$LQDT Risk Factor changes from 00/12/12/24/2024 to 00/11/20/25/2025

Item 1A. Risk Factors.

If any of the following risks occur, our business, financial condition or operating results could suffer. As a result, the trading price of our common stock could decline, and you may lose all or part of your investment in our common stock. The risks and uncertainties described below are not the only significant risks we may face. Other events that we do not currently anticipate or that we currently deem immaterial also may affect our results of operations and financial condition. 20 Summary Risk FactorsOur Company is subject to several risks that if realized could materially affect our business, prospects, financial condition, results of operations, cash flows and access to liquidity. Business and Operating Risks•Our ability to source a sufficient supply of assets and attract engaged buyers. Our ability to increase our revenue and earn profits depends on whether we can successfully retain existing sellers, attract new sellers, expand the supply of assets available for sale on our e-commerce marketplaces and, at the same time, attract and retain active qualified buyers to purchase the assets in the categories we sell. •Our response to rapid technological changes. •Our continuing initiatives. If our continuing initiatives are not implemented successfully and within budget, or if our systems do not perform in a satisfactory manner, we may not realize the anticipated benefits of such continuing initiatives. •Our information technology and digital marketing improvements and availability of technology. If we do not effectively manage improvements to our marketplaces, it could negatively affect our business and our operating results. •Our vendor contracts with Amazon.com, Inc. •Retention of our senior management and other highly skilled employees.•Competition. Our businesses operate in intensely competitive markets. •Our use of software licensed from third parties, open-source software, SAAS, and PAAS offerings.•Our dependence on third parties for marketing technology. •Privacy and security of personal and business information. •Our purchase transaction model. If we fail to accurately predict our ability to sell assets in which we take inventory risk and credit risk, our margins may decline.•Fluctuation in operating results. Our quarterly operating results have fluctuated in the past and may do so in the future, which could cause volatility in our stock price.•Stock price volatility. •Seasonality of our business. If we cannot effectively manage increased demand, or the increased flow of goods we typically experience during these times, it could adversely affect our revenue and our future growth. •Our ability to identify, finance, and integrate acquisitions. •Our international operations. It is costly to establish, develop, and maintain international operations and websites, and promote our brand internationally, and international operations expose us to foreign exchange fluctuations.•Financing. We may need additional financing in the future, which may not be available on favorable terms, if at all.•Demand for our surplus assets. •Our reliance on banking partners and financial system stability. Instability or failure of any of our primary banks or financial partners could result in a sudden loss of access to our funds, delays or failures in payment processing, or increased costs of obtaining alternative banking services, and changes in the terms of our banking relationships could adversely affect our ability to manage working capital and meet our financial obligations. Legal and Regulatory Risks•Laws and regulations related to the technology systems and to the e-commerce industry. •Government regulations applicable to our auction business.•Privacy regulations.•Asset-specific government restrictions. Certain categories of assets sold on our marketplaces are subject to government restrictions. •Product liability. We may be subject to product liability claims if people or property are harmed by the assets we sell.•Audits and investigations.•Anti-corruption laws and regulations.•Fraudulent activity. We periodically receive complaints of fraudulent activities of buyers or sellers on our marketplace, which may cause us to lose sellers and buyers and hurt our ability to grow our business.•Our corporate documents and Delaware law. Some provisions of our charter, bylaws, and Delaware law inhibit potential acquisition bids.•Intellectual property rights. Our ability to effectively safeguard and enforce our intellectual property rights may be limited, potentially impacting our reputation and adversely affecting our business growth. Assertions that we infringe on intellectual property rights of others could result in significant costs and substantially harm our business and operating results.General Risk Factors•Internal controls over financial reporting.•Accounting and reporting policies or practices. Changes in accounting and reporting policies or practices may affect our financial results, which may affect our stock price.•Our reputation. Damage to our reputation could harm our business.•Goodwill. We carry a significant amount of goodwill on our balance sheet and a future occurrence of a potential indicator of impairment could result in goodwill impairment charges. Our ability to attract enough quantities of suitable assets and buyers with suitable interests in those assets will depend on various factors, some of which are out of our control. These factors include our ability to: offer sellers liquid marketplaces for their assets; offer buyers desirable assets; develop and implement effective seller and buyer marketing strategies; comply with regulatory and commercial seller requirements affecting marketing and disposition of certain assets; efficiently catalog, handle, store, ship, and track delivery of assets; and achieve high levels of seller and buyer satisfaction. As an e-commerce company, we must continuously improve and upgrade our technology, transaction processing systems, and network infrastructure to allow our operations to grow in both size and scope. Without such continuous improvements, our operations might suffer from unanticipated system disruptions, slow transaction processing, unreliable service levels, or impaired quality or delays in reporting accurate financial information, any of which could negatively affect our reputation and ability to attract and retain sellers and buyers. We may also face material delays in introducing new services, assets, and enhancements. The e-commerce industry is rapidly changing with increasing deployment of artificial intelligence (AI) driven platforms, which have the potential to alter the competitive dynamics of digital advertising by changing the way in which users consume information and interact with