Vroom, Inc.

Previous wording

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, risk retention financing in securitizations, and junior subordinated debentures.

Current wording

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 Convertible Notes due 2026 (the “2026 Notes”) or long-term debt at the Vroom, Inc. level, but still maintain UACC’s Warehouse Credit Facilities (as defined below), securitization debt, risk retention financing in securitizations, and junior subordinated debentures.

Previous wording

The Prepackaged Chapter 11 Case was intended to address the impact of the 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. See “Liquidity and Capital Resources” for more information on our 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.

Current wording

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. See “Liquidity and Capital Resources” for more information on our 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.

Previous wording

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

Current wording

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

Previous wording

As of January 14, 2025 we emerged from the Prepackaged Chapter 11 Case and continue to operate as a viable going concern.

Current wording

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

Previous wording

In addition to its financing expertise, the UACC platform brings with it extensive application processing, underwriting and servicing capabilities. UACC services the retail installment sales contracts it originates or purchases and will continue to service the contracts it originated or purchased for customers of Vroom’s former ecommerce business. 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 June 30, 2025, UACC serviced a portfolio of approximately 79,000 retail installment sales contracts with an aggregate principal outstanding balance of $1.0 billion.

Current wording

In addition to its financing expertise, the UACC platform brings with it extensive application processing, underwriting and servicing capabilities. UACC services the retail installment sales contracts it originates or purchases and will continue to service the contracts it originated or purchased for customers of Vroom’s former ecommerce business. 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 September 30, 2025, UACC serviced a portfolio of approximately 78,000 retail installment sales contracts with an aggregate principal outstanding balance of $1.0 billion.

Previous wording

Leveraging computer vision and AI, CarStory has curated a comprehensive used vehicle information database, including over 246 million vehicle identification numbers ("VINs"), 188 million window stickers, 4 billion vehicle photos and 393 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. consumer vehicles. This data is aggregated with demand insights from millions of consumer sessions and data from CarStory’s proprietary VIN database to generate more accurate vehicle valuations.

Current wording

Leveraging computer vision and AI, CarStory has curated a comprehensive used vehicle information database, including over 248 million vehicle identification numbers ("VINs"), 194 million window stickers, 4.1 billion vehicle photos and 397 million sales cycles, along with price and price elasticity models. CarStory receives data for over four and a half million unique VINs listed for sale every day, resulting in CarStory having data for an estimated 90% of U.S. consumer vehicles. This data is aggregated with demand insights from millions of consumer sessions and data from CarStory’s proprietary VIN database to generate more accurate vehicle valuations.

Previous wording

Our financial results for the periods from January 1, 2025 through January 14, 2025 and the three and six months ended June 30, 2024 are referred to as those of the “Predecessor” periods. Our financial results for the periods from January 15, 2025 through June 30, 2025 and the three months ended June 30, 2025 are referred to as those of the “Successor” periods. Our results of operations as reported in our Condensed Consolidated Financial Statements for these periods are prepared in accordance with U.S. GAAP. 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 June 30, 2025 separately, management views our operating results for the six months ended June 30, 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 June 30, 2025 against any of the previous periods reported in our Condensed 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 Condensed Consolidated Financial Statements in accordance with U.S. GAAP, the tables and discussion below also present the combined results for the six months ended June 30, 2025. The combined results for the six months ended June 30, 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 June 30, 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 six months ended June 30, 2025 (prepared on a Non-GAAP basis) and six months ended June 30, 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.

Current wording

Our financial results for the periods from January 1, 2025 through January 14, 2025 and the three and nine months ended September 30, 2024 are referred to as those of the “Predecessor” periods. Our financial results for the periods from January 15, 2025 through September 30, 2025 and the three months ended September 30, 2025 are referred to as those of the “Successor” periods. Our results of operations as reported in our Condensed Consolidated Financial Statements for these periods are prepared in accordance with U.S. GAAP. 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 September 30, 2025 separately, management views our operating results for the nine months ended September 30, 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 September 30, 2025 against any of the previous periods reported in our Condensed 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 Condensed Consolidated Financial Statements in accordance with U.S. GAAP, the tables and discussion below also present the combined results for the nine months ended September 30, 2025. The combined results for the nine months ended September 30, 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 September 30, 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 nine months ended September 30, 2025 (prepared on a Non-GAAP basis) and nine months ended September 30, 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.

