Heritage Global Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Heritage Global Inc. has filed its annual 10-K report for the fiscal year ending December 31, 2023.</b>

AI Summary

Heritage Global Inc. (HGBL) filed a Annual Report (10-K) with the SEC on March 14, 2024. Heritage Global Inc. filed its 2023 Form 10-K on March 14, 2024. The filing covers the fiscal year ending December 31, 2023. The company was formerly known as Counsel RB Capital Inc., C2 Global Technologies Inc., and ACCERIS COMMUNICATIONS INC. Heritage Global Inc. is incorporated in Florida. The company's business address is in San Diego, California.

Why It Matters

For investors and stakeholders tracking Heritage Global Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Heritage Global Inc.'s financial performance, operations, and risk factors for the fiscal year 2023. Investors and stakeholders can use this report to assess the company's financial health, strategic direction, and potential risks moving forward.

Risk Assessment

Risk Level: medium — Heritage Global Inc. shows moderate risk based on this filing. The company has a history of name changes and restructuring, indicating potential past operational or strategic challenges.

Analyst Insight

Review the detailed financial statements and risk factors in the 10-K to understand Heritage Global Inc.'s current financial position and future outlook.

Key Numbers

• 2023-12-31 — Fiscal Year End (CONFORMED PERIOD OF REPORT)
• 2024-03-14 — Filing Date (FILED AS OF DATE)
• 001-39471 — SEC File Number (SEC FILE NUMBER)
• 7389 — SIC Code (STANDARD INDUSTRIAL CLASSIFICATION)

Key Players & Entities

• Heritage Global Inc. (company) — FILER
• Counsel RB Capital Inc. (company) — FORMER COMPANY
• C2 Global Technologies Inc (company) — FORMER COMPANY
• ACCERIS COMMUNICATIONS INC (company) — FORMER COMPANY
• Florida (location) — STATE OF INCORPORATION
• San Diego (location) — BUSINESS ADDRESS CITY
• 858-847-0655 (phone) — BUSINESS PHONE
• David Ludwig (person) — Member

FAQ

Industry Context

Heritage Global Inc. operates within the business services sector, specifically classified under 'SERVICES-BUSINESS SERVICES, NEC'.

Regulatory Implications

The filing is a 10-K, which is an annual report required by the U.S. Securities and Exchange Commission (SEC) for public companies.

What Investors Should Do

1. Analyze the financial statements within the 10-K for revenue, net income, and other key financial metrics.
2. Review the 'Risk Factors' section to understand potential challenges and uncertainties facing Heritage Global Inc.
3. Examine any disclosures related to executive compensation and corporate governance.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K.
• 2024-03-14: Filing Date — Date the 10-K was officially filed with the SEC.

Year-Over-Year Comparison

This is the initial filing analyzed, so no comparison to a previous filing is available.

Key Financial Figures

• $0.01 — nge on which registered Common stock, $0.01 par value HGBL The Nasdaq Stock Mar
• $200 billion — da. Since the 1980s, NLEX has sold over $200 billion face value of performing, nonperforming
• $148.9 million — nception of HGC in 2019, we have issued $148.9 million in total loans to investors through bot
• $62.9 million — e total loans funded since inception is $62.9 million. Our income from secured lending consis
• $38.4 m — e of investments in notes receivable of $38.4 million, recorded in both notes receivabl
• $23.8 m — tes receivable balance of approximately $23.8 million, representing 62% of our total no
• $51.6 million — Loans") with an amortized cost basis of $51.6 million or 59% of the amortized cost basis of t
• $22.2 m — ctured Loans at amortized cost basis is $22.2 million, or 57% of HGC's share of the loa
• $8.4 million — loan book. On our financial statements, $8.4 million is classified as notes receivable and $
• $13.8 million — n is classified as notes receivable and $13.8 million is classified as equity method investme
• $1.0 million — sses on the loans later restructured of $1.0 million as of September 30, 2023. We reevaluate
• $1.1 m — s related to the Restructured Loans was $1.1 million, of which $0.4 million was classi
• $0.4 million — ctured Loans was $1.1 million, of which $0.4 million was classified as notes receivable and
• $0.7 million — was classified as notes receivable and $0.7 million was recorded within equity method inves
• $23.8 million — tes receivable balance of approximately $23.8 million from one borrower, representing 62% of

Filing Documents

• hgbl-20231231.htm (10-K) — 2348KB
• hgbl-ex10_25.htm (EX-10.25) — 40KB
• hgbl-ex10_26.htm (EX-10.26) — 111KB
• hgbl-ex10_27.htm (EX-10.27) — 47KB
• hgbl-ex10_28.htm (EX-10.28) — 140KB
• hgbl-ex10_29.htm (EX-10.29) — 371KB
• hgbl-ex10_34.htm (EX-10.34) — 40KB
• hgbl-ex10_35.htm (EX-10.35) — 35KB
• hgbl-ex10_36.htm (EX-10.36) — 31KB
• hgbl-ex10_44.htm (EX-10.44) — 58KB
• hgbl-ex21.htm (EX-21) — 11KB
• hgbl-ex23_1.htm (EX-23.1) — 4KB
• hgbl-ex31_1.htm (EX-31.1) — 14KB
• hgbl-ex31_2.htm (EX-31.2) — 14KB
• hgbl-ex32_1.htm (EX-32.1) — 10KB
• hgbl-ex32_2.htm (EX-32.2) — 10KB
• hgbl-ex97_1.htm (EX-97.1) — 58KB
• img15146307_0.jpg (GRAPHIC) — 65KB
• img161594754_0.jpg (GRAPHIC) — 569KB
• 0000950170-24-031436.txt (&nbsp;) — 13688KB
• hgbl-20231231.xsd (EX-101.SCH) — 1735KB
• hgbl-20231231_htm.xml (XML) — 2237KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations. 16 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk. 23 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data. 23 Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure. 23 Item 9A.