content over the internet. If we are unable to address these new technologies, adapt to evolving market expectations, or compete effective with AI-driven ecosystems, our growth and market position could be adversely impacted. In addition, the expansion and improvement of our systems and infrastructure may require us to commit substantial financial, operational, and technical resources, with no assurance our business will grow as a result. We may lack sufficient resources to continue to make the significant investments in information technology to compete with our competitors. If we fail to respond to technological change or to adequately maintain, expand, upgrade, and develop our systems and infrastructure promptly, our ability to grow and remain competitive could be limited and our revenue could decrease. We cannot assure you that these initiatives will be beneficial to the extent, or within the timeframes, expected, or that the estimated efficiency, cost savings, and other improvements will be realized as anticipated or at all. 23 For example, we are simultaneously implementing enhancements for operating leverage in our retail operations and investing and expanding further our direct-to-consumer channel by opening a location in Columbus, Ohio under the name Retail Rush. The results of our Retail Rush initiative are affected by a variety of factors, including without limitation: national and regional economic trends in the United States; changes in shipping and transportation costs; changes in our merchandise mix; the weather; changes in pricing; changes in the timing of promotional and advertising efforts; and holidays or seasonal periods. This provides our sellers with a common account experience and simplifies our operations. Iterative information technology and digital marketing improvements require management time and resources to educate employees, redesign internal processes, and implement new ways of conducting business with our sellers and buyers. If we do not effectively manage improvements to our marketplaces, including digital marketing and data driven improvements or the timing, costs, and adoption by sellers and buyers, it could negatively affect our business and our operating results, as well as damage our reputation and our prospects. In addition, the dedication of resources to sustain, secure, and enhance our existing sites constrains the ability to undertake transformation initiatives focused on growth opportunities.com, Inc. in our RSCG segment under which we acquire a significant portion of our purchased inventory, and a disruption in our relationship with Amazon could have a material adverse effect on our revenues and operating results.com, Inc., under which we acquire and then resell assets.2 million of inventory purchased under such contracts with Amazon.com, Inc. is included in our Inventory balances on our Consolidated Balance Sheets as of September 30, 2025 and 2024, respectively. If Amazon stopped selling inventory to us on acceptable terms or adversely changed the mix and quantity of the inventory that they make available to us for purchase, we likely could not procure alternative inventory from other vendors in a timely and efficient manner and on acceptable terms, or at all, which could have a material adverse effect on our revenue and operating results. Angrick, III, our Chairman and Chief Executive Officer. Losing any member of our existing senior management team could damage key seller relationships, result in the loss of key information, expertise, or know-how, lead to unanticipated recruitment and training costs, and make it more difficult to operate our business and achieve our business goals. Our future success also depends on our ability to continue to attract, retain, and motivate highly skilled employees, particularly employees with technology, sales, marketing, operations, and administrative technical expertise. As AI-enabled tools and technology evolve at an accelerated pace, attracting talent, across all disciplines, that are able to safely leverage these technologies becomes of increasing importance. Competition for employees in our industry is intense. If we cannot attract, assimilate, and retain employees with the skills we require, we may not grow our business and revenue as expected and we could experience increased turnover, decreased levels of buyer and seller service, low morale, inefficiency or internal control failures. Further changes to immigration policies in the U.S. and other key jurisdictions that restrain the flow of technical and professional talent may inhibit our ability to adequately recruit and retain highly skilled employees. 24 We must also attract, train, and retain a large and growing number of qualified employees in our RSCG and GovDeals warehouses and storage lots, while controlling related labor costs and maintaining our core values. Our ability to control labor and benefit costs is subject to numerous internal and external factors, regulatory changes, prevailing wage rates, and healthcare and other insurance costs. We compete with other retail and non-retail businesses for these employees and invest significant resources in training and motivating them. We may not be able to attract or retain highly qualified employees in the future, which could have a material adverse effect on our business, financial condition, and results of operations. We have many competitors in different industries, including the online services market for auctioning or liquidating surplus assets and retail markets. Competitive pressures could affect our ability to attract and retain buyers and sellers, which could decrease our revenue and negatively affect our operating results. They may devote greater financial resources to marketing and promotional campaigns, secure better terms from sellers and vendors, adopt more aggressive pricing or inventory availability policies, or devote substantially more resources to technology and infrastructure than we do. This heightened focus on e-commerce has increased the competition we face. If this competition continues to intensify, it may become progressively more difficult to attract enough buyers and sellers to our marketplaces to sustain growth without significant increases in resources. We increasingly may compete in other geographies with local competitors that have advantages we do not, such as a greater ability to operate within the local regulatory and political environments. Furthermore, a smaller competitor may achieve scale by means of competitive advantage over our company, resulting in their ability to directly compete with us for the same source of inventory that we currently acquire. Our operating results depend on the availability and performance of our marketplace technology, network infrastructure, and transaction processing systems, which