaged Chapter 11 Case.

Each Warrant was immediately exercisable upon the issuance date and will expire five years from the issuance date.

On July 7, 2025, the Company's Warrants commenced trading on the OTCQX Best Market under the symbol "VRMWW".

Going Concern

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generally accepted accounting principles (“U.S.

Upon emergence from the Prepackaged Chapter 11 Case, the Company adopted fresh start accounting in accordance with FASB Codification Topic 852, Reorganizations ("ASC 852") and became a new entity for financial reporting purposes.

As a result, the consolidated financial statements after the Effective Date are not comparable with the consolidated financial statements on or before that date as indicated by the “black line” division in the financial statements and footnote tables.

References to “Successor” relate to the Company's financial position and results of operations after the Effective Date.

References to “Predecessor” refer to the Company's financial position and results of operations on or before the Effective Date.

Refer to Note 6 — Fresh Start Accounting for further details.

Principles of Consolidation

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GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures.

On an ongoing basis, the Company evaluates its estimates, including, among others, those related to finance receivables, income taxes, stock-based compensation, contingencies, warranties and GAP (as defined below) income-related reserves, fair value measurements and useful lives of property and equipment and intangible assets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company bases its estimates on historical experience, market conditions, and on various other assumptions that are believed to be reasonable.

Actual results may differ from these estimates.

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Comprehensive Loss

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Cash and cash equivalents include cash deposits at financial institutions and highly liquid investments with original maturities of three months or less.

Outstanding checks that are in excess of the cash balances at certain financial institutions are included in “Accounts payable” in the consolidated balance sheets and changes in these amounts are reflected in operating cash flows in the consolidated statements of cash flows.

Outstanding checks that are in excess of the cash balances at certain financial institutions are included in “Other liabilities” in the consolidated balance sheets and changes in these amounts are reflected in operating cash flows in the consolidated statements of cash flows.

Restricted Cash

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Interest income is subsequently recognized only to the extent cash payments are received until the consumer is able to make periodic interest and principal payments in accordance with the finance receivable terms.

Finance Receivables Held for Sale, Net

Finance receivables that the Company intends to sell and not hold to maturity are classified as held for sale.

The Company intends to sell finance receivables through securitization transactions.

Finance receivables classified as held for sale, for which the fair value option has not been elected, are recorded at the lower of cost or fair value.

Deferred acquisition costs and any discounts are deferred until the finance receivables are sold and are then recognized as part of the total gain or loss on sale.

Refer to Note 3 – Revenue Recognition.

The Company records a valuation allowance to report finance receivables at the lower of cost or fair value.

To determine the valuation allowance, finance receivables are evaluated collectively as they represent a large group of smaller-balance homogeneous loans.

To the extent that actual experience differs from estimates, significant adjustments to the Company's valuation allowance may be needed.

Fair value adjustments are recorded in "Realized and unrealized losses, net of recoveries" in the consolidated statements of operations.

Principal balances and corresponding deferred acquisition costs and discounts of finance receivables are charged-off when the Company is unable to sell the finance receivable and the related vehicle has been repossessed and liquidated or the receivable has otherwise been deemed uncollectible.

As of December 31, 2024 and 2023, the valuation allowance for finance receivables classified as held for sale was $ 31.1 million and $ 33.8 million, respectively.

Refer to No te 16 – Financial Instruments and Fair Value Measurements .

Finance Receivables at Fair Value

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Finance receivables for which the fair value option was elected under ASC 825 are classified as finance receivables at fair value.

Finance receivables at fair value include both finance receivables held for sale at fair value as well as finance receivables held for investment at fair value.

Finance receivables held for sale at fair value represent finance receivables that the Company intends to sell, as described above, but elected the fair value option.

Upon emergence from the Prepackaged Chapter 11 Case, and application of fresh start accounting, the Company made an accounting policy election to account for all finance receivables as finance receivables held for investment at fair value.

Prior to the accounting policy change, the Company's finance receivables at fair value included both finance receivables held for sale at fair value as well as finance receivables held for investment at fair value.

The Company did not have any finance receivables held for sale at fair value as of December 31, 2025, and the aggregate principal balance and the fair value of the finance receivables held for investment was $ 909.9 million and $ 808.6 million, respectively as of December 31, 2025.

The aggregate principal balance and the fair value of the finance receivables held for sale at fair value was $ 365.0 million and $ 320.6 million, respectively, and the aggregate principal balance and the fair value of the finance receivables held for investment at fair value was $ 211.2 million and $ 183.2 million, respectively as of December 31, 2024.

The Company did no t have any finance receivables held for sale at fair value as of December 31, 2023.

The Company reassesses the estimate for fair value at each reporting period with any changes reflected as a fair value adjustment and recorded in "Realized and unrealized losses, net of recoveries" in the consolidated statements of operations.

For all finance receivables at fair value, the Company recognizes the fees it charges to dealers upon acquisition as other income at the time of issuance of the finance receivable and recognizes the acquisition costs to underwrite the finance receivables as an expense in the period incurred.

For finance receivables held for sale at fair value, any discounts are deferred until the finance receivables are sold.

For finance receivables held for investment at fair value, any discounts are amortized over the contractual life of the underlying finance receivables.

For all finance receivables at fair value, the Company recognizes the fees it charges to dealers upon acquisition as other income at the time of issuance of the finance receivables and recognizes the acquisition costs to underwrite the finance receivables as an expense in the period incurred.

For finance receivables held for investment at

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

fair value, any discounts are amortized over the contractual life of the underlying finance receivables and is recognized in realized and unrealized loss, net of recoveries on the consolidated statement of operations.

Refer to Note 16 – Financial Instruments and Fair Value Measurements.

Finance Receivables Held for Sale, Net

Upon emergence from the Prepackaged Chapter 11 Case, and application of fresh start accounting, the Company made an accounting policy election to elect the fair value option for all finance receivables held for sale, net.

The Company reports all finance receivables on a prospective basis as Finance Receivables at Fair Value.

Refer to Note 6 — Fresh Start Accounting for further details.

The finance receivables that the Company intended to sell were classified as held for sale and recorded at the lower of cost or fair value.

The Company intended to sell finance receivables through securitization transactions.

Deferred acquisition costs and any discounts were deferred until the finance receivables were sold and were then recognized as part of the total gain or loss on sale.

Refer to Note 3 — Revenue Recognition for further details.

Prior to the Effective Date, the Company recorded a valuation allowance to report finance receivables held for sale at the lower of cost or fair value.

To determine the valuation allowance, finance receivables were evaluated collectively as they represent a large group of smaller-balance homogeneous loans.

To the extent that actual experience differed from estimates, significant adjustments to the Company's valuation allowance were needed.

Fair value adjustments were recorded in "Realized and unrealized losses, net of recoveries" in the consolidated statements of operations.

Principal balances and corresponding deferred acquisition costs and discounts of finance receivables were charged-off when the Company was unable to sell the finance receivable and the related vehicle had been repossessed and liquidated, or the receivable had otherwise been deemed uncollectible.

As of December 31, 2025, the Company did no t have any finance receivables classified as held for sale, net and therefore did not have a valuation allowance.

As of December 31, 2024, the valuation allowance for finance receivables classified as held for sale was $ 31.1 million.

Refer to No te 16 – Financial Instruments and Fair Value Measurements .

Consolidated CFEs

The 2022-2, 2023-1, and 2024-1 securitization transaction VIEs are consolidated collateralized financing entities (CFEs).

Refer to Note 4 – Variable Interest Entities and Securitizations.

During the years ended December 31, 2024 and 2023, the Company recognized the following revenue and expenses associated with these CFEs in the consolidated statements of operations (in thousands):

The Company's securitization transactions are consolidated collateralized financing entities (CFEs) that are VIEs.

Refer to Note 4 — Variable Interest Entities and Securitizations for further details.

The Company recognized the following revenue and expenses associated with these CFEs in the consolidated statements of operations (in thousands):

Period from January 15 through December 31,

Period from January 1 through January 14,

Interest income

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Noninterest income (loss), net

Reorganization items, net

The assets and liabilities of the CFEs are presented as part of "Restricted cash", “Finance receivables at fair value”, "Interest receivable", "Other Assets", "Long term debt", and "Other liabilities", respectively, on the consolidated balance sheets.

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Charges for repairs and maintenance that do not improve or extend the life of the respective assets are expensed as incurred.

When assets are retired or otherwise disposed of, their costs and related accumulated depreciation are written off and any resulting gains or losses are recorded during the period.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

assets are retired or otherwise disposed of, their costs and related accumulated depreciation are written off and any resulting gains or losses are recorded during the period.

Depreciation and amortization are calculated using the straight-line method over the following estimated useful lives of the assets:

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Internal-use software

1 to 10 years

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company capitalizes direct costs of materials and services utilized in developing or obtaining internal-use software.

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The Company periodically reassesses the useful lives of its definite-lived intangible assets when events or circumstances indicate that useful lives have significantly changed from the previous estimate.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company determines if an arrangement is a lease at inception by evaluating if the asset is explicitly or implicitly identified or distinct, if the Company will receive substantially all of the economic benefit or if the lessor has an economic benefit and the ability to substitute the asset.

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Additionally, leases with an initial term of 12 months or less are not recorded on the Company’s consolidated balance sheet and expenses for these leases are recognized on a straight-line basis over the lease term.

The Company incurred impairment charges related to operating lease right-of-use assets of $ 4.2 million for the period from January 15, 2025, to December 31, 2025, related to costs associated with planned facility closures that will continue to be incurred under the contract for its remaining term without economic benefit to the Company.

Long-lived asset impairment

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When the carrying value of the asset group exceeds its estimated undiscounted future cash flows, the Company recognizes an impairment charge for the amount by which the carrying value of the asset group exceeds the fair value of the asset group.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As a result of filing of the Prepackaged Chapter 11 Case on November 13, 2024, the Company determined a triggering event existed as of December 31, 2024, indicating the carrying amount of our asset groups may not be recoverable.

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For the CarStory asset group, the carrying value of the asset group exceeded the estimated undiscounted future cash flows, however, it did not exceed the estimated fair value, as such, no impairment charges were recognized.

The Company determined there were no triggering events as of December 31, 2025.

The Company accounts for income taxes under the asset and liability method.

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The Company reduces the measurement of a deferred tax asset, if necessary, by a valuation allowance if it is more likely than not that the Company will not realize some or all of the deferred tax asset.

The Company accounts for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon technical merits, it is more likely than not that the position will be sustained upon examination.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Potential interest and penalties associated with unrecognized tax positions are recognized in income tax expense.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law.

OBBBA includes, among other provisions, changes affecting (i) the deductibility and/or amortization of domestic research or experimental expenditures for taxable years beginning after December 31, 2024, (ii) the timing and availability of certain clean energy tax incentives (including an accelerated phase-out for certain credits for projects beginning after June 30, 2026), and (iii) certain international tax rules impacting foreign income and the calculation of Foreign-Derived Intangible Income (“FDII”), among other cross-border considerations.

The Company evaluated the relevant provisions of OBBBA and determined that OBBBA did not have a material impact on the Company’s consolidated financial statements.

Stock-Based Compensation

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UACC’s customers, in this instance, are the third-party automotive dealers through which it purchases or acquires retail installment sale contracts for consumers.

CarStory’s customers are dealers, automotive financial services

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

companies and others in the automotive industry who purchase CarStory’s digital retailing services.

CarStory’s customers are dealers, automotive financial services companies and others in the automotive industry who purchase CarStory’s digital retailing services.

For the years ended December 31, 2025 and 2024, no customer represented 10% or more of the Company’s revenues and no customer represented more than 10% of the Company’s accounts receivable as of December 31, 2025 and 2024 .

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In addition, prepetition obligations that were impacted by the Chapter 11 process have been classified on the consolidated balance sheets as of December 31, 2024 as liabilities subject to compromise.

These liabilities are reported at the amounts which were allowed by the Bankruptcy Court, even if they may be settled for lesser amounts.

Refer to Note 6 — Prepackaged Chapter 11 Case.

During the bankruptcy proceedings, the Company was operating as debtor-in-possession in accordance with the applicable provisions of the Bankruptcy Code.

In general, as a debtor-in-possession under the Bankruptcy Code, the Debtor was authorized to continue to operate as an ongoing business, but would not have been able to engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court.

In addition, prepetition obligations that were impacted by the Chapter 11 process have been

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

classified on the consolidated balance sheets as of December 31, 2024 as liabilities subject to compromise.

Refer to Note 6 — Fresh Start Accounting

The Company emerged from the Prepackaged Chapter 11 Case on January 14, 2025.

On January 14, 2025, the Company emerged from the Prepackaged Chapter 11 Case, as discussed in Note 1 — Description of Business and Basis of Presentation.

On the Effective Date, each holder of the Notes received a pro rata share of 92.94 % of the New Common Stock (subject to dilution) and all of the Company’s outstanding obligations under the Notes and the Indenture were deemed fully satisfied and discharged.

no longer has long-term debt, but UACC has securitization debt and their trust preferred securities.

On the Effective Date, each holder of the 2026 Notes received a pro rata share of 92.94 % of the Common Stock (subject to dilution) and all of the Company’s outstanding obligations under the 2026 Notes and the Indenture were deemed fully satisfied and discharged.

As of December 31, 2025, the Company had cash and cash equivalents of $ 10.4 million and restricted cash of $ 55.9 million.

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The Company has historically had negative cash flows and generated losses from operations and the Company’s primary source of liquidity has been cash generated through financing activities.

In January 2024, the Company announced its Value Maximization Plan pursuant to which it discontinued its ecommerce operations and wound-down its used vehicle dealership business.

Refer to Note 1 — Description of Business and Basis of Presentation — Value Maximization Plan.

As a result of the liquidation of the Company's vehicle inventory as part of the Ecommerce Wind-Down, the Company repaid all amounts outstanding under the 2022 Vehicle Floorplan Facility in the first quarter of 2024 and the agreement was terminated.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024 , UACC has four warehouse credit facilities with an aggregate borrowing limit of $ 825.0 million and outstanding borrowings related to the Warehouse Credit Facilities were $ 359.9 million and excess borrowing capacity was $ 28.2 million.

The terms of the facilities generally mature within two years and the Company typically renews the facilities in the ordinary course.

On March 8, 2025, the Company renewed one of its Warehouse Credit Facilities, now expiring in June 2026.

The remaining Warehouse Credit Facilities have terms expiring between July and September 2025.

Refer to Note 10 — Warehouse Credit Facilities and Consolidated VIEs.

The Company is having ongoing discussions with the remaining lenders to extend the terms beyond the current expiration dates and expects facilities to be amended and renewed at sufficient borrowing capacity.

As of December 31, 2025 , UACC had three warehouse credit facilities with an aggregate borrowing limit of $ 600.0 million and outstanding borrowings related to the Warehouse Credit Facilities were $ 318.7 million and excess borrowing capacity was $ 11.3 million.

The Warehouse Credit Facilities have expiration dates in June 2026, August 2026 and April 2027, respectively.

The Company is in ongoing discussions with the warehouse lenders to extend the terms beyond the current expiration dates and expect facilities to be amended and renewed at sufficient borrowing capacity.

