What the changes say
- Technology dependence is more prominent, including public-cloud outages, AI-driven cyberattacks, AI search reducing advertising traffic, and rapid system upgrades.
- Third-party and concentration risks expand to Amazon inventory, banking partners, cloud software, and skilled employees.
- Asset-market risk is narrowed to assets sold on the marketplaces, explicitly including used vehicles and real estate.
- The company adds execution risks for retail initiatives, digital marketing, acquisitions, compliance, fraud, and international operations.
What changed since the prior 10-K
New
- NewBusiness and Operating Risks
Our response to rapid technological changes. To remain competitive, we must continue to enhance and improve the functionality and features of our e-commerce business, as well as transaction processing systems and network infrastructure, to allow our operations to grow in both size and scope
Maintaining competitiveness requires continual upgrades to the e-commerce platform, transaction systems, and network infrastructure.
- NewBusiness and Operating Risks
Our continuing initiatives. If our continuing initiatives are not implemented successfully and within budget, or if our systems do not perform in a satisfactory manner, we may not realize the anticipated benefits of such continuing initiatives
Execution failures or cost overruns in technology, digital marketing, marketplace improvements, Amazon inventory sourcing, or employee retention could undermine expected benefits.
- NewBusiness and Operating Risks
Competition. Our businesses operate in intensely competitive markets
Competition, third-party software and cloud providers, marketing tracking, data protection, inventory and credit exposure, and volatile results could pressure the business.
- NewBusiness and Operating Risks
Seasonality of our business
Seasonal surges in demand and goods flow could exceed the company’s ability to manage marketplace activity.
- NewBusiness and Operating Risks
Our ability to identify, finance, and integrate acquisitions. If we cannot achieve our acquisition objectives in a cost-effective and timely manner, we may not realize the anticipated benefits of the acquisition, or it may take us longer than we expect to realize the benefits of the acquisition
Acquisition integration, international operations, adverse currency movements, economic conditions, and unavailable or expensive financing could hurt growth.
- NewBusiness and Operating Risks
Demand for our surplus assets. Our revenues could decrease if there was significant erosion in the supply of, demand for, or market values of the types of assets sold on our marketplaces
Bank failure or instability could interrupt access to funds, payment processing, working capital, and affordable banking services.
- NewLegal and Regulatory Risks
Laws and regulations related to the technology systems and to the e-commerce industry. We face legal uncertainties relating to our technology systems and to the e-commerce industry in particular and may become subject to costly government regulation
Auction, privacy, asset-specific, and product-liability regulations could impose fines, litigation, operating restrictions, or costly compliance obligations.
- NewLegal and Regulatory Risks
Audits and investigations
Unfavorable audits or investigations could produce penalties, sanctions, operating losses, and revisions to previously reported results.
- NewLegal and Regulatory Risks
Anti-corruption laws and regulations. Due to the international scope of our operations, we are subject to extensive anti-corruption laws and regulations
International operations create anti-corruption exposure, while fraudulent buyer or seller activity could drive away marketplace participants.
- NewLegal and Regulatory Risks
Our corporate documents and Delaware law. Some provisions of our charter, bylaws, and Delaware law inhibit potential acquisition bids
Delaware corporate provisions may deter acquisitions, while intellectual-property disputes could create costs, litigation, and reputational harm.
- NewBusiness and Operating Risks
If our strategy to compete against our many competitors is not effective, we may lose market share and our financial condition, results of operations, and long-term earnings growth may be negatively affected
Marketplace performance depends on internal systems and public-cloud availability; outages or failures could reduce buyer and seller demand.
- NewBusiness and Operating Risks
Additionally, our advertising products rely on organic search engine traffic to drive demand for our listing services. If substantial traffic shifts from organic ‘click through’ search to AI generated search results, we may experience a significant decrease in traffic for the advertising listings
AI-generated search could divert organic traffic from advertising listings, while evolving AI-enabled cyber fraud raises privacy, security, litigation, and regulatory risks.
- NewBusiness and Operating Risks
Reliance on Banking Partners and Financial System Stability
- NewBusiness and Operating Risks
Instability or failure of any of our primary banks or financial partners—whether due to insolvency, regulatory action, cyberattack, or other disruptions—could result in a sudden loss of access to our funds, delays or failures in payment processing, or increased costs of obtaining alternative banking services
- NewLegal and Regulatory Risks
Our ability to effectively safeguard and enforce our intellectual property rights may be limited, potentially impacting our reputation and adversely affecting our business growth
Dropped
- DroppedBusiness and Operating Risks
Our operating results depend on our websites, network infrastructure, and transaction processing systems, and our software runs on public clouds. Service interruptions or system failures could negatively affect the demand for our services and our ability to grow our revenue
- DroppedLegal and Regulatory Risks
We may not adequately protect or enforce our intellectual property rights, which could harm our reputation and negatively affect the growth of our business
Reworded
- 97% rewrittenLegal and Regulatory Risks
Assertions that we infringe on intellectual property rights of others could result in significant costs and substantially harm our business and operating results
Adds that developing non-infringing technology internally may be costly, time-consuming, and unsuccessful.
