| Item 1.01. | Entry into a Material Definitive Agreement. |
On April 27, 2022, affiliates of America’s
Car-Mart, Inc. (the “Company”) completed a securitization transaction (the “Securitization Transaction”),
which involved the issuance and sale in a private offering of $236,000,000 aggregate principal amount of 3.23% Class A Asset Backed Notes
(the “Class A Notes”), $52,000,000 aggregate principal amount of 4.47% Class B Asset Backed Notes (the “Class B Notes”),
$74,570,000 aggregate principal amount of 5.48% Class C Asset Backed Notes (the “Class C Notes”), and $37,430,000 aggregate
principal amount of 8.58% Class D Asset Backed Notes (the “Class D Notes” and, together with the Class A Notes, the Class
B Notes and the Class C Notes, the “Notes”). The Notes were issued by ACM Auto Trust 2022-1 (the “Issuer”), an
indirect subsidiary of the Company. The Notes are collateralized by loans directly originated by the Company’s operating subsidiaries,
America’s Car Mart, Inc. and Texas Car-Mart, Inc. The Issuer will be the sole obligor of the Notes; the Notes will not be obligations
of or guaranteed by the Company or any of its other affiliates or subsidiaries. Net proceeds from the offering (after deducting the underwriting
discount payable to the initial purchasers and other fees) were approximately $396.0 million and are being used to pay outstanding debt,
make the initial deposit into a reserve account, and for other general purposes.
Kroll Bond Rating Agency (“KBRA”)
has rated the Notes as follows: Class A Notes, AA- (sf); Class B Notes, A- (sf); Class C Notes, BBB-
(sf); and Class D Notes, BB- (sf).
To execute the Securitization Transaction, Colonial
Auto Finance, Inc., a wholly owned subsidiary of the Company (the “Seller”), sold or conveyed certain customer receivable
contracts (the “Receivables”) (loans made to finance customer purchases of used vehicles from the Company’s subsidiaries)
to ACM Funding, LLC, an indirect wholly owned subsidiary of the Company (the “Depositor”), pursuant to a Purchase Agreement,
dated as of April 27, 2022, by and between the Seller and the Depositor (the “Purchase Agreement”). The Receivables were then
sold by the Depositor to the Issuer pursuant to a Sale and Servicing Agreement, dated April 27, 2022, by and between the Depositor, the
Issuer, America’s Car Mart, Inc. , as servicer (the “Servicer”), and Wilmington Trust, National Association, as trustee
(the “Trustee”) (the “Sale and Servicing Agreement”). Under the Sale and Servicing Agreement, the Servicer is
responsible for servicing the Receivables and the Servicer will receive a monthly service fee equal to 4.00% (annualized) based on the
outstanding principal balance of the Receivables. If the Servicer defaults on its obligations under the Sale and Servicing Agreement,
it may, and under certain circumstances will, be terminated and replaced as servicer.
The Notes were sold initially to Credit Suisse
Securities (USA) LLC, as an initial purchaser and representative of the initial purchasers, and then reoffered and resold only to “Qualified
Institutional Buyers” as defined in Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended, in transactions
meeting the requirements of Rule 144A.
Credit enhancement for the Notes will consist
of overcollateralization, a reserve account funded with an initial amount of not less than 2.00% of the pool balance as of the cut-off
date, excess interest on the Receivables, and, in the case of the Class A Notes, the Class B Notes and the Class C Notes, the subordination
of certain payments to the noteholders of less senior classes of notes.
The Servicer will have the right at its option
to purchase (and/or designate one or more other persons to purchase) the Receivables and the other issuing entity property (other than
the reserve account) from the issuing entity on any payment date if both of the following conditions are satisfied: (a) as of the last
day of the related collection period, the Note balance has declined to 10% or less of the Note balance as of April 27, 2022, and (b) the
sum of the purchase price (as described below) and the available funds for such payment date would be sufficient to pay the sum of (i)
the servicing fee for such payment date and all unpaid servicing fees for prior periods, (ii) all fees, expenses and indemnities owed
to the Trustee, the owner trustee, the backup servicer and the calculation agent and not previously paid (without giving effect to any
caps), (iii) interest then due on the outstanding notes and (iv) the aggregate unpaid Note balance of all of the outstanding Notes (the
“Optional Redemption”). If the Servicer (or its designee) purchases the Receivables and other Issuer property (other than
the reserve account), the purchase price will equal the greater of (a) the unpaid principal amount of all of the outstanding Notes, plus
accrued and unpaid interest on the outstanding Notes at the applicable interest rate up to but excluding that payment date (after giving
effect to all distributions to be made on that payment date) and (b) the pool balance.
If certain events of default were to occur under
the Indenture, the Trustee may, and at the direction of the required noteholders, shall cause the principal amount of all of the Notes
outstanding to be immediately due and payable at par, together with interest thereon. Events of default under the Indenture include, but
are not limited to, events such as failure to make required payments on the Notes or specified bankruptcy-related events. If an event
of default related to specified bankruptcy-related events were to occur under the Indenture, all unpaid principal of and accrued interest,
if applicable, on all the Notes outstanding shall become and be immediately due and payable without any declaration or other act on the
part of the Trustee or any noteholder.
The foregoing descriptions of the Indenture, the
Purchase Agreement and the Sale and Servicing Agreement do not purport to be complete and are qualified in their entirety by reference
to such documents, which are filed as Exhibits 4.1, 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated
by reference herein.