As of December 31, 2025, the Company was in compliance with all covenants related to the Warehouse Credit Facilities.

Failure to secure sufficient warehouse borrowing capacity beyond the expiration of the remaining facilities in 2025 or failure to satisfy the covenants therein and or any other requirements contained within the agreements would restrict access to the Warehouse Credit Facilities and would have a material adverse effect on the financial condition, results of operations and liquidity of the Company.

Refer to Note 10 - Warehouse Credit Facilities and Consolidated VIEs.

Failure to secure warehouse borrowing capacity beyond their expiration or failure to satisfy the covenants therein and or any other requirements contained within the agreements would restrict access to the Warehouse Credit Facilities and would have a material adverse effect on the financial condition, results of operations and liquidity of the Company.

Certain breaches of covenants may also result in acceleration of the repayment of borrowings prior to the scheduled maturity.

Refer to Note 10 – Warehouse Credit Facilities of Consolidated VIEs for further discussion.

On March 8, 2025, Vroom, Inc., UACC and its indirect subsidiary Darkwater Funding LLC, as co-borrowers, entered into a credit agreement with Mudrick Capital Management, L.P.

(“Lender”), who as of January 14, 2025 was a related party as they are a 76.5 % shareholder of the Company, for a $ 25.0 million delayed draw term loan facility (“Delayed Draw Facility”).

The Delayed Draw Facility allows for multiple drawdowns by each co-borrower, subject to satisfaction of usual and customary conditions precedent.

The Delayed Draw Facility bears interest at a rate of Term SOFR + 850 bps, payable quarterly in arrears, with a full payment-in-kind option.

Interest is also payable upon any payment of principal.

The co-borrowers’ obligations under the Delayed Draw Facility will be collateralized by asset backed residual certificates in certain UACC securitization trusts.

The Delayed Draw Facility matures on December 31, 2026 ;

however, borrowings can be prepaid at any time, in whole or in part, without penalty or premium.

Once amounts are repaid they may not be reborrowed.

The Delayed Draw Facility includes certain usual and customary covenants with respect to the co-borrowers’ activities and the collateral.

The Company expects to use cash and cash equivalents to finance future capital requirements and UACC’s Warehouse Credit Facilities to fund finance receivables.

Certain advance rates available to UACC on borrowings from the Warehouse Credit Facilities have decreased as a result of the increasing credit losses in UACC’s portfolio.

Any future decreases on available advance rates may have an adverse impact on the Company's liquidity.

Upon our emergence from bankruptcy on January 14, 2025, the Company continues to operate as a viable going concern.

The accompanying audited consolidated financial statements have been prepared on the basis that the Company will continue to operate as a going concern, which contemplates that it will be able to realize assets and settle liabilities and commitments in the normal course of business for twelve months following the issuance date.

The Company’s future capital requirements will depend on many factors, including the ability to realize the intended benefits of the Value Maximization Plan, Prepackaged Chapter 11 Case, and Long-Term-Strategic Plan, available advance rates on and the amendment and renewal of the remaining Warehouse Credit Facilities, the ability to meet the requirements for continued listing on the Nasdaq Global Market, the ability to complete additional securitization transactions on terms favorable to the Company, and future credit losses.

The Company anticipates that existing cash and cash equivalents, the credit agreement with Mudrick Capital Management, L.P., and UACC's Warehouse Credit Facilities will be sufficient to support the Company’s ongoing operations and obligations, for at least the next twelve months from the date of issuance of the consolidated financial statements.

Refer to Note 10 — Warehouse Credit Facilities of Consolidated VIEs for further details.

On March 8, 2025, Vroom, Inc., UACC and its indirect subsidiary Darkwater Funding LLC, as co-borrowers, entered into a credit agreement for a delayed draw term loan facility (“Delayed Draw Facility”), which matures on December 31, 2026 , with Mudrick Capital Management, L.P.

(“Lender”), who is a 76.5 % shareholder of the Company, and as of January 14, 2025, became a related party .

On October 9, 2025 the maximum facility amount was amended from $ 25.0 million to $ 35.0 million effective as of September 30, 2025.

As of December 31, 2025, the Company drew $ 8.0 million against the Delayed Draw Facility.

Refer to Note 20 — Related Party Transactions for further details.

On August 29, 2025, the Company issued $ 10.0 million aggregate principal amount of 2030 Notes to Annox Capital, LLC and Robert J.

Mylod, Jr., the Managing Partner of Annox Capital, LLC and the Independent Executive Chair of the board of directors of the Company.

Refer to Note 11 — Long Term Debt for further details.

On November 25, 2025, Vroom, Inc.

entered into a Note Purchase Agreement with Robert J.

Mylod, Jr., the Independent Executive Chair of the board of directors of the Company.

As of December 31, 2025, the Company drew $ 10.5 million against the Delayed Draw Notes.

Refer to Note 20 — Related Party Transactions for further details.

Upon the Company's emergence from the Prepackaged Chapter 11 Case on January 14, 2025, the Company continues to operate as a viable going concern.

The accompanying consolidated financial statements have been prepared on the basis that the Company will continue to operate as a going concern, which contemplates that it will be able to realize assets and settle liabilities and commitments in the normal course of business for twelve months following the issuance date.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s future capital requirements will depend on many factors, including the ability to realize the intended benefits of the Prepackaged Chapter 11 Case and Long-Term Strategic Plan, available advance rates on and the renewal of the Warehouse Credit Facilities and delayed draw facility, the ability to complete additional securitization transactions on terms favorable to the Company, and future credit losses.

The Company anticipates that existing cash and cash equivalents, the delayed draw facility, the delayed draw notes, and UACC's Warehouse Credit Facilities will be sufficient to support the Company’s ongoing operations and obligations, for at least the next twelve months from the date of issuance of the consolidated financial statements.

Net Loss Per Share Attributable to Common Stockholders

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Under the two-class method, net loss is attributed to common stockholders and participating securities based on their participation rights.

Under the two-class method, the net loss

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

attributable to common stockholders is not allocated to the preferred stock as the holders of the Company’s preferred stock do not have a contractual obligation to share in the Company’s losses.

Under the two-class method, the net loss attributable to common stockholders is not allocated to the preferred stock as the holders of the Company’s preferred stock do not have a contractual obligation to share in the Company’s losses.

Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

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Accounting Standards Adopted

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with Topic 606 as if the acquirer had originated the contracts.

The Company adopted the guidance on January 1, 2023 , which did no t have a material impact on the Company's consolidated financial statements and related disclosures.

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

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Refer to Note 17 — Segment Information.

Accounting Standards Issued But Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements.

The guidance will be effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements and related disclosures.

The Company adopted the guidance for fiscal year beginning January 1, 2025, on a retroactive basis, which did not have a material impact on the Company's consolidated financial statements and related disclosures.

Refer to Note 18 — Income Taxes.

Accounting Standards Issued But Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE) , which requires additional disclosure of the nature of expenses included in the income statement in response to longstanding requests from investors for more information about an entity’s expenses.

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Early adoption is permitted.

The Company is currently evaluating the impact that the adoption of this guidance will have on its condensed consolidated financial statements and related disclosures.

The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

The amendments modernize the recognition and disclosure framework for internal-use software costs, removing the previous “development stage” model and introducing a more judgment-based approach.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted.

The Company is currently evaluating the impact of ASU 2025-06 on the consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition

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The Company’s interest income is related to finance receivables originated by UACC for its network of third-party dealership customers and vehicle financing UACC offered to Vroom’s customers through its ecommerce platform prior to the Ecommerce Wind-down.

Interest income also includes discount income on finance receivables held for investment at fair value, which represents the amortization of unearned acquisition discounts over the contractual life of the underlying finance receivables using the interest method.

Upon emergence from the Prepackaged Chapter 11 Case, and application of fresh start accounting, the Company made an accounting policy election to recognize discount income on finance receivables held for investment at fair value as a component of "Realized and unrealized losses, net of recoveries".

In the Predecessor periods discount income on finance receivables held for investment at fair value was recognized as a component of "Interest income" on the Company’s consolidated statement of operations.

The discount income represents the amortization of unearned acquisition discounts over the contractual life of the underlying finance receivables using the interest method.

Interest income on each automotive finance receivable is calculated based on the finance receivable’s outstanding principal balance multiplied by the contractual interest rate.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

An account is considered delinquent if a scheduled payment has not been received by the date such payment was contractually due.

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Servicing income represents the annual fees earned on the outstanding principal balance of the finance receivables serviced as well as late charges, collection payments, and other fees.

Fees are earned monthly at an annual rate of approximately 4 % for the 2022-1 securitization transaction and 3.25 % for the 2022-2, 2023-1, and 2024-1 securitization transactions of the outstanding principal balance of the finance receivables serviced.

Late charges and other fees are calculated at predetermined amounts or percentages of overdue finance receivable balances and are recorded on a cash basis.

From January to March 2023, UACC waived the monthly servicing fees related to the 2022-2 securitization transaction, which resulted in consolidation of the 2022-2 VIE.

Servicing fees related to the 2022-2, 2023-1, and 2024-1 securitization transactions are eliminated in consolidation.

Refer to Note 4 – Variable Interest Entities and Securitizations.

Fees are earned monthly at an annual rate of approximately 4 %, for the 2022-1 securitization transaction, of the outstanding principal balance of the finance receivables serviced.

Late charges and other permitted fees are assessed in accordance with contractual terms and applicable state law, generally at the maximum allowable amounts or as a percentage of overdue finance receivable balances and are recorded on a cash basis.

Refer to Note 4 — Variable Interest Entities and Securitizations for further details.

Warranties and GAP income

Prior to the Ecommerce Wind-Down, the Company offered third-party financing and third-party value-added products such as vehicle service contracts, guaranteed asset protection (“GAP”) and tire and wheel coverage, to its used vehicle customers pursuant to arrangements with the third parties that sell and administered these products and are responsible for their fulfillment.

The Company continues to runoff the legacy Vroom third party vehicle service and GAP policies sold prior to the Ecommerce Wind-Down

UACC also offers third-party vehicle service contracts and United Auto Credit GAP to consumers who obtain financing through UACC.

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The Company recognizes revenue on a net basis when the consumer enters into an arrangement for the products.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A portion of the fees earned on third-party financing and value-added products is subject to chargebacks in the event of early termination, default, or prepayment of the contracts by end-customers.

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As of December 31, 2025 and December 31, 2024, the Company recognized $ 9.9 million and $ 11.0 million, respectively, related to cumulative profit-sharing payments to which it expects to be entitled, which are included within “Other assets."

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CarStory Revenue

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For each VIE that UACC establishes in its role as sponsor of securitization transactions, the Company performs an analysis to determine if it is the primary beneficiary of the VIE.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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UACC has no obligation to provide liquidity or contribute cash or additional assets to the VIEs and does not guarantee any asset-backed securities.

In 2025, UACC completed the 2025-1 securitization transaction, in which it issued approximately $ 307.8 million of rated asset-backed securities in an auto finance receivable securitization transaction from a securitization trust, established and sponsored by UACC for proceeds of $ 306.5 million.

The trust was collateralized by finance receivables with an aggregate principal balance of $ 382.1 million as of March 12, 2025.

These finance receivables are serviced by UACC and UACC receives an "at market" servicing fee.

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 balance sheet.

In 2024, UACC completed the 2024-1 securitization transaction, in which it sold approximately $ 300.0 million of rated asset-backed securities in an auto finance receivable securitization transaction from a securitization trust, established and sponsored by UACC for proceeds of $ 297.2 million.

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The Company also repurchased $ 4.2 million of the non-investment grade securities related to the 2022-2 securitization transaction for $ 4.8 million.

In 2023, UACC completed the 2023-1 securitization transaction, in which it sold rated asset-backed non-investment grade securities, for proceeds of $ 260.9 million.

UACC still retains the residual interests related to the 2023-1 securitization transaction and therefore consolidated the 2023-1 VIE and accounted for this transaction as a secured borrowing.

The trust is collateralized by finance receivables with an aggregate principal balance of $ 326.4 million as of January 31, 2023.

These finance receivables are serviced by UACC.

UACC retained the servicing rights to these finance receivables and receives an "at market" servicing fee.

UACC is the primary beneficiary of the 2025-1, 2024-1, 2023-1, and 2022-2 securitization trusts, as it has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE.

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Refer to Note 11 — Long Term Debt for further details.

In July 2022, UACC sold a pool of finance receivables in the 2022-2 securitization transaction.

UACC retained the servicing rights to these finance receivables and receives an "at market" servicing fee.

UACC retained an insignificant amount of the asset-backed securities issued in the securitization in order to comply with risk retention rules.

Originally, the Company concluded that it is not the primary beneficiary of the 2022-2 securitization trust because UACC retained interests in the VIE are insignificant.

Therefore, the Company did not originally consolidate the 2022-2 trust.

From January to March 2023, although not contractually required, UACC elected to waive its servicing fee on the 2022-2 securitization, due to higher-than-expected losses, which transferred more than an insignificant portion of the corresponding risk of loss from the VIE to the Company.

Since UACC has the power to direct the significant activities of the VIE, as it is the servicer, and additionally it absorbs the risk of loss, the Company concluded that it is the primary beneficiary of the VIE.

In March 2023, the Company accounted for the transaction as secured borrowings and consolidated the 2022-2 securitization trust.

The beneficial interest was then eliminated.

The VIE model allows for a measurement alternative when a reporting entity elects the fair value option and consolidates a collateralized financing entity (“CFE”).

This measurement alternative eliminates the accounting mismatch that may arise from measurement differences between the CFE’s financial assets and third-party financial liabilities in earnings and attributes those earnings to the controlling equity interest in the consolidated income statement.

The 2022-2 and 2023-1 securitization trusts consolidated by UACC meet the definition of a CFE, therefore, the Company has elected to apply the measurement alternative when consolidating these VIEs.

All of the consolidated securitization trusts meet the definition of a CFE and the Company has elected to apply the measurement alternative when consolidating these VIEs.

Upon emergence from the Prepackaged Chapter 11 Case, and application of fresh start accounting, the Successor made an accounting policy election to apply the measurement alternative to the 2024-1 CFE.

Refer to Note 16 – Financial Instruments and Fair Value Measurements for further detail.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

UACC has four senior secured warehouse credit facilities.

UACC had three senior secured warehouse credit facilities as of December 31, 2025.

Through trusts, UACC entered into warehouse facility agreements with certain banking institutions, primarily to finance the purchase and origination of finance receivables as well as to provide funding for general operating activities.

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These trusts are consolidated VIEs.

Refer to Note 10 – Warehouse Credit Facilities of Consolidated VIEs for further details on the warehouse facilities.

Refer to Note 10 — Warehouse Credit Facilities of Consolidated VIEs for further details.

Creditors or beneficial interest holders of VIEs for which the Company is the primary beneficiary generally have recourse only to the assets and cash flows of the VIEs and do not have recourse to the Company.

