VRM 10-K & 10-Q changes, risk factors and insider trading

An investment in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with the financial and other information contained in this Annual Report on Form 10-K, before you decide to purchase shares of our common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material or important, may also become material or important factors that adversely affect our business. If any of the following risks or others not specified below materialize, our business, financial condition and results of operations could be materially and adversely affected. In that case, the trading price of our common stock could decline and you could lose all or part of your investment in our common stock.

We recently emerged from the Prepackaged Chapter 11 Case,Case in January 2025, which couldconsumed adverselya affectsubstantial portion of time and attention of our businessmanagement and relationships,could andcontinue to subject us to risks and uncertainties.

As previously disclosed, on November 13, 2024, Vroom, Inc. (in the context of the Prepackaged Chapter 11 Case, the “Debtor”) 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 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). 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 (the “Confirmation Order”). On January 14, 2025, the conditions to the effectiveness of the Plan were satisfied or waived and the Plan became effective. We emerged from the Prepackaged Chapter 11 Case on January 14, 2025.

Furthermore, weWe may not realize any or all of the intended benefits of the Prepackaged Chapter 11 Case, the benefits may not be on the terms or in the manner we expect, and the costs incurred may exceed the intended benefits. The occurrence of one or more of these events could have a material and adverse effect on our operations, financial condition and reputationreputation, 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.

On January 22, 2024, we announced the Value Maximization Plan, pursuant to which we discontinued our ecommerce operations and wound down our used vehicle dealership business in order to preserve cash and maximize stakeholder value through our remaining businessesbusinesses, UACC and CarStory (the "Ecommerce Wind-Down"). As a result, we have incurred costs including severance costs, inventory liquidation costs, contract and lease termination costscosts, and non-cash asset impairments. We incurred total cash charges of approximately $15.8 million for severance and other personnel-related costs, and approximately $13.9 million in contract and lease termination costs in relation to the Value Maximization Plan. We may incur additional charges in connection with the Vroom Ecommerce Wind-Down.

The purpose of the Value Maximization Plan was to wind-down our ecommerce operations, which were not profitable and had significant cash burn, in order to preserve cash and enable us to maximize stakeholder value through our remaining businesses, UACC and CarStory.CarStory businesses. As of December 31, 2024,2025, we had cash and cash equivalents of approximately $29.3$10.4 million. Given our Ecommerce Wind-Down expenses, including employee severance costs, our ongoing operating expenses and recent losses at UACC, there can be no assurance that we will succeed in achieving profitability and creating meaningful stakeholder value.

Additionally, the Ecommerce Wind-Down involves furthercontinued risks, including:

negative impact on our business relationships, includingincluding, but not limited toto, potential relationships with our customers, suppliers, vendors, licenseeslicensees, and employees; and unintended negative consequences from changes to our business.

If any of these or other factors impair our ability to successfully implement theour ValueLong-Term MaximizationStrategic Plan, we may not realize its intended benefits and we may not be able to realizeor other business opportunitiesopportunities, as we maycould be required to spend additional time and incur additional expense relating to the Value Maximization Plan that otherwise would be used on the development, expansion and profitability of our other businesses, any of which could adversely impact our business, operational results, financial positionUACC and cash flows.CarStory.

We expect to use our cash and cash equivalents to finance our future capital requirements and UACC’s senior secured warehouse facility agreements (the “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 increasing credit losses in UACC's portfolio and overall higher interest rates. Any future decreases on available advance rates may have an adverse impact on our liquidity. The Warehouse Credit Facilities were not impacted by the Prepackaged Chapter 11 Case and remain outstanding. If we are unable to maintain the Warehouse Credit Facilities that expire on varying dates in 20252026 and 2027 absent renewal, on favorable terms or at all, or if they are terminated or expire and are not renewed or we are unable to find a satisfactory replacement, we may be unable to fund our finance receivables, and our business, operational results, financial position and cash flows would be materially adversely affected.

In addition, in AprilMarch 2024,2025, UACC sold approximately $262.5$307.8 million of rated asset-backed securities in an auto loan securitization transaction from a securitization trust, established and sponsored by UACC for proceeds of $261.3$306.5 million. The trust is collateralized by finance receivables with an aggregate principal balance of $380.1$382.1 million. These finance receivables are serviced by UACC.UACC Asand aUACC resultreceives ofan “at market” conditions,servicing UACCfee. The Company retained the Class E non-investment grade securities and residual interests, which willrequired requirethe usCompany to account for the 2024-12025-1 securitization as secured borrowings and the assets and liabilities of the trust remain on the balance sheet pending the sale of such retained interests. In May 2024, UACC sold approximately $37.5 million of Class E non-investment grade securities that were initially retained for proceeds of $35.9 million.sheet.

Our revenue growth may be adversely affected by factors including our inability to maintain, grow and develop the UACC and CarStory businesses; weakness in the automotive retail industry generally; general economic conditions, including as a result of tariffs, high interest rates and inflation; global pandemics and other public health emergencies; and increasing competition. Our historical revenue growth is not indicative of our future performance, particularly given the Ecommerce Wind-Down.Wind-Down and application of fresh start accounting. We have not invested in growing CarStory's customer base since Vroom acquired CarStory, resulting in CarStory's revenue being concentrated in a small number of customers. An increasing number of consumers conduct online research using AI tools, which has resulted in decreased website traffic and negatively impacted CarStory’s revenue. We may not be able to adapt effectively and competitively to meet this shift. If we are unable to maintain, grow and develop the UACC and CarStory businesses and generate sufficient revenue and achieve profitability, our business, financial condition and results of operations will be materially and adversely affected. Additionally, our cash needs may increase in the future as we focus on growing and developing the UACC and CarStory businesses.

Our future capital requirements will depend on many factors, including the impacts of our emergence from the Prepackaged Chapter 11 Case, our ability to realize the benefits of the Long-Term Strategic Plan, available advance rates on and the amendment and renewal of the Warehouse Credit Facilities, the ability to meet (or continue to meet, as the case may be) the requirements of Nasdaq for listing on the Nasdaq Stock Market LLC or any other exchange, the ability to complete additional securitization transactions on terms favorable to us, future credit losses, the ability to obtain the necessary financing to meet obligations and repay liabilities arising from business operations when they come due, the ability to generate and maintain sufficient cash, and the ability to generate profitable operations in the future. There can be no assurance that our liquidity will be sufficient to achieve the objectives of our Long-Term Strategic Plan, grow and develop UACC and CarStory, operate our business, or comply with the terms of our indebtedness. See "—UACC may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow its business" and “—Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could materially adversely affect our business, financial condition and results of operations and impair our ability to satisfy our debt obligations.”

