Company: HGBL
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0000950170-25-038691
Chunk: 141

Company: Heritage Global Inc.
Filing Date: 2025-03-13
Form: 10-K
Item: Item 1B
Chunk 141
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        12,894

        Deferred tax liabilities:

        Trade names

        (681
        )

        (708
        )

        Customer relationships

        (68
        )

        (48
        )

        Equity method investments

        (20
        )

        (28
        )

        Operating lease right-of-use assets

        (588
        )

        (599
        )

        Other

        (167
        )

        (173
        )

        Total gross deferred tax liabilities

        (1,524
        )

        (1,556
        )

        Total deferred tax assets

        9,521

        11,338

        Less: valuation allowance

        (3,513
        )

        (2,223
        )

        Deferred tax assets, net of valuation allowance
         
        $
        6,008

        $
        9,115

       The Inflation Reduction Act (“IRA”) was enacted on August 16, 2022. The IRA has not had a material impact to the Company’s financial statements for the tax years ended December 31, 2024 or 2023 and management does not believe it will have a material impact on the Company's financial statements in future tax years.Uncertain Tax PositionsThe accounting for uncertainty in income taxes requires a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. Upon adoption of this principle in 2007, the Company derecognized certain tax positions that, upon examination, more likely than not would not have been sustained as a recognized tax benefit. As a result of derecognizing uncertain tax positions, the Company has recorded a cumulative reduction in its deferred tax assets of approximately $4.4 million associated with prior years’ tax benefits, which are not expected to be available primarily due to change of control usage restrictions, and a reduction in the rate of the tax benefit associated with all of its tax attributes.Due to the Company’s historic policy of applying a valuation allowance against its deferred tax assets, the effect of the above was an offsetting reduction in the Company’s valuation allowance. Accordingly, the above reduction had no net impact on the Company’s financial position, operations or cash flow. As of December 31, 2024, the total unrecognized tax benefit has been determined to be $4.4 million.In the unlikely event that these tax benefits are recognized in the future, the amount recognized at that time should