Heritage Global (HGBL) risk factors, FY2025 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 concentrated29% rewritten
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. 06Liens on collateral securing loans that we make to our borrowers may be subject to control by our senior lenders based on our contractual arrangements with those senior lenders. If there is a default, the value of the collateral may not be sufficient to repay in full both the senior lender(s) and usNew
7. 07Our operating results are subject to significant fluctuation

Operational and Governmental Risks

1. 08We are subject to the risks associated with managing growth
2. 09A portion of our business is conducted through Joint Ventures
3. 10We are dependent upon key personnel
4. 11Disruptions to information systems and those of certain third-party service providers utilized by us could adversely impact our operations, reputation and brand
5. 12The auction portion of our business may be subject to a variety of additional costly government regulations
6. 13Certain categories of merchandise that we sell are subject to government restrictions
7. 14We are subject to the U.S. Foreign Corrupt Practices Act (“FCPA”)
8. 15Our business is subject to environmental risk
9. 16Changes 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. 17If 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. 18We may require additional financing in the future, which may not be available, or may not be available on favorable terms
12. 19Provisions 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. 20• the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval
14. 21• the consideration paid to the holders of the corporation’s voting stock is at least equal to certain fair price criteria
15. 22Our Board of Directors may issue additional shares of preferred stock without stockholder approval
16. 23We 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. 24The market price of our common stock may be volatile and this may adversely affect our stockholders
18. 25• general economic and stock market conditions
19. 26We have a material amount of goodwill which, if it becomes impaired, would result in a reduction in our net income
20. 27We may not be able to utilize income tax loss carry forwards
21. 28We have not declared any dividends on our common stock to date and have no expectation of doing so in the foreseeable future
22. 29Our executive officers, directors and their affiliates hold a large percentage of our common stock and their interests may differ from other stockholders
23. 30We could be delisted from Nasdaq, which could seriously harm the liquidity of our stock and our ability to raise capital
24. 31• 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. 32The 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