The following table presents the total assets and total liabilities associated with the Company's variable interests in consolidated VIEs, as classified in the consolidated balance sheets (in thousands):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2025

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Finance receivables at fair value

Finance receivables held for sale

Interest receivable

Securitization debt

Securitization debt at fair value

Warehouse credit facilities

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Interest receivable

Securitization debt

Securitization debt at fair value

Warehouse credit facilities

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1 Refer to Note 10 – Warehouse Credit Facilities of Consolidated VIEs for further details of the warehouse facilities.

UACC establishes securitization trusts to purchase finance receivables.

The securitization trusts issue asset-backed securities, which are collateralized by the finance receivables that UACC sells to the securitization trusts.

Upon sale of the finance receivables to the securitization trusts, the Company recognizes a gain or loss on sales of finance receivables if it determines it qualifies for sale accounting treatment and it is not the primary beneficiary of the VIE.

In February 2022, UACC sold a pool of finance receivables in the 2022-1 securitization transaction.

UACC retained the servicing rights to these finance receivables and receives an "at market" servicing fee.

UACC retained an insignificant amount of the asset-backed securities issued in the securitization in order to comply with Risk Retention Rules.

The 2022-1 securitization trust is a VIE that the Company does not consolidate.

As the servicer, UACC retained

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the power to direct the activities that are most significant to the entities, however, the Company concluded that it is not the primary beneficiary of the 2022-1 securitization trust because UACC retained interests in the VIE are insignificant.

The beneficial interest retained by UACC included rated notes and unrated residual certificates issued by the 2022-1 securitization trust.

As of December 31, 2024 and 2023, the assets UACC retains in the unconsolidated VIEs were approximately $ 2.2 million and $ 4.5 million, respectively, and are included in "Beneficial interests in securitizations" in the Company's consolidated balance sheet.

The beneficial interests in securitizations are subject to restrictions on transfer pursuant to UACC’s obligations as a sponsor under Risk Retention Rules.

These securities are interests in securitization trusts, thus there are no contractual maturities.

During 2023, the Company entered into a Risk Retention Financing Facility to finance the majority of its retained beneficial interests in securitizations.

Refer to Note 11 – Long Term Debt for further detail.

The following table summarizes the amortized cost, the carrying amount, which is the fair value, and the maximum exposure to losses of UACC's assets related to unconsolidated VIEs (in thousands):

As of December 31, 2024

As of December 31, 2023

Aggregate Principal Balance

Carrying Value

Total Exposure

Aggregate Principal Balance

Carrying Value

Total Exposure

Total unconsolidated VIEs

Total exposure represents the estimated loss UACC would incur under severe, hypothetical circumstances, such as if the value of the interests in the securitization trusts and any associated collateral declined to zero.

The Company believes the possibility of this is remote.

As such, the total exposure presented above is not an indication of the Company's expected losses.

Discontinued Operations

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The Company's ecommerce operations were previously a reportable segment and the exit represents a strategic shift that had a major effect on the Company's operations and financial results.

Therefore, in accordance with ASC 205, as of and for the year ended December 31, 2024, the Company reported the ecommerce operations and used vehicle dealership business as discontinued operations and recast prior periods to reflect this presentation.

Therefore, in accordance with ASC 205, the Company reported the ecommerce operations and used vehicle dealership business as discontinued operations.

During the year ended December 31, 2024 , the Company incurred charges of approximately $ 15.8 million for severance and other personnel-related costs and approximately $ 13.9 million for contract and lease termination costs as a result of the Ecommerce Wind-Down recorded in "Net loss from discontinued operations" in the consolidated statements of operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the major income and expense line items from discontinued operations as reported in the consolidated statements of operations (in thousands):

Period from January 15, to

Retail vehicle, net

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Total cost of sales

Total gross profit

Total gross profit (loss)

Selling, general and administrative expenses

Loss (gain) on disposal of long lived assets

Gain (loss) on disposal of long lived assets

Depreciation and amortization

Impairment charges

Loss from operations

Income (loss) from operations

Interest expense

Interest income

Loss before provision for income taxes

Provision (benefit) for income taxes

Net loss from discontinued operations

Interest loss

Income (loss) before provision for income taxes

Provision for income taxes

Net income (loss) from discontinued operations

Net income (loss) from discontinued operations for the period from January 1, 2025, to January 14, 2025, was not material.

The following table summarizes the major classes of assets and liabilities from discontinued operations as reported in the consolidated balance sheets:

3 unchanged sentences

Accrued expenses

Vehicle floorplan

Deferred revenue

Operating lease liabilities

Other liabilities

Liabilities from discontinued operations

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Prepackaged Chapter 11 Case

As discussed in Note 1 – Description of Business and Basis of Presentation, on November 13, 2024, the Company, and in the context of the Prepackaged Chapter 11 Case, the Debtor, commenced the Prepackaged Chapter 11 Case.

On January 14, 2025, the Company emerged from bankruptcy.

On June 18, 2021, the Company issued $ 625.0 million aggregate principal amount of 0.75 % unsecured Convertible Senior Notes due 2026 (the “Notes”), including $ 75.0 million aggregate principal amount of such notes pursuant to the exercise in full of the overallotment option granted to the initial purchasers.

The Notes were issued pursuant to an indenture (the “Indenture”), between the Company and U.S.

Bank National Association, as trustee.

The filing of the Prepackaged Chapter 11 Case constituted an event of default, resulting in the immediate acceleration of the Company’s obligations to pay approximately $ 291.6 million in outstanding principal and interest under the Indenture.

On January 14, 2025, by operation of the Plan, all outstanding obligations under the Notes and the Indenture were deemed fully satisfied and discharged.

Under Chapter 11, certain pre-petition claims that are not fully secured and that have at least a possibility of not being repaid at the full claim amount are presented as liabilities subject to compromise on the Company’s consolidated balance sheet as of December 31, 2024.

Contractual interest on prepetition debt obligations is equal to reported interest expense.

Upon emergence from bankruptcy on January 14, 2025, the Company converted 364,516 shares (after the automatic conversion of the Common Stock at a ratio of 1-for-5 ) of old Common Stock into New Common Stock, issued an additional 4,798,593 shares of Common Stock related to the conversion of the Notes, and provided the option for existing equityholders to purchase an additional 364,516 in new warrants.

As the Company reports net losses, diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders because potentially dilutive common shares are not assumed to have been issued as their effect is anti-dilutive.

ASC 852 requires that, for periods including and after the filing of a Chapter 11 petition, the consolidated financial statements distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business.

The following table sets forth, as of December 31, 2024, information about the amounts presented as liabilities subject to compromise in the consolidated balance sheet (in thousands):

Convertible senior notes

Total liabilities subject to compromise

Additionally, certain expenses resulting from and recognized during the bankruptcy proceedings are recorded in Reorganization items, net in the consolidated statement of operations.

Reorganization items, net consisted of the following (in thousands):

Debt valuation adjustments

Professional fees

Total reorganization items, net

(DEBTOR-IN-POSSESSION)

Fresh Start Accounting

As discussed in Note 1 — Description of Business and Basis of Presentation, on November 13, 2024, the Company commenced the Prepackaged Chapter 11 Case.

On January 14, 2025, the Effective Date, the conditions to the effectiveness of the Plan were satisfied or waived and the Plan became effective.

On January 14, 2025 , the Company emerged from the Prepackaged Chapter 11 Case.

On the Effective Date, each holder of the Notes received a pro rata share of 92.94 % of the Common Stock, (subject to dilution) and all of the Company’s outstanding obligations under the Notes and the Indenture were deemed fully satisfied and discharged.

There were no other creditors of the Company impaired in connection with the Prepackaged Chapter 11 Case.

The Company adopted an Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to, among other changes to its prior amended and restated certificate of incorporation, effect an automatic conversion of the Common Stock at a ratio of 1-for-5 .

As a result of the automatic conversion and the issuance of shares of Common Stock pursuant to the Plan, there were approximately 5,163,109 outstanding shares of the Common Stock as of the Effective Date.

On the Effective Date, the Company entered into the Warrant Agreement with Equiniti Trust Company LLC, as warrant agent.

In accordance with the Plan and pursuant to the Warrant Agreement, on the Effective Date, the Company issued the Warrants to purchase an aggregate of 364,516 shares of the Common Stock, at an exercise price of $ 60.95 per share, to stockholders of the Predecessor in accordance with the Prepackaged Chapter 11 Case.

Each Warrant was immediately exercisable upon the issuance date and will expire five years from the issuance date.

In connection with the emergence from the Prepackaged Chapter 11 Case and in accordance with ASC Topic 852, the Company qualified for and adopted fresh start accounting on the Effective Date.

The Company was required to adopt fresh start accounting because (i) the holders of existing voting shares of the Predecessor received less than 50 % of the voting shares of the Successor Company, and (ii) the reorganization value of the assets immediately prior to confirmation of the Plan was less than the post-petition liabilities and allowed claims.

In accordance with ASC Topic 852, with the application of fresh start accounting, the Company allocated its equity value to its individual assets and liabilities based on their estimated fair values.

As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the consolidated financial statements after January 14, 2025, are not comparable with the consolidated financial statements as of or prior to that date.

Reorganization Value

In accordance with ASC Topic 852, with the application of fresh start accounting, the Company allocates the equity value to its individual assets and liabilities based on their estimated fair values in conformity with ASC Topic 820, Fair Value.

As set forth in the Plan and the disclosure statement, the value of the Successor Company was assigned to its equity and estimated to be between $ 115.6 million and $ 179.4 million.

The Company estimated the enterprise value and corresponding equity value utilizing two valuation methods:

a comparable public company analysis, and a discounted cash flow (“DCF”) method.

The DCF analysis is a forward-looking enterprise valuation methodology that estimates fair value by calculating the present value of expected future cash flows to be generated plus a present value of the estimated terminal value.

The Company established an estimate of future cash flows through December 31, 2029, based on the financial projections and assumptions utilized in the Company’s disclosure statement to the Plan, which were derived from earnings forecasts and assumptions regarding growth and profit projections.

A terminal value was calculated using the constant growth method based on the projected cash flows for the final year of the forecast period.

The cash flow assumptions used in the DCF analysis reflected the Company’s best estimates at the time the analysis was prepared.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The financial statements below represent the condensed financial statements of the Debtor as of December 31, 2024 and for the year ended December 31, 2024:

(DEBTOR-IN-POSSESSION)

CONDENSED BALANCE SHEETS

(in thousands, except share and per share amounts)

The selected public companies analysis is based on the enterprise values of selected publicly traded companies that have operating and financial characteristics comparable in certain respects to the Company.

Under this methodology, certain financial multiples that measure financial performance and value are calculated for the selected company.

A reference range was determined utilizing such multiples and is applied to certain of the Company's financial metrics to imply an estimated equity value for the business.

Based on the estimates and assumptions discussed below, the Company estimated the Successor’s equity value to be $ 164.5 million for financial reporting purposes, which is within the range of equity value per the Plan.

The following table reconciles the enterprise value to the estimated fair value of the Successor Common Stock as of the Effective Date (in thousands, except per share data):

Enterprise value

Cash and cash equivalents

Restricted cash

Investments in subsidiaries

LIABILITIES AND STOCKHOLDERS’ EQUITY

Warehouse credit facilities of consolidated VIEs

Long-term debt

Fair value of Successor Equity

Successor warrants

Fair value of Successor common stock

Shares issued upon emergence

Per share value

The reconciliation of the Company’s enterprise value to reorganization value as of the Effective Date is as follows:

(in thousands):

Enterprise value

Cash and cash equivalents

Restricted cash

Other liabilities

Due to affiliates

Reorganization value of Successor assets

The enterprise value and corresponding equity value are dependent upon achieving the future financial results set forth in the Company’s projections, as well as the realization of certain other assumptions.

All estimates, assumptions, valuations and financial projections, including the fair value adjustments, the financial projections, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond the Company’s control.

Accordingly, the Company cannot assure that the estimates, assumptions, valuations or financial projections will be realized and actual results could vary materially.

The results of the Company's analysis indicated that the principal assets requiring fair value adjustments on the Effective Date include finance receivables held for sale, identified intangible assets and leased assets.

Further detail regarding the valuation process is described below.

Finance receivables held for sale, net

As of the Effective Date, the finance receivables held for sale, net were reclassified to finance receivables at fair value, refer to Note 2 — Summary of Significant Accounting Policies for further details.

To estimate the fair value of the finance receivables the Company utilized the valuation methodologies which are used to value finance receivables at fair value on a recurring basis.

Refer to the Fair Value of Financial Instruments Not Carried at Fair Value section in Note 15 — Financial Instruments and Fair Value Measurements for further details.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Intangible Assets

The identified intangible assets of $ 14.2 million, which principally consisted of technology, trade names and trademarks, and customer relationships were estimated based on either the cost approach, relief from royalty or multi-period excess earnings methods.

Significant assumptions for identified intangibles included royalty rates, discount rates, margins, attrition rates, revenue growth rates, and economic lives.

Such fair value measurement of intangible assets is considered Level 3 of the fair value hierarchy.

For the technology-based intangibles that were valued using the relief from royalty income approach, the royalty rate was estimated to be 5.0 % and the discount rate 25 %.

For the technology-based intangibles that were valued using the cost approach, the margin was estimated to be 8.5 %.

For trade names and trademarks valued under the relief from royalty income approach, the royalty rate was estimated to be 0.5 % and the discount rate 25 %.

For customer-related intangible assets that were valued using the multi-period excess earnings method, the attrition rate was estimated to be 10 % and the discount rate 25 %.

Lease Liabilities and Right of Use Assets

The present value of lease liabilities was measured as the present value of the remaining lease payments, as if the leases were new leases as of the Effective Date.

The Company used its incremental borrowing rate (“IBR”) as the discount rate in determining the present value of the remaining lease payments using a fundamental credit rating analysis.

Based upon the corresponding lease terms, the IBRs ranged between approximately 6.2 % - 7.6 %.

Right of use asset values were estimated based on the lease liability.

Consolidated Balance Sheet

The adjustments set forth in the following consolidated balance sheet as of January 14, 2025 reflect the effects of the transactions contemplated by the Plan and executed on the Effective date (reflected in the column “Reorganization Adjustments”), and fair value and other required accounting adjustments resulting from the adoption of fresh start accounting (reflected in the column “Fresh Start Accounting Adjustments”), (in thousands):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of January 14, 2025

Reorganization

Fresh Start Accounting

Cash and cash equivalents

Restricted cash

Finance receivables at fair value

Finance receivables held for sale, net

Interest receivable

Property and equipment, net

Intangible assets, net

Operating lease right-of-use assets

Assets from discontinued operations

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Warehouse credit facilities of consolidated VIEs

Long-term debt

Operating lease liabilities

Other liabilities

Liabilities subject to compromise

Liabilities from discontinued operations

Total liabilities

Total stockholders’ equity

Stockholders’ (deficit) equity:

Common stock - Predecessor

Common stock - Successor

Additional paid-in-capital - Predecessor

Additional paid-in-capital - Successor

Warrants - Successor

Accumulated deficit

Total stockholders’ (deficit) equity

Total liabilities and stockholders’ equity

(DEBTOR-IN-POSSESSION)

CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

Noninterest income:

Gain on debt extinguishment

Total noninterest income

Professional fees

Interest expense on corporate debt

Other expenses

Total expenses

Loss from continuing operations before reorganization items and provision for income taxes

Reorganization adjustments

Represents write-off of prepaid asset related to predecessor directors and officers insurance tail policy.

