UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________



FORM 10-K/A Amendment No. 1



☒ ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended
December 31, 2021



☐ TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the
transition period from 
to





Commission file number: 001-14116



CONSUMER PORTFOLIO SERVICES, INC.

(Exact name of registrant as specified in its
charter)



|California                                                     | 33-0459135                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)
|                                                               |                                     
|3800 Howard Hughes Pkwy, Las Vegas, NV                         | 89169                               
|(Address of principal executive offices)                       | (Zip Code)                          



Registrant’s telephone number, including
area code: (949) 753-6800



Securities registered pursuant to Section 12(b)
of the Act:



|Title of Each Class        | Trading Symbol | Name of Each Exchange on Which Registered  
|-------------------------- | -------------- | -------------------------------------------
|Common Stock, no par value | CPSS           | The Nasdaq Stock Market LLC (Global Market)



Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes ☐ No ☒



Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒



Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that
the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes
☒ No ☐



Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒
No ☐



Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions
of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging
growth company” in Rule 12b-2 of the Exchange Act.



|Large accelerated filer ☐ |                             | Accelerated filer ☐
|------------------------- | --------------------------- | -------------------
|                          |                             |                    
|Non-accelerated filer ☒   | Smaller reporting company ☒
|                          | Emerging Growth Company ☐  



If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐





Indicate by check mark whether the registrant has
filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its
audit report. ☐



Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒



As of the close of business on April 26,2022, there were 21,133,500
common shares of the registrant outstanding. The aggregate market value of the 15,970,613 shares of the registrant’s common stock
held by non-affiliates as of the date of filing of this report, based upon the closing price of the registrant’s common stock of
$4.50 per share reported by Nasdaq as of June 30, 2021, was approximately $71,867,759. For purposes of this computation, a registrant
sponsored pension plan, an employee savings plan, and all directors and executive officers, are deemed to be affiliates. Such determination
is not an admission that such plans and individuals are in fact affiliates of the registrant.















EXPLANATORY NOTE



On March 16, 2022, Consumer Portfolio Services,
Inc. (the “Company” or “CPS”) filed its Annual Report on Form 10-K for the fiscal year ended December 31,
2021 (the “2021 Form 10-K”). This Amendment No. 1 (the “Amendment”) amends Part III, Items 10 through
14, of the 2021 Form 10-K to include information previously omitted from the 2021 Form 10-K in reliance on General Instruction
G(3) to Form 10-K. That instruction provides that registrants may incorporate by reference certain information from a definitive
proxy statement, or, if such statement is not filed by 120 days after the end of the fiscal year, then by amendment of the annual report.
Accordingly, Part III of the 2021 Form 10-K is hereby amended to add the information set forth below.



In addition, as required by Rule 12b-15 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), certifications by the Company’s principal executive
officer and principal financial officer are filed as exhibits to this Amendment under Item 15 of Part IV. The certifications are
filed with this Amendment as Exhibits 31.1 and 31.2. Because no financial statements are included in this Amendment and this Amendment
does not contain or amend any disclosures with respect to Items 307 or 308 of Regulation S-K, paragraphs 3, 4 and 5 of the certifications
have been omitted. This Amendment does not include the certifications under Section 906 of the Sarbanes-Oxley Act of 2002 because
no financial statements are included in this Amendment.



Except as stated herein, this Amendment
does not reflect events occurring after the filing of the 2021 Form 10-K with the SEC on March 16, 2022 and no attempt has been made
in this Amendment to modify or update other disclosures contained in the 2021 Form 10-K.



































































i







PART III



Item 10. Directors, Executive Officers and Corporate
Governance.



Directors



The names of the Company’s directors, their
principal occupations, and certain other information regarding them are set forth below. None of the Company’s directors currently
serves on the board of directors of any other publicly-traded companies.



Charles E. Bradley, Jr., 62, has been the
President and a director of the Company since its formation in March 1991, and was elected Chairman of the Board of Directors in July
2001. Mr. Bradley has been the Company's Chief Executive Officer since January 1992. From April 1989 to November
1990, he served as Chief Operating Officer of Barnard and Company, a private investment firm. From September 1987 to March
1989, Mr. Bradley, Jr. was an associate of The Harding Group, a private investment banking firm. Having been with the Company
since its inception, Mr. Bradley brings comprehensive knowledge of the Company’s business, structure, history and culture to the
Board and the Chairman position.



Chris A. Adams, 73, has been a director of
the Company since August 2007. Since 1982 he has been the owner and chief executive of Latrobe Pattern Company and K Castings Inc., which
are firms engaged in the business of fabricating metal parts. With his experience as chief executive of manufacturing companies, Mr. Adams
contributes to the Company’s Board significant organizational and operational management skills.



Louis M. Grasso, 76, has been a director of
the Company since October 2019. Mr. Grasso was the founder and majority owner of PFC Corporation until his retirement in November 2011,
upon sale of PFC’s portfolio of assets to Capstone Realty Advisors. Over a period of 35 years, PFC Corporation originated over $1.8
billion of mortgage loans, and issued $1.8 billion of mortgage-backed securities. He brings to the Board knowledge and experience bearing
in particular on the Company’s strategies for meeting its capital requirements, and broad organizational and management skills.



William W. Grounds, 66, has been a director
of the Company since December 2021. From 2008 to 2021, he was the President and COO of Infinity World Development Corp, which is
a subsidiary of a sovereign wealth fund in the United Arab Emirates. He served on the board of MGM Resorts International from 2013 to
2021 and of Remark Holdings Inc. from 2013 to 2019. During his career he has held senior executive positions in major real estate private
equity investment, development and construction entities. Mr. Grounds brings to the Board experience as a director of publicly-traded
companies, and skills in investment and general management.



Brian J. Rayhill, 59, has been a director
of the Company since August 2006. Mr. Rayhill has been a practicing attorney in New York State since 1988. As an experienced
advocate, counselor and litigator, Mr. Rayhill brings legal knowledge and perspective to the Company’s Board.



William B. Roberts, 84, has been a director of the Company since
its formation in March 1991. From 1981 until his retirement at the end of 2020, he was the President of Monmouth Capital Corp., an investment
firm that specializes in management buyouts. Having spent decades in the business of finance, Mr. Roberts brings to the Company’s
Board his perspective and judgment regarding means of financing its business.



Gregory S. Washer, 60, has been a director
of the Company since June 2007. He was the president and owner of Clean Fun Promotional Marketing, a promotional marketing company, from
its founding in 1986 through its sale in September 2014. He continued to act as a consultant to Clean Fun through August 2017, and is
now retired. With his experience in promotions and marketing, Mr. Washer contributes to the Board significant organizational and operational
management skills, combined with a wealth of experience in promotion and marketing of services.



Daniel S. Wood, 63, has been a director of
the Company since July 2001. Mr. Wood was president of Carclo Technical Plastics, a manufacturer of custom injection moldings,
from September 2000 until his retirement in April 2007. Previously, from 1988 to September 2000, he was the chief operating
officer and co-owner of Carrera Corporation, the predecessor to the business of Carclo Technical Plastics. As president of Carclo, Mr.
Wood was responsible for the overall operation of that company and for the quality and integrity of its financial statements. He brings
to the Board the knowledge and perspective useful in evaluating the Company’s financial statements, and broad organizational and
management skills.









2







Executive Officers



The information regarding the Company’s executive officers set
forth in Part I of this report under the caption “Executive Officers of the Registrant” is incorporated herein by reference.



Section 16(a)
Beneficial Ownership Reporting Compliance



Directors, executive officers and holders of in excess of 10% of the
Company's common stock are required to file reports concerning their transactions in and holdings of equity securities of the Company.  Based
on a review of reports filed by each such person, and inquiry of each regarding holdings and transactions, the Company believes that all
reports required with respect to the year 2021 were timely filed, except that: (A) one Form 4 was filed one day late for each of Chris
A. Adams, Danny Bharwani, Charles E. Bradley, Jeffrey P. Fritz, Louis M. Grasso, John P. Harton, Michael T. Lavin, Brian J. Rayhill, William
B. Roberts, Teri L. Robinson, Laurie A. Straten, Christopher Terry, Gregory S. Washer, and Daniel S. Wood, on August 6, 2021, with respect
to stock options granted on August 3, 2021 (B) two Form 4s were filed for Louis M. Grasso on (i) May 24, 2021 with respect to a transaction
on May 18, 2021 and on (ii) June 25, 2021 with respect to a transaction on June 22, 2021, and (C) one Form 3 was filed for William W.
Grounds on April 29, 2022 with respect to Mr. Ground being elected as director on December 1, 2021.