Vroom has not been profitable since its inception in 2012 and had an accumulated deficit of approximately $2,125.8$53.1 million as of December 31, 2024.2025 after adopting fresh start accounting. We incurred net losses of $165.1$(53.1) million and $364.6$(165.1) million for the years ended December 31, 20242025 and 2023,2024, respectively, which includes $26.9$1.0 million and $279.5$(26.9) million, respectively, related to net income (loss) from discontinued operations. We may continue to incur significant losses in the future for a number of reasons, including increased losses on UACC's portfolio, our inability to maintain, grow and maximize the value of the UACC and CarStory businesses; weakness in the automotive retail industry generally; general economic conditions, including as a result of tariffs, high interest rates, inflation and unemployment; global pandemics and other public health emergencies; and increasing competition, as well as other risks described in this Annual Report on Form 10-K, and we may encounter unforeseen expenses, difficulties, complications and delays in achieving the goals of our Long-Term Strategic Plan.

As of December 31, 2024,2025, UACC had $353.4$393.2 million of securitization debt funded by cashflows on receivables within the securitization trusts and $359.9$318.7 million in outstanding borrowings related to the Warehouse Credit Facilities. Following emergence from the Prepackaged Chapter 11 Case on January 14, 2025, we do not hold any long-term debt at the Vroom, Inc. level. Our UACC indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things:

requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness,indebtedness and preferred unit distributions, which will reduce the amount of cash available for other purposes;

Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves, or to pay amounts due under our indebtedness, and our cash needs may increase in the future. In addition, our existing indebtedness contains, and any future indebtedness that we may incur may contain, financial and other restrictive covenants that may limit our ability to operate our business, raise capitalcapital, or make payments under our other indebtedness.

We recognized impairment charges of $5.2$4.2 million related to long-lived assets during the year ended December 31, 2024.2025. If our amortizable intangible assets or remaining long-lived assets become impaired in the future, we would incur additional impairment charges, which would negatively affect our results of operations. There is significant judgment required in the analysis of a potential impairment of identified intangible assets and other long-lived assets. Impairment may result from, among other things, significant changes in the manner of use of the acquired assets, negative industry or economic trends and/or significant underperformance relative to historic or projected operating results. See Notes 7 andNote 12 to the Company’s Consolidated Financial Statements.

macroeconomic conditions, including as a result of tariffs, interest rates, inflation, unemployment and underemployment rates, vehicle supply and demanddemand, and labor costs;

Changes in demographics and population, local and regional downturnsdownturns, or severe weather conditions and other catastrophic occurrences in any of the states where UACC has a high concentration of borrowers or dealership partners could result in payment delays and increased risk of losseslosses, andwhich could materially and adversely affect our revenues and results of operations. During the year ended December 31, 2024,2025, 41.03%40.7% of UACC's originations were located in UACC's three largest states (measured by aggregate financed amount). While we believe that we have a diverse geographic presence, we expect that these three states will continue to generate significant amounts of our loans due to economic, demographic, regulatory, competitive and other conditions in these states. Adverse developments in these states could lead to reduced demand for automotive financing,financing and could materially adversely affect our financial condition and results of operations.

We believe our success has depended, and continues to depend, on the efforts and talents of our executives and employees. Our future success depends on our continuing ability to retain, develop, motivate and attract highly qualified and skilled employees. Qualified individuals are in high demand, and we may incur significant costs to retain and attract them. In particular, we are highly dependent on the services of our leadership team to the development of our business, future vision, and strategic direction, including as we realign our business in accordance with the Long-Term Strategic Plan. During the year ended December 31, 2024,2025, we had a number of transitionstransition occur on our senior leadership team, includingteam with respect to our Chief Financial Officer and Chief Legal Officer roles.role. Additionally, as a result of the Value Maximization Plan, our business relies more heavily on the performance of UACC and CarStory, and therefore on the key personnel from those subsidiaries. Our future performance will depend, in part, on the successful transition of these positions and any other key management positions that may experience turnover in the future. We heavily rely on the continued service and performance of our senior management team, which provides leadership, contributes to the core areas of our businessbusiness, and helps us to efficiently execute our business, including with respect to strategic initiatives such as our Long-Term Strategic Plan and our emergence from bankruptcy.Plan. If members of our senior management team, including our executive leadership, become unavailable, including due to personal circumstances or if they become ill, or if we are otherwise unable to retain them, we may not be able to manage our business effectively and, as a result, our business and operating results could be harmed. If the senior management team, including any new hires that we make, fails to work together effectively and to execute our plans and strategies on a timely basis, or if we are unable to retain key employees in a cost-effective manner or at all, then our business and future growth prospects could be harmed.

Furthermore, in light of the reduction in headcount as part of our Value Maximization Plan and the impact of the Prepackaged Chapter 11 Case and our emergence from bankruptcy, we may find it difficult to maintain valuable aspects of our culture, to prevent a negative effect on employee morale or attrition beyond our planned reduction in headcount, and to attract competent personnel who are willing to embrace our culture in the future. Our executive officers and other employees are at-will employees, which means they may terminate their employment relationship with us at any time, and their knowledge of our business and industry would be extremely difficult to replace. We may not be able to retain the services of any members of our senior management or other key employees, particularly in light of the Ecommerce Wind-Down.employees. If we do not succeed in retaining and motivating existing employees or attracting well-qualified employees in the future, our business, financial condition and results of operations could be materially and adversely affected.