leverage public cloud infrastructure. Significant service interruptions or system failures, whether internal or within the broader cloud ecosystem, could negatively affect the demand for our services and our ability to grow our revenue. Our systems rely on the availably and scalability of the public cloud providers in which they are hosted. We have occasionally experienced interruptions to our services due to system failures. Any disruption to the third-party data centers we utilize, interruptions or failures of our systems or our ability to communicate with third-party systems could negatively affect the demand for our services and our ability to grow our revenue. Any disruption to either the outsourced systems or the communication links between us and the outsourced supplier could negatively affect our ability to operate our websites or our transaction systems and could impair our ability to provide services to our buyers and sellers. We may incur additional costs to remedy the damages caused by these disruptions. •We use a combination of licensed and open-source software, software as a service (SAAS), and platform as a service (PAAS) offerings from multiple third parties and global public cloud providers. In addition, the terms of certain open-source software licenses may require us to provide modified versions of the open-source software or any proprietary software that we develop that incorporates all or a portion of the open-source software to others on unfavorable license terms consistent with the open-source license term. If we must license our proprietary software under the foregoing, our competitors and other third parties could obtain access to our intellectual property, which could harm our business. If Google modified the search engine algorithms that control our page rankings, we may experience a significant negative impact on the traffic coming to our marketplaces. A decrease in traffic would reduce the number of new buyers and sellers on our marketplaces and could harm our business.e., email, search engines, social media, and third-party banner ads). If industry leading software browsers, such as Google Chrome, Microsoft Edge, or Apple Safari, disable user analytics tracking or other similar capabilities, our ability to track our promotional campaign performance could be affected, which could in turn prevent us from fully optimizing the marketing spend associated with our promotional campaigns. Like many other e-commerce marketplaces, Apple’s recent upgrades to provide greater transparency as to Identifier for Advertisers (IDFA) has, with respect to some categories of assets, made it harder and more expensive for us to target customers with an interest in purchasing those categories of assets. Additionally, our advertising products rely on organic search engine traffic to drive demand for our listing services. If substantial traffic shifts from organic ‘click through’ search to AI generated search results, we may experience a significant decrease in traffic for the advertising listings. We are required to maintain the privacy and security of personal and business information amidst multiplying threat landscapes and in compliance with privacy and data protection regulations globally. Failure to do so could damage our business, including our reputation with sellers, buyers, and employees, cause us to incur substantial additional costs, and make us subject to litigation and regulatory action. 26 The cyber security threat landscape is rapidly evolving, driven by the emergence of AI-enabled fraudsters who are leveraging advanced automation and personalization tools to orchestrate increasingly sophisticated and targeted attacks. We rely upon IT systems and networks, some of which are managed by third parties, in connection with virtually all of our business activities. Additionally, we collect, store and process information relating to our business, sellers, buyers, and employees. Operating these IT systems and networks, and processing and maintaining this data, in a secure manner, is critical to our business operations and strategy. Losing confidential seller or buyer information could also expose us to the risk of liability and costly litigation. In addition, if there is any perception that we cannot protect our users’ confidential information, we may lose the ability to retain existing, and attract new, sellers and buyers, and therefore our revenue could decline. New developments in the fields of AI, machine learning, and robotics may create new vulnerabilities and cybersecurity risks, and remote work has also increased the possible attack surfaces. These threats pose a risk to the security of our systems and networks and the confidentiality, integrity, and availability of our data. Cybersecurity incidents may range from random attempts to coordinated and targeted attacks, including sophisticated computer crimes and advanced persistent threats. Phishing attacks have also emerged, including as vectors for ransomware attacks, which have increased in breadth, frequency, and sophistication for the Company. In addition, it is possible that our IT systems and networks, or those managed by third parties such as cloud providers or suppliers that otherwise host confidential information, could have vulnerabilities, which could go unnoticed for a period of time. The actions and controls we and our third-party service providers have implemented and are implementing, may not be sufficient to protect our systems, information, or other property. Furthermore, cybersecurity is a significant focus for legislators and regulators, resulting in an increasingly complex landscape of global and state privacy laws. The SEC has implemented requirements mandating enhanced disclosures regarding our cybersecurity risk management, strategy, and governance, as well as the reporting of material cybersecurity incidents. Non-compliance with applicable laws and regulations may lead to financial losses, business disruptions, investor liabilities, regulatory actions, or damage to our reputation. At this time, it is not possible to accurately forecast the additional costs associated with compliance or the timeline for incurring such expenses. Additionally, our insurance coverage may not fully address losses arising from related incidents. These operations could be harmed by several factors, including any material disruption or slowdown at our network of warehouses resulting from labor disputes, changes in the terms of our underlying lease agreements, telecommunications failures, power or service outages, human error, terrorist attacks, natural disasters, government mandated business closures, and shelter-in-place guidelines designed to contain the spread of epidemic or pandemic disease or other events. We assume general and physical inventory and credit