Code of Ethics



The Company has adopted a Code of Ethics for Senior Financial Officers,
which applies to the Company's chief executive officer, chief financial officer, controller and others. A copy of the Code
of Ethics may be obtained at no charge by written request to the Corporate Secretary at the Company's principal executive offices.



Audit and Other Committees



The Board of Directors has established an Audit
Committee, a Compensation Committee, and a Nominating Committee. Each of these three committees operates under a written charter,
adopted by the Board of Directors. The charters are available on the Company’s website,
https://ir.consumerportfolio.com/corporate-governance. The Board of Directors has concluded that each member of these three
committees (every director other than Mr. Bradley, the Company's chief executive officer), is independent in accordance with the
director independence standards prescribed by Nasdaq, and has determined that none of them have a material relationship with the
Company that would impair their independence from management or otherwise compromise the ability to act as an independent
director.



The members of the Audit Committee are Mr. Rayhill
(chairman), Mr. Grasso, Mr. Washer, and Mr. Wood.



The Audit Committee is empowered by the Board of
Directors to review the financial books and records of the Company in consultation with the Company's accounting and auditing staff and
its independent auditors and to review with the accounting staff and independent auditors any questions that may arise with respect to
accounting and auditing policy and procedure.



The Board of Directors has further determined
that Mr. Wood has the qualifications and experience necessary to serve as an "audit committee financial expert" as such
term is defined in Item 407 of Regulation S-K promulgated by the SEC. Mr. Wood, as president of Carclo Technical Plastics,
was responsible for the preparation and evaluation of the audited financial statements of that company.



Item 11. Executive Compensation.



Compensation Committee Interlocks and Insider
Participation



The Compensation Committee
comprises non-employee directors Daniel Wood (chairman), Chris Adams, William Grounds, and William Roberts.



Compensation Committee Report



The Compensation Committee has reviewed and discussed with management
the Compensation Discussion and Analysis contained in this report. Based on such review and discussions and relying thereon,
we have recommended to the Company's Board of Directors that the Compensation Discussion and Analysis set forth below be included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2021.









3







THE COMPENSATION COMMITTEE



Daniel
S. Wood(chairman)           Chris A. Adams             William W. Grounds              William B. Roberts



Compensation Discussion and Analysis





2021 Say-on-Pay Advisory Vote Outcome



The Compensation Committee
annually considers the results of the most recent advisory vote by shareholders to approve executive officer compensation. In the 2021
advisory vote, a majority of the voted shares (62.6%) approved of the compensation of our named executive officers. The Compensation Committee
has noted the substantial negative vote, but has determined to retain the existing design, purposes and structure of our executive compensation
programs. The Compensation Committee will continue to consider the results from future shareholder advisory votes regarding executive
officer compensation in its future administration of executive compensation.



Compensation Objectives



The Company's objectives
with respect to compensation are several.  The significant objectives are to cause compensation (i) to be sufficient in total
amount to provide reasonable assurance of retaining key executives, (ii) to include a significant contingent component, so as to provide
strong incentives to meet designated Company objectives, and (iii) to include a significant component tied to the price of the Common
Stock, so as to align management's incentives with shareholder interests.  The compensation committee ("Committee")
of the Company's Board of Directors is charged with administering the Company’s compensation plans to meet those objectives.  To
the extent that elements of compensation would not advance such objectives, or would do so less effectively than would other elements,
the Committee seeks to avoid paying compensation in those forms.



Role of the Compensation Committee and
the chief executive officer



Our Board of Directors
has authorized the Compensation Committee, which is composed solely of independent directors, to make all decisions regarding executive
compensation, including administration of our compensation plans. In that regard, the Compensation Committee:



| | · | Reviews and discusses with management the factors underlying our compensation policies and decisions, including overall compensation
objectives;                                                                               
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | Reviews and approves all company goals and objectives (both financial and non-financial) relevant to the compensation of the chief
executive officer;                                                                          
| | · | Evaluates, together with the other independent directors, the performance of the chief executive officer in light of these goals and
objectives and that individual’s overall effectiveness;                                   
| | · | Fixes and approves each element of the compensation of the chief executive officer;                                                                                                                                            
| | · | Reviews the performance evaluations of all other members of executive management (the chief executive officer prepares and presents
to the Compensation Committee the performance evaluations of the other executive officers);
| | · | Reviews and approves each element of compensation, as well as the terms and conditions of employment, of those other executive officers;                                                                                       
| | · | Grants awards under our equity compensation plans and oversees the administration of those plans; and                                                                                                                          
| | · | Reviews the costs and structure of our key employee benefit and fringe-benefit plans and programs.                                                                                                                             

The Compensation Committee is authorized to form subcommittee(s) and to retain experts and consultants to assist in the discharge of its
responsibilities. To date it has not done so.



The chief executive officer,
who attends meetings of the Compensation Committee by invitation of the Committee’s chairman, assists the Committee in determining
the compensation of our other executive officers by, among other things:



| | · | Proposing annual merit increases to the base salaries of the other executive officers;                                                                                                                    
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | Establishing annual individual performance objectives for the other executive officers and evaluating their performance against such
objectives (the Committee reviews these performance evaluations); and
| | · | Making recommendations, from time to time, for special stock option and restricted stock grants (e.g., for motivational or
retention purposes) to other executive officers.                               



The other executive officers
do not have a role in determining their own compensation, other than to discuss their annual individual performance objectives and results
achieved with the chief executive officer.









4







Our Overall Approach



The Committee has put
into place a compensation system consisting of three key components: base salary, an annual cash bonus pursuant to an incentive plan,
and long-term equity incentives in the form of stock options.



The table below provides
comparative information regarding the components of our year 2021 executive compensation program. We are applying the same elements in
our executive compensation program for the year 2022.



|Element                          | Form          | Objectives and Basis                                                                                                                                                                                                                                                                                   
|-------------------------------- | ------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Base Salary                      | Cash          | ·Attract and retain high quality personnel
    ·Targeted to be superior to compensation offered by our competitors                                                                                                                                                                                     
|Annual Incentive Bonus           | Cash          | ·Achieve objectives set annually
    ·Annual bonus amount is set and computed as a percentage of base salary
    ·Actual payout determined by Company and individual performance
    ·Target total cash (base salary + target bonus) designed to be superior to compensation offered by our competitors
|Long-Term Incentive
Compensation | Stock
options | ·Align interests of executives with those of shareholders;
    ·Target long-term incentive award size designed to retain executives through long-term vesting and the potential for wealth accumulation,
contingent on benefit to the shareholders                                                     



The Committee has from
time to time considered providing additional elements of executive compensation. It has considered elements such as restricted
stock awards, restricted stock units, compensation contingent on a change in control, defined benefit pension plans, deferred cash compensation,
and supplemental retirement plans (supplemental in the sense that they exceed the limits for tax advantaged treatment). To
date, the Committee has elected not to pay compensation in such forms, having determined that the Company's objectives are better met
by one or more of the elements of compensation that it does pay.



Regarding
restricted stock and restricted stock units, the Committee has noted that any form of equity equivalent to or closely tied to common
stock does serve to meet the objective of aligning officers' personal interest with that of the shareholders generally. The
Committee believes, however, that the objective is better met by grants of stock options than by grants of share equivalents,
because recipients of the grants will face the same degree of variance in results at a lesser cost to the Company, when option
grants are compared to grants of restricted stock units. Further, unlike restricted stock, option grants will not provide a reward
to the holder absent an improvement over time in the Company’s stock price. The committee has elected not to provide material
perquisites as compensation, having determined that cash is a better medium of exchange.



Regarding compensation
that would be payable contingent on a change in control of the Company, the Committee believes that there are certain legitimate objectives
to be met by such contingent compensation. As of the date of this report, however, no such contingent compensation plans are in place.
Regarding defined benefit pension plans, deferred cash compensation and supplemental retirement plans, the Committee believes that the
Company's retention objective is better met by straight cash payments, whether in the form of base salary or in the form of bonus compensation.
In particular with respect to plans for deferred compensation, the Committee believes those make sense for the Company and for the recipient
only on the basis of assumptions regarding future tax rates payable by each. Having no assurance that such assumptions would be correct,
the Committee has chosen not to put into place any special deferred compensation programs for the company’s executive officers.
Those officers do participate in a company-sponsored tax-deferred savings plan, commonly known as a 401(k) plan, on the same terms available
to company employees generally.



The Committee may in
the future revisit its conclusions as to any of the components discussed above, or may consider other forms of compensation.