Previous wording

While credit losses are inherent in the automotive finance receivables business, several variables have negatively affected UACC’s recent loss and delinquency rates, including rising interest rates, the current inflationary environment and vehicle depreciation. However, UACC has seen some improvement in our more recently issued finance receivable vintages, leading to lower losses as the more seasoned finance receivables are replaced with new originations, which has positively impacted the fair value of our finance receivables and the losses recognized for the six months ended June 30, 2025. Some of this is driven by seasonality and the current rate environment. While we expect long term improvements in our finance receivable portfolio, we expect some downward trends to continue to negatively impact our business for the remainder of 2025. 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. 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 and any future decreases on available advance rates may have an adverse impact on our liquidity.

Current wording

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 nine months ended September 30, 2025. While we expect long term improvements in our finance receivable portfolio, we expect some downward trends to continue to negatively impact our business for the remainder of 2025 and 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 tighten our credit program. We initially saw some improvements with the 2023 and 2024 vintages as a result of theses 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 and any future decreases on available advance rates may have an adverse impact on our liquidity.

Previous wording

As of June 30, 2025, UACC had 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 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.

Current wording

As of September 30, 2025, UACC had three 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.

Previous wording

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 senior secured warehouse credit facility agreements (the “Warehouse Credit Facilities”) have decreased and any future decreases on available advance rates may have an adverse impact on our liquidity.

Current wording

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 senior secured warehouse credit facility agreements (the “Warehouse Credit Facilities”) have decreased and any future decreases on available advance rates may have an adverse impact on our liquidity. We continue to evaluate the effectiveness of our controls to ensure appropriate pledging of collateral balances.

Previous wording

In March 2025, we renewed two of our Warehouse Credit Facilities, Facility Two and Facility Four, with an aggregate borrowing capacity of $400 million, now expiring in June 2026 and April 2027, respectively. Warehouse Credit Facility One, 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. Following the expiration of Warehouse Credit Facility One, UACC now has three senior secured Warehouse Credit Facilities. We expect to renew Warehouse Credit Facility Three prior to its expiration on August 29, 2025. There can be no assurance that adequate additional financing will be available to us on acceptable terms, or at all, if needed. See "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 our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

As of September 30, 2025, we renewed three of our Warehouse Credit Facilities, with an aggregate borrowing capacity of $600 million, now expiring in June 2026, April 2027, and August 2026, respectively. Warehouse Credit Facility One, 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. However, there can be no assurance that adequate additional financing will be available to us on acceptable terms, or at all.

Previous wording

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 that year. Based on the July 2025 meeting, the Federal Reserve interest rates remained unchanged. 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.

Current wording

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 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. Additional cuts were made in the beginning of 2025 and based on the October 2025 meeting, the Federal Reserve officials voted for another quarter-point rate cut, lowering their benchmark lending rate to the lowest in three years. 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.

Previous wording

In addition, the current U.S. Presidential administration has announced (and in some cases, partially delayed or rescinded) new tariffs on imports to the United States from other countries. Many countries have announced plans to impose retaliatory tariffs as well as other trade restrictions and retaliatory measures. Such significant tariffs, restrictions or other retaliatory measures could 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. 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 and other restrictions are ongoing and changing rapidly, if the resulting environment of retaliatory tariffs or other practices of additional trade restrictions or barriers increase automobile prices in the U.S. or cause volatility, this could lead to negative consumer sentiment and 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.

Current wording

In addition, the current U.S. Presidential administration has announced (and in some cases, partially delayed or rescinded) new tariffs on imports to the United States from other countries. Many countries have announced plans to impose retaliatory tariffs as well as other trade restrictions and retaliatory measures. Such significant tariffs, restrictions or other retaliatory measures could 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 and rare earth minerals), 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 and other restrictions are ongoing and changing rapidly, if the resulting environment of retaliatory tariffs or other practices of additional trade restrictions or barriers increase automobile prices in the U.S. or cause volatility, this could lead to negative consumer sentiment and 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.