Represents the settlement of the Company's pre-petition Convertible Notes, as of the Effective date, which is calculated as follows (in thousands):

Convertible note

Accrued interest on convertible senior note

Liabilities subject to compromise

Issuance of 92.94 % of Successor common shares to prepetition convertible note holders (1)

Gain on settlement of liabilities subject to compromise

(1) Note the total issuances of Successor equity in the amount of $ 164.4 million was issued to Predecessor note holders in the amount of $ 150.2 million and Predecessor equity holders in the amount of $ 14.2 million.

The total issuance to the Predecessor equity holders of $ 14.2 million included warrants of $ 2.8 million and 7.06 % of Successor common shares totaling $ 11.4 million.

Represents the cancellation of Predecessor common stock.

Represents the issuance of Successor common stock.

Represents the cancellation of Predecessor additional paid-in capital.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Represents the fair value of 5,163,109 Successor common shares totaling $ 161.7 million and 364,516 Successor warrants totaling $ 2.8 million.

This results in total Successor equity in the amount of $ 164.5 million.

Fresh Start Adjustments

Represents reclassification of finance receivables held for sale to finance receivables at fair value due to a change in Accounting Policy in accordance with fresh start accounting.

Upon reclassification, the finance receivables were adjusted to fair value.

Represents a fair value adjustment to property, plant and equipment, net.

Represents a fair value adjustment to intangible assets, net.

Represents a fair value adjustment to record the initial measurement of the operating lease right-of-use assets to the amount of the operating lease liabilities in accordance with fresh start accounting.

Represents a fair value adjustment to other assets, which includes the write-off of debt issuance costs of warehouse credit facilities.

Represents an adjustment to long-term debt, which includes the write-off of debt issuance costs of $ 2.9 million and an adjustment related to the fair value option election for the 2024-1 securitization debt, which resulted in a fair value adjustment to the securitization debt of $ 1.6 million .

The fair value of the debt was determined using a non-binding quote from broker dealers.

Represents the cumulative impact, as of the Effective Date, to accumulated deficit from the reorganization adjustments and fresh start accounting adjustments.

The cumulative impact to accumulated deficit from the reorganization adjustments is calculated, as follows (in thousands):

Adjustment to Predecessor common stock and additional paid-in-capital

Gain on settlement of liabilities subject to compromise

Warrants and common stock issued to Predecessor equity holders

Reorganization adjustment to total assets

Cumulative impact to accumulated deficit

Reorganization items, net

Loss from continuing operations before provision for income taxes

Provision for income taxes from continuing operations

Net loss from continuing operations

Net loss from discontinued operations

(DEBTOR-IN-POSSESSION)

The Company applied ASC 852 in preparing the consolidated financial statements starting on the Prepackaged Chapter 11 Case petition date.

ASC 852 requires the financial statements, for the periods subsequent to the petition date and up to and including the Effective Date, to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business.

Certain expenses resulting from and recognized during the Company's bankruptcy proceedings, gains on the settlement of liabilities under the Plan and the net impact of fresh start accounting adjustments are recorded in

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DEBTOR-IN-POSSESSION)

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

Operating activities

Net cash (used in) provided by operating activities from continuing operations

Net cash provided by (used in) operating activities from discontinued operations

Net cash (used in) provided by operating activities

Investing activities

Net cash provided by investing activities from continuing operations

Financing activities

Repurchases of convertible senior notes

Proceeds from the issuance of common stock in at-the-market offering, net of offering costs

Net cash provided by (used in) financing activities from continuing operations

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at the beginning of period

Cash, cash equivalents and restricted cash at the end of period

Reorganization items, net in the Company's Consolidated Statements of Operations.

Reorganization items, net consisted of the following (in thousands):

Period from January 1 through January 14,

Net gain on settlement of debt

Net loss on fresh start adjustments

Net loss on reorganization adjustment of other assets

Debt valuation adjustments

Professional fees

Total reorganization items, net

Property and Equipment, Net

5 unchanged sentences

Property and equipment, net

Depreciation and amortization expense was $ 2.1 million and $ 2.1 million for the years ended December 31, 2024 and 2023, respectively.

Upon emergence from the Prepackaged Chapter 11 Case, and application of fresh start accounting, the Company recorded property and equipment at fair value as of the Effective Date, as discussed in Note 6 — Fresh Start Accounting for further details.

Depreciation and amortization expense was $ 1.5 million for the period from January 15, 2025 to December 31, 2025 and $ 2.1 million for the year ended December 31, 2024, respectively.

Depreciation and amortization expense for the period from January 1, 2025, to January 14, 2025, was not material.

The Company recorded impairment charges for "Property and equipment, net" of $ 2.8 million for the year ended December 31, 2024, respectively, related to the Company's internal-use software that no longer have a planned future use.

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13 unchanged sentences

Total intangible assets

Amortization expense for intangible assets was $ 27.0 million and $ 27.0 million for the years ended December 31, 2024 and 2023, respectively.

Amortization expense for intangible assets was $ 1.0 million for the period from January 1, 2025 to January 14, 2025, $ 1.8 million for the period from January 15, 2025 to December 31, 2025, and $ 27.0 million for the years ended December 31, 2024.

The estimated amortization expense for intangible assets subsequent to December 31, 2025, consists of the following (in thousands):

10 unchanged sentences

Total other liabilities

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Warehouse Credit Facilities of Consolidated VIEs

UACC has four senior secured warehouse facility agreements (the “Warehouse Credit Facilities”) with banking institutions as of December 31, 2024.

UACC has three senior secured warehouse facility agreements (the “Warehouse Credit Facilities”), through consolidated VIEs, with banking institutions as of December 31, 2025.

The Warehouse Credit Facilities are collateralized by eligible finance receivables and available borrowings are computed based on a percentage of eligible finance receivables.

2 unchanged sentences

Facility Three

Facility Four

Execution date

3 unchanged sentences

Commitment termination date

July 21, 2025

August 28, 2026

September 12, 2025

April 12, 2027

Aggregate borrowings limit

As of December 31, 2024

As of December 31, 2025 (Successor)

Aggregate principal balance of finance receivables pledged as collateral

1 unchanged sentence

Restricted cash

As of December 31, 2023

As of December 31, 2024 (Predecessor)

Aggregate principal balance of finance receivables pledged as collateral

2 unchanged sentences

As of December 31, 2025 and 2024, the Company's weighted average interest rate on the Warehouse Credit Facilities borrowings was approximately 5.55 % and 6.32 %, respectively.

During the year ended December 31, 2025 the Company renewed three of its previous four Warehouse Credit Facilities.

On July 21, 2025 , the remaining fourth Warehouse Credit Facility, which had a borrowing capacity of $ 200 million, expired pursuant to its terms and was not extended or renewed.

The Company believes that its borrowing capacity from its other Warehouse Credit Facilities is sufficient to support its current operational needs and therefore elected not to renew this commitment.

The Company's ability to utilize its Warehouse Credit Facilities is primarily conditioned on the satisfaction of certain legal, operating, administrative and financial covenants contained within the agreements.

3 unchanged sentences

As of December 31, 2025 and 2024, the Company was in compliance with all covenants related to the Warehouse Credit Facilities.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long Term Debt

Debt instruments, excluding warehouse credit facilities of consolidated VIEs, which are discussed in Note 10 — Warehouse Credit Facilities of Consolidated VIEs, consisted of the following (in thousands):

Convertible senior notes

Securitization debt of consolidated VIEs at fair value

2 unchanged sentences

Junior subordinated debentures

Upon filing of the Prepackaged Chapter 11 Case, the convertible senior notes were reclassified to liabilities subject to compromise.

See Note 6 — Prepackaged Chapter 11 Case for further details.

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Convertible Senior Notes

On June 18, 2021, the Company issued $ 625.0 million aggregate principal amount of the Notes, including $ 75.0 million aggregate principal amount of such notes pursuant to the exercise in full of the overallotment option granted to the initial purchasers.

Convertible Notes due 2026

On June 18, 2021, the Company issued $ 625.0 million aggregate principal amount of 0.75 % unsecured Convertible Senior Notes due 2026 (the “2026 Notes”), including $ 75.0 million aggregate principal amount of such notes pursuant to the exercise in full of the overallotment option granted to the initial purchasers.

The 2026 Notes were issued pursuant to an indenture (the “Indenture”), between the Company and U.S.

Bank National Association, as trustee.

On November 13, 2024, the Company commenced the Prepackaged Chapter 11 Case, pursuant to which each holder of an Allowed Unsecured Notes Claim (as defined therein) received, in full and final satisfaction, settlement, discharge and release of, and in exchange for, its Allowed Unsecured Notes Claim, its pro rata share of 92.94 % of the New Common Stock (subject to dilution by the New Warrants, the MIP, and the Post-Effective Date Equity Awards, all terms as defined therein).

On November 13, 2024, the Company commenced the Prepackaged Chapter 11 Case.

On the Effective Date, the conditions to the effectiveness of the Plan were satisfied or waived and the Plan became effective.

On January 14, 2025, the Company emerged from the Prepackaged Chapter 11 Case.

On the Effective Date, each holder of the 2026 Notes received a pro rata share of 92.94 % of the Common Stock, as defined below, and all of the Company’s outstanding obligations under the 2026 Notes and the Indenture were deemed fully satisfied and discharged.

2 unchanged sentences

On January 14, 2025, the Effective Date, by operation of the Plan, all outstanding obligations under the 2026 Notes and the Indenture were deemed fully satisfied and discharged.

At this time, approximately $ 290.5 million in aggregate principal amount of the Notes were outstanding.

Prior to the Effective Date, the Notes bore interest at a rate of 0.75% per annum, payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2022 .

The Notes had a maturity date of July 1, 2026 , subject to earlier repurchase, redemption or conversion.

The total net proceeds from the offering, after deducting commissions paid to the initial purchasers and debt issuance costs paid to third-parties, were approximately $ 608.9 million.

In 2023, the Company repurchased $ 74.2 million in aggregate principal amount of the Notes, net of deferred issuance costs, for $ 36.5 million in open-market transactions.

The Company recognized a gain on extinguishment of debt of $ 37.9 million for the year ended December 31, 2023.

The Company accounts for the Notes as a single liability-classified instrument measured at amortized cost.

Prior to the Effective Date, t he 2026 Notes bore interest at a rate of 0.75% per annum, payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2022.

The Company accounted for the 2026 Notes as a single liability-classified instrument measured at amortized cost.

As a result of filing the bankruptcy petition, the Company wrote off the remaining unamortized debt discount and debt issuance costs of $ 2.4 million, recorded within "Reorganization items, net" on the consolidated statements of operations.

The net carrying value was $ 290.5 million as of December 31, 2024.

A s of December 31, 2023, the unamortized debt discount and debt issuance costs was $ 3.7 million and the net carrying value was $ 286.8 million.

Prior to the filing of the bankruptcy petition, the Notes were issued at par value and fees associated with the issuance of these Notes were amortized to interest expense using the effective interest method over the contractual term of the Notes.

The interest expense for the years ended December 31, 2024 and 2023 were $ 3.4 million and $ 4.3 million, respectively.

The net carrying value was $ 290.5 million as of December 31, 2024 recorded in "Liabilities subject to compromise" in the consolidated balance sheet.

The 2026 Notes were issued at par value and fees associated with the issuance of these 2026 Notes were amortized to interest expense using the effective interest method over the contractual term of the 2026 Notes.

The interest expense for the year ended December 31, 2024 was $ 3.4 million.

The effective interest rate of the Notes was 1.3 % as of December 31, 2024.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Securitization Debt of Consolidated VIEs

1 unchanged sentence

The Company elected to account for the 2022-2, 2023-1, and 2025-1 securitization debt under the fair value option using the measurement alternative.

Fair value adjustments are recorded in "Realized and unrealized losses, net of recoveries" in the condensed consolidated statements of operations.

Upon emergence from the Prepackaged Chapter 11 Case, and application of fresh start accounting, the Company made an accounting policy election to apply the measurement alternative to the 2024-1 securitization debt.

Fair value adjustments are recorded in "Realized and unrealized losses, net of recoveries" in the consolidated statements of operations.

Refer to Note 16 — Financial Instruments and Fair Value Measurements.

The 2024-1 securitization debt is measured at amortized cost.

For the 2022-2, 2023-1, 2024-1, and 2025-1 securitization transactions, the Company consolidated the VIEs and accounted for these transactions as secured borrowings.

Refer to Note 4 — Variable Interest Entities and Securitizations for further discussion.

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Upon the issuance of the securitization debt for the 2023-1 and 2024-1 securitization transactions, UACC retained the residual interests.

UACC retained the residual interests in the 2023-1, 2024-1, and 2025-1 securitization transactions.

UACC also retains the servicing rights for all finance receivables that were securitized;

therefore, it is responsible for the administration and collection of the amounts owed under the contracts.

In the first quarter of 2023, UACC waived its servicing fees related to the 2022-2 securitization and subsequently consolidated the 2022-2 trust.

The securitization agreements also require certain funds to be held in restricted cash accounts to provide additional collateral for the borrowings or to be applied to make payments on the securitization debt.

4 unchanged sentences

None of the assets of these subsidiaries are available to pay other creditors of the Company or its affiliates.

The securitization debt issued is included in "Long-term debt" on the condensed consolidated balance sheet.

The securitization debt issued is included in "Long-term debt" on the consolidated balance sheet.

The securitization debt of consolidated VIEs consisted of the following (in thousands):

As of December 31, 2024

As of December 31, 2025 (Successor)

Final Scheduled Payment Date

2 unchanged sentences

Outstanding Principal

United Auto Credit 2022-2-C

United Auto Credit 2022-2-D

2 unchanged sentences

April 10, 2029

United Auto Credit 2023-1-C

July 10, 2028

United Auto Credit 2023-1-D

2 unchanged sentences

September 10, 2029

Total rated notes at fair value

United Auto Credit 2024-1-A

August 10, 2026

United Auto Credit 2024-1-B

June 10, 2027

United Auto Credit 2024-1-C

4 unchanged sentences

November 12, 2030

Total rated notes at amortized cost

Unamortized debt issuance costs

Net carrying value

(DEBTOR-IN-POSSESSION)

United Auto Credit 2025-1-A

June 10, 2027

United Auto Credit 2025-1-B

February 10, 2028

United Auto Credit 2025-1-C

June 10, 2030

United Auto Credit 2025-1-D

July 10, 2030

United Auto Credit 2025-1-E

October 10, 2031

Total rated notes at fair value

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2023

As of December 31, 2024 (Predecessor)

Final Scheduled Payment Date

2 unchanged sentences

Outstanding Principal

Net Carrying Value

United Auto Credit 2021-1-D

June 10, 2026

United Auto Credit 2021-1-E

June 10, 2026

United Auto Credit 2021-1-F

September 10, 2027

United Auto Credit 2022-2-B

December 10, 2025

United Auto Credit 2022-2-C

3 unchanged sentences

April 10, 2029

United Auto Credit 2023-1-A

July 10, 2025

United Auto Credit 2023-1-B

July 10, 2028

United Auto Credit 2023-1-C

4 unchanged sentences

September 10, 2029

Total rated notes

Total rated notes at fair value

United Auto Credit 2024-1-A

August 10, 2026

United Auto Credit 2024-1-B

June 10, 2027

United Auto Credit 2024-1-C

October 10, 2029

United Auto Credit 2024-1-D

November 12, 2029

United Auto Credit 2024-1-E

November 12, 2030

Total rated notes at amortized cost

Unamortized debt issuance costs

Net carrying value

The final scheduled payment date represents legal maturity of the remaining balance sheet securitization debt.