We are subject to various litigation matters from time to time, the outcome of which could have a material adverse effect on our business, financial conditioncondition, and results of operations. Claims arising out of actual or alleged violations of law could be asserted against us by individuals, either individually or through class actions, by governmental entities in civil or criminal investigations and proceedingsproceedings, or by other entities. These claims could be asserted under a variety of laws, includingincluding, but not limited toto, consumer finance laws, consumer protection laws, intellectual property laws, privacy laws, labor and employment laws, securities lawslaws, and employee benefit laws. These actions could expose us to adverse publicity and to substantial monetary damages and legal defense costs, injunctive relief and criminal and civil fines and penalties, includingincluding, but not limited toto, suspension or revocation of licenses to conduct business. For example, a consolidated class action is pending in the U.S. District Court for the Southern District of New York asserting claims on behalf of a putative class of Company stockholders against us, certain of our officers, and certain of our directors, among others, alleging violations of the federal securities laws. We also are a party to certain stockholder derivative suits in which the Company is named as a nominal defendant in suits that various individual stockholders seek to bring on behalf of the Company against certain of our current and former directors and officers. These suits are pending in the U.S. District Court for the Southern District of New York and the U.S. District Court for the District of Delaware and are based on the same general course of conduct alleged in the consolidated securities class action. We believe these lawsuits are without merit and intend to vigorously contest these claims. Further, the Company expects that the claims asserted in all six of the above derivative suits will be dismissed because the claims were released by the January 8, 2025 order of the U.S. Bankruptcy Court for the Southern District of Texas confirming the Company's plan of reorganization.

See Part I, Item 3. “Legal Proceedings” for more information about these matters and the other legal proceedings to which we are subject.

UACC provides indirect financing by drawing on its Warehouse Credit Facilities to purchase retail installment sales contracts from automotive dealers and pledging eligible finance receivables as collateral, then typically selling the receivables related to the retail installment sales contracts. 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. In addition, UACC has entered into arrangements to sell automotive finance receivables that it purchases, through securitizations, and we expect UACC to enter into additional securitizations in the future, subject to market conditions. If UACC is not able to sell receivables under these current or future arrangements for a variety of reasons, including increased credit losses or because it has reached its capacity under the arrangements, its financing partners exercise termination rights before it reaches capacity, general economic or credit market conditions, market disruptiondisruption, or it reaches the scheduled expiration date of the commitment, and itif UACC is not able to enter into new arrangements on similar terms, it may not have adequate liquidity and our business, financial condition and results of operations may be adversely affected. For example, as a result of market conditions at the time, which led to unfavorable pricing, we retained the non-investment grade securities and residual interests in UACC's 2023-1 securitization, requiring that the transaction remain on balance sheet pending the sale of the additional retained interests. Although we subsequently sold the non-investment grade securities, we continue to hold the residual interests. There can be no assurance that these residual interests will be sold and off-balance sheet treatment will be achieved in the future for this transaction. Furthermore, if we are unable to sell the residual interests, we could be subject to credit risk and be forced to incur unexpected asset write-offs and bad-debt expense. In addition, as a result of high interest rates, the current inflationary environment and vehicle depreciation in the used automotive industry, UACC has been experiencing higher loss severity. Waiver of monthly servicing fees also results in reduced servicing income. Any future waivers of monthly servicing fees on other prior off-balance sheet securitization transactions could result in consolidation of such transactions. Such future consolidations could increase our indebtedness and may have a material adverse effect on our results of operations, financial condition and liquidity.

There can be no assurance that UACC will be able to complete additional securitizations in the future, particularly if the securitization markets become constrained. In addition, the value of any securities that UACC may retain in its securitizations, including securities retained to comply with applicable risk retention rules, might be reduced or, in some cases, eliminated as a result of an adverse change in economic conditions, the financial marketsmarkets, or credit performance. For example, on March 1, 2024, UACC's BB-rated securities from the 2022-2 securitization transaction were downgraded by one ratings agency to a CCC rating. On September 19, 2024, these same securities were subsequently downgraded to a CC rating. UACC's other rated securities may also be downgraded or put on negative credit watch. In addition, as a result of higher interest rates, the current inflationary environment and vehicle depreciation in the used automotive industry, UACC is experiencing higher portfolio losses. The increased losses could lead to reduced servicing income if UACC elects to waive monthly servicing fees going forward as it did in the first quarter of 2023 on the 2022-2 securitization transaction. The waiver of monthly servicing fees on the 2022-2 securitization transaction resulted in consolidation of the related finance receivables and securitization debt on Vroom’s financial statements.fees. If it is not possible or economical for UACC to securitize its automotive finance receivables in the future, it would need to seek alternative financing to support its operations and to meet its existing debt obligations, which may be less efficient and more expensive than raising capital via securitizations and may have a material adverse effect on our results of operations, financial condition, and liquidity.

UACC specializes in the purchase and servicing of contracts to finance vehicle purchases primarily by non-prime customers, including those who have limited credit history, past credit problems, or low income. Such contracts generally have a higher risk of non-performance,non-performance and may result in higher delinquencies and higher losses than contracts with customers who have higher credit ratings. UACC is currently experiencing increasing credit losses on its finance receivables, which has negatively impacted the fair value of our financial receivables and increased the losses recognized during 2023 and 2024. Increasing credit losses negatively impacted our business during 2023 and 2024 and we2025. We expect these credit losses to continue to negatively impact our business during 2025.2026. Due to the Ecommerce Wind-Down, UACC has become our largest businessbusiness, and our results of operations and financial condition are increasingly vulnerable to adverse developments in UACC's business.

Until UACC sells automotive finance receivables, and to the extent it retains interests in those receivables after it sells them, whether pursuant to securitization transactions or otherwise, UACC is exposed to the risk that certain customersaccountholders will be unable or unwilling to repay their retail installment sales contracts according to their terms and that the vehicle collateral securing the payment of those retail installment sales contracts may not be sufficient to ensure full repayment. Additionally, higher energy prices (including the price of gasoline) and other consumer prices, unstable real estate values, reset of adjustable-rate mortgages to higher interest rates, geopolitical tensions around the world, interest rate increases, regional bank failures, inflationinflation, the impact of tariffs, and other factors can affect consumer confidence and disposable income. While credit losses are inherent in the automotive finance receivables market, these conditions can increase loss frequency and severity, decrease consumer demand for motor vehiclesvehicles, and weaken collateral values on certain types of motor vehicles in any period of extended economic slowdown or recession and could have a material adverse effect on our results of operations and financial condition. UACC's origination mix is mostly comprised of non-prime borrowers, and the actual rates of delinquencies, defaults, repossessions and losses on its receivables are higher and more volatile than those experienced in the general motor vehicle finance industry and may be adversely affected to a greater extent during an economic downturn. In addition, caps on interest rates by individual states may limit UACC's ability to offset rising interest rates against automotive financing rates it offers to dealers.

