Heritage Global (HGBL) risk factors, FY2024 10-K

Other

1. 01We face significant competition in our business
2. 02Our business is subject to inventory risk and credit risk
3. 03Our Specialty Lending segment is concentrated
4. 04Our Specialty Lending segment depends on the expertise, efforts and financial health of our borrowers
5. 05Our Specialty Lending segment depends on the ability of our borrowers to purchase charged off receivables at favorable prices
6. 06Our operating results are subject to significant fluctuation

Operational and Governmental Risks

1. 07We are subject to the risks associated with managing growth
2. 08A portion of our business is conducted through Joint Ventures
3. 09We are dependent upon key personnel
4. 10Disruptions to information systems and those of certain third-party service providers utilized by us could adversely impact our operations, reputation and brand
5. 11The auction portion of our business may be subject to a variety of additional costly government regulations
6. 12Certain categories of merchandise that we sell are subject to government restrictions
7. 13We are subject to the U.S. Foreign Corrupt Practices Act (“FCPA”)
8. 14Our business is subject to environmental risk
9. 15Changes in tax laws or their interpretations, or becoming subject to additional foreign, U.S. federal, state or local taxes, could negatively affect our business, financial condition and results of operations
10. 16If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud
11. 17We may require additional financing in the future, which may not be available, or may not be available on favorable terms
12. 18Provisions in our organizational documents and Florida or certain other state laws could delay or prevent a change in control of our company, which could adversely affect the price of our common stock
13. 19• the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval
14. 20• the consideration paid to the holders of the corporation’s voting stock is at least equal to certain fair price criteria
15. 21Our Board of Directors may issue additional shares of preferred stock without stockholder approval
16. 22We may conduct future offerings of our common stock and preferred stock that may diminish our investors’ pro rata ownership and depress our stock price
17. 23The market price of our common stock may be volatile and this may adversely affect our stockholders
18. 24• general economic and stock market conditions
19. 25We have a material amount of goodwill which, if it becomes impaired, would result in a reduction in our net income
20. 26We may not be able to utilize income tax loss carry forwards
21. 27We have not declared any dividends on our common stock to date and have no expectation of doing so in the foreseeable future
22. 28Our executive officers, directors and their affiliates hold a large percentage of our common stock and their interests may differ from other stockholders
23. 29We could be delisted from Nasdaq, which could seriously harm the liquidity of our stock and our ability to raise capital
24. 30• Shares of our common stock could be less liquid and marketable, thereby reducing the ability of stockholders to purchase or sell our shares as quickly and as inexpensively as they have done historically. If our stock is traded as a “penny stock,” transactions in our stock would be more difficult and cumbersome
25. 31The financial reporting obligations of being a public company in the United States are expensive and time consuming and place significant additional demands on our management