Previous wording

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 June 30, 2025 (Successor) Period, which we refer to as the six months ended June 30, 2025, in order to provide some comparability of such information to the six months ended June 30, 2024. See "Non-GAAP Financial Measures" above.

Current wording

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 September 30, 2025 (Successor) Period, which we refer to as the nine months ended September 30, 2025, in order to provide some comparability of such information to the nine months ended September 30, 2024. See "Non-GAAP Financial Measures" above.

Previous wording

Interest income decreased $13.7 million, or 13.2%, to $90.2 million for the six months ended June 30, 2025, from $103.9 million for the six months ended June 30, 2024. This decrease was primarily a result of the accounting policy change which resulted in lower discount income as well as a decrease driven by a lower finance receivable balance. The loan portfolio decreased to $849.0 million as of June 30, 2025, from $880.6 million as of June 30, 2024.

Current wording

Interest income decreased $6.0 million, or 11.8%, to $44.8 million for the three months ended September 30, 2025, from $50.8 million for the three months ended September 30, 2024. This decrease was primarily a result of the accounting policy change which resulted in lower discount income as well as lower finance receivable balance. The loan portfolio decreased to $817.7 million as of September 30, 2025, from $850.6 million as of September 30, 2024.

Previous wording

Interest expense decreased $2.8 million, or 9.6%, to $26.5 million for the six months ended June 30, 2025 from $29.3 million for the six months ended June 30, 2024, primarily as a result of lower interest expense incurred on the Warehouse Credit Facilities, which decreased $7.6 million to $8.9 million for the six months ended June 30, 2025 from $16.5 million for the three months ended June 30, 2024. The decrease was offset by higher interest expense incurred on securitization debt, which increased $4.7 million to $17.6 million for the six months ended June 30, 2025, from $12.9 million for the six months ended June 30, 2024. The decrease of interest expense incurred on the Warehouse Credit Facilities is attributable to a lower outstanding balance of $205.8 million as of June 30, 2025 as compared to $270.1 million as of June 30, 2024, due to repayments of the Warehouse Credit Facilities in connection with completion of the 2025-1 securitization, as well as a decrease in the weighted average interest rates, which decreased from 7.19% to 5.99% in the respective periods. The increase of interest expense incurred on securitization debt is attributable to a higher outstanding balance of $526.7 million as of June 30, 2025, as compared to $472.2 million as of June 30, 2024, as well as overall higher interest rates on securitization debt.

Current wording

Interest expense decreased $2.0 million, or 13.2%, to $13.3 million for the three months ended September 30, 2025 from $15.3 million for the three months ended September 30, 2024, primarily as a result of lower interest expense incurred on the Warehouse Credit Facilities, which decreased $1.8 million to $4.5 million for the three months ended September 30, 2025 from $6.3 million for the three months ended September 30, 2024. The decrease was also partially due to lower interest expense incurred on securitization debt, which decreased $0.3 million to $8.8 million for the three months ended September 30, 2025, from $9.1 million for the three months ended September 30, 2024. The decrease of interest expense incurred on the Warehouse Credit Facilities is attributable to a lower outstanding balance of $269.8 million as of September 30, 2025 as compared to $321.8 million as of September 30, 2024, due to repayments of the Warehouse Credit Facilities in connection with completion of the 2025-1 securitization, as well as a decrease in the weighted average interest rates, which decreased from 6.97% to 6.02% in the respective periods. The decrease of interest expense incurred on securitization debt is attributable to overall lower interest rates on the 2025-1 securitization debt.

Previous wording

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, when we still had finance receivables held for sale, 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.

Current wording

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.

Previous wording

Realized and unrealized losses, net of recoveries, increased by $1.3 million or 6.8% to $20.9 million for the three months ended June 30, 2025, from $19.6 million for the three months ended June 30, 2024, primarily driven by higher losses on finance receivables, partially offset by the change in accounting policy related to discount income, which reduced the credit losses in the current period.