UACC relies on its internally developed credit scoring systems to forecast loss rates of the automotive finance receivables it originates or purchases. If it relies on systems that fail to effectively forecast loss rates on receivables it originates or purchases, those receivables may suffer higher losses than expected. UACC’s credit scoring systems that were in place before the launch of its redeveloped credit-scoring model in September 2025, were developed prior to the onset of the COVID-19 pandemic and, accordingly, were not designed to take into account the effect of the economic, financial and social disruptions resulting from the pandemic, including the associated stimulus programs. Additionally, as noted above, we believe that the impact of the pandemic on the economy and individuals led to loss and delinquency expectations that may not accurately predict the performance of UACC's receivables.

UACC is dependent upon establishing and maintaining relationships with a large number of manufacturer-franchised and independent motor vehicle dealers to supply it with automobile contracts. During the years ended December 31, 2020 through 2024,2025, no single dealer accounted for 1% or more of the automobile contracts UACC purchased, other than Vroom,Vroom through ourthe Company's former ecommerce business. The agreements UACC has with dealers to purchase automobile contracts do not require dealers to submit a minimum number of automobile contracts for purchase. The failure of dealers to submit automobile contracts that meet UACC’s underwriting criteria could result in reductions in its revenues or the cash flows available to it, and, therefore, could have an adverse effect on UACC's and our results of operations.

UACC uses debt financing to maintain and grow its business. UACC relies on borrowings under senior secured 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. UACC currently has fourthree Warehouse Credit Facilities, all of which have terms expiring betweenin JulyJune 20252026, August 2026 and JuneApril 2026.2027, respectively. See Note 10, Warehouse Credit Facilities and Consolidated VIEs, to the Condensed Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K and "UACC may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow its business." We have commenced discussions with certain of our lenders under the Warehouse Credit Facilities regarding amended facilities that would extend the terms beyond the current expiration dates and have finalized a renewal agreement with one such lender.dates. Failure to secure sufficient warehouse borrowing capacity beyond the expiration of the remaining facilities in 20252026 and 2027 would have a material adverse effect on our ability to finance UACC’s lending operations and our results of operations and liquidity. We cannot guarantee that the Warehouse Credit Facilities will continue to be available beyond their current maturity dates, on acceptable terms, or at all, or that UACC will be able to obtain additional financing on acceptable terms or at all. The availability of additional financing will depend on a variety of factors such as market conditions, the general availability of credit, the losses incurred in UACC's loan portfolio, UACC’s financial position, its results of operations, and the capacity for additional borrowing under its existing financing arrangements. Certain 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. If UACC’s various financing alternatives were to become limited or unavailable, it may be unable to maintain or grow origination volume at the level that we anticipate and our financial condition and results of operations would be materially adversely affected.

We and certain of our third-party providers collect, maintain and process data about current and prospective customers, employees, business partners and others, including personally identifiablepersonal information, as well as proprietary information belonging to our business such as trade secrets (collectively, "Confidential Information"). We rely on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business (collectively, "IT Systems"). We own and manage some of these IT Systems but also rely on third parties that are not directly under our control to manage certain areas of these operations. For example, we rely on encryption, storage, and processing technology developed by third parties to securely transmit, operate on and store such information. Successful cyberattacks that disrupt or result in unauthorized access to thirdour partyor third-party IT Systems can materially impact our operation and financial results. Due to the volume and sensitivity of the personal information and data we and these third parties manage and expect to manage in the future, as well as the nature of our customer base, the security features of our informationIT systems are critical. Any failure or perceived failure by us or by third parties who access our IT Systems and/or Confidential Information to maintain the security of personal and other data that is provided to us by customers, employees and vendors could harm our reputation and brand and expose us to a risk of loss or litigation and possible liability, any of which could adversely affect our business, financial condition, and results of operations. While we employ a number of security measures designed to protect the security of our IT Systems and Confidential Information, there can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, and of third parties we rely on will be fully implemented, complied with or effective in protecting our IT Systems and Confidential Information.

There are numerous federal, state and local laws and regulations regarding privacy and the collection, processing, storing, sharing, disclosing, using and protecting of personal information and other data, the scope of which are constantly changing, subject to differing interpretations, and which may be costly to comply with, inconsistent between jurisdictions or conflicting with other rules. We are also subject to specific contractual requirements contained in third-party agreements governing our use and protection of personal information and other data. We are subject to the terms of our privacy policies and the privacy- and security-related obligations to third parties. We strive to comply with applicable laws, policies, legal obligations and industry codes of conduct relating to privacy and data protection, to the extent possible. However, itthe isapplication possibleand thatinterpretation of such requirements are constantly evolving and are subject to change, creating a complex compliance environment. In some cases, these obligationsrequirements may be interpretedeither unclear in their interpretation and appliedapplication, or they may have inconsistent or conflicting requirements with each other. Further, there has been a substantial increase in newlegislative waysactivity and regulatory focus on data privacy and security in the United States, including in relation to cybersecurity incidents. In addition, some such requirements place restrictions on our ability to process personal information across our business or inacross acountry manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. Additionally, new regulations could be enacted with which we are not familiar.borders. Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to customers or other third parties, our privacy-related legal obligations or any compromise of security that results in the unauthorized release or transfer of sensitive information, which may include personally identifiable information or other customer data, may result in governmental enforcement actions, litigation or public statements against us by consumer advocacy groups or others and could cause customers, vendors and third-party business partners to lose trust in us, which could have a material adverse effect on our business, financial condition and results of operations. Additionally, if vendors, developers or other third parties that we work with violate applicable laws or our policies, such violations may also put customers’, vendors’ or receivables-purchasers’ information at risk and could in turn harm our business, financial condition and results of operations.