- 75% rewrittenBusiness and Operating Risks
Certain aspects of our marketing technology depend on third parties over whom we have no direct control
No substantive change; the same Google algorithm and cross-channel marketing-tracking dependence remains.
Was: Certain aspects of our marketing technology depend on third parties over whom we have no control
- 49% rewrittenBusiness and Operating Risks
We may not realize the anticipated benefits from our continuing initiatives
Adds the example of simultaneously improving retail operating leverage and opening a Retail Rush location in Columbus, Ohio.
- 46% rewrittenBusiness and Operating Risks
Our international operations expose us to foreign exchange fluctuations that could harm our operations
No substantive change to the foreign-currency exposure description.
- 35% rewrittenBusiness and Operating Risks
Decreases in the supply of, demand for, or market values of surplus assets, including used vehicles and real estate, could harm our business
Specifies used vehicles and real estate, while removing explicit references to price competition and recent economic conditions.
Was: Decreases in the supply of, demand for, or market values of surplus assets and real estate, could harm our business
- 31% rewrittenBusiness and Operating Risks
If we do not respond to rapid technological changes or continuously upgrade our systems, we could fail to grow our business and our revenue could decrease
Removes the closing statement that the e-commerce industry is rapidly changing; the technology-upgrade risk otherwise remains materially the same.
- 30% rewrittenBusiness and Operating Risks
If we do not retain our senior management and other highly skilled employees, we may not achieve our business objectives
No substantive change; the senior-management, CEO, key-person insurance, and skilled-employee concerns remain.
- 29% rewrittenBusiness and Operating Risks
Our inability to use software licensed from third parties, open-source software, SAAS, and PAAS offerings under current license or contractual terms could interfere with our proprietary rights thereby disrupting our business
Broadens the dependency description to global public-cloud providers and removes the detailed list of named software vendors.
- 26% rewrittenBusiness and Operating Risks
We have vendor contracts with Amazon.com, Inc. in our RSCG segment under which we acquire a significant portion of our purchased inventory, and a disruption in our relationship with Amazon could have a material adverse effect on our revenues and operating results
- 25% rewrittenBusiness and Operating Risks
If we fail to identify, finance, and integrate acquisitions, our future operating results may be materially adversely affected
- 24% rewrittenBusiness and Operating Risks
Global economic conditions, including those from macro-trends and global events, may harm our business and results of operations
- 23% rewrittenGeneral Risk Factors
We carry a significant amount of goodwill on our balance sheet
- 23% rewrittenBusiness and Operating Risks
If we fail to accurately predict our ability to sell assets in which we take inventory risk and credit risk our margins may decline
- 22% rewrittenLegal and Regulatory Risks
We face legal uncertainties relating to our technology systems and to the e-commerce industry in particular and may become subject to costly government regulation
All 50 risk factors
Headings as the filing states them, in filing order.