The Base Salary Element



With respect to the retention
objective, the Committee considers an executive's base salary to be the most critical component. Acting primarily on the basis
of recommendations of the chief executive officer, the Committee adjusts other officers' base salaries annually, with the adjustment generally
consisting of a 2% to 10% increase from the prior year's rate. Where exceptional circumstances apply, such as recruitment of
a new executive officer, a promotion to executive officer status or a special need to retain an individual officer, the chief executive
officer may recommend, and the Committee may approve, a larger increase.









5







The Company's general
approach in setting the annual compensation of its named executive officers is to set those officers’ base compensation by reference
to their base rates for the preceding year. During the year ended December 2021, the Company's chief executive officer, Charles
E. Bradley, Jr., received $995,000 in base salary. In setting that rate in the first quarter of 2021, the Committee considered
the base salary rate that the Company had paid in the prior year ($995,000), the desirability of providing an annual increase, the desirability
of ensuring retention of the services of the Company's incumbent chief executive officer, the Company’s financial performance, and
the levels of chief executive officer compensation prevailing among other financial services companies. The Committee considered whether
to adjust officers’ base compensation for 2021, and determined not to increase the base rate for the chief executive officer or
the other named executive officers.



The Annual Incentive
Bonus (EMB) element





To encourage executive
officers and key management personnel to exercise their best efforts and management skills toward causing the Company to meet its overall
objective, and toward achieving designated specific individual objectives, the Company has implemented an Executive Management Bonus Plan,
with annual payouts. Under the Company's bonus plan as applied to the year ended December 2021, the Company’s two executive
vice presidents (each of whom is among the named executive officers) were eligible to receive a cash bonus of up to 140% of their base
salaries, and the Company’s senior vice presidents (two of whom are among the named executive officers) were eligible to receive
a cash bonus of up to 110% of their base salaries. The chief executive officer was eligible to receive a cash bonus of up to
500% of his base salary. The implementation of this element for the year 2021 is discussed below.



The Long-Term Incentive
Compensation Element



The Committee also
awards incentive and non-qualified stock options under the Company's stock option plans. Such awards are designed to assist in the
retention of key executives and management personnel and to create an incentive to create shareholder value over a sustained period
of time. The Company believes that stock options are a valuable tool in compensating and retaining employees. During the year ended
December 31, 2021, the Committee granted stock options to the Company's executive officers. All such grants were awarded on August
3, 2021, and all carry exercise prices equal to the market price for the Company's common stock at the date of grant.  The
terms of such options are described below, under the caption "Grants of Plan-Based Awards in Last Fiscal Year." The
numbers of shares made subject to each of the option grants were based on various factors relating to the responsibilities of the
individual officers and to the extent of previous grants to such individuals.



Because the exercise
price of all options granted is equal to or above the fair market value of the Company's common stock on the date of grant, the option
holders may realize value only if the stock price appreciates from the price on the date the options were granted. This design
is intended to focus executives on the enhancement of shareholder value over the long term.



Other Elements



The Company also maintains
certain broad-based employee benefit plans, such as medical and dental insurance, and a qualified defined contribution retirement savings
plan (401(k) plan), in which executive officers are permitted to participate. Such officers participate on the same terms as
non-executive personnel who meet applicable eligibility criteria, and are subject to any legal limitations on the amounts that may be
contributed or the benefits that may be payable under the plans.  The Company does not maintain any form of defined benefit
pension or retirement plan in which executive officers may participate, nor does it maintain any form of supplemental retirement savings
or supplemental deferred compensation plan.



Exercise of Discretion



In exercising its discretion
as to the level of executive compensation and its components, the Committee considers a number of factors. Members of the Committee
conduct informal surveys of compensation paid to comparable executives within and without the consumer finance industry. The
Committee finds these data useful primarily in evaluating the overall level of compensation paid or to be paid to the Company's executive
officers. The Committee noted that the Company met and exceeded its budget objectives for the year. Operational
factors considered included individual and group management goals; indicators of the performance and credit quality of the Company's servicing
portfolio, including levels of delinquencies and charge-offs; and indicators of successful management of personnel, including employee
stability. All of such factors are assessed with reference to the judgment of the Committee as to the degree of difficulty
of achieving desired outcomes. With respect to payment of annual bonuses and grants of stock options, the Committee also takes
note of factors relating to the degree of the Company's success over the most recent year.









6







Specific Objectives
and Evaluation



In the first quarter
of 2021 the compensation committee designated specific objectives with respect to the chief executive officer to be accomplished within
the year 2021, and fixed weights to be associated with each such objective. The chief executive officer proposed to the committee specific
annual objectives with respect to each other executive officer of the company, which the committee, after making certain modifications,
approved. These objectives and the Committee’s administration of the annual incentive bonus element of compensation are
discussed in detail below, under the heading “ - Grants of Plan-Based Awards in Last Fiscal Year - Executive Management Bonus Plan.”



Grants of Options



The Committee's award
of stock options to the Company's officers in August 2021 included option grants to the chief executive officer and the other named executive
officers.  In determining the appropriate level of such grant, the Committee considered the long-term performance of the chief
executive officer and the desirability of providing significant incentive for future performance, as well as the desirability of ensuring
that officer's continued retention by the Company, and the various factors noted above with respect to option grants generally. These
grants and the Committee’s administration of the long-term incentive element of compensation are discussed in detail below, under
the heading “-Grants of Plan-Based Awards in Last Fiscal Year – Equity Incentives.”



Stock Ownership, Hedging
and Pledging. Our board of directors and compensation committee have considered whether to establish a minimum stock ownership
goal for members of our senior management. We have elected not to do so, considering that such a policy would either be strict and mandatory,
in which case it would undermine the compensatory objectives of our equity compensation plans, or would be merely hortatory, in which
case it could be expected to have little effect. We’ve also noted that the multiyear vesting terms of the equity incentives granted
under our plans have the effect of aligning our executives’ individual personal financial incentives with the future price performance
of the Company’s stock.



As part of our comprehensive
compliance policy, we remind all company executive officers of the mandatory legal prohibition on selling short company shares. We also
prohibit company executive officers from entering into transactions that would have the effect of causing those individuals to benefit
from a decline in the price of the company stock, such as the purchase of “put” options. We prohibit such “hedging”
transactions but we do not find it appropriate to prohibit our executive officers from pledging their shares of company stock as security
for a loan. We believe that the beneficial incentives of owning company stock remain substantially the same with or without such a pledge.



Summary of Compensation



The following table summarizes all compensation earned during the three
fiscal years ended December 31, 2021 by the Company's chief executive officer, its chief financial officer, and the other three most highly
compensated individuals (such five individuals, the "named executive officers") who were serving in such position or as executive
officers at any time in 2021. It lists their names, the principal positions in which they served in those years, and each component of
compensation paid with respect to those years.









7







Summary Compensation Table



|Name and Principal Position | Year | Salary   | Non-Equity
                                                       Incentive Plan
                                                       Compensation | Option
                                                                                Awards (1) | All Other
                                                Compen-
                                                sation (2) | Total     
|--------------------------- | ---- | -------- | ---------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------- | ----------
|Charles E. Bradley, Jr.     | 2021 | $995,000 | $2,900,000                                                                                                                                           | $795,300                                                                                          | $360                                                                                                                         | $4,690,660
|President & Chief           | 2020 | 995,000  | 2,600,000                                                                                                                                            | 318,696                                                                                           | 360                                                                                                                          | 3,914,056 
|Executive Officer           | 2019 | 995,000  | 2,600,000                                                                                                                                            | 334,290                                                                                           | 480                                                                                                                          | 3,929,770 
|                            |      |          |                                                                                                                                                      |                                                                                                   |                                                                                                                              |           
|Jeffrey P Fritz             | 2021 | 411,000  | 401,000                                                                                                                                              | 238,590                                                                                           | 360                                                                                                                          | 1,050,950 
|Executive Vice President    | 2020 | 411,000  | 327,000                                                                                                                                              | 119,511                                                                                           | 360                                                                                                                          | 857,871   
|& Chief Financial Officer   | 2019 | 411,000  | 233,000                                                                                                                                              | 100,287                                                                                           | 480                                                                                                                          | 744,767   
|                            |      |          |                                                                                                                                                      |                                                                                                   |                                                                                                                              |           
|Michael T. Lavin            | 2021 | 411,000  | 575,000                                                                                                                                              | 238,590                                                                                           | 360                                                                                                                          | 1,224,950 
|Executive Vice President    | 2020 | 411,000  | 493,000                                                                                                                                              | 199,185                                                                                           | 360                                                                                                                          | 1,103,545 
|& Chief Operating Officer   | 2019 | 411,000  | 461,000                                                                                                                                              | 100,287                                                                                           | 480                                                                                                                          | 972,767   
|                            |      |          |                                                                                                                                                      |                                                                                                   |                                                                                                                              |           
|Teri L. Robinson            | 2021 | 368,000  | 403,000                                                                                                                                              | 159,060                                                                                           | 360                                                                                                                          | 930,420   
|Senior Vice President       | 2020 | 368,000  | 355,000                                                                                                                                              | 106,232                                                                                           | 360                                                                                                                          | 829,592   
|- Originations              | 2019 | 368,000  | 328,000                                                                                                                                              | 66,858                                                                                            | 480                                                                                                                          | 763,338   
|                            |      |          |                                                                                                                                                      |                                                                                                   |                                                                                                                              |           
|Laurie A. Straten           | 2021 | 368,000  | 359,000                                                                                                                                              | 159,060                                                                                           | 360                                                                                                                          | 886,420   
|Senior Vice President       | 2020 | 368,000  | 355,000                                                                                                                                              | 106,232                                                                                           | 360                                                                                                                          | 829,592   
|-Servicing                  | 2019 | 362,000  | 328,000                                                                                                                                              | 66,858                                                                                            | 480                                                                                                                          | 757,338   
|                            |      |          |                                                                                                                                                      |                                                                                                   |                                                                                                                              |           