The automobile financing business is large and highly competitive. UACC competes with a number ofseveral national, regionalregional, local and localcaptive finance companies, banks, credit unions, fintech companies, and captive financefintech companies. Many of these companies are much larger and have greater financial resources than UACC, including greater access to capital markets for debt instruments or access to lower cost deposit bases. These funding sources may be unavailable to UACC. Many of these companies also have long-standing relationships with automobile dealers and may provide other financing to dealers, including floor plan financing for the dealers' purchases of automobiles from manufacturers and auctions, which we do not offer. There can be no assurance that we will be able to continue to compete successfully and, as a result, we may not be able to purchase automobile contracts from dealers at a price acceptable to us, which could result in reductions in our revenues or the cash flows available to us. Additionally, if UACC is unsuccessful in maintaining and growing its dealer network, our results of operations, cash flows, and financial condition may be adversely affected.

In addition, the automotive data and service business is large and very competitive. CarStory competes with a number of companies in the automotive industry, including valuation services, VIN data providers, website marketplaces, inventory aggregators, and retail e-commerceecommerce platforms. SomeMany of these companies are significantly larger with well-established sales and marketing teams. We compete with other companies to attract customers to our marketplace and dealers to our digital solutions. If we are unable to grow CarStory's marketplace and customer base, our results of operations, cash flows, and financial condition may be adversely affected.

Our business is affected by general business and economic conditions. The global economy often experiences periods of instability, and this volatility may lead to high unemployment and a lack of available credit, which may in turn lead to increased delinquencies, defaults, repossessions and losses on motor vehicle contracts financed through UACC and could materially and adversely affect our business, financial condition and results of operations. For example, in 2025, the non-prime automotive financing industry faced challenges relating to increasing delinquencies and defaults, lowered recoveries, and other factors, leading some of UACC’s competitors to cease new loan originations, file bankruptcy, or otherwise significantly alter their operations.

Our business may be impacted by the imposition of tariffs and other trade barriers, which may make it more costly for automobile manufacturers and sellers to export and import vehicles and raw materials, and increase the price consumers in the U.S. pay for vehicles. In recent years, the U.S. government has renegotiated or terminated certain existing bilateral or multi-lateral trade agreements. In addition, the new Presidential administration recentlyhas announcedimplemented (and in some cases, partially delayed or rescinded) newsignificant tariffs on imports to the United States from various countries, including those from the European Union, Japan, China, Canada and Mexico,Mexico. 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 someMexico, countriesremain have announced plans to impose retaliatory tariffs.elevated. Such significant tariffs onand importsother couldrestrictions have had, and may continue to have, a major impact on the United States automotive industry, which depends heavily on cross border trade. ShouldThese tariffs behave implemented and sustained for an extended period of time, they would havehad 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 wouldcould exacerbate the impact, as could the uncertainty regarding whetherthe tariffs will be implementedmagnitude or sustained.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 disruptdisrupted existing supply chains and imposeimposed additional costs on businesses in the automotive industry in the United States and globally. While negotiations regarding tariffs are ongoing,ongoing ifand changing rapidly, the resulting environment of retaliatory trade or other practices of additional trade restrictions or barriers increase automobile prices in the U.S.,U.S. thisand caused volatility, which has led to, and could continue to lead toto, further decreased consumer demand for automobiles, and in turn, decreased demand for motor vehicle contracts financed through UACC, which would negatively impact our results of operations, cash flows, and financial condition.

In our prior ecommerce business, we have been subject to audits, requests for information, investigations and other inquiries from our regulators related to customer complaints. As we encountered operational challenges in keeping up with our rapid growth from 2020 through the first quarter of 2022, we experienced an increase in customer complaints, leading to an increase in such regulatory inquiries. We endeavored to promptly respond to any such inquiries and cooperate with our regulators. However, we have incurred fines in certain states and in April 2022, the Attorney General of Texas filed a lawsuit on behalf of the State of Texas in the District Court of Travis County, Texas against theVroom, Company,Inc. and Vroom Automotive, LLC, alleging violation of the Texas Deceptive Trade Practices − Consumer Protection Act and Texas Business and Commerce Code § 17.41 et seq. In December 2023, Vroom, Inc., Vroom Automotive, LLC and the Attorney General of the State of Texas reached a final agreement to resolve all claims in the petition, without any admission of wrongdoing by either Vroom entity. UnderPursuant to the agreement, which the court approved on December 13, 2023, the Company will pay a total ofpaid $2 million in civil penalties and $1 million in attorneys' fees, with the first half due in September 2024 and theagreed remaining half due in September 2025, andto abide permanently by an injunction of certain operational practices that were previously implemented. The agreement was approved by the District Court of Travis County on December 13, 2023. See Part II, Item 1 – “Legal Proceedings.”

In relation to our prior ecommerce business, we have beenwere licensed as a dealer in the states of Texas, Florida, Arizona, California, Ohio and Wisconsin. We also haveheld a motor vehicle sales finance license in Texas in connection with our Texas dealer license, a retail installment seller license in Florida in connection with our Florida dealer license, a retail installment seller license in Pennsylvania, and filed the required notice in Arizona in connection with our Arizona dealer license. As a result of the Ecommerce Wind-Down, we arehave terminatingterminated the foregoing licenses oncenearly all transactions,such including title and registration transactions on behalf of our customers, are completed in the relevant jurisdiction.licenses.

UACC's financing operations are subject to U.S. federal, state, and local laws and regulations regarding contract origination, acquiring motor vehicle installment sales contracts from retail sellers, furnishing data to credit reporting agencies, servicing, debt collection practices, and securitization transactions. Certain states require UACC to have a sales finance license, consumer credit license, or similar applicable license. UACC has obtained licenses in all states where licensing is required. In addition, UACC is subject to enforcement by the CFPB and state consumer protection agencies, including state attorney general offices and state financial regulatory agencies. Any failure to renew or maintain or any revocation of any of UACC's licenses would materially and adversely affect our business, financial condition and results of operations. Further, any statutory or other financial penalties imposed on UACC by a regulator for violations of federal, state or local laws or regulations could materially impact our financial condition and results of operations. On November 14, 2024, the Massachusetts Office of Consumer Affairs and Business Regulation, Division of Banks, commenced a routine compliance examination of UACC that is ongoing and in its final stages. In connection therewith, the Division of Banks indicated that it intends to issue findings of compliance violations and impose penalties, but the extent and scope are still unknown until UACC receives a written report of preliminary findings and has the opportunity to respond.

