Company: HGBL
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0000950170-25-038691
Chunk: 134

Company: Heritage Global Inc.
Filing Date: 2025-03-13
Form: 10-K
Item: Item 1B
Chunk 134
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        $
        2,208

        $
        2,539

        December 31,

        December 31,

        Lease liabilities:
         
        2024

        2023

        Del Mar, CA
         
        $
        364

        $
        203

        Hayward, CA

        1,311

        1,594

        San Diego, CA

        381

        498

        Edwardsville, IL

        261

        353

        Total lease liabilities
         
        $
        2,317

        $
        2,648

      The Company’s leases generally do not provide an implicit rate, and, therefore, the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used its incremental borrowing rate as of January 1, 2019 for operating leases that commenced prior to that date. As of January 1, 2019, the Company’s incremental borrowing rate was 5.25%. For leases commencing after January 1, 2019 the Company uses its incremental borrowing rate at time of commencement. On September 1, 2022, June 1, 2023, and September 23, 2024, the Company’s incremental borrowing rate was 5.50%, 7.25%, and 6.25%, respectively. The weighted average remaining lease term for operating leases is 3.2 years and the weighted average discount rate is 5.50% as of December 31, 2024. The weighted average remaining lease term for operating leases was 4.1 years and the weighted average discount rate was 5.35% as of December 31, 2023. Lease expense for leases determined to be operating leases is recognized on a straight-line basis over the lease term. For both 2024 and 2023, lease expense was approximately $0.8 million. Cash paid for operating leases in 2024 and 2023 was $0.9 million and $0.8 million, respectively. The Company had no short-term or variable leases in 2024 or 2023.

F-19

The lease expense for each location are as follows (in thousands):