| | (1) | Represents the dollar value of accrued for financial accounting purposes in connection with the
                                                                grant of such options, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718
                                                                and SFAS 123R. Value was estimated using a Black-Scholes model for 2019, 2020, and 2021. For the year 2021 the weighted average
                                                                fair value per option was $2.6510, based on assumptions of 4.11 years expected life, expected volatility of 71.38%, and a risk-free
                                                                rate of 0.51%. For the year 2020 the weighted average fair value per option was $1.33, based on assumptions of 4.11 years expected
                                                                life, expected volatility of 72.10%, and a risk-free rate of 0.26%. For the year 2019 the weighted average fair value per option was
                                                                $1.11, based on assumptions of 4.11 years expected life, expected volatility of 37.13%, and a risk-free rate of 1.53%. In all
                                                                cases, we assumed a dividend yield of 0.0%.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Amounts in this column represent premiums paid by the Company for group life insurance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  



Grants of Plan-Based Awards in Last Fiscal Year



Equity Incentives



In the year ended December 31, 2021, we did not grant any stock awards
or stock appreciation rights to any of our named executive officers. We granted options to substantially all of our management
level employees on August 3, 2021. The option grants noted in the tables above and below were awarded to the named executive officers
as part of those grants. We also granted awards under our Executive Management Bonus Plan, which were evaluated and paid out after the
end of the year. The amounts paid are shown in the table above (Summary Compensation Table) as “Non-Equity Incentive Plan Compensation.”









8







In the August 2021 grant, the chief executive officer received an option
to purchase 300,000 shares of the Company's common stock at the market closing price ($4.95 per share) on the date of grant, with such
right to purchase to become exercisable in increments of 25% on each of the first through fourth anniversaries of the grant date, and
to expire on the seventh anniversary. Each of the other executive officers of the Company received a grant at that time on the same terms.
Mr. Fritz and Mr. Lavin received such grants with respect to 90,000 shares each, and Ms. Robinson and Ms. Straten each received such a
grant with respect to 60,000 shares.



The table below provides information regarding the awards granted to
the named executive officers in 2021.





Grants of Plan-Based Awards



|Name         | Estimated future payouts under non-equity incentive
    plan awards Threshold Target Maximum | Grant Date | Number of Shares
    Underlying Options | Exercise Price | Grant Date Fair
    Value
|------------ | -------------------------------------------------------------------------------------------- | ---------- | --------------------------------------- | -------------- | -------------------------
|Mr. Bradley  | --                                                                                           | --         | --                                      | 8/03/2021      | 300,000                  
|             | $ --                                                                                         | $4,975,000 | $4,975,000                              | --             | --                       
|Mr. Fritz    | --                                                                                           | --         | --                                      | 8/03/2021      | 90,000                   
|             | $ --                                                                                         | 575,400    | 575,400                                 | --             | --                       
|Mr. Lavin    | --                                                                                           | --         | --                                      | 8/03/2021      | 90,000                   
|             | $ --                                                                                         | 575,400    | 575,400                                 | --             | --                       
|Ms. Robinson | --                                                                                           | --         | --                                      | 8/03/2021      | 60,000                   
|             | $ --                                                                                         | 404,800    | 404,800                                 | --             | --                       
|Ms. Straten  | --                                                                                           | --         | --                                      | 8/03/2021      | 60,000                   
|             | $ --                                                                                         | 404,800    | 404,800                                 | --             | --                       



The “target” and “maximum” figures appearing
in the table above represent the maximum cash payout under the individual executives’ Executive Management Bonus Plan awards
as of the date the incentive was fixed. The actual payout to each individual named in the table above has been determined and paid prior
to the date of this report. That amount was in each case materially less than the maximum (approximately 58% of the maximum, in the case
of the chief executive). The respective actual payments are described below, and appear above in the Summary Compensation Table under
the heading “Non-Equity Plan Compensation.” Because each non-equity incentive plan award has been settled and paid, the future
payout under such awards as of the date of this report is in each case zero. The “grant date fair value” figures appearing
in the table above, which are the computed fair values of stock option awards, are computed as described in note 1 to the Summary Compensation
Table.



Executive Management Bonus Plan



The Executive Management Bonus Plan award granted to the chief executive
officer, Mr. Bradley, called for him to meet as many as possible of six separate operational and financial objectives within the year
2021. The Compensation Committee assigned to each of those objectives a value as a percentage of base salary. The objectives and their
weightings were as follows: to meet or exceed the Company’s quarterly budgeted earnings (25% each quarter, total of 100%), to raise
up to $60 million of debt capital (60%), to renew or replace one of the specific warehouse credit facilities (50%), to execute three rated
securitization transactions (30% each, 90% total), to increase the Company’s annual originations of receivables to each of four
targets (100% in the aggregate, creditable in increments of 25% for reaching aggregate amounts of $800 million, $850 million, $900 million,
and $950 million), and to cause the Company’s common stock to trade in excess of each of four targets (100% in the aggregate, creditable
in increments of 25% for reaching prices of $4.50, $5.00, $5.50, and $6.00 per share).



The total of the seven weightings is 500%; accordingly, the target
and maximum possible value to that officer of the award was 500% of his base salary for 2021.



In a series of meetings, the committee evaluated the chief executive’s
performance in comparison to the goals. The Compensation Committee determined that the budget objective was met in all four quarters of
2021, and credited the chief executive with the maximum value, or 100%. The Company was successful in raising new debt capital in June
2021, in the amount of $50 million. The Committee credited the chief executive with the full 60% designated for that objective.









9







The Committee also determined that the renewal of the warehouse line
was not completed in 2021 and found no credit was earned in that respect.



The Committee noted that the Company had executed four rated securitizations
during the year, three of them after the objective was fixed, representing the full creditable performance of 90%. It determined that
our originations volume exceeded $1.1 billion for the year while maintaining credit quality, representing creditable performance in the
full amount of 100%. The Committee noted that the stock price objective was exceeded with respect to all targets and credited the chief
executive with the maximum value of 100%.



The aggregate valuation of all creditable performance for the
chief executive officer was thus 450%, which would imply a bonus payment under our Executive Management Bonus Plan of $4,478,000. The
committee elected to pay a bonus less than the maximum creditable percentage, in the amount of $2,900,000, representing 291% of our chief
executive’s base salary.



The Executive Management Bonus Plan awards granted to the named
executive officers other than the chief executive officer are evaluated on a more subjective basis, and were set by the Compensation Committee
in consultation with and on the recommendation of the chief executive officer. Factors used in determining the amount of bonus for the
two named executive officers who are executive vice presidents of the Company are these: (I) an evaluation of the executive’s skills
and performance, 30%, (II) whether the executive has met two individual objectives approved by the compensation committee, 18% in aggregate,
(III) whether the Company as a whole has met or exceeded budget targets, 12%, (IV) a subjective evaluation of that executive’s departments,
30%, and (V) a discretionary allocation recommended by the chief executive officer and approved by the compensation committee, 50%.



Numerical scores are assigned to each of these factors, up to
the maximum percentages stated above, and can result in a maximum bonus of 140% of base compensation.



Similar factors are applied in determining the amount of annual
bonus for executive officers who are senior vice presidents of the Company: (I) skills and performance, 30%, (II) two individual objectives,
18%, (III) Company budget, 12%, (IV) subjective evaluation of that executive’s department, 20%, and (V) discretionary allocation,
30%, resulting in a maximum bonus of 110% of base compensation.



