Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 136

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1
Chunk 136
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 and expenses during the reported periods. These are material estimates that could be susceptible to changes
in the near term and, accordingly, actual results could differ from those estimates.

Reclassification

Certain amounts for the prior
year have been reclassified to conform to the current year’s presentation with no effect on previously reported earnings or shareholders’
equity.

Financial Covenants 

Certain of our securitization
transactions, our warehouse credit facilities and our residual interest financing contain various financial covenants requiring minimum
financial ratios and results. Such covenants include maintaining minimum levels of liquidity and net worth and not exceeding maximum leverage
levels. As of December 31, 2024, we were in compliance with all such covenants. In addition, certain of our debt agreements other than
our term securitizations contain cross-default provisions. Such cross-default provisions would allow the respective creditors to declare
a default if an event of default occurred with respect to other indebtedness of ours, but only if such other event of default were to
be accompanied by acceleration of such other indebtedness.

Provision for Contingent Liabilities

We are routinely involved
in various legal proceedings resulting from our consumer finance activities and practices, both continuing and discontinued. Our legal
counsel has advised us on such matters where, based on information available at the time of this report, there is an indication that it
is both probable that a liability has been incurred and the amount of the loss can be reasonably determined.

     F-15 

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We have recorded a liability
as of December 31, 2024, which represents our estimate of the immaterial aggregate probable incurred losses for legal contingencies. The
amount of losses that may ultimately be incurred, over and above such losses as are probable, cannot be estimated with certainty.

Accounting Pronouncements Recently Adopted

In November of 2023, the
FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in
this ASU became effective for the Company beginning with this Annual Report on Form 10-K for the year ended December 31, 2024, and we
have adopted using the retrospective transition method. The adoption did not have a material impact on the Company’s consolidated
financial statements. See Note 13