Business Description

Business and Organization America’s Car-Mart, Inc., a Texas corporation (the “Company”), is one of the largest publicly held automotive retailers in the United States focused exclusively on the “Integrated Auto Sales and Finance” segment of the used car market. References to the Company include the Company’s consolidated subsidiaries. The Company’s operations are principally conducted through its two operating subsidiaries, America’s Car Mart, Inc., an Arkansas corporation (“Car-Mart of Arkansas”), and Colonial Auto Finance, Inc., an Arkansas corporation (“Colonial”). Collectively, Car-Mart of Arkansas and Colonial are referred to herein as “Car-Mart.” The Company primarily sells older model used vehicles and provides financing for substantially all of its customers. Many of the Company’s customers have limited financial resources and would not qualify for conventional financing as a result of limited credit histories or past credit problems. As of April 30, 2026, the Company operated 94 dealerships located primarily in small cities throughout the South-Central United States. Business Strategy Near-Term Priorities In light of the Company's current liquidity position, the Company's near-term business strategy is focused on stabilizing operations and preserving financial flexibility. Those near-term priorities include: Preserving Liquidity. The Company is prioritizing preserving cash across the organization, including curtailing vehicle inventory purchases, reducing finance receivable originations, tightening underwriting standards, limiting capital expenditures, and reducing staffing levels in connection with dealership closures, in order to strengthen its liquidity position during this period. Optimizing the Dealership Footprint. The Company is continuing to evaluate its dealership footprint in order to reduce operating costs and concentrate resources in its strongest markets, balancing those savings against the risk of impairing collections performance. During fiscal year 2026, the Company closed 60 dealerships as part of this evaluation and transitioned servicing and collection of the associated customer accounts to nearby dealerships or the Company's centralized collections department. Because the centralized collections model is still in the early stages of implementation and its effectiveness over a full collections cycle has not yet been demonstrated, the Company intends to pace any additional dealership closures and consolidations so as not to outrun the model's proven capacity to maximize collections dollars. The Company expects to continue this evaluation and may close or consolidate additional dealerships going forward. Obtaining and Managing Financing. On October 30, 2025, the Company closed a five-year, $300.0 million senior secured term loan (the "Term Loan") with funds managed by Silver Point Capital, L.P., and used a portion of the proceeds to repay and retire its revolving line of credit. Subsequent to fiscal year-end, the Company obtained a series of short-term waivers from its lenders and, on June 19, 2026, entered into an amendment to the Term Loan providing covenant relief for a limited period, subject to the Company’s satisfaction of specified milestones and conditions. The Company is in discussions with its lenders regarding a new financing agreement to support its operations. Addressing Going Concern. As described under "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" in Item 7 of this Annual Report on Form 10-K and in Note B to the Consolidated Financial Statements in Item 8 of this Annual Report, conditions affecting the Company's liquidity and capital structure raise substantial doubt about the Company's ability to continue as a going concern.…