risk with respect to these assets. These risks are especially significant because some of the goods we purchase and resell on our websites are impacted by rapid technological change, obsolescence, and price erosion, and because we sometimes make large purchases of particular types of inventory or industrial equipment when manufacturing facilities or campuses close. In addition, we do not typically receive warranties on the assets we purchase and, as a result, we must resell or dispose of any returned goods on an as-is basis, which limits the types of buyers willing to purchase our assets. To manage our inventory successfully, we must maintain enough buyer demand to sell assets for a reasonable financial return. We may overpay for the acquired assets if we miscalculate buyer demand or if the acquired assets are not as desirable as we predicted. If assets are not attractive to our buyer base, we may have to take significant losses resulting from lower sale prices, which could reduce our revenue and margins. We plan to continue to opportunistically make such acquisitions. To satisfy local laws and regulations, maximize returns, or effectively manage our operational cash flows, among other business factors, we may acquire inventory in partnership with one or more third parties. In these partnership arrangements, the Company works with one or more third parties to maximize the return on the assets being sold, while utilizing the competitive advantages of all partners involved. The risks described above are heightened in these inventory acquisition transactions due to their size and, at times, the limited market for the assets we acquire. Obtaining financing to fund such acquisitions will increase our costs, which will decrease any profits we receive from the sale of the acquired assets.In our RSCG segment, we are obligated under certain supply agreements to take delivery of product regardless of prevailing demand conditions, which limits our ability to adjust our inventory levels in response to fluctuations in our buyer demand. Our customers are not generally required to purchase any minimum volume of products or services and may reduce or cease purchases at any time. If our buyer demand declines, whether due to the loss of a customer or from broader market weakness, we could experience excess inventory and operational inefficiencies, including increased storage and handling requirements, and reductions in our margins. The risk is heightened under purchase model transactions, where we also bear inventory risk. Any such increase would require the use of additional working capital and any funds so used would not be available for other purposes. Similarly, our future operating results may vary significantly from quarter to quarter due to many factors, including factors beyond our control. You should not rely on period-to-period comparisons of our operating results as an indication of our future performance.S. federal government level that may lead to federal government shutdowns or negative impacts on the U.S. economy;•customs or border control policies and new or changing tariffs or trade sanctions;•event-driven disruptions such as war, terrorism, armed hostilities, disease, and natural disasters;•changes in energy and commodities prices, including the timing and speed of recovery in energy sector macro conditions;•seasonal patterns in selling and purchasing activity; and•costs related to acquisitions of technology or equipment. If this occurs, even temporarily, it could cause volatility in our stock price. In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management's attention and resources. As a result, we expect a disproportionate number of transactions on our marketplaces to occur at certain times during the year. If we cannot effectively manage increased demand, or the increased flow of goods we typically experience during these times, it could adversely affect our revenue and our future growth. If too many buyers and sellers access our websites within a short period of time due to increased demand, we may experience system interruptions that make our websites unavailable or prevent us from providing efficient service, which may reduce our financial and operational results and the attractiveness of our value-added services. If we cannot staff warehouses adequately, we may not be able to process assets quickly enough which, in turn, could mean dissatisfaction of sellers or increased third-party storage costs and reduced profitability.We have completed and may complete additional acquisitions in the future. The success of any acquisition, including anticipated synergies, benefits and cost savings, will depend, in part, on our ability to successfully combine and integrate our current operations with the acquisition. Our ability to successfully integrate the acquired businesses and operations with our existing businesses plays a significant role in realizing the anticipated benefits of any acquisitions. The integration process could cause the loss of key employees, buyers, sellers, or other vendors, increase our operating or other costs, decrease our profit margins, disrupt our other businesses, or divert management’s attention and Company’s resources from our existing businesses. If, as a result of these or other integration risks, we cannot achieve our acquisition objectives in a cost-effective and timely manner, we may not realize the anticipated benefits of the acquisition, or it may take us longer to realize the benefits of the acquisition than we expect. We may not obtain any required acquisition financing on favorable terms, or at all, which could make it impossible or costlier to acquire other businesses. If we can obtain financing, the terms may be onerous and restrict our operations. Further, certain acquisitions may be subject to regulatory approval, which can be time-consuming and costly to obtain, and the terms of such regulatory approvals may impose limitations on our ongoing operations or require us to divest assets or lines of business. Additionally, businesses that we acquire outside the U.S. may present unique challenges or increase our exposure to risks associated with foreign operations, including foreign currency risks and risks associated with local regulatory regimes. We are required to comply with the laws of the countries or markets in which we operate. In addition, because our services are accessible worldwide and facilitate the sales of goods and provide services to users worldwide, one or more jurisdictions may claim that we or our users are required to comply with their laws based on the location of our servers, or one or more of our users, or location of the assets or service being sold or provided. Our international operations may not be profitable on a sustained basis or at all.S.S. Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting certain payments to government officials and other third parties;•laws and policies of the U.S. If any counterparty to our joint ventures or strategic alliances is unwilling or unable to perform its obligations to us, we may not realize the benefits of such arrangements and we may experience material unanticipated problems, expenses, and liabilities.S. dollars. As a result, our financial results are impacted by fluctuations in foreign currency rates. The results of our foreign subsidiaries are translated from the local currency to U.S. dollars for financial reporting purposes. For example, if the U.S. dollar weakens against foreign currencies, the translation of these foreign currency denominated revenues and expenses will result in increased U.S. dollar denominated revenues and expenses. These factors and others may harm our business and our results of operations. In addition, currency exchange rates may negatively affect our results if we pay for inventory using a different currency than we receive when we sell the inventory.While from time to time we enter into transactions to hedge certain foreign currency exposures, it is impossible to eliminate the effects of this exposure. In addition, since the hedging activities are designed to lessen volatility, they not only reduce the negative impact of a stronger U.S. Dollar or other trading currency, but they also reduce the positive impact of a weaker U.S. Dollar or other trading currency. Our future financial results could be significantly affected by the value of the U.S. Dollar in relation to the foreign currencies in which 31 we conduct business. The degree to which our financial results are affected for any given time period will depend in part upon our hedging activities. We may also require additional funds if vendors and other third parties from whom we purchase inventory, other goods or services extend less favorable credit terms to us. Our business may not generate the cash needed to finance such requirements. We currently maintain a Credit Agreement with Wells Fargo Bank, National Association (the Credit Agreement). Terms of the Credit Agreement provide for revolving loans (the Line of Credit) up to a maximum aggregate principal amount of $35.0 million sublimit for standby letters of credit, access to which expires on March 31, 2027. As of September 30, 2025, the Company had no outstanding borrowings under the Line of Credit and had $9.0 million of standby letters of credit outstanding. The amount of standby letters of credit are reserved against the Line of Credit and are not available for borrowing, resulting in $26.0 million of remaining borrowing capacity under the Line of Credit as of September 30, 2025. We are able to issue standby letters of credit for various purposes, including the facilitation of transactions with vendors or other counterparties. If our access to the Credit Agreement is reduced or if vendors or other counterparties change their transacting requirements, we could face higher costs and challenges in managing our working capital effectively, which may adversely affect our operations and financial condition. Further, upon expiration of this line of credit facility, commercial terms for subsequent credit facilities (such as the borrowing amount, interest rates, or related terms) may no longer be favorable to the Company. If, alternatively, we raise additional funds by issuing equity or convertible debt securities, the percentage ownership of our existing stockholders would be reduced, and these securities may have rights, preferences, or privileges senior to those of our common stock. A large degree of economic uncertainty remains both domestically and abroad, which can adversely affect access to capital, and the cost of capital. Global financial developments, downturns, and global health crises or pandemics may harm us, including due to disruptions or restrictions on our employees’ ability to work and travel. The United States and other key international economies have been affected from time to time by falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity, and foreign exchange markets, bankruptcies, labor shortages, labor unrest, pandemics, natural disasters, supply chain disruptions, inflation, and overall uncertainty with respect to the economy, including with respect to tariff and trade issues.Ongoing armed conflicts around the world, such as those in Ukraine and the Middle East, could create or exacerbate risks facing our business. These armed conflicts have resulted and could continue to result in, disruptions to trade, commerce, pricing stability, and/or supply chain continuity, in both Europe and globally, and has introduced significant uncertainty into the global markets. We believe that other potential conflicts that could result in similar disruption could include a military conflict between mainland China and Taiwan, possible international intervention and sanctions, and the resulting potential disruption to the operations of our CAG and Machinio teams in China. Moreover, in addition to our operations, in the case of a military conflict between China and Taiwan, global manufacturers would likely lose access to advanced semiconductor chips and other products that are sourced from Taiwan. Such a conflict would also likely limit access to key Chinese ports and exporters due to both military actions and potential international sanctions, which would create significant disruption for a variety of industries that we serve that rely on supply chain in China. Increasing costs, such as increasing tariffs and trade wars between nations, may make international trade less profitable and adversely affect our global business. Tariffs, economic sanctions and other changes in U.S. trade policy have in the past and could in the future trigger retaliatory actions by affected countries. Such changes have the potential to adversely impact the U.S. economy or certain sectors thereof or the economy of other countries in which we operate, our industry, the industries of our customers, the global demand for our products, and consumer spending generally.Decreases in the supply of, demand for, or market values of surplus assets, including used vehicles and real estate, could harm our business.Our revenues could decrease if there was significant erosion in the supply of, demand for, or market values of the types of assets sold on our marketplaces, including used vehicles and real estate, which could adversely affect our financial condition and results of operations. As a result, potential buyers may retain their existing vehicles for longer periods of time, further decreasing supply. These factors could impact the overall profitability of used vehicle sales on our marketplaces because although used vehicles are selling for