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”)time 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 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 Convertible Notes ordue long-term2026 debt at (the Vroom,“2026 Inc. level, but still maintain UACC’s Warehouse Credit Facilities (as defined belowNotes”), securitization debt, financing of beneficial interest in securitizations, and junior subordinated debentures..

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.

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”).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 Commoncommon Stockstock at a ratio of 1-for-5. As a result of the automatic conversion and the issuance of shares of Commoncommon Stockstock pursuant to the Plan, there were approximately 5,163,109 outstanding shares of newly issued Commoncommon Stockstock as of the Effective Date (the “New Common Stock”).

On the Effective Date, the Companywe 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 Companywe 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 of the Company 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”.

AsOn describedthe above,Effective Date, we filedemerged from 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.

UACC, which Vroom acquired in February 2022,UACC is an indirect lender that offers vehicle financing to consumers through third-partya 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.

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 December 31, 2024,2025, UACC serviced a portfolio of approximately 78,00076,000 retail installment sales contracts with an aggregate principal outstanding balance of $1.0approximately billion.$950.0 million.

Leveraging computer vision and AI, CarStory has curated a comprehensive used vehicle information database, including over 245256 million vehicle identification numbers ("VINs"), 183203 million window stickers, 3.94.2 billion vehicle photos and 370411 million sales cycles, along with price and price elasticity models. CarStory receives data for over three and a half4.1 million unique VINs listed for sale every day, resulting in CarStory having data for an estimated 90%80% 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.

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

Since the announcement ofannouncing the Value Maximization Plan in January 2024, wethe haveCompany beenhas focusedpivoted onto buildingexecuting a long-term strategic plan leveraging("Long-Term Strategic Plan") that leverages our remainingcore assetsassets, including Vroom and CarStory technology, to improve the profitability of the business andthrough achievefour threestrategic key objectivesinitiatives: achieve pre-COVID Cumulative Net Losses (CNL) or lower, grow origination with pre-COVID CNL or lower, and lower operating cost.

Build a world class sales and marketing program: Attractby attracting and retainretaining the best dealers and drivedriving deeper dealer engagement to enable growth. ImproveIn the2025, our technology teams made substantial progress towards modernizing our infrastructure to drive speed and scalability. This included a complete overhaul of Fast Lane, aUACC’s portalonline builtdealer portal. Launched in early 2026, this upgraded platform leverages direct dealer feedback to provideminimize friction, increase application volume, and streamline the dealeruser with everything they need from application through contracting.experience.

Build operational excellence in originations: Enhanceby enhancing systemic capabilities and decisioning for a more efficient process. IntegrateIn Vroom2025, patent-pendingwe drove operational efficiency by integrating Vroom’s patented AI agent into UACC'scertain aspects of UACC’s funding processprocess. This integration helped automate verification and is intended to reduce costs, improve accuracy,fraud and reducelower fraud.the Buildcost-per-funded a pre-verification automated engine to improve dealer service, improve credit quality and increase capture rates.contract.

EBITDAIn andthe 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 areto Adjusted net income (loss). Adjusted net income (loss) is a supplemental performance measuresmeasure that our management uses to assess our operating performance and the operating leverage in our business. Because EBITDA and Adjusted EBITDAnet facilitateincome (loss) facilitates internal comparisons of our historical operating performance on a more consistent basis, therefore we use thesethis measuresmeasure for business planning purposes.

We calculate Adjusted EBITDAnet loss as EBITDAnet income (loss) from continuing operations adjusted to excludefor stock compensation expense, severance expense related to the continuing operations,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), gainoperating onlease debtright-of-use extinguishmentassets impairment and long-lived asset impairment charges.

The following table presents a reconciliation of EBITDA and Adjusted EBITDAnet loss to net income (loss) from continuing operations, which is the most directly comparable U.S. GAAP measure (in thousands):

While credit losses are inherent in the automotive finance receivables business, several variables have negatively affected UACC’s recent loss and delinquency rates, including risinghigher interest rates, the current inflationary environment and vehicle depreciation. UACC is currently experiencing higher losses on its finance receivables,depreciation, which has negatively impacted the fair value of our finance receivables and the losses recognized for the year ended December 31, 2024.2025. WeWhile we expect thislong trendterm improvements in our finance receivable portfolio, we expect some downward trends to continue to negatively impact our business into 2025.2026. 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,program. suchWe initially saw some improvements with the 2023 and 2024 vintages as tighteninga credit,result whichof isthese startingchanges. Subsequently, macroeconomic factors have negatively impacted these vintages. This unfavorable loan performance continued on 2025 originations, resulting in us making further refinements to return our delinquenciescredit andprogram expectedin portfolio performance on those vintagesorder to normalizedimprove levels.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. Anyany future decreases on available advance rates may have an adverse impact on our liquidity.

UACC has fourthree senior secured warehouse credit facility agreements (the “Warehouse Credit Facilities,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. Anyany 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.

OnAs Marchof 8,December 31, 2025, we renewedhad onethree of our Warehouse Credit Facilities, with $200 million of borrowing capacity, now expiring in June 2026. The remaining Warehouse Credit Facilities, withan aggregate borrowing capacity of $625$600 million, expireexpiring betweenin JulyJune 2026, August 2026 and SeptemberApril 2025.2027, respectively. We are in ongoing discussions with the remainingwarehouse 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. SeeThe Partremaining I,fourth ItemWarehouse 1ACredit RiskFacility, Factors—Wewhich mayhad a borrowing capacity of $200 million, expired on July 21, 2025, pursuant to its terms, and we elected not generateto renew this commitment on the basis that borrowing capacity from our other Warehouse Credit Facilities is sufficient liquidity to operatesupport our business,current and,operational UACC may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow its business.needs.

We intend to moderately grow our automotive financing business while focusing on achieving profitability. UACC will seekintends 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,financing. althoughIn UACCmid-2024, intendswe began indirectly offering competitive vehicle financing services to expandconsumers with slightly higher, or “near-prime,” credit scores compared to our historical customer base. The Near-Prime Program is still in its offeringsearly acrossstages and a broadersmall rangepercentage of theour credit spectrum going forward and has launched a pilot program for near-prime consumers.portfolio. We also intend to drive dealer and customer engagement through technology innovations.

