CRMT

• The Company's independent auditor has expressed substantial doubt about its ability to continue as a going concern, and failure to address liquidity and covenant issues could force bankruptcy or liquidation, potentially wiping out common stockholders.
• Liquidity constraints have forced a significant reduction in vehicle inventory purchases, which has reduced sales, finance receivable originations, and revenues, creating a self-reinforcing cycle that further strains cash flows.
• The Company entered a short-term amendment to its Term Loan waiving certain defaults through as late as November 2026, but the waivers are conditional on meeting specific milestones, and failure could trigger debt acceleration.
• A back-up servicer activation for the Company's asset-backed securitization trusts could lead to higher delinquencies and credit losses, diminishing the residual value the Company expects to realize from those trusts.
• The recent closure of 60 dealerships may disrupt collections because many non-prime customers historically pay in person, increasing the risk of higher delinquencies and credit losses.
• Elevated fuel prices, partly driven by military conflict involving Iran, are reducing the disposable income of the Company's non-prime customer base, contributing to higher credit losses and a larger allowance for credit losses.

As of April 30, 2026, the Company leased approximately 83% of its facilities, including dealerships and the Company’s corporate offices. These facilities are located principally in the states of Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee and Texas. The Company’s corporate offices are located in approximately 50,000 square feet of leased space in Rogers, Arkansas. For additional information regarding the Company’s properties, see “Operations-Dealership Locations and Facilities” under Item 1 above.

In the ordinary course of business, the Company has become a defendant in various types of legal proceedings. While the outcome of these proceedings cannot be predicted with certainty, the Company does not expect the final outcome of any of these proceedings, individually or in the aggregate, to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

• Total revenue decreased 7.9% to $1,281.5 million, driven by a 14.3% drop in retail units sold following the consolidation of 60 dealerships and reduced finance receivable originations due to liquidity constraints.
• Provision for credit losses rose to 40.8% of sales from 32.7%, and the allowance for credit losses increased to 25.15% of net finance receivables, driven by persistent inflation and elevated fuel prices straining customers' ability to pay.
• Gross margin declined to 35.4% from 36.7%, partly due to a prior-year accounting benefit, though gross profit per retail unit increased $74 to $7,442 as higher average selling prices offset the percentage decline.
• The Company closed a $300.0 million senior secured term loan, repaid its revolving line of credit, and ended the year with $47.0 million in cash, but subsequent covenant breaches and the lack of a revolving facility raise substantial doubt about its ability to continue as a going concern.
• Finance receivable originations fell to $952.5 million from $1,075.1 million, and inventory dropped 51.8% to $54.1 million, reflecting deliberate capital preservation and constrained vehicle purchasing.
• SG&A expenses increased to 20.2% of sales, driven by restructuring charges from the dealership consolidation and professional fees for evaluating strategic alternatives.

The Company is exposed to market risk on its financial instruments from changes in interest rates. In particular, the Company has historically had exposure to changes in the federal primary credit rate and changes in the prime interest rate of its lender. The Company does not use financial instruments for trading purposes but has in the past utilized an interest rate swap agreement to manage interest rate risk. Interest rate risk. The Company’s exposure to changes in interest rates relates primarily to its debt obligations. The Company is exposed to changes in interest rates as a result of its senior secured note and the interest rates charged to the Company under its senior secured note fluctuate based on its primary lender’s base rate of interest. The Company had an outstanding balance on its senior secured note of $300.0 million at April 30, 2026. The impact of a 1% increase in interest rates would result in increased annual interest expense of approximately $3.0 million and a corresponding decrease in net income before income tax. The Company’s earnings are impacted by its net interest income, which is the difference between the income earned on interest-bearing assets and the interest paid on interest-bearing notes payable. The Company’s finance receivables carry a fixed annual interest rate based on the Company’s contract interest rate as of the origination date of the installment sale contract, while its senior secured note payable contains variable interest rates that fluctuate with market interest rates. The Company’s finance receivables carry annual interest rates ranging from 6.0% to 20.3%. The primary interest rate on the Company’s senior secured note payable is generally SOFR plus 7.5%. 50 Table of Contents

• The independent auditor, Grant Thornton LLP, issued an unqualified opinion on the consolidated financial statements for the fiscal year ended April 30, 2026.
• A going concern warning was issued because the company failed debt covenants after year-end, obtained only temporary relief, and is exploring strategic alternatives including a potential sale or bankruptcy.
• The critical audit matter identified was the $329.9 million allowance for credit losses on $1.4 billion in finance receivables, due to significant management judgment in adjusting for current conditions and macroeconomic forecasts.
• Total revenues declined to $1.28 billion from $1.39 billion, and the company reported a net loss of $139.1 million compared to net income of $17.9 million in the prior year.
• The company closed 60 dealership locations during the year, resulting in $11.0 million in impairment charges on long-lived assets.
• Finance receivables, net of the allowance, decreased to $1.08 billion, and the allowance for credit losses increased to 25.15% of the principal balance from 23.25% a year earlier.