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

Expected payments, which will depend on the performance of such receivables, as to which there can be no assurance, are $ 161.4 million in 2025, $ 96.8 million in 2026, and $ 108.1 million in 2027.

In February 2024, UACC exercised its option to repurchase the 2021-1 securitization debt for a total redemption price of $ 35.6 million.

Expected payments, which will depend on the performance of such receivables, as to which there can be no assurance, are $ 199.1 million in 2026, $ 113.4 million in 2027, $ 52.3 million in 2028, and $ 38.6 million in 2029.

The aggregate principal balance and the net carrying value of finance receivables pledged to the securitization debt consists of the following (in thousands):

As of December 31,

Aggregate Principal Balance

7 unchanged sentences

Total finance receivables of CFEs

Financing of Beneficial Interests in Securitizations

On May 3, 2023, UACC entered into a Risk Retention Financing Facility enabling it to finance asset-backed securities issued in its securitization transactions and held by UACC pursuant to applicable Risk Retention Rules.

Under this facility, UACC sells such retained interests and agrees to repurchase them on a future date.

In its initial transaction under this facility, UACC pledged $ 24.5 million of its retained beneficial interests as collateral, and received proceeds of $ 24.1 million, with expected repurchase dates ranging from March 2025 to September 2029 .

Following the completion of the 2024-1 securitization transaction, the Company pledged an additional $ 15.8 million of its retained beneficial interests as collateral under the Risk Retention Financing Facility, and received proceeds of $ 15.6 million, with expected repurchase dates ranging from August 2026 to November 2030 at the initial closing date.

The securitization trusts will

(DEBTOR-IN-POSSESSION)

(1) For the Successor period, net carrying value is equal to fair value.

Financing of beneficial interest in securitizations

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

distribute payments related to UACC's pledged beneficial interests in securitizations directly to the lender, which will reduce the beneficial interests in securitizations and the related debt balance.

On May 3, 2023, UACC entered into a Risk Retention Financing Facility enabling it to finance a portion of its asset-backed securities issued in its securitization transactions and held by UACC, pursuant to applicable Risk Retention Rules.

Under this facility, UACC sells such retained interests and agrees to repurchase them on a future date.

As of December 31, 2025, UACC pledged $ 27.6 million of its retained beneficial interests as collateral, and the outstanding borrowings related to this risk retention financing facility were $ 19.8 million, with expected repurchase dates ranging from June 2027 to October 2031 .

The securitization trusts will distribute payments related to UACC's pledged beneficial interests in securitizations directly to the lender, which will reduce the beneficial interests in securitizations and the related debt balance.

Pledged collateral levels are monitored and are generally maintained at an agreed-upon percentage of the fair value of the amounts borrowed during the life of the transactions.

1 unchanged sentence

At the termination of this agreement, UACC is obligated to return the amounts borrowed.

The outstanding balance of this facility, net of unamortized debt issuance costs, was $ 17.7 million and $ 15.4 million as of December 31, 2024 and December 31, 2023, respectively, and is included in "Long-term debt" on the consolidated balance sheet.

As of December 31, 2024 and December 31, 2023, the fair value of the collateral pledged under this facility was $ 18.3 million and $ 15.8 million, respectively.

The outstanding balance of this facility, net of unamortized debt issuance costs, was $ 19.6 million and $ 17.7 million as of December 31, 2025 and 2024, respectively, and is included in "Long-term debt" on the consolidated balance sheet.

As of December 31, 2025 and 2024, the fair value of the collateral pledged under this facility was $ 20.0 million and $ 18.3 million, respectively.

Junior Subordinated Debentures

18 unchanged sentences

The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Lease term and discount rate

The weighted-average remaining lease term and discount rate for the Company’s operating leases, excluding short-term operating leases, were 5.4 years and 8.0 % as of December 31, 2025 , respectively, and 6.0 years and 7.9 % as of December 31, 2024, respectively.

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As the rate implicit in the lease is generally not readily determinable for the Company’s operating leases, the discount rates used to determine the present value of the Company’s lease liabilities are based on the Company’s incremental borrowing rate at the lease commencement date and commensurate with the remaining lease term.

3 unchanged sentences

The Company’s lease costs and activity for the years ended December 31, 2025 and 2024 were as follows (in thousands):

Period from January 15 through December 31,

Operating lease cost

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Net lease cost

Period from January 15 through December 31,

Other information

2 unchanged sentences

Right-of-use assets obtained in exchange for operating lease liabilities

The Company incurred impairment charges related to operating lease right-of-use assets of $ 2.4 million for the year ended December 31, 2024, related to costs associated with planned facility closures that will continue to be incurred under the contract for its remaining term without economic benefit to the Company.

Lease costs and activity for the period from January 1, 2025, to January 14, 2025, was not material.

The Company incurred impairment charges related to operating lease right-of-use assets of $ 4.2 million for the period from January 15, 2025, to December 31, 2025 and $ 2.4 million for the year ended December 31, 2024, related to costs associated with planned facility closures that will continue to be incurred under the contract for its remaining term without economic benefit to the Company.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Maturity of Lease Liabilities

3 unchanged sentences

Operating lease liabilities

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Commitments and Contingencies

From time to time, the Company is involved in various claims and legal actions that arise in the ordinary course of business and an unfavorable resolution of any of these matters could materially affect the Company’s future results of operations, cash flows or financial position.

On November 13, 2024, the Company commenced the Prepackaged Chapter 11 Case under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court, under the name In re Vroom, Inc ., Case No.

24-90571 (CML).

On January 8, 2025, the Bankruptcy Court entered an order (a) approving the Debtor’s disclosure statement, (b) confirming the Prepackaged Plan of Reorganization of Vroom, Inc.

under Chapter 11 of the Bankruptcy Code (the “Plan”), and (c) granting related relief.

On January 14, 2025, the conditions to the effectiveness of the Plan were satisfied or waived and the Plan became effective, and the Company emerged from the Prepackaged Chapter 11 Case.

Additionally, from time to time, the Company is also party to various disputes that the Company considers routine and incidental to its business.

The Company does not expect the results of any of these routine actions to have a material effect on the Company’s business, results of operations, financial condition, or cash flows.

The Company accrues a liability when a loss is considered probable and the amount can be reasonably estimated.

When a material loss contingency is reasonably possible but not probable, the Company does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can be made.

Legal fees are expensed as incurred.

Beginning in March 2021, multiple putative class actions were filed in the U.S.

District Court for the Southern District of New York by certain of the Company’s stockholders against the Company and certain of the Company’s officers alleging violations of federal securities laws.

District Court for the Southern District of New York by certain of the Company’s stockholders against Vroom, Inc., Vroom Automotive, LLC, and certain of their officers alleging violations of federal securities laws.

The lawsuits were captioned Zawatsky et al.

et al., Case No.

All three of the lawsuits asserted similar claims under Sections 10(b) and 20(a) of the Exchange Act, and SEC Rule 10b-5.

In each case, the named plaintiff(s) sought to represent a proposed class of all persons who purchased or otherwise acquired the Company’s securities during a period from June 9, 2020 to March 3, 2021 (in the case of Holbrook and Hudda ), or November 11, 2020 to March 3, 2021 (in the case of Zawatsky ).

In August 2021, the Court consolidated the cases under the new name In re:

In August 2021, the Court consolidated the cases under the new name I n re:

Securities Litigation , Case No.

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The court-appointed lead plaintiff subsequently filed a consolidated amended complaint that reasserts claims under Sections 10(b) and 20(a) of the Exchange Act, and SEC Rule 10b-5 against the Company and certain of the Company’s officers, and added new claims under Sections 11, 12 and 15 of the Securities Act against the Company, certain of its officers, certain of its directors, and the underwriters of the Company’s September 2020 secondary offering.

The Company filed a motion to dismiss all claims, and briefing of this motion is complete.

The Company believes this lawsuit is without merit and intends to vigorously contest these claims.

While the outcome of any complex legal proceeding is inherently unpredictable and subject to significant uncertainties, based upon information presently known to management, the Company believes that the potential liability, if any, will not have a material adverse effect on the Company’s financial condition, cash flows, or results of operations.

On March 19, 2025, the Court entered an order granting Vroom’s motion to dismiss all claims, and the plaintiffs elected not to file a motion to amend their complaint.

Thereafter, on May 30, 2025, the Court entered a final judgment of dismissal, for which the time period to appeal has expired.

Accordingly, the cases have been closed.

In August 2021, November 2021, January 2022, and February 2022, various Company stockholders filed purported shareholder derivative lawsuits on behalf of the Company in the U.S.

District Court for the Southern District of New York against certain of the Company’s officers and directors, and nominally against the Company, alleging violations of the federal securities laws and breaches of fiduciary duty to the Company and/or related violations of Delaware law based on the same general course of conduct alleged in In re:

District Court for the Southern District of New York against certain of Vroom’s officers and directors, and nominally against the Company, alleging violations of the federal securities laws and breaches of fiduciary duty to the Company and/or related violations of Delaware law based on the same general course of conduct alleged in In re:

Securities Litigation.

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Securities Litigation .

All four derivative suits remain in preliminary stages and there have been no substantive developments in any matter.

(DEBTOR-IN-POSSESSION)

The stockholders who filed these lawsuits have voluntarily dismissed their claims and these cases have been closed.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In April 2022 and April 2024, two of the Company’s stockholders filed separate purported shareholder derivative lawsuits on behalf of the Company in the U.S.

District Court for the District of Delaware against certain of the Company’s officers and directors, and nominally against the Company, alleging violations of the federal securities law and breaches of fiduciary duty to the Company and/or related violations of Delaware law based on the same general course of conduct alleged in In re:

District Court for the District of Delaware against certain of Vroom’s officers and directors, and nominally against the Company, alleging violations of the federal securities law and breaches of fiduciary duty to the Company and/or related violations of Delaware law based on the same general course of conduct alleged in In re:

Securities Litigation .

The case filed in April 2022 is captioned Godlu v.

Hennessy et al., Case No.

Hennessy et al.

22-cv-569, the case filed in April 2024 is captioned Hudda v.

2 unchanged sentences

Securities Litigation .

Both lawsuits remain in preliminary stages and there have been no substantive developments.

The Company expects that the claims asserted in all six of the above derivative suits will be dismissed because the claims asserted in these cases were released by the January 8, 2025 order of the U.S.

Bankruptcy Court for the Southern District of Texas confirming the Company’s plan of reorganization.

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.

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.

the FTC's Mail, Internet, or Telephone Order Merchandise Rule, 16 C.F.R.

the FTC’s Used Motor Vehicle Trade Regulation Rule,16 C.F.R.

and the FTC’s Pre-Sale Availability Rule, 16 C.F.R.

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.

Under the agreement, the Company agreed to pay a total of $ 1 million in customer redress and abide permanently by an injunction.

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.

The case is captioned Federal Trade Commission v.

et al., Case No.

4:24-cv-02496.

In April 2022, the Attorney General of Texas filed a petition 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, Texas Business and Commerce Code § 17.41 et seq., based on alleged deficiencies and other issues in the Company’s marketing of used vehicles and fulfilment of customer orders, including the titling and registration of sold vehicles.

The stockholders who filed these lawsuits have voluntarily dismissed their claims and these cases have been closed.

In April 2022, the Attorney General of Texas filed a petition on behalf of the State of Texas in the District Court of Travis County, Texas against Vroom, Inc.

and Vroom Automotive, LLC, alleging violation of the Texas Deceptive Trade Practices − Consumer Protection Act, Texas Business and Commerce Code § 17.41 et seq., based on alleged deficiencies and other issues in Vroom’s marketing of used vehicles and fulfilment of customer orders, including the titling and registration of sold vehicles.

According to the petition, 80% of the customer complaints referenced in the petition were received in the 12 months prior to April 2022.

The petition is captioned State of Texas v.

Vroom Automotive LLC, and Vroom Inc., Case No.

Vroom Automotive LLC & Vroom Inc.

D-1-GN-001809.

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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.

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 and paid 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.

Under the agreement, the Vroom entities 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.

As of September 1, 2025, the Vroom entities completed their payment obligations under the agreement.

On November 13, 2024, we commenced a voluntary proceeding (the “Prepackaged Chapter 11 Case”) under Chapter 11 of the United States Code, 11 U.S.C.

24-90571 (CML).

On January 8, 2025, the Bankruptcy Court entered an order (a) approving the Debtor’s disclosure statement, (b) confirming the Prepackaged Plan of Reorganization of Vroom, Inc.

under Chapter 11 of the Bankruptcy Code (the “Plan”), and (c) granting related relief.

On January 14, 2025, the conditions to the effectiveness of the Plan were satisfied or waived and the Plan became effective, and the Company emerged from the Prepackaged Chapter 11 Case.

Additionally, from time to time, the Company is involved in various claims and legal actions that arise in the ordinary course of business and an unfavorable resolution of any of these matters could materially affect the Company’s future results of operations, cash flows or financial position.

The Company is also party to various disputes that the Company considers routine and incidental to its business.

The Company does not expect the results of any of these routine actions to have a material effect on the Company’s business, results of operations, financial condition, or cash flows.

The Company accrues a liability when a loss is considered probable and the amount can be reasonably estimated.

Legal fees are expensed as incurred.

As previously disclosed, the Company has been subject to audits, requests for information, investigations and other inquiries from its regulators.

1 unchanged sentence

The Company has incurred fines in certain states and could continue to incur fines, penalties, restitution, or alterations in the Company's business practices, which in turn, could lead to increased business expenses, additional limitations on the Company's business activities and further reputational damage, although to date such expenses have not had a material adverse effect on the Company’s financial condition, cash flows, or results of operations.

Nasdaq Notice of Delisting

On November 21, 2024, the Company received a notice from the Nasdaq Listing Qualifications Department that Nasdaq had determined to delist the Company’s Common Stock.

Nasdaq reached its decision that the Company was no longer suitable for listing pursuant to Nasdaq Listing Rules 5101, 5110(b), and IM-5101-1, as a result of the Company’s

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

filing of the Prepackaged Chapter 11 Case on November 13, 2024.

On November 28, 2024, the Company requested a hearing before a Nasdaq Hearing Panel.

During the pendency of our appeal, on December 2, 2024, the Common Stock was suspended from trading on Nasdaq and was quoted on an over-the-counter market.

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 the Common Stock ceased on the over-the-counter market, and Nasdaq issued a Moot Letter to cancel the hearing and close the matter.

On February 20, 2025, the New Common Stock was relisted for trading on the Nasdaq Global Market.