Current wording

Realized and unrealized losses, net of recoveries, increased by $13.5 million or 44.6% to $43.6 million for the three months ended September 30, 2025, from $30.1 million for the three months ended September 30, 2024, primarily driven by an increase in the number and severity of delinquencies as well as lower recoveries of finance receivables, partially offset by the change in accounting policy related to discount income, which reduced the credit losses in the current period.

Previous wording

Servicing income decreased by $0.3 million or 20.7% to $1.3 million for the three months ended June 30, 2025 from $1.6 million for the three months ended June 30, 2024, primarily driven by a lower balance of the 2022-1 securitization, which is accounted for as an off-balance sheet securitization.

Current wording

Servicing income decreased by $0.4 million or 27.2% to $1.1 million for the three months ended September 30, 2025 from $1.5 million for the three months ended September 30, 2024, primarily driven by a lower balance of the 2022-1 securitization, which is accounted for as an off-balance sheet securitization.

Previous wording

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.

Current wording

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 finance receivables on straight-line basis.

Previous wording

Warranties and GAP income, net increased by $2.1 million or 124.0% to $3.7 million for the three months ended June 30, 2025, as compared to $1.6 million for the three months ended June 30, 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.

Current wording

Warranties and GAP income, net increased by $0.8 million or 37.7% to $2.9 million for the three months ended September 30, 2025, as compared to $2.1 million for the three months ended September 30, 2024, primarily as a result of funding more contracts with warranty products, and charging higher fees in the current year period.

Previous wording

Compensation and benefits decreased $3.1 million or 15.1% to $17.4 million for the three months ended June 30, 2025, from $20.5 million for the three months ended June 30, 2024. The decrease was primarily a result of lower salary expense as a result of fewer employees as we continued right-sizing our workforce, 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.

Current wording

Compensation and benefits decreased $5.7 million or 29.0% to $14.1 million for the three months ended September 30, 2025, from $19.8 million for the three months ended September 30, 2024. The decrease was primarily a result of a decrease in variable compensation and an increase in internal software capitalization as we continue to invest in building our technology assets.

Previous wording

Professional fees decreased $0.2 million or 22.3% to $0.6 million for the three months ended June 30, 2025, from $0.8 million for the three months ended June 30, 2024.

Current wording

Professional fees decreased by $0.1 million or 5.6% to $0.8 million for the three months ended September 30, 2025, from $0.9 million for the three months ended September 30, 2024.

Previous wording

CarStory revenue decreased $1.1 million or 36.6% to $1.8 million for the three months ended June 30, 2025, from $2.9 million for the three months ended June 30, 2024, primarily as a result of the loss of a major customer.

Current wording

CarStory revenue decreased $1.6 million or 53.4% to $1.3 million for the three months ended September 30, 2025, from $2.9 million for the three months ended September 30, 2024, primarily as a result of the loss of a major customer.

Previous wording

Compensation and benefits decreased $0.9 million or (35.8)% to $1.6 million for the three months ended June 30, 2025, from $2.5 million for the three months ended June 30, 2024. The decrease was primarily a result of an increase in the allocation of CarStory resources to UACC.

Current wording

Compensation and benefits decreased $1.7 million or (55.9)% to $1.4 million for the three months ended September 30, 2025, from $3.1 million for the three months ended September 30, 2024. The decrease was primarily a result of an increase in the allocation of CarStory resources to UACC.

Previous wording

Depreciation and amortization decreased $1.5 million or 92.9% to $0.1 million for the three months ended June 30, 2025 from $1.6 million for the three months ended June 30, 2024, primarily as a result lower intangible assets upon emergence from our Prepackaged Chapter 11 Case, leading to lower amortization expense in the current year period.

Current wording

Depreciation and amortization decreased $1.5 million or 93.1% to $0.1 million for the three months ended September 30, 2025 from $1.6 million for the three months ended September 30, 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.

Previous wording

Warranties and GAP loss, net increased $0.3 million or 89.3% to income of $28 thousand for the three months ended June 30, 2025, from a loss of $0.3 million for the three months ended June 30, 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.

