Company: HGBL
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0000950170-25-038691
Chunk: 129

Company: Heritage Global Inc.
Filing Date: 2025-03-13
Form: 10-K
Item: Item 1B
Chunk 129
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 during 2024 includes the additional investment in notes receivable of approximately $5.0 million, which was offset by principal payments made by borrowers of approximately $10.8 million and noncash transfer of notes receivable to equity method investments of approximately $2.5 million. As of December 31, 2024, the Company’s outstanding notes receivable balance related to financing of laboratory equipment sales, net of unamortized deferred fees and costs on originated loans and adjusted for the allowance for credit losses, was $0.4 million. There was no notes receivable balance related to financing of laboratory equipment sales as of December 31, 2023. The activity during 2024 includes investment in notes receivable of approximately $0.6 million, which was offset by principal payments made by purchasers of $0.3 million and an immaterial amount of deferred financing fees, and allowance for credit losses.The table below shows the Company’s lending activity: 

        2024

        2023

        Notes receivable, beginning of year
         
        $
        18,262

        $
        9,163

        Investment in notes receivable

        5,675

        29,826

        Noncash transfer of notes receivable to equity method investments

        (2,487
        )

        (8,851
        )

        Principal repayments

        (11,041
        )

        (11,876
        )

        Notes receivable, end of year

        10,409

        18,262

        Deferred financing fees and costs, net

        (52
        )

        (141
        )

        Allowance for credit losses

        (383
        )

        (650
        )

        Notes receivable, net, end of year
         
        $
        9,974

        $
        17,471

      In accordance with ASC 326, the Company performs a review of notes receivable on a quarterly basis. During 2023, the Company recorded a provision for credit losses in selling, general and administrative expense on the consolidated statement of income of approximately $0.5 million. As of December 31, 2024 and 2023, the allowance for credit losses was approximately $0.4 million and $0.7 million, respectively. The change in allowance for credit losses in 2024 was primarily driven by decreases in loan balances. The Company's credit loss reserve rate specific