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 thethat year. BasedWhile additional cuts were made in 2025, based on the JanuaryMarch 2025 first policy2026 meeting, the Federal Reserve officials voted to keep interest rates remained unchanged.steady. 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.economy and our business.

In addition, the newcurrent U.S. Presidential administration has recentlyimplemented announced (and in some cases, partially delayed or rescinded) newsignificant tariffs on imports to the United StatesStates, 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 European Unionother countries, Japan,including Canada and Mexico, andremain suchelevated. Many countries have announced plans to imposeimposed retaliatory tariffs.tariffs as well as other trade restrictions and retaliatory measures. Such significant tariffstariffs, onrestrictions importsor 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 tariffsrestrictions inby the United States or retaliatory tariffs imposed by other governments would exacerbate the impact, as could the uncertainty regarding whetherthe magnitude or duration of these measures. Additionally, fragility in the supply chain exacerbated by tariffs willand beother implementedindustry orconcerns, sustained.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 steelsteel, aluminum and rare earth minerals), automobiles, parts, and other products and materials have the potential to disruptdisrupted existing supply chains and imposeimposed additional costs on businesses in the automotive industry in the United States and globally. While negotiations regarding tariffs and other restrictions are ongoing,ongoing ifand changing rapidly, the resulting environment of retaliatory tariffs orand other practices of additional trade restrictions or barriers increasehave increased automobile prices in the U.S.,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 wouldhas negatively impacted and could continue to negatively impact our results of operations, cash flows, and financial condition.

On May 14, 2026, the Company entered into an Exchange and Subscription Agreement (the “Exchange Agreement”) with the investors party thereto and a collateral agent, pursuant to which the Company agreed to co-issue, as joint and several obligations, up to $50.0 million aggregate principal amount of Senior Secured Delayed Draw Convertible Notes due 2032 (the “2032 Notes”). At the closing, certain investors will exchangeexchanged $28.5 million aggregate principal amount of outstanding notes of the Company, together with accrued and unpaid interest thereon through the closing date, for Notes to be issued by the Company,2032 leaving $21.5 million of remaining delayed draw commitments under the facility.Notes. The outstanding notes to be exchanged consist of $10.0 million of 5.000%5.0% Convertible Senior Notes due 2030, $10.5 million of Senior Secured Delayed Draw Notes due 2026 and $8.0 million of notes outstanding under the delayed draw term loan facility with Mudrick Capital Management, L.P. UponOn deliveryMay for29, cancellation at2026 the closing,Company drew an additional $11.5 million, leaving $10.0 million of remaining delayed draw commitments under the outstanding2032 notes will be cancelled and the liens securing such notes will be released, discharged and terminated.Notes.

The 2032 Notes bear interest at 5.0% per annum, payable quarterly, and mature on June 30, 2032. The 2032 Notes are secured by a first priority lien on substantially all assets of the Company, subject to permitted liens, and rank senior in right of payment to all unsecured indebtedness and junior lien indebtedness of each Issuer.

The Exchange Agreement and the 2032 Notes provide for a delayed draw facility under which Additional Notes may be issued from time to time up to the remaining commitment amount, subject to specified funding conditions. The Company, on behalf of the Company,itself, or the investors may elect to fund under the facility, with subsequent draws funded pro rata by the holders and evidenced by separate Additional Notes. The proceeds of any Additional Notes issued after the closing are required to be used for working capital and other general corporate purposes of the Company.

The conversion price for each 2032 Note will equal 120% of the applicable reference price, determined at signing for 2032 Notes issued at the closing and at the applicable funding notice date for any Additionaladditional Notes.notes. Subject to specified limitations, holders may convert their 2032 Notes on and after April 1, 2032, and the 2032 Notes may also become convertible in connection with certain specified corporate events. The Company may settle conversions in shares of common stock, cash or a combination thereof.

Upon a fundamental change, holders may require the Company to repurchase their 2032 Notes for the principal amount to be repurchased plus accrued and unpaid interest. The 2032 Notes also require mandatory ratable redemption in specified circumstances, including certain non-permitted asset sales, casualty or condemnation events, debt issuances and liens, subject to the exceptions and limitations set forth in the 2032 Notes.

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 MarchJune 31,30, 2026, UACC serviced a portfolio of approximately 76,00075,000 retail installment sales contracts with an aggregate principal outstanding balance of approximately $930.0$925.0 million.

We calculate Adjusted net income (loss) as net income (loss) from continuing operations less preferred stock dividends attributable to noncontrolling interests of subsidiary, 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 income (loss) to net income (loss) from continuing operations, which is the most directly comparable U.S. GAAP measure (in thousands):

Non-GAAP Combined ThreeSix Months Ended MarchJune 31,30, 2025

Our financial results for the periods from January 1, 2025 through January 14, 2025 are referred to as those of the “Predecessor” period. Our financial results for the periods from January 15, 2025 through MarchJune 31,30, 2025 are 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. 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 MarchJune 31,30, 2025 separately, management views our operating results for the threesix months ended MarchJune 31,30, 2025 by combining the results of the applicable Predecessor and Successor periods because such presentation provides the most meaningful comparison of our results to other periods. We believe we cannot adequately benchmark the operating results of the period from January 15, 2025 through MarchJune 31,30, 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 threesix months ended MarchJune 31,30, 2025. The combined results for the threesix months ended MarchJune 31,30, 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 MarchJune 31,30, 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 threesix months ended MarchJune 31,30, 2025 (prepared on a Non-GAAP basis) and threesix months ended MarchJune 31,30, 2026 (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.

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,rates since COVID, the current inflationary environment and vehicle depreciation, which has negatively impacted the fair value of our finance receivables and the losses recognized. While we are beginning to see some improvements in our more recently issued finance receivable vintages and we expect long term improvements in our overall finance receivable portfolio, we expect some downward trends to continue to negatively impact our business intoin 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 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 and any future decreases on available advance rates may have an adverse impact on our liquidity.

