Consumer Portfolio Services, Inc. | |
19500 Jamboree Road
Irvine, California 92612
Facsimile (949) 753-6897
Telephone (949) 753-6800
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·
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A reference in paragraph (b) II.C to a cumulative 2010 adjustment of $489,000 becomes a reference to a cumulative adjustment of $2.1 million
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A reference in paragraph (b) II.C to that amount being five-tenths of one percent becomes a reference to that amount being 2.3%
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·
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A second reference, in paragraph (b) II.D, to that amount being five-tenths of one percent becomes a second reference to that amount being 2.3%.
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I.
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Quantitative review for 2009
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II.
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Quantitative review for 2010
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A.
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Fluctuations in warrant values during the year would have resulted in a decrease of interest expense of $651,000, or eight tenths of one percent, compared to the amount previously reported.
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B.
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We incurred and reported a substantial loss for 2010 ($33.8 million). The decreased interest expense of $651,000 would have decreased the net loss by only 1.9%.
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C.
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As at December 31, 2009, the appropriate reference for comparison of Shareholders’ Equity is the beginning equity for 2009, again because that figure represents a normalized capital account. The cumulative 2010 adjustment of $2.1 million (comprising both the change in interest expense and reclassification of the warrant) would represent only 2.3% of the 2009 beginning equity.
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D.
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We concluded that, even combining both the cumulative catch-up adjustment and the adjustment for the 2010 period, the adjustments are immaterial to the balance sheet. The change to normalized equity is 2.3%, clearly immaterial in relation to our large operating loss. The decrease in the net loss of 1.9% (please take note that it would have been a decrease for 2010, though it would have been a comparably small increase for 2009) is likewise quantitatively immaterial. Thus the adjustments are also immaterial to our results of operations.
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Sincerely,
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/s/ Jeffrey P. Fritz
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Jeffrey P. Fritz
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Chief Financial Officer
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Consumer Portfolio Services, Inc.
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SAB 99 Materiality Analysis for Error in Accounting for Warrants
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Dollars in thousands
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For the reporting year ended December 31, 2009 | ||||||||||||||||||||||||||||
As Originally Reported
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Quarter Ended
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Quarter Ended
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Six Months Ended
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Quarter Ended
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Nine Months Ended
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Quarter Ended
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Year Ended
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Mar-09
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Jun-09
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Jun-09
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Sep-09
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Sep-09
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Dec-09
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Dec-09
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Net Loss
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$ | (510 | ) | $ | (5,954 | ) | $ | (6,464 | ) | $ | (4,307 | ) | $ | (10,771 | ) | $ | (46,436 | ) | $ | (57,207 | ) | |||||||
Shareholders' Equity
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$ | 89,518 | $ | 83,742 | $ | 80,487 | $ | 35,577 | ||||||||||||||||||||
As Corrected for Effect of Immaterial Error
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Quarter Ended
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Quarter Ended
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Six Months Ended
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Quarter Ended
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Nine Months Ended
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Quarter Ended
|
Year Ended
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Mar-09
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Jun-09
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Jun-09
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Sep-09
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Sep-09
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Dec-09
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Dec-09
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Net Loss
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$ | (572 | ) | $ | (5,985 | ) | $ | (6,557 | ) | $ | (5,109 | ) | $ | (11,666 | ) | $ | (46,412 | ) | $ | (58,078 | ) | |||||||
Shareholders' Equity
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$ | 89,215 | $ | 83,408 | $ | 78,450 | $ | 33,487 | ||||||||||||||||||||
Net Effect of Immaterial Error
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Net Loss
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$ | (62 | ) | $ | (31 | ) | $ | (93 | ) | $ | (802 | ) | $ | (895 | ) | $ | 24 | $ | (871 | ) | ||||||||
Shareholders' Equity
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$ | (303 | ) | $ | (334 | ) | $ | (2,037 | ) | $ | (2,090 | ) | ||||||||||||||||
For the reporting year ended December 31, 2010 | ||||||||||||||||||||||||||||
As Originally Reported
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Quarter Ended
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Quarter Ended
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Six Months Ended
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Quarter Ended
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Nine Months Ended
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Quarter Ended
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Year Ended
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Mar-10
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Jun-10
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Jun-10
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Sep-10
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Sep-10
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Dec-10
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Dec-10
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Net Loss
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$ | (5,817 | ) | $ | (8,968 | ) | $ | (14,785 | ) | $ | (4,499 | ) | $ | (19,284 | ) | $ | (14,541 | ) | $ | (33,825 | ) | |||||||
Shareholders' Equity
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$ | 29,280 | $ | 20,291 | $ | 16,069 | $ | 4,554 | ||||||||||||||||||||
As Corrected for Effect of Immaterial Error
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Quarter Ended
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Quarter Ended
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Six Months Ended
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Quarter Ended
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Nine Months Ended
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Quarter Ended
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Year Ended
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Mar-10
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Jun-10
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Jun-10
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Sep-10
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Sep-10
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Dec-10
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Dec-10
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Net Loss
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$ | (7,935 | ) | $ | (6,767 | ) | $ | (14,702 | ) | $ | (3,442 | ) | $ | (18,144 | ) | $ | (15,030 | ) | $ | (33,174 | ) | |||||||
Shareholders' Equity
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$ | 24,379 | $ | 17,591 | $ | 14,424 | $ | 2,421 | ||||||||||||||||||||
Net Effect of Immaterial Error
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Net Loss
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$ | (2,118 | ) | $ | 2,201 | $ | 83 | $ | 1,057 | $ | 1,140 | $ | (489 | ) | $ | 651 | ||||||||||||
Shareholders' Equity
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$ | (4,901 | ) | $ | (2,700 | ) | $ | (1,645 | ) | $ | (2,133 | ) |