higher prices, fewer vehicles are being sold. Climate change initiatives, including significant changes to engine emission standards applicable to certain types of assets, may also adversely affect the supply of, demand for, and market values of such assets.In addition, there are many factors that contribute to adverse market conditions in the real estate sector, including but not limited to, rising interest rates, inflationary pressures, changes in consumer demand or demographic trends, regulatory changes and natural disasters or climate-related events. Such adverse market conditions could impact the supply of, demand for, and market values of real estate, which could, in turn, adversely affect our financial condition and results of operations.Reliance on Banking Partners and Financial System Stability We rely on a limited number of banks and financial institutions both domestically and internationally to provide critical services, including cash management, payment processing, credit facilities, and other transactional support. Our ability to access funds, process payments, and manage liquidity depends on the continued stability and operational soundness of these banking partners.Instability or failure of any of our primary banks or financial partners—whether due to insolvency, regulatory action, cyberattack, or other disruptions—could result in a sudden loss of access to our funds, delays or failures in payment processing, or increased costs of obtaining alternative banking services. 33 In addition, changes in the terms of our banking relationships, such as reduced credit availability, increased collateral requirements, or changes in transaction limits, could adversely affect our ability to manage working capital and meet our financial obligations. If we are unable to access our funds or secure alternative banking arrangements on acceptable terms, our operations, financial condition, and results of operations could be materially and adversely affected.The laws and regulations related to the Internet and e-commerce are evolving, including laws and regulations regarding user privacy, freedom of expression, pricing, fraud, quality of assets and services, taxation, advertising, intellectual property rights, and information security. Any failure or perceived failure by us, or third parties with which we do business, to comply with applicable data privacy and security laws, regulations, rules, industry codes of conduct, policies, standards or other legal or contractual obligations, may result in, among other things, governmental or regulatory investigations, enforcement actions, regulatory or other fines, orders requiring that we change our practices, criminal compliance orders, claims for damages by affected individuals or litigation or public statements against us by consumer advocacy groups or others, and could cause customers to lose trust in us. Current and future laws and regulations could increase our cost of doing business and/or decrease the demand for our services.Many states and other jurisdictions have regulations governing the conduct of traditional "auctions", the liability of traditional "auctioneers" in conducting auctions, the sale of real property via traditional “auctions”, and handling property by "secondhand dealers" which may apply to online auction services. In addition, certain states have laws or regulations that expressly apply to online auction services. We expect to continue to incur costs in complying with these laws and could be subject to fines or other penalties for any failure to comply with these laws. We may be required to make changes in our business to comply with these laws, which could increase our costs, reduce our revenue, cause us to prohibit the listing of certain items, or restrict certain listing formats in some locations, any of which may adversely affect our financial condition or operating results. Users of our websites may not always comply with our terms and conditions or with laws and regulations applicable to them and their transactions. It is possible that we may be subject to allegations of civil or criminal liability for any unlawful activities conducted by sellers or buyers. Any costs we incur because of any such allegations, or because of actual or alleged unlawful transactions using our marketplaces, or in our efforts to prevent any such transactions, may harm our opportunities for future revenue growth. In addition, any negative publicity we receive regarding any such transactions or allegations may damage our reputation, our ability to attract new sellers and buyers, and our business. These statutory and regulatory requirements are evolving, increasing in complexity and number, sometimes conflicting, and may change significantly. How companies collect, process, use, store, share, or transmit personal and employee data is subject to increasing scrutiny by governments and the public, which could accelerate the adoption of additional legislation or regulations. New statutory or regulatory developments may restrict our ability to collect and use demographic and personal information from our buyers and our sellers, which could be costly or harm our marketing efforts. Further, there may be conflicts among the privacy and data protection laws adopted by the countries in which we operate. Judicial and regulatory application and interpretation of these statutory and regulatory requirements are often uncertain and may also limit our marketing efforts. Compliance with regulations regarding privacy, security, and protection of user and employee data, increased government or private enforcement, and changing public attitudes about data privacy, may increase the cost of growing our business and require us to expend significant capital and other resources. Our failure to comply with these federal, state, and international laws and regulations could subject us to lawsuits, fines, criminal penalties, statutory damages, adverse publicity, and other costs which could decrease our profitability. Such restrictions include the U.S. Export Administration Regulations, the International Traffic in Arms Regulations, and economic sanctions and embargo laws administered by the Office of the Foreign Assets Control Regulations. These restrictions prohibit us from selling property to (a) persons or entities that appear on lists of restricted or prohibited parties maintained by the United States or other governments or (b) countries, regimes, or nationals that are the target of applicable economic sanctions or other embargoes. If we are alleged to have violated these laws or regulations, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines, and suspension or debarment from doing business with U.S. federal government agencies. In addition, we could suffer serious harm to our reputation if allegations of