Controls and Procedures

Controls and Procedures. 23 Item 9B. Other Information. 24 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 24 PART III Item 10. Directors, Executive Officers and Corporate Governance. 25 Item 11.

Executive Compensation

Executive Compensation. 25 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 25 Item 13. Certain Relationships and Related Transactions, and Director Independence. 25 Item 14. Principal Accountant Fees and Services. 25 PART IV Item 15. Exhibits and Financial Statement Schedules. 26 Item 16. Form 10-K Summary 29 2 Forward-Looking Information This Annual Report on Form 10-K for the year ended December 31, 2023 (the "Report") contains certain "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995 that are based on management's exercise of business judgment as well as assumptions made by, and information currently available to, management. When used in this document, the words "may," "will," "anticipate," "believe," "estimate," "expect," "intend," and words of similar import, are intended to identify any forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements reflect our current view of future events and are subject to certain risks and uncertainties, including those noted under Item 1A. "Risk Factors" below. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results could differ materially from those anticipated in these forward-looking statements. We undertake no obligation, and do not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our expectations will materialize. PART I Throughout this Report, we refer to Heritage Global Inc., a Florida corporation ("HG"), together with its subsidiaries, as "we," "us," "our," or the "Company." For each year discussed, our f

B usiness

Item 1. B usiness. Overview and History We are an asset services company specializing in financial and industrial asset transactions. We provide a full suite of services including market making, acquisitions, refurbishment, dispositions, valuations and secured lending. We focus on identifying, valuing, acquiring and monetizing underlying tangible assets across more than twenty-five global sectors. We act as an advisor, as well as a principal, acquiring or brokering turnkey manufacturing facilities, surplus industrial machinery and equipment, industrial inventories, and charged-off receivable portfolios. Our operations are organized into two divisions, Industrial Assets and Financial Assets. Within these two divisions, we group our business activities into the following four operating segments to manage performance: Industrial Assets Division Auction and Liquidation – Through our subsidiary Heritage Global Partners, Inc. ("HGP"), we operate a global full-service auction, appraisal and asset advisory firm, including the acquisition of turnkey manufacturing facilities and used industrial machinery and equipment. Refurbishment & Resale – Through our subsidiary Heritage ALT LLC ("ALT"), we acquire, refurbish and supply specialized laboratory equipment. Financial Assets Division Brokerage – Through our subsidiary National Loan Exchange, Inc. ("NLEX"), we broker charged-off receivables in the United States and Canada on behalf of lenders including banks, mortgage companies, and auto and alternative lending sources. Specialty Lending – Through our subsidiary Heritage Global Capital LLC ("HGC"), we provide specialty financing solutions to investors in charged-off and nonperforming asset portfolios. Corporate Information HG was incorporated in Florida in 1983 under the name "MedCross, Inc." Our name was changed to "I-Link Incorporated" in 1997, to "Acceris Communications Inc." in 2003, to "C2 Global Technologies Inc." in 2005, to "Counsel RB Capital Inc.

Ris k Factors

Item 1A. Ris k Factors. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we are including the following cautionary statements identifying important factors that could significantly and adversely affect the Company and cause actual results to differ materially from those projected in forward looking statements made by, or on behalf of, the Company. The risks and uncertainties described below should be considered carefully, and with all the other information contained in this Report, in evaluating the Company and its business. You should carefully consider and evaluate these risk factors, as any of them could materially and adversely affect our business, financial condition and results of operations, which, in turn, can adversely affect the price of our securities. Competition and Economic Risks We face significant competition in our business. Our business depends on our ability to successfully obtain a continuous supply of auction or appraisal contracts, or distressed and surplus assets for profitable resale to third parties. In this regard, we compete with numerous other organizations, some of which are much larger and better-capitalized, with greater resources available for both asset acquisition and associated marketing to potential customers. Additionally, some competitors have a longer history of activity in the business and may have advantages with respect to accessing both deals and capital. Our business is subject to inventory risk and credit risk. Under our business model, when not acting solely as an auctioneer, we assume the general and physical inventory and credit risks associated with purchasing assets for subsequent resale. Although we do enter into transactions for which a subsequent purchaser has already been identified, in most cases we purchase assets and assume the risk that they may sell for less than our forecasted price. Further, we may miscalculate demand or resale value and s

View Full Filing

View this 10-K filing on SEC EDGAR