Risk Factors Update Summary

• Discontinuation of ecommerce operations and wind-down of used vehicle dealership business to incur approximately $31.5 million in one-time expenses.
• The business is highly dependent on the ability to securitize and sell automotive finance receivables.
• Agreements may not effectively prevent unauthorized use of intellectual property, leading to costly litigation.
• Wind-down plan costs expected to exceed $31.5 million, with $15.0 million in lease terminations and $16.5 million in severance costs.
• Cash and cash equivalents decreased from approximately $398 million to $94 million.
• The company may incur penalties and fees totaling $2 million due to a lawsuit settlement.
• Reliance on third-party licenses may lead to discontinuation of offerings, impacting financials significantly.
• Wind-down activities may exceed estimated costs, impacting business, financial position, and cash flows.
• Wind-down expenses and ongoing costs may hinder growth and profitability of UACC and CarStory.
• Failure to comply with evolving regulatory frameworks around AI could adversely affect the business.
• Use of open-source software poses risks of litigation, errors, and defects affecting technology deployment.
• Wind-down plan aims to maximize stakeholder value through remaining businesses UACC and CarStory.
• Increased loss severity in UACC's portfolio may lead to reduced servicing income and consolidation of financial statements.