impropriety are made against us, whether or not true. Our exposure to product liability claims may be increased if, for example, the manufacturers of the relevant assets do not have enough protection from such claims. Defense of any such actions could be costly and involve significant time and attention of our management and commitment of other resources, may cause us to incur monetary liabilities or penalties, and may require us to change our business in ways adverse to us. We cannot be certain that our insurance coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on commercially reasonable terms, or at all. In addition, some of our agreements with our vendors and sellers do not indemnify us against product liability. Any adverse findings from audits or reviews of our performance could result in a significant adjustment to our previously reported operating results. The results of an audit could significantly limit the volume and type of assets made available to us, resulting in lower revenue and profitability. If such an audit uncovers improper or illegal activities, we could be subject to civil and criminal penalties and administrative sanctions and we could suffer serious harm to our reputation. Government and law enforcement agencies may also investigate our activities under contracts with commercial businesses and governmental entities. If, as the result of a government audit or investigation, or for any other reason, we are suspended or debarred from contracting with governments generally, or any specific agency, if our reputation or relationship with government agencies is impaired, or if any government otherwise ceases doing business with us or significantly decreases the amount of business it does with us, our revenue and profitability could substantially decrease.S. Foreign Corrupt Practices Act, the U.K. Bribery Act 2010 and similar anti-corruption laws of other countries. Our practices and policies to promote compliance with such laws and regulations may not be effective and violations of anti-corruption laws or regulations by our employees or by intermediaries acting on our behalf may result in severe criminal or civil sanctions, disrupt our business, and adversely affect our reputation, business, and results of operations or financial condition. From time to time, we have received complaints that our sellers or buyers trading in our marketplaces are alleged to have engaged in fraudulent or unlawful activity. In addition, we may suffer losses because of purchases paid for with fraudulent credit card data even though the associated financial institution approved payment. If a transaction is disputed, we may not be able to require users of our services to make required payments or to deliver promised goods. We also may receive complaints from buyers about the quality of purchased goods, requests for reimbursement or communications threatening or commencing legal actions against us. Negative publicity generated because of fraudulent conduct by third parties or failure to satisfactorily settle disputes related to transactions on our websites could damage our reputation, cause us to lose sellers and buyers and hurt our ability to grow our business. These provisions include: a staggered Board of Directors; a prohibition on actions by our stockholders by written consent; limitations on persons authorized to call a special meeting of stockholders; the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval; advance notice procedures required for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; and the requirement that Board of Director vacancies be filled by a majority of our directors then in office. These provisions could also discourage proxy contests and may make it more difficult for you and other stockholders to elect directors of your choosing and cause us to take other corporate actions you may desire. In addition, our bylaws provide that the Delaware Court of Chancery will be the exclusive forum for certain types of legal action (or, if the Court of Chancery does not have jurisdiction, another state court or a federal court within Delaware). This exclusive forum provision may limit the ability of our stockholders to challenge certain corporate actions in a judicial forum that such stockholders find favorable for disputes with the Company or our current or former directors or officers. 36 Our ability to effectively safeguard and enforce our intellectual property rights may be limited, potentially impacting our reputation and adversely affecting our business growth. We rely on contractual restrictions and copyright and trade secret laws to protect our proprietary rights, know-how, information and technology. Despite these protections, a third party could copy or otherwise obtain and use our intellectual property without authorization or independently develop similar intellectual property.liquidation.com, www.govdeals.com, www.allsurplus.com, www.secondipity.com, www.retailrush.com, www.machinio.com, www.machineryhost.com, www.bid4assets.com, and www.sierraauction.com. We pursue the registration of our domain names in the U.S. and internationally. We have no patents or registered copyrights. Effective patent, copyright, trademark, service mark, trade secret, and domain name protection are expensive to maintain and may require litigation to enforce. We have licensed in the past, and expect to license in the future, certain of our proprietary rights, such as trademarks or copyrighted material, to others. These licensees may take actions that diminish the value of our proprietary rights or harm our reputation. Our competitors may adopt trade names or domain names similar to ours, impeding our ability to promote our marketplaces and possibly leading to buyer or seller confusion. In addition, we could face trade name, trademark, or service mark infringement claims brought by owners of other registered or unregistered trademarks or service marks, including trademarks or service marks that may incorporate variations of our marketplace names. Any claims related to our intellectual property or confusion related to our marketplaces could damage our reputation and negatively affect the growth of our business.Third parties may claim that our internally developed systems or licensed third-party technology for operating our online auction platform and related websites infringes their intellectual property rights. Similar claims could be made against the providers from whom we license technology. The resolution of these disputes may result in the need to modify technology, develop alternative solutions, or enter into royalty or licensing agreements. Transitioning to different technology could disrupt business operations. Developing non-infringing technology internally may be both costly and time-consuming, and there is no guarantee