Company: CPSS
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001683168-25-005901
Chunk: 57

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 8
Chunk 57
---
 recognize any interest income for contracts that are greater than 90 days past due.

If
a contract exceeds the 90 days past due threshold at the end of one period, and then makes the necessary payments such that it becomes
less than or equal to 90 days delinquent at the end of a subsequent period, it would be restored to full accrual status for our financial
reporting purposes. At the time a contract is restored to full accrual in this manner, there can be no assurance that full repayment of
interest and principal will ultimately be made. However, we monitor each obligor’s payment performance and are aware of the severity
of his delinquency at any time. The fact that the delinquency has been reduced below the 90-day threshold is a positive indicator. Should
the contract again exceed the 90-day delinquency level at the end of any reporting period, it would again be reflected as a non-accrual
account.

Our
policy for placing a contract on non-accrual status is independent of our policy to grant an extension. In practice, it would be an uncommon
circumstance where an extension was granted and the account remained in a non-accrual status, since the goal of the extension is to bring
the contract current (or nearly current).

Liquidity and Capital Resources 

Our
business requires substantial cash to support our purchases of automobile contracts and other operating activities. Our primary sources
of cash have been cash flows from the proceeds from term securitization transactions and other sales of automobile contracts, amounts
borrowed under various revolving credit facilities (also sometimes known as warehouse credit facilities), customer payments of principal
and interest on finance receivables, fees for origination of automobile contracts, and releases of cash from securitization transactions
and their related spread accounts. Our primary uses of cash have been the purchases of automobile contracts, repayment of amounts borrowed
under lines of credit, securitization transactions and otherwise, operating expenses such as employee, interest, occupancy expenses and
other general and administrative expenses, the establishment of spread accounts and initial overcollateralization, if any, the increase
of credit enhancement to required levels in securitization transactions, and income taxes. There can be no assurance that internally generated
cash will be sufficient to meet our cash demands. The sufficiency of internally generated cash will depend on the performance of securitized
pools (which determines the level of releases from those pools and