Following the end of the year 2021, our compensation committee
evaluated each named executive officer’s performance in relation to these standards and goals. The Company met its overall budget
target in each quarter, and each officer accordingly received full credit with respect to that target.



With respect to the individual factors, the compensation committee,
acting in part on the advice of our chief executive officer, determined that creditable performance for 2021 for each named executive
officer other than the chief executive officer was as set forth below:



|             | Maximum percentage | Creditable percentage | Base Salary | Result (rounded to nearest $1000)
|------------ | ------------------ | --------------------- | ----------- | ---------------------------------
|Mr. Fritz    | 140%               | 97.5%                 | $411,000    | $401,000                         
|Mr. Lavin    | 140                | 140                   | 411,000     | 575,000                          
|Ms. Robinson | 110                | 109.5                 | 368,000     | 403,000                          
|Ms. Straten  | 110                | 97.6                  | 368,000     | 359,000                          



On that basis, the Compensation Committee approved payments to these
named executive officers in the amounts shown in the rightmost column.









10







Outstanding Equity Awards at Fiscal Year-end



The following table sets forth as of December 31, 2021 the number of
unexercised options held by each of the named executive officers, the number of shares subject to then exercisable and unexercisable options
held by such persons and the exercise price and expiration date of each such option.  Each option referred to in the table was
granted at an option price per share no less than the fair market value per share on the date of grant. None of such individuals holds
a stock award; accordingly, only information concerning option awards is presented.



|Name                    |  | Number of securities underlying unexercised
    options (exercisable) |         |  | Number of securities underlying unexercised
    options (unexercisable) |  |         | Option exercise price |  |   | Option expiration date
|----------------------- |  | --------------------------------------------------------------------- | ------- |  | ----------------------------------------------------------------------- |  | ------- | --------------------- |  | - | ----------------------
|Charles E. Bradley, Jr. |  |                                                                       | 140,000 |  |                                                                         |  | –       |                       |  | $ | 1.20                  
|                        |  |                                                                       | 60,000  |  |                                                                         |  | –       |                       |  | $ | 1.94                  
|                        |  |                                                                       | 100,000 |  |                                                                         |  | –       |                       |  | $ | 3.72                  
|                        |  |                                                                       | 250,000 |  |                                                                         |  | –       |                       |  | $ | 6.86                  
|                        |  |                                                                       | 250,000 |  |                                                                         |  | –       |                       |  | $ | 7.97                  
|                        |  |                                                                       | 300,000 |  |                                                                         |  | –       |                       |  | $ | 6.11                  
|                        |  |                                                                       | 300,000 |  |                                                                         |  | –       |                       |  | $ | 3.48                  
|                        |  |                                                                       | 300,000 |  |                                                                         |  | –       |                       |  | $ | 4.35                  
|                        |  |                                                                       | 225,000 |  |                                                                         |  | 75,000  | (1)                   |  | $ | 3.48                  
|                        |  |                                                                       | 150,000 |  |                                                                         |  | 150,000 | (2)                   |  | $ | 3.53                  
|                        |  |                                                                       | 60,000  |  |                                                                         |  | 180,000 | (3)                   |  | $ | 2.47                  
|                        |  |                                                                       | –       |  |                                                                         |  | 300,000 | (4)                   |  | $ | 4.95                  
|                        |  |                                                                       |         |  |                                                                         |  |         |                       |  |   |                       
|Jeffrey P. Fritz        |  |                                                                       | 36,000  |  |                                                                         |  | –       |                       |  | $ | 1.20                  
|                        |  |                                                                       | 14,000  |  |                                                                         |  | –       |                       |  | $ | 1.94                  
|                        |  |                                                                       | 60,000  |  |                                                                         |  | –       |                       |  | $ | 6.86                  
|                        |  |                                                                       | 60,000  |  |                                                                         |  | –       |                       |  | $ | 7.97                  
|                        |  |                                                                       | 90,000  |  |                                                                         |  | –       |                       |  | $ | 6.11                  
|                        |  |                                                                       | 90,000  |  |                                                                         |  | –       |                       |  | $ | 3.48                  
|                        |  |                                                                       | 90,000  |  |                                                                         |  | –       |                       |  | $ | 4.35                  
|                        |  |                                                                       | 67,500  |  |                                                                         |  | 22,500  | (1)                   |  | $ | 3.48                  
|                        |  |                                                                       | 45,000  |  |                                                                         |  | 45,000  | (2)                   |  | $ | 3.53                  
|                        |  |                                                                       | 22,500  |  |                                                                         |  | 67,500  | (3)                   |  | $ | 2.47                  
|                        |  |                                                                       | –       |  |                                                                         |  | 90,000  | (4)                   |  | $ | 4.95                  
|                        |  |                                                                       |         |  |                                                                         |  |         |                       |  |   |                       
|Michael T. Lavin        |  |                                                                       | 21,600  |  |                                                                         |  | –       |                       |  | $ | 1.20                  
|                        |  |                                                                       | 8,400   |  |                                                                         |  | –       |                       |  | $ | 1.94                  
|                        |  |                                                                       | 75,000  |  |                                                                         |  | –       |                       |  | $ | 6.86                  
|                        |  |                                                                       | 60,000  |  |                                                                         |  | –       |                       |  | $ | 7.97                  
|                        |  |                                                                       | 90,000  |  |                                                                         |  | –       |                       |  | $ | 6.11                  
|                        |  |                                                                       | 90,000  |  |                                                                         |  | –       |                       |  | $ | 3.48                  
|                        |  |                                                                       | 90,000  |  |                                                                         |  | –       |                       |  | $ | 4.35                  
|                        |  |                                                                       | 67,500  |  |                                                                         |  | 22,500  | (1)                   |  | $ | 3.48                  
|                        |  |                                                                       | 45,000  |  |                                                                         |  | 45,000  | (2)                   |  | $ | 3.53                  
|                        |  |                                                                       | 37,500  |  |                                                                         |  | 112,500 | (3)                   |  | $ | 2.47                  
|                        |  |                                                                       | –       |  |                                                                         |  | 90,000  | (4)                   |  | $ | 4.95                  









11







|Name              |  | Number of securities underlying unexercised
    options (exercisable) |        |  | Number of securities underlying unexercised
    options (unexercisable) |  |        | Option exercise price |  |   | Option expiration date
|----------------- |  | --------------------------------------------------------------------- | ------ |  | ----------------------------------------------------------------------- |  | ------ | --------------------- |  | - | ----------------------
|Teri L. Robinson  |  |                                                                       | 36,000 |  |                                                                         |  | –      |                       |  | $ | 1.20                  
|                  |  |                                                                       | 14,000 |  |                                                                         |  | –      |                       |  | $ | 1.94                  
|                  |  |                                                                       | 60,000 |  |                                                                         |  | –      |                       |  | $ | 6.86                  
|                  |  |                                                                       | 60,000 |  |                                                                         |  | –      |                       |  | $ | 7.97                  
|                  |  |                                                                       | 60,000 |  |                                                                         |  | –      |                       |  | $ | 6.11                  
|                  |  |                                                                       | 60,000 |  |                                                                         |  | –      |                       |  | $ | 3.48                  
|                  |  |                                                                       | 60,000 |  |                                                                         |  | –      |                       |  | $ | 4.35                  
|                  |  |                                                                       | 45,000 |  |                                                                         |  | 15,000 | (1)                   |  | $ | 3.48                  
|                  |  |                                                                       | 30,000 |  |                                                                         |  | 30,000 | (2)                   |  | $ | 3.53                  
|                  |  |                                                                       | 20,000 |  |                                                                         |  | 60,000 | (3)                   |  | $ | 2.47                  
|                  |  |                                                                       | –      |  |                                                                         |  | 60,000 | (4)                   |  | $ | 4.95                  
|                  |  |                                                                       |        |  |                                                                         |  |        |                       |  |   |                       
|Laurie A. Straten |  |                                                                       | 18,000 |  |                                                                         |  | –      |                       |  | $ | 1.20                  
|                  |  |                                                                       | 7,000  |  |                                                                         |  | –      |                       |  | $ | 1.94                  
|                  |  |                                                                       | 25,000 |  |                                                                         |  | –      |                       |  | $ | 6.86                  
|                  |  |                                                                       | 90,000 |  |                                                                         |  | –      |                       |  | $ | 7.97                  
|                  |  |                                                                       | 60,000 |  |                                                                         |  | –      |                       |  | $ | 6.11                  
|                  |  |                                                                       | 60,000 |  |                                                                         |  | –      |                       |  | $ | 3.48                  
|                  |  |                                                                       | 60,000 |  |                                                                         |  | –      |                       |  | $ | 4.35                  
|                  |  |                                                                       | 45,000 |  |                                                                         |  | 15,000 | (1)                   |  | $ | 3.48                  
|                  |  |                                                                       | 30,000 |  |                                                                         |  | 30,000 | (2)                   |  | $ | 3.53                  
|                  |  |                                                                       | 20,000 |  |                                                                         |  | 60,000 | (3)                   |  | $ | 2.47                  
|                  |  |                                                                       | –      |  |                                                                         |  | 60,000 | (4)                   |  | $ | 4.95                  
|                  |  |                                                                       |        |  |                                                                         |  |        |                       |  |   |                       





(1) Becomes exercisable as to the unexercisable portion on May 9, 2022.