Other Matters

4 unchanged sentences

Preferred Stock

On June 11, 2020, the Company amended its certificate of incorporation to authorize the issuance of up to 10,000,000 shares of preferred stock.

As of December 31, 2024 , there was no preferred stock issued or outstanding.

On January 14, 2025, the Company amended its certificate of incorporation to authorize the issuance of up to 5,000,000 shares of preferred stock, $ 0.001 par value per share, there was no preferred stock issued or outstanding.

On February 13, 2024, the Company amended its certificate of incorporation to effect a 1-for-80 reverse stock split of shares of the Company’s outstanding Common Stock, such that every 80 shares of Common Stock became one of Common Stock .

The shares of Common Stock authorized for issuance remained unchanged at 500,000,000 and the par value per share of Common Stock remained unchanged at $ 0.001 .

Each share of Common Stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders.

As previously disclosed, effective as of January 14, 2025, the Company amended its certificate of incorporation to authorize the issuance of up to 250,000,000 shares of Common Stock, $ 0.001 par value per share as well as effect an automatic conversion of the Common Stock at a ratio of 1-for-5 , which is referred to as New Common Stock.

As of December 31, 2025 and December 31, 2024, there was no preferred stock issued or outstanding.

Effective as of January 14, 2025, the Company amended its certificate of incorporation to authorize the issuance of up to 250,000,000 shares of Common Stock, $ 0.001 par value per share as well as effect an automatic conversion of the Common Stock at a ratio of 1-for-5 .

Stock-based Compensation

1 unchanged sentence

Awards may be issued in the form of restricted stock units, restricted stock, stock appreciation rights, and stock options.

As of December 31, 2024, the Company has registered an additional 264,299 shares of the Company's common stock to be issued pursuant to the 2020 Plan.

Effective as of June 13, 2024, the stockholders approved an amendment to the 2020 Plan to increase the number of authorized shares by 350,000 shares.

Pursuant to the Plan, the 2020 Plan was further amended on January 14, 2025, to increase the number of shares reserved for issuance under the 2020 Plan to account for the proposed post-emergence management incentive program, which accounts for 15 % of the fully-diluted shares of Common Stock as of immediately following the Effective Date, inclusive of the Warrants, the management incentive program and the converted existing equity awards:

10 % will be allocated for awards of restricted stock units and 5 % will be allocated for awards of stock options.

The amended and restated 2020 Plan authorizes the issuance of:

(i) 1,166,880 shares of common stock, (ii) any shares which are subject to awards under the 2014 Plan or any other prior plans which are forfeited or lapse unexercised and are not issued under the prior plans;

and (iii) an annual increase on the first day of each calendar year beginning on January 1, 2022, and ending on and including January 1, 2030, equal to the lesser of (A) 4 % of the shares outstanding (on an as‑converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares as determined by the Board of Directors or the Compensation Committee.

As of December 31, 2025, there were 49,022 shares available for future issuance under the 2020 Plan.

1 unchanged sentence

Awards under the Inducement Award Plan may only be granted to a newly hired employee who has not previously been an employee or a member of the Board or an employee who is being rehired following a bona fide period of non-employment by the Company, in each case as a material inducement to the employee’s entering into employment.

(DEBTOR-IN-POSSESSION)

An aggregate of 7,500 shares of the Company’s common stock are reserved for issuance under the Inducement Award Plan.

The Inducement Award Plan continues to govern awards granted and outstanding under that plan but no new awards may be granted under that plan.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

aggregate of 37,500 shares of the Company’s common stock are reserved for issuance under the Inducement Award Plan.

As of December 31, 2024 , there were 32,444 shares available for future issuance under the Inducement Award Plan.

Stock Options

The following table summarizes stock option activity for the year ended December 31, 2025:

Exercise Price

Contractual Life

Unvested and outstanding as of January 15, 2025

Forfeited / cancelled

Outstanding as of December 31, 2025

Vested and exercisable as of December 31, 2025

Stock option activity for the period from January 1, 2025, to January 14, 2025, was not material.

The Company recognized $ 0.8 million for the period from January 15, 2025 to December 31, 2025 and $ 0.1 million for the year ended December 31, 2024.

The stock-based compensation expense related to stock options for the period from January 1, 2025 to January 14, 2025 was not material.

As of December 31, 2025, the Company had $ 2.7 million of unrecognized stock-based compensation expense related to stock options that is expected to be recognized over a weighted-average period of 3.0 years.

As of December 31, 2024, the Company had $ 0.1 million of unrecognized stock-based compensation expense that is expected to be recognized over a weighted-average period of 0.4 years.

On March 12, 2025, 259,400 stock options were granted to the CEO whereby 129,700 have a fair value of $ 11.25 per share and an exercise price of $ 45.70 per share, and the remaining 129,700 have a fair value of $ 9.62 per share and an exercise price of $ 60.95 per share.

Additionally, on March 12, 2025, an aggregate of 65,000 stock options were granted to certain members of key management whereby 32,500 have a fair value of $ 11.25 per share and an exercise price of $ 45.70 per share, and the remaining 32,500 have a fair value of $ 9.62 per share and an exercise price of $ 60.95 per share.

The fair values of these stock options were determined using the Black-Scholes option pricing model.

The stock options vest ratably over a four-year period subject to continued employment through each applicable vesting date.

The grant date fair value of stock options granted during the year ended December 31, 2025 was estimated at the time of grant using the Black-Scholes option-pricing model and utilized the following assumptions:

Stock Option 1

Stock Option 2

Fair value of common stock (per share)

Expected term (in years)

Risk-free interest rate

Expected volatility

Dividend yield

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes restricted stock unit ("RSUs") activity for the year ended December 31, 2025:

2 unchanged sentences

Value per Share

Unvested and outstanding as of December 31, 2023

Unvested and outstanding as of January 15, 2025

Vested and released

1 unchanged sentence

Outstanding as of December 31, 2025

Vested and exercisable

Unvested and outstanding as of December 31, 2024

The Company recognized $ 5.8 million and $ 6.9 million of stock-based compensation expense related to RSUs for the years ended December 31, 2024 and 2023, respectively.

RSU activity for the period from January 1, 2025, to January 14, 2025, was not material.

The Company recognized $ 4.3 million for the period from January 15, 2025 to December 31, 2025 and $ 5.8 million of stock-based compensation expense related to RSUs for the year ended December 31, 2024.

The Company recognized $ 0.1 million of stock-based compensation expense related to RSUs for the period from January 1, 2025 to January 14, 2025.

As of December 31, 2025 and 2024 , the Company had $ 13.2 million and $ 1.2 million, respectively, of unrecognized stock-based compensation expense that is expected to be recognized over a weighted-average period of 3.0 and 0.7 years, respectively.

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Subsequent changes in fair value for designated items are reported in earnings.

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4 unchanged sentences

Money market funds

Finance receivables

Finance receivables at fair value

Other assets (beneficial interests in securitizations)

8 unchanged sentences

Money market funds

Finance receivables

Finance receivables at fair value

Other assets (beneficial interests in securitizations)

14 unchanged sentences

To eliminate potential measurement differences, the Company elected the measurement alternative included in ASC 810-30, allowing the Company to measure both the financial assets and liabilities of a qualifying CFE using the fair value of either the CFE’s financial assets or liabilities, whichever is more observable.

Under the measurement alternative prescribed by ASC 810-30, the Company recognizes changes in the CFE’s net assets, including changes in fair value adjustments and net interest earned, in its consolidated statements of operations.

(DEBTOR-IN-POSSESSION)

Upon emergence from the Prepackaged Chapter 11 Case, and application of fresh start accounting, the Company made an accounting policy election to apply the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

measurement alternative to the 2024-1 consolidated CFE.

The Company is required to determine whether the fair value of the financial assets or the fair value of the financial liabilities of the eligible CFEs are more observable, but in either case, the methodology results in the fair value of the financial assets of the securitization trust being equal to the fair value of their liabilities.

5 unchanged sentences

Where a third-party broker dealer quote is not available, an internal model is utilized using unobservable inputs or if the Company has multiple quotes that are not within determined range, it classifies the securitization debt as Level 3 of the fair value hierarchy.

The financial assets of the consolidated CFEs are an aggregate value derived from the fair value of the CFEs liabilities.

The Company determined that CFEs finance receivables in their entirety should be classified as Level 3 of the fair value hierarchy.

16 unchanged sentences

If internally developed models are utilized or if the Company has multiple quotes that are not within a consensus range of each other, the Company deems these securities to be classified as Level 3 of the fair value hierarchy.

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6 unchanged sentences

Transfer within Level 3 categories

Transfers into Level 3

Transfers out of Level 3

Losses included in realized and unrealized losses

4 unchanged sentences

Finance Receivables at Fair Value

Securitization Debt of Consolidated CFEs

Fair value as of January 1, 2025

Reclassification of finance receivables held for sale to finance receivables at fair value, net

Reclassification of finance receivables due to a change in Accounting Policy

Transfer within Level 3 categories

Consolidation of VIEs

Losses included in realized and unrealized losses

1 unchanged sentence

Issuances, net of discount

Fair value as of January 14, 2025

Finance Receivables of Consolidated CFEs

Finance Receivables at Fair Value

Securitization Debt of Consolidated CFEs

Fair value as of January 1, 2024

Transfer within Level 3 categories

Transfers into Level 3

Losses included in realized and unrealized losses

Losses included in Warranties and GAP

Issuances, net of discount

Fair value as of December 31, 2024

The Company's transfers between levels of the fair value hierarchy are assumed to have occurred at the beginning of the reporting period on a quarterly basis.

During the year ended December 31, 2025, transfers out of Level 3 liabilities related to achieving consensus pricing from third-party broker dealers on the 2022-2 E rated notes related to the securitization debt of consolidated CFEs.

During the year ended December 31, 2024, transfers into Level 3 liabilities related to not achieving consensus pricing from third-party broker dealers on the 2022-2 E rated notes related to the securitization debt of consolidated CFEs.

During the year ended December 31, 2023, $ 180.7 million of finance receivables related to the 2022-2 securitization transaction were consolidated and classified as Level 3 and $ 248.1 million of finance receivables held for sale related to the 2023-1 securitization transaction were reclassified to Level 3 finance receivables of consolidated CFEs.

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

The following table presents the gains or losses recorded in "Realized and unrealized losses, net of recoveries" in the consolidated statements of operations related to the eligible financial instruments for which the fair value option was elected (in thousands):

Period from January 15 through December 31,

Period from January 1 through January 14,

Year Ended December 31,

Financial Assets

Finance receivables of CFEs

Finance receivables at fair value

Beneficial interests in securitizations

Financial Liabilities

Debt of securitized VIEs

Finance receivables held for sale, net

Debt of securitized VIEs at fair value

Collection expenses

Total net loss included in "Realized and unrealized losses, net of recoveries"

The following table presents other relevant data related to the finance receivables carried at fair value (in thousands):

As of December 31, 2024

As of December 31, 2025 (Successor)

Finance Receivables of CFEs at Fair Value

4 unchanged sentences

Aggregate fair value of receivables carried at fair value that are on nonaccrual status (90 days or more past due)

As of December 31, 2023

As of December 31, 2024 (Predecessor)

Finance Receivables of CFEs at Fair Value

6 unchanged sentences

The following table presents other relevant data related to securitization debt of consolidated VIEs carried at fair value (in thousands):

As of December 31, 2024

As of December 31, 2025 (Successor)

Securitization debt of consolidated VIEs at Fair Value

1 unchanged sentence

Aggregate fair value of rated notes of securitized VIEs

As of December 31, 2023

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024 (Predecessor)

Securitization debt of consolidated VIEs at Fair Value

1 unchanged sentence

Aggregate fair value of rated notes of securitized VIEs

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value of Financial Instruments Not Carried at Fair Value

The carrying amounts of restricted cash and other liabilities approximate fair value due to their short-term nature.

The carrying value of the Warehouse Credit Facilities was determined to approximate fair value due to its short-term duration and variable interest rate that approximates prevailing interest rates as of each reporting period.

The carrying value of the Warehouse Credit Facilities and related party lines of credit were determined to approximate fair value due to its short-term duration and variable interest rate that approximates prevailing interest rates as of each reporting period.

Finance receivables held for sale, net :

For finance receivables eligible to be sold in a securitization, the Company determines the fair value of these finance receivables utilizing sales prices based on estimated securitization transactions, adjusted for transformation costs, risk and a normal profit margin associated with securitization transactions.

For finance receivables eligible to be sold in a securitization, the Company determined the fair value of these finance receivables utilizing sales prices based on estimated securitization transactions, adjusted for transformation costs, risk and a normal profit margin associated with securitization transactions.

Such fair value measurement is considered Level 3 of the fair value hierarchy.

As of December 31, 2024, the carrying value and fair value of these finance receivables held for sale, net were $ 114.6 million.

As of December 31, 2023, the Company determined that all of these finance receivables should be marked to their fair value of $ 468.8 million based on the results of the Company's lower of amortized cost basis or fair value analysis.

For finance receivables that were securitized, the Company determines the fair value of these finance receivables by estimating the proceeds that would be generated from selling the notes and the residual interests in the securitization trust.

The fair value of the notes was determined utilizing non-binding quoted prices provided by broker dealers, as discussed above, and the Company uses a discounted cash flow model to estimate the fair value of the residual interests in the trust.

As of December 31, 2025, the Company did no t have any finance receivables held for sale, net.

As of December 31, 2024, the carrying value and fair value of the finance receivables held for sale, net were $ 114.6 million.

For finance receivables sold in a securitization, the Company determined the fair value of these finance receivables by estimating the proceeds that would be generated from selling the notes and the residual interests in the securitization trust.

The fair value of the notes was determined utilizing non-binding quoted prices provided by broker dealers, as discussed above, and the Company used a discounted cash flow model to estimate the fair value of the residual interests in the trust.

Such fair value measurement is considered Level 3 of the fair value hierarchy.

As of December 31, 2024, the carrying value and fair value of these finance receivables held for sale, net were $ 178.8 million and $ 183.3 million, respectively.

As of December 31, 2023, there were no finance receivables held for sale that were securitized.

As of December 31, 2025, there were no finance receivables held for sale, net that were sold in a securitization.

As of December 31, 2024, the carrying value and fair value of the finance receivables held for sale, net that were sold in a securitization were $ 178.8 million and $ 183.3 million, respectively.

The significant unobservable inputs utilized in the discounted cashflow model include the following:

3 unchanged sentences

Discount Rate

In addition, the Company has finance receivables that are currently ineligible to be sold in a securitization.

As of December 31, 2024 and 2023 , the carrying value and fair value of these finance receivables held for sale, net were $ 24.8 million and $ 34.8 million, respectively.

These are finance receivables that became delinquent and currently do not meet the securitization criteria.

The Company uses a discounted cash flow model to estimate the fair value of future recoveries for these finance receivables.

In addition, the Company also had finance receivables that were no longer eligible to be sold in a securitization.

As of December 31, 2025, there were no finance receivables held for sale, net, that were no longer eligible to be sold in a securitization.

As of December 31, 2024, the carrying value and fair value of the finance receivables held for sale, net were no longer eligible to be sold in a securitization were $ 24.8 million.