Current wording

Warranties and GAP income, net decreased $1.5 million or (83.9)% to $0.3 million for the three months ended September 30, 2025, from $1.8 million for the three months ended September 30, 2024, primarily as a result of a revised estimate that was recorded in the prior year period.

Previous wording

Other income primarily represents interest earned on cash and cash equivalents. Other income decreased $0.8 million or 93.7% to $0.1 million for the three months ended June 30, 2025, from $0.9 million for the three months ended June 30, 2024, primarily driven by lower cash and cash equivalent balances.

Current wording

Other income primarily represents interest earned on cash and cash equivalents. Other income increased $1.5 million or 284.3%, primarily driven by a release of aged accruals.

Previous wording

Compensation and benefits expense decreased $2.1 million or 50.5% to $2.1 million for the three months ended June 30, 2025 from $4.2 million for the three months ended June 30, 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.

Current wording

Compensation and benefits expense decreased $1.6 million or 65.4% to $0.8 million for the three months ended September 30, 2025 from $2.4 million for the three months ended September 30, 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.

Previous wording

Interest expense on corporate debt decreased $0.9 million or 100.0% to none for the three months ended June 30, 2025, from $0.9 million for the three months ended June 30, 2024, primarily related to the extinguishment of our Notes that were converted to equity as part of our Prepackaged Chapter 11 Case.

Current wording

Interest expense on corporate debt decreased $0.9 million or 95.4% for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily related to the extinguishment of our 2026 Notes that were converted to equity as part of our Prepackaged Chapter 11 Case.

Previous wording

Other expenses decreased $1.4 million or 70.6% to $0.5 million for the three months ended June 30, 2025 from $1.9 million for the three months ended June 30, 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.

Current wording

Other expenses decreased $0.9 million or 70.1% to $0.4 million for the three months ended September 30, 2025 from $1.3 million for the three months ended September 30, 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.

Previous wording

Interest income decreased $6.7 million, or 12.7%, to $45.7 million for the three months ended June 30, 2025, from $52.4 million for the three months ended June 30, 2024. This decrease was primarily a result of the accounting policy change which resulted in lower discount income as well as a decrease driven by a lower finance receivable balance. The loan portfolio decreased to $849.0 million as of June 30, 2025, from $880.6 million as of June 30, 2024.

Current wording

Interest income decreased $19.7 million, or 12.8%, to $135.0 million for the nine months ended September 30, 2025, from $154.7 million for the nine months ended September 30, 2024. This decrease was primarily a result of the accounting policy change which resulted in lower discount income as well as a decrease driven by a lower finance receivable balance. The loan portfolio decreased to $817.7 million as of September 30, 2025, from $850.6 million as of September 30, 2024.

Previous wording

Interest expense decreased $1.9 million, or 12.3%, to $13.1 million for the three months ended June 30, 2025 from $15.0 million for the three months ended June 30, 2024, primarily as a result of lower interest expense incurred on the Warehouse Credit Facilities, which decreased $3.7 million to $3.3 million for the three months ended June 30, 2025 from $7.0 million for the three months ended June 30, 2024. The decrease was offset by higher interest expense incurred on securitization debt, which increased $1.9 million to $9.9 million for the three months ended June 30, 2025, from $8.0 million for the three months ended June 30, 2024. The decrease of interest expense incurred on the Warehouse Credit Facilities is attributable to a lower outstanding balance of $205.8 million as of June 30, 2025 as compared to $270.8 million as of June 30, 2024, due to repayments of the Warehouse Credit Facilities in connection with completion of the 2025-1 securitization, as well as a decrease in the weighted average interest rates, which decreased from 7.19% to 5.99% in the respective periods. The increase of interest expense incurred on securitization debt is attributable to a higher outstanding balance of $526.7 million as of June 30, 2025, as compared to $472.2 million as of June 30, 2024, as well as overall higher interest rates on securitization debt.