(2) Becomes exercisable as to cumulative increments of one-half of the unexercisable portion on August 8, 2022 and 2023.

(3) Becomes exercisable as to cumulative increments of one-third of the unexercisable portion on June 1, 2022, 2023 and 2024

(4) Becomes exercisable as to cumulative increments of 25% of the unexercisable portion on August 3, 2022, 2023, 2024, and 2025.





Option Exercises in Last Fiscal Year



All of the five named executive officers exercised stock options during
2021. The table below shows the realized value and the number of options exercised for those three individuals. None of our officers hold
stock awards; accordingly, no stock awards vested during 2021.



Option Exercises and Stock Vested



|             | Value realized on exercise (1) | Number of shares acquired on exercise
|------------ | ------------------------------ | -------------------------------------
|Mr. Bradley  | $4,284,660                     | 699,999                              
|Mr. Fritz    | 157,000                        | 50,000                               
|Mr. Lavin    | 223,600                        | 50,000                               
|Ms. Robinson | 246,250                        | 65,000                               
|Ms. Straten  | 174,745                        | 37,750                               



(1)       The value realized is the difference
between the fair market value of the Company’s common stock on the date of exercise (the closing price reported by Nasdaq) and the
exercise price of the option.









12







Executive Management Bonus Plan (Non-equity
Incentive Plan)



The salary and cash bonus of the named executive officers are determined
by the Compensation Committee. The compensation appearing in the Summary Compensation Table above under the caption "Non-Equity Incentive
Plan Compensation" is paid pursuant to an executive management bonus plan (the “EMB Plan”).   The EMB Plan
is administered by the Compensation Committee. Among other things, the Compensation Committee selects participants in the EMB Plan from
among the Company’s executive officers and determines the performance goals, target amounts and other terms and conditions of awards
under the EMB Plan. With respect to officers other than the chief executive officer, determinations of base salary and of criteria relating
to the EMB Plan are based in part on evaluations of such officers prepared by the chief executive officer, which are furnished to and
discussed with the Compensation Committee.



Director Compensation



Throughout 2021, we paid our non-employee directors a retainer of
$5,167 per month, with an additional fee of $500 per month for service on a board committee ($1,000 for a committee chairman).
Non-employee directors also received per diem fees of $1,000 for attendance in person at meetings of the board of directors,
or $500 for attendance by telephone. No per diem fees are paid for attendance at committee meetings. The Board in
2021 approved issuance to each non-employee director of options to purchase an aggregate of 30,000 shares. The exercise prices of
all such options are the closing price of the Company’s common stock on the date of grant, which was $2.61 per share. The
following table summarizes compensation received by our directors for the year 2021:



|Name of Director            | Fees Earned
                                                                              or Paid in Cash (1) | Option Awards (2) | Total   
|--------------------------- | ------------------------------------------------------------------------------------------------------------- | ----------------- | --------
|Chris A. Adams              | $82,004                                                                                                       | $78,243           | $160,247
|Charles E. Bradley, Jr. (3) | –                                                                                                             | –                 | –       
|Louis M. Grasso             | 66,004                                                                                                        | 78,243            | 144,247 
|William W. Grounds (4)      | 11,334                                                                                                        | –                 | 11,334  
|Brian J. Rayhill            | 89,504                                                                                                        | 78,243            | 167,747 
|William B. Roberts          | 70,504                                                                                                        | 78,243            | 148,747 
|Gregory S. Washer           | 78,004                                                                                                        | 78,243            | 156,247 
|Daniel S. Wood              | 89,004                                                                                                        | 78,243            | 167,247 



(1)       This column reports
cash compensation earned in 2021 for Board and committee service.

(2)       This column
represents the dollar amount recognized for financial statement reporting purposes with respect to the 2021 fiscal year for the fair value
of stock options granted to the directors in 2021.  The fair value was estimated using a binomial option-pricing model in accordance
with SFAS 123R.  The fair value per option was $2.61, based on assumptions of 3.24 years expected life, expected volatility
of 79.20%, expected dividend yield of 0.0%, and a risk-free rate of 0.37%. In addition to the stock option awards granted in 2021, our
directors held at December 31, 2021 option awards granted in previous years. The total options held at December 31, 2021 represent the
right to purchase shares as follows: Mr. Bradley, 2,840,000 shares; Mr. Adams, 330,000 shares; Mr. Grasso, 60,000 shares; Mr. Rayhill,
410,000 shares; Mr. Roberts, 60,000 shares; Mr. Washer, 330,000 shares; and Mr. Wood, 345,000 shares.

(3)       Mr. Bradley's
compensation as chief executive officer of the Company is described elsewhere in this report. He received no additional compensation for
service on the Company's Board of Directors.

(4) Mr. Grounds was elected a director at the shareholder
meeting held December 1, 2021 and thus did not receive any option awards issued earlier in 2021.



Pension Plans



The Company's officers
do not participate in any pension or retirement plan, other than a tax-qualified defined contribution plan (commonly known as a 401(k)
plan).









13







Potential Payments Upon Termination or Change of Control



This section provides
information regarding payments and benefits to the named executive officers that would be triggered by termination of the officer’s
employment (including resignation, or voluntary termination; severance, or involuntary termination; and retirement) or a change of control
of the Company.



Each of the named
executive officers is an at-will employee and, as such, does not have an employment contract. In addition, if the officer’s employment
terminates for any reason other than a change of control of the Company, any unvested stock options are terminated, and vested options
become subject to accelerated expiration: ordinarily three months following separation from service, or twelve months in the case of disability,
retirement or death. Accordingly, there are no payments or benefits that are triggered by any termination event (including resignation
and severance) other than in connection with a change of control of the Company.



Benefits Triggered by Change of Control or Termination after Change
of Control



Our stock option
plans provide that each employee of ours who holds outstanding unexpired options under our stock option may have the right to exercise
such options following a change of control of the Company, without regard to the date such option would first be exercisable. Each of
the named executive officers holds such options. The “acceleration” of options is mandatory following certain changes of control,
and subject to the discretion of the Compensation Committee following certain others. Acceleration is mandatory in the event of (i) the
sale, or other disposition of substantially all of the Company’s assets, or (ii) a merger or similar transaction in which shareholders
of the Company hold less than 50% of the shares of the surviving entity; provided, however, that acceleration following a merger or similar
transaction is mandatory only if the holder suffers a Qualifying Termination (defined below) within one year following the transaction,
or if the surviving entity does not provide the holder with an equivalent award. Acceleration is also mandatory if a holder suffers a
Qualifying Termination within one year following (iii) a change within a three-year period in the membership of a majority of the board
of directors (excluding changes recommended by the board), or (iv) a person’s acquisition of outstanding voting securities of the
Company, other than directly from the Company and without approval of the board, resulting in that person’s having beneficial ownership
of greater than 25% of the Company.



Under our stock
option plans, the Compensation Committee may exercise its discretion to provide for acceleration under other circumstances than those
described above with respect to any particular stock option or class of stock options. The committee would expect to exercise its discretion
with the intention of preserving the value of the stock option award. To date, such discretion has not been exercised. A “Qualifying
Termination” is a termination of the holder’s employment by the Company other than for cause, disability or death, or by the
holder for “good reason” (principally relating to a material diminution in the holder’s authority, compensation or responsibilities,
or a relocation of greater than 50 miles). The preceding description applies to options held by officers and employees. Options issued
to non-employee directors accelerate without the exercise of discretion upon any of the four categories of change of control described
above.





As of December 31, 2021, each of the named executive officers would
realize a benefit if unvested stock options were to become immediately exercisable upon a change in control, based on the value of the
shares underlying such options at the closing market price on December 31, 2021, which was $11.85 per share. The respective amounts of
such possible benefit are set forth in the following table:





|             | Potential Value Upon Acceleration
|------------ | ---------------------------------
|Mr. Bradley  | $5,634,150                       
|Mr. Fritz    | 1,816,875                        
|Mr. Lavin    | 2,238,975                        
|Ms. Robinson | 1,351,950                        
|Ms. Straten  | 1,351,950                        









14







Management Structure



The board of directors is responsible for overseeing the management
of the Company. Its oversight is aimed at seeing to it that the company’s business is managed to meet our goals, and that the interests
of the shareholders are served.