of success. Any of these factors could affect our operating results. Compliance with these requirements has resulted in, and is likely to continue to result in, significant costs and the commitment of time and operational resources. We cannot be certain that our design for internal controls over financial reporting, or any changes to be made, will enable management to determine that our internal controls are effective for any period. If we cannot conclude that our internal controls over financial reporting are effective, market perception of our financial condition and the trading price of our stock may be adversely affected, and seller and buyer perception of our business may suffer. Internal controls may become less effective over time because of, among other things, changes in conditions, failures to comply with our policies and procedures, or new business that strains our system of internal controls. Some require our management to use estimates and make subjective and complex judgments about matters that are uncertain. Factors may arise over time that lead us to change our estimates and judgments. Any changes in accounting policies or methods could reduce our net income, and such reductions may be independent of changes in our operations. These reductions in reported net income could cause our stock price to decline. Our ability to attract and retain highly skilled employees, clients and buyers, and to successfully do business would be harmed if our reputation was damaged. Harm to our reputation can arise from numerous sources, including, among others, employee misconduct, security breaches, compliance failures, litigation or regulatory outcomes, or governmental investigations. Our reputation could also be harmed by the failure or perceived failure of an affiliate, joint-venture, or a vendor or other third party with which we do business, to comply with laws or regulations. In addition, our reputation or prospects may be significantly damaged by adverse publicity or negative information regarding us, whether or not true, that may be posted on social media, non-mainstream news services or other parts of the Internet, and this risk can be magnified by the speed and pervasiveness with which information is disseminated through those channels. Should any of these or other events or factors that can undermine our reputation occur, the additional costs and expenses that we may need to incur to address the issues giving rise to the damage to our reputation may adversely affect our earnings and results of operations. Any damage to our reputation could impair our ability to retain existing or attract new customers, investors and employees. The future occurrence of a potential indicator of impairment, such as a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a material negative change in relationships with significant customers, strategic decisions made in response to economic or competitive conditions, loss of key personnel, or a more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of, could result in goodwill impairment charges. We have recorded goodwill impairment charges in the past, and such charges materially affected our historical results of operations. For additional information, see Note 7 - Goodwill to the accompanying consolidated financial statements. Item 1B. Unresolved Staff Comments. Item 1C. Cybersecurity. We are subject to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security. We have implemented comprehensive cybersecurity and data privacy programs, fostering a culture of awareness across all employee groups and systems. This achievement builds on our previous SOC2 Type 1 certification and complements our ongoing TX Ramp compliance. On an annual basis, we review the SOC2 (or equivalent) attestation of controls for material third-party service providers, coupled with monitoring industry notices and threat intelligence regarding potential vulnerabilities or threats targeting these third-party services. Our marketplace services are protected by multiple layers of security including firewalls, endpoint protection, WAF and Bot mitigation. Our "defense in depth" approach to asset protection is backed by AI-powered threat detection and response systems and actively monitored 24/7 by a dedicated team of security professionals. We maintain a formal incident response plan, which is regularly tested and updated to ensure prompt detection, reporting, and mitigation of cybersecurity incidents. We assess our program's effectiveness through various exercises, including active Disaster Recovery production environment tests, tabletop exercises, continuous vulnerability tests, and annual penetration testing. We conduct company-wide mandatory cybersecurity training as well as periodic employee education exercises, such as phishing simulation email campaigns designed to emulate real-world attacks. Each employee undergoes annual cybersecurity training with supplemental training disseminated throughout the year. This continual education helps promote a culture that understands the critical role cybersecurity and data privacy play in protecting our clients' assets. Furthermore, our computing environments, products, and services are reviewed by our internal security team and our controls are tested regularly by independent third-party assessors as part of our annual SOC2 and SOX re-certifications. Our Board of Directors is responsible for oversight of the Company's cyber risk management program, including risk identification, mitigation strategy and efforts, and resources and receives quarterly updates on cybersecurity risks and mitigation efforts from management, including our Chief Technology Officer (CTO). The Audit Committee of the Board of Directors is responsible for reviewing the Company's financial reporting of cybersecurity risks and incidents in accordance with SEC rules. We will continue to invest in our security infrastructure to ensure it meets or exceeds industry standards for cybersecurity and employs dedicated resources to protect our systems. Management's Role. Our internal security team in conjunction with the Chief Technology Officer (CTO) reviews current risks with a cross-functional leadership committee on a quarterly basis. For additional information regarding cybersecurity risks, see the risk factor in Part I, Item 1A. Risk Factors captioned: "We are required to maintain the privacy and security of personal and business information amidst multiplying threat landscapes and in compliance with privacy and data protection regulations globally. Failure to do so could damage our business, including our reputation with sellers, buyers, and employees, cause us to incur substantial additional costs, and make us subject to litigation and regulatory action." 39 .

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