Current wording

Interest expense decreased $4.9 million, or 10.9%, to $39.8 million for the nine months ended September 30, 2025 from $44.7 million for the nine months ended September 30, 2024, primarily as a result of lower interest expense incurred on the Warehouse Credit Facilities, which decreased $9.3 million to $13.4 million for the nine months ended September 30, 2025 from $22.7 million for the three months ended September 30, 2024. The decrease was offset by higher interest expense incurred on securitization debt, which increased $4.4 million to $26.4 million for the nine months ended September 30, 2025, from $22.0 million for the nine months ended September 30, 2024. The decrease of interest expense incurred on the Warehouse Credit Facilities is attributable to a lower outstanding balance of $269.8 million as of September 30, 2025 as compared to $321.8 million as of September 30, 2024, due to repayments of the Warehouse Credit Facilities in connection with completion of the 2025-1 securitization, as well as a decrease in the weighted average interest rates, which decreased from 6.97% to 6.02% in the respective periods. The increase of interest expense incurred on securitization debt is attributable to a higher outstanding balance of $458.9 million as of September 30, 2025, as compared to $410.0 million as of September 30, 2024.

Previous wording

Realized and unrealized losses, net of recoveries, decreased by $6.0 million or 12.9% to $41.3 million for the six months ended June 30, 2025, from $47.3 million for the six months ended June 30, 2024, primarily driven by lower losses on finance receivables as well as discount income being recognized as a component of Realized and unrealized losses, net of recoveries.

Current wording

Realized and unrealized losses, net of recoveries, increased by $5.3 million or 6.9% to $82.8 million for the nine months ended September 30, 2025, from $77.5 million for the nine months ended September 30, 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.

Previous wording

Servicing income decreased by $0.9 million or 25.0% to $2.7 million for the six months ended June 30, 2025 from $3.6 million for the six months ended June 30, 2024, primarily driven by a lower balance of the 2022-1 securitization, which is accounted for as an off-balance sheet securitization.

Current wording

Servicing income decreased by $1.3 million or 25.6% to $3.8 million for the nine months ended September 30, 2025 from $5.1 million for the nine months ended September 30, 2024, primarily driven by a lower balance of the 2022-1 securitization, which is accounted for as an off-balance sheet securitization.

Previous wording

Warranties and GAP income, net increased by $4.3 million or 134.9% to $7.6 million for the six months ended June 30, 2025, from $3.3 million for the six months ended June 30, 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.

Current wording

Warranties and GAP income, net increased by $5.2 million or 97.0% to $10.5 million for the nine months ended September 30, 2025, from $5.3 million for the nine months ended September 30, 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.

Previous wording

Other income decreased $0.1 million or 5.7% to $2.0 million for the three months ended June 30, 2025, from $2.1 million for the three months ended June 30, 2024.

Current wording

Other income decreased $0.1 million or 1.7% to $6.2 million for the nine months ended September 30, 2025, from $6.3 million for the nine months ended September 30, 2024.

Previous wording

Compensation and benefits decreased $5.8 million or 14.7% to $33.5 million for the six months ended June 30, 2025, from $39.3 million for the six months ended June 30, 2024. The decrease was primarily a result of lower salary expense as a result of fewer employees as we continue right-sizing our workforce, 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.

Current wording

Compensation and benefits decreased $11.5 million or 19.5% to $47.6 million for the nine months ended September 30, 2025, from $59.1 million for the nine months ended September 30, 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.

Previous wording

Professional fees increased by $3.2 million or 222.1% to $4.7 million for the six months ended June 30, 2025, from $1.5 million for the six months ended June 30, 2024, primarily as a result of an increase in legal and audit services.

Current wording

Professional fees increased by $3.2 million or 136.5% to $5.5 million for the nine months ended September 30, 2025, from $2.3 million for the nine months ended September 30, 2024, primarily as a result of an increase in legal and audit services.

Previous wording

Impairment charges increased $0.7 million or 26.4% to $3.5 million related to lease impairment charges incurred during the six months ended June 30, 2025, as compared to $2.8 million of capitalized internal-use software related impairment charges incurred during the six months ended June 30, 2024.

Current wording

Impairment charges decreased $1.7 million or 32.6% to $3.5 million related to lease impairment charges incurred during the nine months ended September 30, 2025, as compared to $5.2 million 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 $2.4 million incurred during the nine months ended September 30, 2024.