Note 16 – Subsequent Events

The Company has evaluated events subsequent to June 30, 2026 for potential recognition or disclosure in its condensed consolidated financial statements. There have been no material subsequent events requiring recognition or disclosure in this Quarterly Report on Form 10-Q, other than noted below.

Acquisition of Boston Note Company

On July 31, 2026, a wholly owned subsidiary of the Company operating in its Financial Assets Division acquired Boston Note Company, a nationwide broker and buyer of privately held loans, notes, and mortgages, commonly known as seller notes or carry-back notes. Following the transaction, Boston Note Company will do business as Boston Note, a Heritage Global company. Aggregate purchase consideration is expected to be approximately $2.0 million if all contingent milestones are achieved.

Wind Down of Specialty Lending Segment

On July 30, 2026, the Board authorized a strategic plan (the “Exit Plan”) to wind down the Company’s Specialty Lending segment, which has operated through Heritage Global Capital LLC, a wholly owned subsidiary of the Company (“HGC”), and provided specialty financing solutions to investors in charged-off and nonperforming asset portfolios. Based upon the continuation of difficulties with its largest borrower as previously described in the Company's Annual Report on Form 10-K and the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026, filed with the SEC on May 7, 2026, declining further in the second quarter of 2026, and the Board’s evaluation of the business of the Specialty Lending segment in consultation with its advisors, the Board determined that the Exit Plan is in the best interests of the Company. As part of the Exit Plan, HGC will take steps to wind down or exit its position in the joint ventures through which HGC conducts a portion of the business of Specialty Lending segment.

In connection with the implementation of the Exit Plan, the Company expects to incur cash expenditures consisting primarily of employee-related costs related to the wind down process and professional services expenses. The total amount of these expenditures has yet to be determined and will depend on the duration and scope of the activities necessary to implement the Exit Plan. The Company will file an amendment to the Company’s Current Report on Form 8-K, filed with the SEC on July 31, 2026, after it makes a determination of such estimate.

In addition, the Company will recognize a material non-cash impairment charge of approximately $21.7 million, which the Company recognized for the reporting period ended June 30, 2026. Of the aggregate non-cash impairment charges, (i) $18.2 million consists of the write-down of equity method investments and (ii) approximately $3.5 million consists of an increase in the reserve for credit losses for notes receivable.

The Company anticipates that the Exit Plan will commence in the third quarter of 2026 and the completion date will depend on the duration and scope of the activities necessary to implement the Exit Plan. As part of the Exit Plan, the Company, through the Specialty Lending segment, may continue to fund an immaterial number of loans or pursue restructuring efforts with its remaining borrowers.

The costs (including the categories of costs incurred) and timing estimates related to the Exit Plan are subject to a number of assumptions and actual results may differ. As the Exit Plan is implemented, management will continue to evaluate the estimated costs (including the categories of costs incurred) and timing set forth above and may revise its estimates of such costs and timing, as appropriate.