These were finance receivables that became delinquent and no longer meet the expected securitization sales criteria.

The Company used a discounted cash flow model to estimate the fair value of future recoveries for finance receivables.

Such fair value measurement is considered Level 3 of the fair value hierarchy.

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26.3 % - 47.2 %

12.7 % - 20.1 %

Discount Rate

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Convertible Senior Notes:

The fair value of the 2030 Notes, which are not carried at fair value on the Company's consolidated balance sheets, approximated their carrying value as of December 31, 2025.

The fair value of the 2026 Notes, which are not carried at fair value on the accompanying consolidated balance sheets, was determined utilizing actual bids and offer prices of the 2026 Notes in markets that are not active and are classified within Level 2 of the fair value hierarchy.

(in thousands)

Carrying value

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Securitization Debt:

The fair value of the 2024-1 securitization debt, which is not carried at fair value on the accompanying condensed consolidated balance sheets, was determined utilizing non-binding quoted prices provided by broker dealers, as discussed above, and classified as Level 2 of the fair value hierarchy.

Upon emergence from the Prepackaged Chapter 11 Case, and application of fresh start accounting, the Company made an accounting policy change to elect the fair value option and apply the measurement alternative to the 2024-1 securitization debt.

As of December 31, 2024, the 2024-1 securitization debt was not carried at fair value on the Company's consolidated balance sheet.

As of December 31, 2024, the fair value of the debt was determined utilizing non-binding quoted prices provided by broker dealers, as discussed above, and classified as Level 2 of the fair value hierarchy.

(in thousands)

Carrying value

Financing of beneficial interests in securitizations:

The fair value of the financing of beneficial interests in securitizations, which are not carried at fair value on the accompanying consolidated balance sheets, approximated their carrying value as of December 31, 2024 and December 31, 2023 and are classified within Level 3 of the fair value hierarchy.

The fair value of the financing of beneficial interests in securitizations, which are not carried at fair value on the accompanying consolidated balance sheets, approximated their carrying value as of December 31, 2025 and 2024 and are classified within Level 3 of the fair value hierarchy.

Junior Subordinated Debentures:

The fair value of the junior subordinated debentures, which are not carried at fair value on the accompanying consolidated balance sheets, approximated their carrying value as of December 31, 2025 and 2024 and are classified within Level 3 of the fair value hierarchy.

Fresh start accounting :

In accordance with ASC Topic 852, with the application of fresh start accounting, the Company allocated the reorganization value to its individual assets and liabilities based on their estimated fair values in conformity with ASC Topic 805, Business Combinations.

Refer to Note 6 — Fresh Start Accounting for further details.

Segment Information

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Certain shared costs, including corporate administration, are allocated to segments based upon specific allocation of expenses.

Corporate activities also include the runoff of legacy Vroom third party vehicle service and GAP policies sold prior to the Ecommerce Wind-Down as well as certain Vroom contracts, primarily Software and IT related, that have been renegotiated and right-sized to account for reduced headcount following the Ecommerce Wind-down.

The Company retrospectively restated segment results for the comparative period to conform to the new presentation.

Corporate activities also include the runoff of legacy Vroom third party vehicle service and GAP policies sold prior to the Ecommerce Wind-Down.

No operating segments have been aggregated to form the reportable segments.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company determined its operating segments based on how the chief operating decision maker (“CODM”) reviews the Company’s operating results in assessing performance and allocating resources.

The Company’s CODM is the chief executive office (“CEO”).

The CODM reviews Adjusted EBITDA for each of the reportable segments.

Adjusted EBITDA is defined as net loss before interest expense on corporate debt, interest income on cash and cash equivalents, income tax expense, depreciation and amortization expense, stock compensation expense, bankruptcy costs, reorganization items, severance expense related to the continuing operations, gain on debt extinguishment and long-lived asset impairment charges, incurred by the segment.

During the period from January 15, 2025, to December 31, 2025, the CODM changed the profitability measure reviewed for the Company's segment from Adjusted EBITDA to Adjusted net income (loss).

The CODM reviews Adjusted net income (loss) for each of the reportable segments.

Adjusted net income (loss) is defined as net income (loss) from continuing operations adjusted for stock compensation expense, severance expense, bankruptcy costs (which represent professional fees incurred related to the bankruptcy prior to filing of the petition and post-emergence), reorganization items, net (which relate to certain charges incurred during the bankruptcy proceedings, such as legal and professional fees incurred directly as a result of the bankruptcy proceeding, the write-off of deferred financing costs and discount on debt subject to compromise and other related charges), operating lease right-of-use assets impairment and long-lived asset impairment charges incurred by segment.

All expense categories on the consolidated statement of operations are significant and there are no other significant segment expenses that would require disclosure.

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Accordingly, the Company does no t report segment asset information.

As of December 31, 2024 and December 31, 2023, long-lived assets were predominantly located in the United States.

As of December 31, 2025 and 2024, long-lived assets were predominantly located in the United States.

The UACC reportable segment represents UACC’s operations with its network of third-party dealership customers, including the purchases and servicing of vehicle installment contracts.

The segment also includes the runoff portfolio of retail installment sale contracts originated for Vroom or purchased from Vroom prior to the Ecommerce Wind-Down.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The CarStory reportable segment represents sales of AI-powered analytics and digital services to automotive dealers, automotive financial services companies and others in the automotive industry.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Information about the Company’s reportable segments and corporate activities are as follows (in thousands):

Period from January 15 through December 31,

Period from January 1 through January 14,

Interest income

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Realized and unrealized losses, net of recoveries

Net interest income after losses and recoveries

Net interest income (loss) after losses and recoveries

Noninterest (loss) income:

Servicing income

Warranties and GAP income (loss), net

Warranties and GAP income, net

CarStory revenue

Gain on debt extinguishment

Total noninterest (loss) income

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Total expenses

Adjusted EBITDA

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Provision for income taxes from continuing operations

Adjusted net income (loss)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The reconciliation between reportable segment Adjusted EBITDA to consolidated loss from continuing operations before provision for income taxes is as follows (in thousands):

Adjusted EBITDA by Segment

Interest expense on corporate debt

Interest income on cash and cash equivalents

Interest income (expense)

Interest expense:

Warehouse credit facility

Securitization debt

Total interest expense

Net interest income (loss)

Realized and unrealized losses, net of recoveries

Net interest income (loss) after losses and recoveries

Noninterest (loss) income:

Servicing income

Warranties and GAP income (loss), net

CarStory revenue

Total noninterest (loss) income

Compensation and benefits

Professional fees

Software and IT costs

Depreciation and amortization

Interest expense on corporate debt

Impairment charges

Other expenses

Total expenses

Provision for income taxes from continuing operations

Adjusted net loss

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The reconciliation between reportable segment Adjusted net income (loss) to net loss from continuing operations before provision for income taxes is as follows (in thousands):

Period from January 15 through December 31,

Period from January 1 through January 14,

Adjusted net income (loss)

Stock compensation expense

Severance expense

Impairment charges

Corporate loss from continuing operations before reorganization items and provision for income taxes

Loss from continuing operations before reorganization items and provision for income taxes

Corporate income (loss) from continuing operations

Reorganization items

Net loss from continuing operations

Income Tax Provision

Domestic and foreign pretax income (loss) from continuing operations are as follows for the years ended December 31, 2024 and 2023 (in thousands):

Domestic and foreign pretax income (loss) from continuing operations are as follows (in thousands):

Period from January 15 through December 31,

Period from January 1 through January 14,

The components of the provision for income taxes from continuing operations are as follows (in thousands):

Period from January 15 through December 31,

Period from January 1 through January 14,

State and local

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Provision (benefit) for income taxes

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was signed into law.

The IRA includes implementation of a new alternative minimum tax, an excise tax on stock buybacks, and significant tax incentives for energy and climate initiatives, among other provisions.

The Company evaluated the provisions included under the IRA and the provisions do not have a material impact to the Company's consolidated financial statements.

The components of income taxes paid (net of refunds) are as follows (in thousands):

Period from January 15 through December 31,

State and local

Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions (in thousands):

Period from January 15 through December 31,

Massachusetts

South Carolina

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law.

The Company evaluated the relevant provisions of OBBBA and determined that OBBA did not have a material impact on the Company’s consolidated financial statements.

Tax Rate Reconciliation

The Company’s effective tax rate from continuing operations for the years ended December 31, 2025 and 2024 was ( 0.56 )% and ( 0.52 )%, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the provision for income taxes from continuing at the statutory rate to the amount reflected in the consolidated statements of operations is as follows (in thousands):

Income taxes at statutory rate

State income taxes, net of federal benefit

Period from January 15 through December 31,

Period from January 1 through January 14,

federal statutory tax rate

State and local income taxes, net of federal benefit

Foreign Rate Differential

Permanent differences

Statutory tax rate difference between Serbia and United States

Eﬀect of Cross-Border Tax Laws

Nontaxable or nondeductible

Share-based Compensation

Cancellation of Debt Income Exclusion

Other Permanent differences

Change in valuation allowance

Provision for income taxes

Other adjustments

Provision (benefit) for income taxes

Deferred Tax Assets (Liabilities)

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The Company maintained a full valuation allowance against its net deferred tax assets because the Company has determined that it is more likely than not that these assets will not be fully realized based on a current evaluation of expected future taxable income and the Company being in a cumulative 3-year loss position.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Significant components of the Company’s deferred tax assets and liabilities from continuing operations are as follows (in thousands):

As of December 31,

Period from January 15 through December 31,

Deferred tax assets:

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Intangible amortization

Unrealized Gains/Losses

Repo Expenses

2 unchanged sentences

Net deferred income taxes

As of December 31, 2024, 2023 , and 2022, the consolidated valuation allowance balance for both continuing and discontinued operations was $ 400.2 million, $ 358.7 million and $ 258.8 million, respectively and the consolidated change in valuation allowance for both continuing and discontinued operations was $ 41.5 million and $ 99.9 million for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2025, 2024 , and 2023, the consolidated valuation allowance balance for both continuing and discontinued operations was $ 398.2 million, $ 400.2 million and $ 358.7 million, respectively.

The consolidated change in valuation allowance for both continuing and discontinued operations included additions of $ 30.3 million and $ 6.4 million for federal and state valuation adjustments, partially offset by Section 108 tax attribute reductions of $ 37.7 million and $ 1.0 million change in deferred assets for the year ended December 31, 2025.

The consolidated change in valuation allowance for both continuing and discontinued operations was $ 41.5 million for the year ended December 31, 2024.

Net Operating Losses

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The company is not currently under audit for any US federal or state income tax audits.

The Internal Revenue Code (IRC) Section 382 provides for a limitation of the annual use of net operating loss and tax credit carryforwards following certain ownership changes (as defined by the IRC Section 382) that limits the Company’s ability to utilize these carryforwards.

The Company completed a Section 382 study to determine the applicable limitation, if any.

It was determined that the Company has undergone four ownership changes the most recent of which was April 2021.

These changes will substantially limit the use of the net operating losses generated before the change in control.

The Internal Revenue Code (“IRC”) Section 382 provides for a limitation of the annual use of net operating loss and tax credit carryforwards following certain ownership changes (as defined by the IRC Section 382).

The Company completed a Section 382 study and determined that the Company has undergone five ownership changes, the most recent of which occurred on the Effective Date.

The IRC Section 382 limitations arising as a result of these ownership changes generally limit the use of the net operating losses generated before the applicable ownership change.

However, an exception to the IRC Section 382 limitation applies when, among other requirements, so-called “qualified creditors” and shareholders of a corporation in a title 11 Case receive, in respect of their claims and interests, as applicable, at least 50% of the vote and value of the stock of the corporation pursuant to a confirmed chapter 11 plan (the “382(l)(5) Exception”).

The Company expects that the 382(l)(5) Exception applied to the ownership change occurring on the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Effective Date and, accordingly, that the Company may not have any limitation on its utilization of federal NOL carryforwards generated prior to emergence from the Prepackaged Chapter 11 Case (other than limitations which existed before the commencement of the Prepackaged Chapter 11 Case).

However, the Company may be limited in its utilization of its federal NOL carryforwards generated before the Effective Date if it triggers another ownership change within two years after the Effective Date.

On the Effective Date, the Company consummated its Prepackaged Chapter 11 Case.

For US tax purposes the Company would be required to recognize cancellation of debt income (“CODI”) in the amount equal to the excess of the adjusted issue price of the debt discharged over the value of any new debt or equity that was issued.

However, IRC Section 108 provides that CODI may be excluded from gross income to the extent that the debt is discharged in a title 11 Case.

In lieu of recognizing CODI, IRC Section 108 requires the Company to reduce its tax attributes, including net operating losses, capital losses, tax credits, depreciable assets, investment in subsidiaries and other investments, in the amount of the CODI that is excluded from gross income.

Uncertain Tax Positions

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To date, no interest or penalties have been accrued in relation to uncertain tax positions.

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders:

Period from January 15 through December 31,

Period from January 1 through January 14,

(in thousands, except share and per share amounts)

Net loss from continuing operations

Net loss from discontinued operations

Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted

Net loss per share attributable to common stockholders, continuing operations, basic and diluted

Net loss per share attributable to common stockholders, discontinued operations, basic and diluted

Total net loss per share attributable to common stockholders, basic and diluted

Net (loss) income from continuing operations

Net income (loss) from discontinued operations

Net (loss) income

Net (loss) income per share attributable to common stockholders, basic:

Continuing operations

Discontinued operations

Net (loss) income per share attributable to common stockholders, diluted:

Continuing operations

Discontinued operations

Weighted-average number of shares outstanding used to compute net (loss) income per share attributable to common stockholders:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following potentially dilutive shares were not included in the calculation of diluted shares outstanding for the periods presented as the effect would have been anti-dilutive:

As of December 31,

Convertible senior notes

As of January 14,

As of December 31,

Convertible notes

Stock options

Restricted stock units

Revised Consolidated Financial Statements Information

In March 2024, in connection with the Ecommerce Wind-Down, the Company identified errors related to an overstatement of credit balances in other current liabilities and accounts payable as of and prior to December 31, 2023.

The Company incorrectly recorded approximately $ 1.4 million of other current liabilities and $ 4.1 million of accounts payable, instead of a reduction in operating expenses of $ 5.5 million, of which $ 4.6 million related to annual periods prior to 2023.

The Company evaluated the impact of these errors and concluded that they are not material to any previously issued annual or interim consolidated financial statements.

As a result of these errors, the Company has revised the consolidated financial statements as of December 31, 2023 and for the year then ended.

The Company has reflected these revisions in its 2024 Quarterly Reports on Form 10-Q and in its 2024 Annual Report on Form 10-K.