Charles E. Bradley currently serves as both the chairman of the board
and our chief executive officer, and is the only member of our board who is not independent of the Company. Largely because of the small
number of directors (eight members in total), our board has chosen not to designate any individual formally as the lead independent director.
Each director retains his full oversight responsibility.



Our board structure supports the independence of our non-management
directors. Our audit committee, compensation committee and nominating committee are each composed solely of independent directors. Our
bylaws provide that any two directors have the authority to call meetings of the board of directors, as do specified officers, including
the president and the secretary. To enhance the possible use of that authority by independent directors, the corporate secretary is under
standing instructions to call a meeting at the instance of any one director.



The board believes that combining the chairman and chief executive
officer positions is currently the most effective leadership structure given Mr. Bradley’s in-depth knowledge of our business and
industry and his demonstrated ability to formulate and implement strategic initiatives. Mr. Bradley is continuously involved in developing
and implementing our strategies, working closely with the company’s other senior executives to seek continued disciplined growth
and excellence in operations. His close involvement in management places Mr. Bradley in the best position to decide which business issues
require consideration by the independent directors of the board. In addition, having a combined chairman and chief executive officer enables
us to speak with a unified voice to shareholders, customers and others concerned with our company. The board believes that combining the
chief executive and chairman roles, as part of a governance structure that includes oversight of management responsibilities by independent
directors, provides the preferred system for meeting the requirement that the Company be managed in the best interest of our shareholders.



Risk Oversight



The board’s overall responsibility for directing the management
of the Company includes risk oversight. The risk oversight function is performed at the board level, and by the Audit and Compensation
Committees.



The board of directors as a whole in its regular meetings discusses
and considers the risk inherent in the existing business of the Company and in proposed initiatives. Because the Company’s business
consists of extending consumer credit to individuals believed to be of higher risk than others (sub-prime credit), the assessment of the
risk assumed in such extensions of credit is a primary consideration on the part of the board. Risk oversight is also a key function of
the Audit and Compensation Committees.



The principal risk management function performed by the Audit Committee
is the ongoing assessment of the credit estimates and allowances periodically recorded in the Company’s books. The committee reviews
that assessment regularly. Other risk assessments performed by the Audit Committee include assessments of contingent liabilities, and
of other reserves and allowances.



The principal risk management functions performed by the Compensation
Committee are its setting and evaluation of objectives for the chief executive officer, in connection with its administration of the
executive management bonus plan. The committee recognizes that the company’s business of extending subprime credit inherently includes
a conflict between growing the business and managing the risk of credit losses: one means to increase the company’s business is
to offer credit on terms that are priced too low for the risk assumed. The Compensation Committee manages that risk by insisting that
objectives to grow the business are qualified by a mandate that credit quality be maintained at appropriate levels. To some extent, such
risk management is shared with the Audit Committee, which performs the primary oversight of whether credit risk assumed is reflected
with adequate allowances in the Company’s financial statements.









15







Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.



|Name and Address of Beneficial Owner                                                           | Amount and Nature of Beneficial Ownership (1) | Percent of Class
|---------------------------------------------------------------------------------------------- | --------------------------------------------- | ----------------
|Charles E. Bradley, Jr.                                                                        | 5,070,866                                     |                 
|Chris A. Adams                                                                                 | 442,213                                       |                 
|Louis M. Grasso                                                                                | 70,300                                        |                 
|William W. Grounds                                                                             | 4,600                                         |                 
|Brian J. Rayhill                                                                               | 455,044                                       |                 
|William B. Roberts                                                                             | 930,078                                       |                 
|Gregory S. Washer                                                                              | 563,803                                       |                 
|Daniel S. Wood                                                                                 | 494,365                                       |                 
|Jeffrey P. Fritz                                                                               | 850,000                                       |                 
|Michael T. Lavin                                                                               | 917,352                                       |                 
|Teri L. Robinson                                                                               | 771,800                                       |                 
|Laurie A. Straten                                                                              | 560,511                                       |                 
|All directors and executive officers combined (15 persons)                                     | 13,102,757                                    | (2)             
|Black Diamond Capital Management, L.L.C., One Sound Shore Drive, Suite 200, Greenwich CT 06830 | 4,679,557                                     | (3)             
|Dimensional Fund Advisors LP, Building One, 6300 Bee Cave Road, Austin, Texas, 78746           | 1,688,184                                     | (4)             



|(1) | Includes certain shares that may be acquired within 60 days after April 26, 2022 from the Company
    upon exercise of options, as follows: Mr. Bradley, 1,640,001 shares; Mr. Adams, 330,000 shares; Mr. Grasso, 60,000
    shares; Mr. Rayhill, 392,000 shares; Mr. Roberts, 30,000 shares; Mr. Washer, 240,000 shares; Mr. Wood, 345,000 shares; Mr. Fritz,
    570,000 shares; Mr. Lavin, 615,000 shares; Ms. Robinson, 444,000 shares; and Ms. Straten, 425,000 shares.  Of Mr.
    Bradley’s shares, 2,000,000 are pledged to secure loan(s) to him. The calculation of beneficial ownership also includes, in
    the case of the executive officers, an approximate number of shares each executive officer could be deemed to hold through
    contributions made to the Company's Employee 401(k) Plan (the "401(k) Plan"). The 401(k) Plan provides an
    option for all participating employees to purchase stock in the Company indirectly by buying units in a mutual fund. Each
    "unit" in the mutual fund represents an interest in Company stock, cash and cash equivalents.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Includes 6,208,501 shares that are not outstanding as of the date of this report, but which may be acquired within 60 days after April 26, 2022 upon exercise of options.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Based on a report on Form 4 filed by the named person and an individual on April 8, 2022.
|--- | -----------------------------------------------------------------------------------------



|(4) | Based on a report on Schedule 13G/A filed by the named person on February 8, 2022.
|--- | ----------------------------------------------------------------------------------



Equity Compensation Plan Information





The table below presents information regarding securities authorized
for issuance under equity compensation plans, including the CPS 2006 Long-Term Equity Incentive Plan, as of December 31, 2021.



|Plan Category                      | Outstanding Options | Weighted average exercise price of Outstanding Options | Number of securities remaining available for future issuance under equity compensation plans
|---------------------------------- | ------------------- | ------------------------------------------------------ | --------------------------------------------------------------------------------------------
|Plans approved by shareholders     | 13,074,551          | $4.54                                                  | 3,881,331                                                                                   
|Plans not approved by shareholders | None                | N/A                                                    | N/A                                                                                         
|Total                              | 13,074,551          | $4.54                                                  | 3,881,331                                                                                   









16







CEO Pay Ratio



The Dodd-Frank Reform and Consumer Protection Act includes a mandate
that public companies disclose the ratio of the compensation of their CEO to their median employee. Our CEO-median employee pay ratio
calculation for 2021 is 86:1. We determined the pay ratio by dividing the total 2021 compensation of the CEO as disclosed in the Summary
Compensation Table by the total 2021 compensation of the median employee, using the same components of compensation as used in the Summary
Compensation Table for the CEO.



There have been no changes to our employee population or
compensation arrangements that we believe would result in a significant change in the pay ratio. Accordingly, we have computed the
ratio by reference to the same employee who we identified as our median employee for the year 2020, who was determined using the
compensation of employees who were actively employed on December 31, 2020. We then computed the ratio by reference to that
employee’s total compensation for the year 2021, which was $54,760. The total compensation of the CEO Charles Bradley in 2021
was $4,690,660.



Item 13. Certain Relationships and Related Transactions, and Director
Independence





Citigroup.On July 10, 2008, CPS and its wholly owned subsidiary
Folio Funding II, LLC, as borrower, agreed with Citigroup Financial Products Inc. (“CGFP”), an affiliate of Citigroup Inc.
(“Citigroup”), to amend and restate the agreements governing a pre-existing revolving residual credit facility. CGFP was the
note purchaser in and administrative agent of that credit facility. The amendments included the issuance to an affiliate of CGFP of a
ten-year warrant to purchase (for nominal consideration) 2,500,000 shares of Company common stock, which warrant was subsequently transferred
to CGFP. Upon issuance of such warrant, CGFP became a person with beneficial ownership of greater than 5% of the Company’s common
stock. On March 10, 2010, the Company repurchased a portion of the warrant, representing 500,000 of the 2,500,000 shares available for
purchase upon exercise of such warrant. On July 10, 2018, CGFP exercised the remaining warrant, receiving 1,999,995 shares after surrender
of shares equal in value to the nominal exercise price. On October 20, 2021, the Company purchased 1,999,995 shares of its stock from
CGFP for a purchase price of $12.5 million, the prevailing market price at the time of the sale. The shares purchased, which represent
approximately 8.7% of the common shares outstanding prior to the transaction have been cancelled and retired.



