| Summary of Fair Value Measurement Inputs and Valuation Techniques |
The fair value of warrants issued is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions in the table below. | | | | | | | | | | | | | Years Ended, | | April 30, 2026 | | April 30, 2025 | | Expected terms (years) | 6 | | 0 | | Risk-free interest rate | 3.55 | % | | — | % | | Volatility | 57.73 | % | | — | % | | Exercise stock price | 22.63 | | — | | | Dividend yield | — | % | | — | % |
The methodology and assumptions utilized to estimate the fair value of the Company’s financial instruments are as follows: | | | | | | | | | Financial Instruments and Other Assets | | Valuation Methodology | | | | | | Cash, cash equivalents, and restricted cash | | The carrying amount is considered to be a reasonable estimate of fair value due to the short-term nature of the financial instruments (Level 1). | | Repossessed inventory | | The fair value approximates wholesale value (Level 1). | | Finance receivables, net | | The Company estimated the fair value of its receivables at what a third-party purchaser might be willing to pay. The Company has had discussions with third parties and has bought and sold portfolios and has had a third-party appraisal in 2025 that indicates a range of 38% to 43% discount to face would be a reasonable fair value in a negotiated third-party transaction. The sale of finance receivables from Car-Mart of Arkansas to Colonial is made at a 40.5% discount. For financial reporting purposes these sale transactions are eliminated (Level 2). | | Accounts payable | | The carrying amount is considered to be a reasonable estimate of fair value due to the short-term nature of the financial instrument (Level 2). | Contingent consideration | | The fair value was based upon inputs from the earn-out projection (Level 2). | | Senior secured note payable | | The fair value approximates carrying value due to the variable interest rates charged on the borrowings, which reprice frequently (Level 2). | | Revolving line of credit | | The fair value approximates carrying value due to the variable interest rates charged on the borrowings, which reprice frequently (Level 2). | | Non-recourse notes payable | | The fair value was based upon inputs derived from prices for similar instruments at period end (Level 2). |
|
| Summary of Estimated Fair Values and Carrying Amounts |
The estimated fair values, and related carrying amounts, of the financial instruments and other assets included in the Company’s financial statements at April 30, 2026 and 2025 are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | April 30, 2026 | | April 30, 2025 | | (In thousands) | | Carrying
Value | | Fair
Value | | Carrying
Value | | Fair
Value | | | | | | | | | | | Cash and cash equivalents | | $ | 46,962 | | | $ | 46,962 | | | $ | 9,808 | | | $ | 9,808 | | | Restricted cash | | 84,684 | | | 84,684 | | | 114,729 | | | 114,729 | | | Inventory - Repossessions | | 20,263 | | | 20,263 | | | 18,845 | | | 18,845 | | | Finance receivables, net | | 1,079,167 | | | 840,770 | | | 1,180,673 | | | 928,130 | | | Accounts payable | | 32,063 | | | 32,063 | | | 34,980 | | | 34,980 | | | Contingent Consideration | | 5,768 | | | 5,768 | | | 6,298 | | | 6,298 | | | Senior secured notes payable, net | | 263,681 | | | 263,681 | | | — | | | — | | | Revolving line of credit, net | | — | | | — | | | 204,769 | | | 204,769 | | | Non-recourse notes payable, net | | 458,685 | | | 462,975 | | | 572,010 | | | 581,029 | |
|