Business and Operating Risks
- 01Our response to rapid technological changes. To remain competitive, we must continue to enhance and improve the functionality and features of our e-commerce business, as well as transaction processing systems and network infrastructure, to allow our operations to grow in both size and scopeNew
- 02Our continuing initiatives. If our continuing initiatives are not implemented successfully and within budget, or if our systems do not perform in a satisfactory manner, we may not realize the anticipated benefits of such continuing initiativesNew
- 03Competition. Our businesses operate in intensely competitive marketsNew
- 04Seasonality of our businessNew
- 05Our ability to identify, finance, and integrate acquisitions. If we cannot achieve our acquisition objectives in a cost-effective and timely manner, we may not realize the anticipated benefits of the acquisition, or it may take us longer than we expect to realize the benefits of the acquisitionNew
- 06Demand for our surplus assets. Our revenues could decrease if there was significant erosion in the supply of, demand for, or market values of the types of assets sold on our marketplacesNew
- 11The success of our business depends on our ability to source a sufficient supply of assets from sellers to attract and retain active professional buyers, who in turn attract more sellers
- 12If we do not respond to rapid technological changes or continuously upgrade our systems, we could fail to grow our business and our revenue could decrease31% rewritten
- 13We may not realize the anticipated benefits from our continuing initiatives49% rewritten
- 14The information technology and digital marketing improvements that are core to our strategy place a significant strain on our management, operational, financial and other resources
- 15We have vendor contracts with Amazon.com, Inc. in our RSCG segment under which we acquire a significant portion of our purchased inventory, and a disruption in our relationship with Amazon could have a material adverse effect on our revenues and operating results26% rewritten
- 16If we do not retain our senior management and other highly skilled employees, we may not achieve our business objectives30% rewritten
- 17We face intense competition
- 18If our strategy to compete against our many competitors is not effective, we may lose market share and our financial condition, results of operations, and long-term earnings growth may be negatively affectedNew
- 19Improving the reliability and redundancy of our systems may be expensive or reduce our margins and may not be successful in preventing system failures
- 20Our inability to use software licensed from third parties, open-source software, SAAS, and PAAS offerings under current license or contractual terms could interfere with our proprietary rights thereby disrupting our business29% rewritten
- 21Certain aspects of our marketing technology depend on third parties over whom we have no direct control75% rewritten
- 22Additionally, our advertising products rely on organic search engine traffic to drive demand for our listing services. If substantial traffic shifts from organic ‘click through’ search to AI generated search results, we may experience a significant decrease in traffic for the advertising listingsNew
- 23An interruption in the operations of our buyer and seller support service system or our warehouses could significantly harm our business and operating results
- 24If we fail to accurately predict our ability to sell assets in which we take inventory risk and credit risk our margins may decline23% rewritten
- 25Our quarterly operating results have fluctuated in the past and may do so in the future, which could cause volatility in our stock price
- 26Our stock price has been volatile, and your investment in our common stock could decline in value
- 27The seasonality of our business places increased strain on our operations
- 28If we fail to identify, finance, and integrate acquisitions, our future operating results may be materially adversely affected25% rewritten
- 29Our international operations expose us to several risks
- 30Our international operations expose us to foreign exchange fluctuations that could harm our operations46% rewritten
- 31We may need additional financing in the future, which may not be available on favorable terms, if at all
- 32Global economic conditions, including those from macro-trends and global events, may harm our business and results of operations24% rewritten
- 33Decreases in the supply of, demand for, or market values of surplus assets, including used vehicles and real estate, could harm our business35% rewritten
- 34Reliance on Banking Partners and Financial System StabilityNew
- 35Instability or failure of any of our primary banks or financial partners—whether due to insolvency, regulatory action, cyberattack, or other disruptions—could result in a sudden loss of access to our funds, delays or failures in payment processing, or increased costs of obtaining alternative banking servicesNew
Legal and Regulatory Risks
- 07Laws and regulations related to the technology systems and to the e-commerce industry. We face legal uncertainties relating to our technology systems and to the e-commerce industry in particular and may become subject to costly government regulationNew
- 08Audits and investigationsNew
- 09Anti-corruption laws and regulations. Due to the international scope of our operations, we are subject to extensive anti-corruption laws and regulationsNew
- 10Our corporate documents and Delaware law. Some provisions of our charter, bylaws, and Delaware law inhibit potential acquisition bidsNew
- 36We face legal uncertainties relating to our technology systems and to the e-commerce industry in particular and may become subject to costly government regulation22% rewritten
- 37Our auction business may be subject to a variety of additional costly government regulations
- 38If we violate privacy regulations, our business could suffer harm
- 39Certain categories of assets sold on our marketplaces are subject to government restrictions
- 40We may be subject to product liability claims if people or property are harmed by the assets we sell
- 41Unfavorable findings resulting from audit or investigation could subject us to a variety of penalties and sanctions, could negatively impact our future operating results, and could force us to adjust previously reported operating results
- 42Our operations are subject to extensive anti-corruption laws and regulations
- 43Fraudulent activities involving our websites and disputes relating to transactions on our websites may cause us to lose sellers and buyers and hurt our ability to grow our business
- 44Some provisions of our charter, bylaws, and Delaware law inhibit potential acquisition bids
- 45Our ability to effectively safeguard and enforce our intellectual property rights may be limited, potentially impacting our reputation and adversely affecting our business growthNew
- 46Assertions that we infringe on intellectual property rights of others could result in significant costs and substantially harm our business and operating results97% rewritten
General Risk Factors
- 47Failure to maintain effective internal controls over financial reporting could have a material adverse effect on our business, operating results, and stock price
- 48Changes in accounting and reporting policies or practices may affect our financial results, which may affect our stock price
- 49Damage to our reputation could harm our business
- 50We carry a significant amount of goodwill on our balance sheet23% rewritten
Other Liquidity Services 10-Ks
- FY2024 10-K risk factors39 risks
Marketplace growth depends on securing enough surplus assets from sellers and active professional buyers to sustain network effects.
Filed Dec 12, 2024
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.