In September 2011, and approximately quarterly thereafter, CGMI acted
as a placement agent of asset-backed notes issued by securitization trusts sponsored by CPS. The issuances of investment-grade and below
investment-grade notes, and the placement compensation to CGMI, from January 1, 2020 to the present, are set forth in the table below.
In each case, one or more other placement agents also received compensation for placing such notes, as well as CGMI.



|               | Investment-grade notes issued | Below investment-grade notes issued | Fees paid to CGMI
|-------------- | ----------------------------- | ----------------------------------- | -----------------
|January 2020   | $ 227,240,000                 | $32,760,000                         | $787,117         
|June 2020      | 179,935,000                   | 22,408,000                          | 328,280          
|September 2020 | 221,000,000                   | 31,200,000                          | 784,245          
|               |                               |                                     |                  
|January 2021   | 211,925,000                   | 18,620,000                          | 370,654          
|April 2021     | 210,000,000                   | 30,000,000                          | 706,368          
|July 2021      | 266,700,000                   | 24,300,000                          | 477,908          
|November 2021  | 310,501,000                   | 38,701,000                          | 1,024,460        
|               |                               |                                     |                  
|February 2022  | 290,400,000                   | 26,400,000                          | 505,139          
|April 2022     | 341,850,000                   | 53,750,000                          | 1,160,627        



On May 11, 2012, the Company entered into a one-year revolving credit
agreement (the "Citi Warehouse Agreement") and related agreements with affiliates of Citigroup and others, under which the lenders
have agreed to lend up to a maximum of $100 million, to be secured by automobile receivables. In connection with the Citi Warehouse Agreement,
the Company paid a closing fee of $1,000,000. The Company first incurred indebtedness under the Citi Warehouse Agreement in the amount
of $9.1 million on May 14, 2012. The Company used the proceeds of that draw for working capital.









17







Following earlier extensions in 2013, 2014, 2016 and 2018, the Company
and the lenders agreed on December 18, 2020 to extend the revolving term of the Citi Warehouse Agreement to December 18, 2022. At the
conclusion of the revolving period, at the election of either the borrower or the lender, the loans are to amortize for an additional
one year, and then become due in full. Loans under the Citi Warehouse Agreement bear interest during the revolving period at a floating
rate equal to one-month LIBOR plus 3.00%, but in all events no less than 3.75% per year, and during the amortization period (if any) at
a floating rate equal to one-month LIBOR plus 4.00%, but in all events no less than 4.75% per year.  The loans are subject to
acceleration upon the occurrence of certain defined events of default. In connection with the 2020 renewal of the Citi Warehouse Agreement,
we paid closing fees of $1,000,000, representing a fee calculated as the product of 0.5% and the fractional number of years by which the
revolving period was extended.



The maximum principal amount of indebtedness under the Citi Warehouse
Agreement during 2021 was $100 million. During 2021, the Company paid $365.9 million of principal and $1.4 million of interest on
such debt. As of April 26, 2022, the principal amount owed was $4.64 million. The Company intends to incur additional indebtedness
under the Citi Warehouse Agreement from time to time as it purchases motor vehicle receivables from dealers.



CPS Leasing. The Company holds 80% of the outstanding shares
of the capital stock of CPS Leasing, Inc. ("CPSL"). The remaining 20% of CPSL is held by Charles E. Bradley, Jr., who is the
chief executive officer and chairman of the board of directors of the Company. CPSL engaged in the equipment leasing business, and is
currently in the process of liquidation as its leases come to term. The Company financed the operations of CPSL by making operating advances
and by advancing to CPSL the fraction of the purchase prices of its leased equipment that CPSL did not borrow under its lines of credit.
The aggregate amounts of the advances made by the Company and outstanding to CPSL as of December 31, 2020 and 2021 were approximately
$90,000, and $60,000, respectively.



Policy on Related Party Transactions and Director
Independence.The agreements and transactions described above, other than those described under the caption “Citigroup,”
were entered into by the Company with parties who personally benefited from such transactions and who had a control or fiduciary relationship
with the Company. It is the Company's policy that any such transactions with persons having a control or fiduciary relationship with
the Company may take place only if approved by the Audit Committee or by the members of the Company's Board of Directors who are disinterested
with respect to the transaction, and independent in accordance with the standards for director independence prescribed by Nasdaq. Such
policy is maintained in writing in the charter of the Audit Committee. The agreements and transactions above were reviewed and approved
by the members of the Company's Board of Directors who were disinterested with respect to the transaction.



The eight directors of the Company are Charles E.
Bradley, Jr., Chris A. Adams, Louis M. Grasso, William W. Grounds, Brian J. Rayhill, William B. Roberts, Gregory S. Washer, and Daniel
S. Wood, of whom Messrs. Rayhill, Grasso, Washer, and Wood compose the Audit Committee. The Board of Directors has concluded that other
than Mr. Bradley (who is the Company's chief executive officer), each of the other seven directors is independent in accordance with the
director independence standards prescribed by Nasdaq, and has determined that none of them has a material relationship with the Company
that would impair his independence from management or otherwise compromise his ability to act as an independent director.



Item 14. Principal Accounting Fees and Services



Fees Paid to Auditors



The following table sets forth the fees accrued or paid to the Company’s
independent registered public accounting firms for the years ended December 31, 2021 and 2020. Crowe has served as the Company’s
independent registered public accounting firm since February 2009, and has reported on the Company’s financial statements for the
years ended December 31, 2008 through 2021.



|Audit and Non-Audit Fees |  | 2020 |           |  | 2021 |  
|------------------------ |  | ---- | --------- |  | ---- | -
|Audit Fees (1)           |  | $    | 810,000   |  |      | $
|Audit-Related Fees (2)   |  |      | 219,700   |  |      |  
|Tax Fees (3)             |  |      | 286,850   |  |      |  
|All Other Fees           |  |      | –         |  |      |  
|TOTAL                    |  | $    | 1,316,550 |  |      | $



(1) Audit fees relate to professional services rendered
in connection with the audit of the Company’s annual financial statements, quarterly review of financial statements included in
the Company’s Quarterly Reports on Form 10-Q, and audit services provided in connection with other statutory and regulatory filings.

(2) Audit-related fees comprise fees for professional services
that are reasonably related to the performance of the audit or review of the Company’s financial statements.

(3) The 2020 and 2021 tax fees represent services rendered
in connection with preparation of state and federal tax returns for the Company and its subsidiaries.











18







Audit Committee Supervision of Principal Accountant



The Audit Committee
acts pursuant to a written charter adopted by the Board of Directors.  Pursuant to the charter, the Audit Committee pre-approves
the audit and permitted non-audit fees to be paid to the independent auditor, and authorizes on behalf of the Company the payment of such
fees, or refuses such authorization. The Audit Committee has delegated to its chairman and its vice-chairman the authority
to approve performance of services on an interim basis. In the fiscal years ended December 31, 2021 and December 31, 2020, all services
for which audit fees or audit related fees were paid were preapproved by the Audit Committee as a whole, or pursuant to such delegated
authority.



In the course of
its meetings, the Audit Committee has considered whether the provision of the non-audit fees outlined above is compatible with maintaining
the independence of the audit firm, and has concluded that such independence is not and was not impaired.





























































19







PART IV



|Item 15. | Exhibits and Financial Statement Schedules.
|-------- | -------------------------------------------



(3)Exhibits:



The exhibits
listed in the Exhibit Index in Part IV, Item 15. “Exhibits and Financial Statement Schedules” of the 2021 Form 10-K were
filed or incorporated by reference as part of the 2021 Form 10-K and the exhibits listed in the Exhibit Index below are filed as
part of this Amendment.



EXHIBIT INDEX



|31.1 | Rule 13a-14(a) certification by Chief Executive Officer
|---- | -------------------------------------------------------
|31.2 | Rule 13a-14(a) certification by Chief Financial Officer







SIGNATURES



Pursuant to the requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, the registrant has caused this amendment to report to be signed on its behalf by the undersigned,
thereunto duly authorized.



|            | CONSUMER PORTFOLIO SERVICES, INC. (registrant)
|----------- | ----------------------------------------------
|May 2, 2022 | By:                                           
|            |                                               



























20