As of MarchJune 31,30, 2026, we hadhave three of our Warehouse Credit Facilities, with an aggregate borrowing capacity of $600 million,million. On June 30, 2026, we renewed Facility One, now expiring in June 2026,2027. AugustThe 2026amendment modifies certain financial covenants by (i) increasing the maximum permitted leverage ratio, (ii) simplifying and Aprilreducing 2027,the respectively.minimum tangible net worth threshold, (iii) updating the performance trigger framework, and (iv) updating the dynamic advance rate mechanism, thereby increasing the maximum advance rate. The aggregate borrowing limit and other material terms remain unchanged. We are in ongoing discussions with the remaining 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 Warehouse Credit Facilities have expiration dates in August 2026 and April 2027, respectively.

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 affect 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 rates were cut slightly in 2025, based on the MarchJuly 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. Although a February 2026 Supreme Court ruling struck down certain tariffs imposed under the International Emergency Economic Powers Act, the administration has moved to reimpose and maintain tariffs under alternative legal authorities. 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 havehas 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.

Non-GAAP Combined ThreeSix Months Ended MarchJune 31,30, 2025

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 MarchJune 31,30, 2025 (Successor) Period, which we refer to as the threesix months ended MarchJune 31,30, 2025, in order to provide some comparability of such information to the threesix months ended MarchJune 31,30, 2026. See "Non-GAAP Financial Measures" above.

Three Months Ended MarchJune 31,30, 2026 and 2025

Interest income decreased $1.9$2.1 million, or 4.4%,4.7%, to $42.5$43.6 million for the three months ended MarchJune 31,30, 20262026, from $44.4$45.7 million for the three months ended MarchJune 31,30, 2025. This decrease was primarily a result of lowera financedecrease receivablein balances. Thethe loan portfolio balance, which decreased to $804.6$807.7 million as of MarchJune 31,30, 2026, from $858.2$849.0 million as of MarchJune 31,30, 2025.

Realized and unrealized losses, net of recoveries, increaseddecreased $4.5by $10.1 million or 22.1%48.6% to $24.8$10.8 million for the three months ended MarchJune 31,30, 20262026, from $20.3$20.9 million for the three months ended MarchJune 31,30, 2025,2025. primarilyThe majority of this improvement was driven by higherlower thanloss expectedassumptions defaultson leadingfinance receivables originated since September 2025, reflecting improved credit performance in vintages underwritten using our redeveloped custom credit-scoring model relative to anour increaseprior inassumptions, realizedwith the remainder attributable to other portfolio and unrealizedmarket losses in the period.factors.

Servicing income decreased $0.3by $0.4 million or 21.2%26.5% to $1.1$0.9 million for the three months ended MarchJune 31,30, 2026 from $1.4$1.3 million for the three months ended MarchJune 31,30, 2025.2025, primarily driven by a lower balance of the 2022-1 securitization, which is accounted for as an off-balance sheet securitization.

Warranties and GAP incomeincome, net decreased $1.2by $0.5 million or 30.2%12.8% to $2.8$3.2 million for the three months ended MarchJune 31,30, 20262026, fromas $4.0compared to $3.7 million for the three months ended MarchJune 31,30, 2025, primarily as a result of higher GAP cancellation and claim losses and lower warranty and GAP premium volumesincome, duepartially tooffset aby decreasehigher inwarranty contracts fundedprofit-share in the current year period.

ProfessionalOther feesincome increased $0.2$1.1 million or 3.8%57.7% to $3.4$3.1 million for the three months ended MarchJune 31,30, 20262026, from $3.2$2.0 million for the three months ended MarchJune 31,30, 2025.2025, primarily as a result of a sales tax refund received related to customers who defaulted on their loans.

SoftwareCompensation and ITbenefits costsdecreased increased $0.5$1.0 million or 20.9%6.3% to $3.0$16.4 million for the three months ended MarchJune 31,30, 20262026, from $2.5$17.4 million for the three months ended MarchJune 31,30, 2025,2025. The decrease was primarily a result of lower salary and benefit expense as a result of anreduced increase in software subscription fees and web services.headcount.

OtherProfessional expensesfees increaseddecreased $0.1by $0.4 million or 1.8%31.0% to $2.0$1.0 million for the three months ended MarchJune 31,30, 20262026, from $1.9$1.4 million for the three months ended MarchJune 31,30, 2025.2025, primarily related to a decrease in audit and support maintenance services.

AdjustedSoftware netand lossIT costs increased $8.3$0.5 million or 18.3% to $15.0$3.2 million for the three months ended MarchJune 31,30, 20262026, from $6.7$2.7 million for the three months ended MarchJune 31,30, 2025, primarily dueas toa lowerresult netof interestan incomeincrease afterin lossessoftware subscription fees and recoveries,web lower warranties and GAP income, net, higher compensation and benefit expense and higher software and IT costs, as discussed above.services.

CarStory revenue decreased $1.5$0.5 million or 52.8%29.7% to $1.3 million for the three months ended MarchJune 31,30, 20262026, from $2.8$1.8 million for the three months ended MarchJune 31,30, 2025, 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.customer during the three months ended June 30, 2025.

Adjusted net (loss) income changed $0.8$0.3 million or 119.0% to $0.1$(0.2) million adjusted net loss for the three months ended MarchJune 31,30, 2026 as compared to $0.7$0.1 million adjusted net income for the three months ended MarchJune 31,30, 20252025, primarily due to a decrease in revenue, partially offset by lower compensation and benefit expense,revenue as discussed above.

ProfessionalCompensation feesand benefits expense decreased $1.3$1.0 million or 53.8%45.2% to $1.1 million for the three months ended MarchJune 31,30, 2026 from $2.4$2.1 million for the three months ended MarchJune 31,30, 2025, primarily as a result of consultinglower stock compensation expense and legallower feesseverance incurredexpense duringrelated to the threetermination monthsof endedcertain Marchemployees 31,in 2025the associatedprior with fresh-start accounting and bankruptcy related items.period.

OtherProfessional expensesfees decreasedincreased $0.4 million or 46.5%47.3% to $0.3$1.0 million for the three months ended MarchJune 31,30, 20262026, from $0.7$0.6 million for the three months ended MarchJune 31,30, 2025.2025, primarily related to an increase in legal services.