The following table (in thousands) sets forth the Company’s consolidated results of operations for the year ended December 31, 2023, which have been retrospectively adjusted for the impact of the immaterial errors identified as well as new financial statement presentation and discontinued operations presentation related to the Ecommerce Wind-Down.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2023

Discontinued Operations

Presentation Reclasses (1)

As Recasted and Revised

Total revenue

Total cost of sales

Total gross profit

Selling, general and administrative expenses

Depreciation and amortization

Impairment charges

Loss from operations

Gain on debt extinguishment

Interest expense

Interest income

Other loss (income), net

Interest income

Total interest expense

Net interest income

Realized and unrealized losses, net of recoveries

Net interest income after losses and recoveries

Total noninterest (loss) income

Total expenses

Loss before provision (benefit) for income taxes

Provision (benefit) for income taxes

Net loss from continuing operations

Net loss from discontinued operations

Total net loss

Net loss per share attributable to common stockholders, continuing operations, basic and diluted

Net loss per share attributable to common stockholders, discontinued operations, basic and diluted

Total net loss per share attributable to common stockholders, basic and diluted

Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted

(1) Reflects revised presentation as a result of the Ecommerce Wind-Down.

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The impacts to our Consolidated Balance Sheet as of December 31, 2023 were as follows (in thousands):

As of December 31, 2023

Discontinued Operations

Presentation Reclasses (1)

As Recasted and Revised

Current Assets:

Cash and cash equivalents

Restricted cash

Accounts receivable, net of allowance

Finance receivables at fair value

Finance receivables held for sale, net

Beneficial interests in securitizations

Prepaid expenses and other current assets

Total current assets

Finance receivables at fair value

Property and equipment, net

Intangible assets, net

Operating lease right-of-use assets

Interest Receivable

Other assets (including other assets of consolidated VIEs of $ 1.8 million)

Assets from discontinued operations

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

Accrued expenses

Vehicle floorplan

Warehouse credit facilities of consolidated VIEs

Current portion of long-term debt

Deferred revenue

Operating lease liabilities, current

Other current liabilities

Total current liabilities

Long-term debt, net of current portion

Operating lease liabilities, excluding current portion

Other long-term liabilities

Liabilities from discontinued operations

Total liabilities

Commitments and contingencies

Stockholders’ equity:

Common stock, $ 0.001 par value;

500,000,000 shares authorized as of December 31, 2023;

1,791,286 shares issued and outstanding as of December 31, 2023

Additional paid-in-capital

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

(1) Reflects revised presentation as a result of the Ecommerce Wind-Down.

There is no impact to our Consolidated Statements of Changes in Stockholders’ Equity for the year ended December 31, 2023 other than the impact to accumulated deficit as a result of the changes in net loss as presented above and as a result of impacts for periods prior to 2023 decreasing opening accumulated deficit as of December 31, 2022 by $ 4.6 million.

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

There is no impact to net cash used in (provided by) operating activities;

investing activities or financing activities in our Consolidated Statements of Cash Flows.

Subsequent Event

As discussed in Note 1 – Description of Business and Basis of Presentation, on November 13, 2024, the Company commenced the Prepackaged Chapter 11 Case.

On the Effective Date, the conditions to the effectiveness of the Plan were satisfied or waived and the Plan became effective.

The Company emerged from the Prepackaged Chapter 11 Case on January 14, 2025 .

In connection with the Company's emergence from bankruptcy and in accordance with ASC Topic 852, the Company qualified for and adopted fresh start accounting on the Effective Date.

The Company was required to adopt fresh start accounting because (i) the holders of existing voting shares of the Predecessor Company received less than 50 % of the voting shares of the Successor Company, and (ii) the reorganization value of the assets immediately prior to confirmation of the Plan was less than the post-petition liabilities and allowed claims.

References to “Successor” relate to the Company's financial position and results of operations after the Effective Date.

References to “Predecessor” refer to the Company's financial position and results of operations on or before the Effective Date.

In accordance with ASC Topic 852, with the application of fresh start accounting, the Company will allocate the reorganization value to its individual assets and liabilities based on their estimated fair values in conformity with ASC Topic 805, Business Combinations.

The reorganization value represents the fair value of the Successor Company's assets before considering liabilities.

As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the consolidated financial statements after January 14, 2025 will not be comparable with the consolidated financial statements as of or prior to that date.

Conversion of Common Stock

Immediately prior to the Effective Date, there were 1,822,577 outstanding shares of the Company’s Common Stock.

The Company has adopted an Amended and Restated Certificate of Incorporation to, among other changes to the Company’s prior amended and restated certificate of incorporation, effect an automatic conversion of the Common Stock at a ratio of 1-for-5 .

As a result of the automatic conversion and the issuance of shares of Common Stock pursuant to the Plan, there were approximately 5,163,109 outstanding shares of New Common Stock as of the Effective Date.

2020 Incentive Award Plan

Pursuant to the Plan, the Company’s existing 2020 Incentive Award Plan (as amended from time to time, the “2020 Plan”), was amended to increase the number of shares reserved for issuance under the 2020 Plan to account for the proposed post-emergence management incentive program, which accounts for 15 % of the fully-diluted shares of New Common Stock as of immediately following the Effective Date, inclusive of the Warrants, the management incentive program and the converted existing equity awards:

10 % will be allocated for awards of restricted stock units and 5 % will be allocated for awards of stock options.

Amendment to Articles of Incorporation or Bylaws

On January 14, 2025, the Board adopted (i) the Company’s Certificate of Incorporation to, among other changes to the Company’s prior amended and restated certificate of incorporation, effect the automatic conversion of Common Stock and (ii) the Amended and Restated Bylaws (the “Bylaws”).

Set forth below are the principal changes to the Certificate of Incorporation and Bylaws.

Capital Stock.

The Company’s authorized capital stock consists of 255,000,000 shares, consisting of (i) 250,000,000 shares of Common Stock, $ 0.001 par value per share;

and (ii) 5,000,000 shares of Preferred Stock, $ 0.001 par value per share.

(DEBTOR-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Certificate of Incorporation and the Bylaws grant stockholders of the Company the power to (i) alter, amend, change or repeal any provision of the Certificate of Incorporation and (ii) adopt, amend, alter or repeal the Bylaws, in each case, by the affirmative vote of the holders of a majority of the voting power of the stock outstanding and entitled to vote thereon, subject to certain ownership limits by the Company’s significant stockholder, Mudrick Capital Management, L.P.

and its affiliates (collectively, the “Significant Stockholder”).

The Certificate of Incorporation and the Bylaws provide that any and all actions required or permitted to be taken by the stockholders of the Company may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing are signed by holders of at least the minimum number of votes necessary to take such action at a meeting, subject to certain ownership limits by the Significant Stockholder.

Board of Directors.

The Certificate of Incorporation and the Bylaws grant stockholders of the Company the power to (i) remove the entire Board or any individual director, with or without cause and (ii) fill any vacancy or newly created directorship in the Board, in each case, by the affirmative vote of the holders of a majority of the voting power of the stock outstanding and entitled to vote thereon, subject to certain ownership limits by the Significant Stockholder.

Limitation of Liability and Indemnification of Officers .

The Certificate of Incorporation provides that no senior officers shall be personally liable to the Company or the shareholders for monetary damages for breach of fiduciary duty as an officer to the fullest extent permitted by the DGCL.

Special Stockholder Meetings.

The Certificate of Incorporation provides that the Secretary of the Corporation may request a special meeting at the request of the holders of at least a majority of the outstanding shares of capital stock of the Corporation, subject to certain ownership limits by the Significant Stockholder.

Corporate Opportunities.

The Certificate of Incorporation provides that, to the fullest extent permitted by law, the Company will renounce any interest or expectancy in any business opportunity, transaction or matter in which the Significant Stockholder, any of its officers, directors, partners or employees and any portfolio company in which any of the foregoing have an equity interest (other than the Company) (each, a “Specified Party”) participates or seeks or desires to participate, and each such Specified Party with have no duty to present such corporate opportunity to the Company.

Credit Agreement with Mudrick Capital Management, L.P

On March 8, 2025, Vroom, Inc., UACC and its indirect subsidiary Darkwater Funding LLC, as co-borrowers, entered into a credit agreement with Mudrick Capital Management, L.P.

(“Lender”), who as of January 14, 2025 was a related party as they are a 76.5 % shareholder of the Company, for a $ 25.0 million delayed draw term loan facility (“Delayed Draw Facility”).

The following table sets forth a reconciliation from basic to diluted weighted-average number of shares outstanding used to compute net (loss) income per share attributable to common stockholders:

Period from January 1 through January 14,

Weighted-average number of shares outstanding used to compute net (loss) income per share attributable to common stockholders:

Convertible 2026 Notes

Potentially dilutive common shares assumed conversion of debt using the if-converted method.

Related Party Transactions

Related Party Line of Credit

On March 8, 2025, Vroom, Inc., UACC and its indirect subsidiary Darkwater Funding LLC, as co-borrowers, entered into a credit agreement for a $ 25.0 million Delayed Draw Facility with Mudrick Capital Management, L.P.

(“Lender”), who is a 76.5 % shareholder of the Company and as of January 14, 2025 became a related party.

On October 9, 2025 the maximum facility amount was amended from $ 25.0 million to $ 35.0 million effective as of September 30, 2025.

The Delayed Draw Facility allows for multiple drawdowns by each co-borrower, subject to satisfaction of usual and customary conditions precedent.

6 unchanged sentences

The Delayed Draw Facility includes certain usual and customary covenants with respect to the co-borrowers’ activities and the collateral.

Warehouse Credit Facility Renewal

On March 8, 2025, we renewed one of our Warehouse Credit Facilities, now expiring June 2026.

The aggregate borrowing limit and significant terms of the agreement remained unchanged except for an increase in the minimum liquidity covenant.

Refer to Note 10 — Warehouse Credit Facilities of Consolidated VIEs.

As of December 31, 2025, the Company drew $ 8.0 million against the Delayed Draw Facility.

On November 25, 2025, Vroom, Inc.

entered into a Note Purchase Agreement with Robert J.

Mylod, Jr., the Independent Executive Chair of the board of directors of the Company.

Pursuant to the Note Purchase Agreement, the Company issued the Delayed Draw Notes in a maximum aggregate principal commitment amount of $ 10.5 million.

The Delayed Draw Notes bear interest, payable quarterly in arrears, at a per annum rate equal to Term SOFR (three-month tenor) plus 7.50 %, and contain customary covenants, events of default, and conditions for subsequent note issuance.

The Delayed Draw Notes are secured by the assets of the Company under the security agreement issued by the Company.

The Notes mature on November 25, 2026 ;

however, the Notes may be prepaid at any time, in whole or in part, without penalty or premium.

As of December 31, 2025, the Company drew $ 10.5 million against the Delayed Draw Notes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Related Party Convertible Notes due 2030

On August 29, 2025, the Company issued $ 10.0 million aggregate principal amount of 5.00 % unsecured Convertible Notes due 2030 (the “2030 Notes”).

The 2030 Notes were issued pursuant to a Note Purchase Agreement with Annox Capital, LLC and Robert J.

Mylod, Jr, the Managing Partner of Annox Capital, LLC and the Independent Executive Chair of the board of directors of the Company.

The 2030 Notes bear interest at a rate of 5.0 % per annum, payable quarterly in arrears on January 1, April 1, July 1, and October 1 of each year, commencing on October 1, 2025.

The 2030 Notes will mature on October 1, 2030 , unless earlier converted.

Each $ 1,000 principal amount of the 2030 Notes will initially be convertible into 28.5714 shares of the Company’s common stock, which is equivalent to an initial conversion price of approximately $ 35.00 per share, subject to adjustment upon the occurrence of specified events.

The 2030 Notes are convertible at the option of the noteholders given the following:

• A noteholder may elect to convert at the market price conversion rate (as defined within the Note Purchase Agreement) any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date;

provided that the aggregate conversion shares (as defined within the Note Purchase Agreement) issued under any 2030 Notes shall not exceed 20 % of the Company’s outstanding Common Stock as of the issuance date unless shareholder approval is obtained or is not required under the relevant exchange rules for issuance in excess of the 20 % cap;

• A noteholder may convert its 2030 Notes at any time from, and including, July 1, 2030 until the close of business on the second scheduled trading day immediately before the maturity date;

• The 2030 Notes will be automatically converted if for thirty consecutive trading days, (i) the last reported sale price is above $ 50 per share and (ii) the average daily trading volume per trading day is at least 25,000 shares and (iii) an effective registration statement is available with respect to the shares received upon conversion;

• Upon the occurrence of specific corporate events such as a change in control or certain beneficial distributions to common stockholders (as set forth in the Note Purchase Agreement).

The Company may settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election.

If the Company undergoes a fundamental change (as defined in the Note Purchase Agreement), subject to certain conditions, holders of the 2030 Notes may require the Company to repurchase for cash all or any portion of the 2030 Notes at a repurchase price equal to the principal amount of the 2030 Notes plus any accrued and unpaid interest.

In addition, if specific corporate events occur prior to the maturity date or if the Company issues a notice of redemption, the Company will increase the conversion rate by pre-defined amounts for a holder who elects to convert their 2030 Notes in connection with such a corporate event.

The Company accounts for the 2030 Notes as a single liability-classified instrument measured at amortized cost.

As of December 31, 2025, the net carrying value was $ 10.0 million.

The 2030 Notes were issued at par value and fees associated with the issuance of these 2030 Notes were immaterial.

The interest expense was immaterial for the year ended December 31, 2025.

The effective interest rate of the 2030 Notes is 5 %.

Subsequent Event

On January 16, 2026, Vroom Automotive, LLC, a Delaware limited liability company and an indirect subsidiary of Vroom, Inc., holding intellectual property licenses and other financial assets, issued to SPE Holdings 2026-1, a Delaware statutory trust (“SPE Holdings”), 15,000 newly issued Series A preferred units and 7,500 newly issued Series B preferred units (collectively, the "Vroom Automotive Preferred Units") for aggregate gross proceeds of $ 22.5 million, pursuant to a Preferred Unit Purchase Agreement by and among the Company, Vroom Automotive, LLC and SPE Holdings.

Vroom Automotive's Second Amended and Restated Limited Liability Company Agreement, dated as of January 16, 2026,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

amends and restates the existing LLC agreement and establishes the terms of the Vroom Automotive Preferred Units.

The Vroom Automotive Preferred Units will be entitled to receive a quarterly preferential distribution, equal to the liquidation preference of such Vroom Automotive Preferred Units multiplied by a variable distribution rate, which will reset on each quarterly distribution date in an amount equal to the ninety (90) day average of the Secured Overnight Financing Rate (SOFR) plus a spread of 8.25 % for Series A Preferred Units and 9 % for Series B Preferred Units .

The Series B Preferred Units are convertible into common units of Vroom Automotive at the option of the Counterparty at any time.

The Series A Preferred Units are not convertible.

On February 5, 2026, UACC completed the 2026-1 securitization transaction, in which it issued approximately $ 225.0 million of rated asset-backed securities in an auto finance receivable securitization transaction from a securitization trust, established and sponsored by UACC for proceeds of $ 224.1 million.

The trust is collateralized by finance receivables with an aggregate principal balance of $ 274.9 million as of February 5, 2026.

These finance receivables are serviced by UACC and UACC receives an "at market" servicing fee.

UACC retained the residual interests, which required us to account for the 2026-1 securitization as secured borrowings and the assets and liabilities of the trust remain on balance sheet.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

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

What changed 10-K

Item 7. Management’s Discussion and Analysis