Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 46

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1
Chunk 46
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 new financing is available, it may not be on terms that are acceptable to us or it may not be sufficient to refinance all of our
indebtedness as it becomes due.

In addition, the transaction
documents for our securitizations restrict our securitization subsidiaries from declaring or making payment to us of (i) any dividend
or other distribution on or in respect of any shares of their capital stock, or (ii) any payment on account of the purchase, redemption,
retirement or acquisition of any option, warrant or other right to acquire shares of their capital stock unless (in each case) at the
time of such declaration or payment (and after giving effect thereto) no amount payable under any transaction document with respect to
the related securitization is then due and owing, but unpaid. These restrictions may limit our ability to receive distributions in respect
of the residual interests from our securitization facilities, which may limit our ability to generate earnings.

Risks Related to Fair Value Accounting

Receivables we’ve
acquired since January 1, 2018 are accounted for based on the fair value method of accounting. The risks described below are risks related
to fair value accounting.

If Actual Results for Our Receivables Materially Deviate from
Our Estimates, We May Be Required to Reduce the Interest Income We Recognize for Some or All of the Receivables Measured at Fair Value.

We
recognize interest income on receivables accounted under fair value based on a level yield internal rate of return that we calculate based
the terms of the receivables and our estimates at the time of acquisition of the future performance of those receivables. Such estimates
include the timing and severity of future credit losses and the rates of amortization and of prepayments. If actual credit losses were
to exceed our estimates, or if the actual amortization and prepayments of the receivables were to be materially different from our estimates,
we might be required to change our estimates, which could result in a reduced interest income for those receivables in subsequent periods.

If Actual Results for Our Receivables Materially Deviate from
Our Estimates, We May Be Required to Reduce the Recorded Value for Some or All of the Receivables Measured at Fair Value.

We
re-evaluate the recorded value of receivables measured at fair value at the close of each quarter. If the re-evaluation were to yield
a value materially different from the previous