📄 What This Document Is 🗳️

This document is a definitive Proxy Statement (Form DEF 14A). Think of it as the official instruction manual for the company’s Annual Meeting of Shareholders. It provides all the details necessary for shareholders to vote on corporate governance issues, electing directors, and ratifying the independent auditor.

The filing was dated April 21, 2026, and it was sent out because the Board of Directors is soliciting shareholder votes for the 2026 Annual Meeting. Shareholders do not need to physically attend to vote; they can use the enclosed proxy card, the internet, or a phone call.

👉 Key Takeaway: The reader should treat this document as a comprehensive guide to shareholder voting and company governance, not a summary of daily business operations.

🏢 Heritage Global's Business & Leadership 🤵

Heritage Global Inc. operates in the complex financial services and auction industry. The Company's business model involves serving multiple areas, including asset sales and providing platforms for financial transactions. Leadership is provided by a robust team of executives and directors with deep experience in finance and auction practices.

The current executive team includes:

Ross Dove (President and Chief Executive Officer): Joined HGI in February 2012. Mr. Dove’s career spans over thirty years in the auction business, including founding and expanding DoveBid, a global auction firm. He has been actively involved in advancing the auction industry, such as with theatre-style auctions.
Brian Cobb (Chief Financial Officer): Served in this role since May 2022. Previously, he worked in the assurance practice at PricewaterhouseCoopers (PwC).
James Sklar (Executive Vice President, General Counsel, and Secretary): Has served in these roles since May 2015. He brings more than three decades of experience in legal matters for asset advisory and auction services firms across multiple continents.
David Ludwig (Class II Director and President of Financial Assets division): Joined in 2014 and is considered a pioneer in the debt sales industry. He has supervised the sale of over 5,000 portfolios with a face value of $150 billion.
Nicholas Dove (President, Industrial Assets Division): Has been in this role since September 2020. He is a licensed auctioneer in multiple states and has professional experience at Heritage Global Partners.

📅 The 2026 Annual Meeting Details 💻

This section outlines the logistics for the Annual Meeting, ensuring shareholders know when and how to participate. The meeting was set to be entirely virtual, which is a modern and efficient way to handle large-scale shareholder participation.

Date and Time: The Annual Meeting is scheduled for June 3, 2026, at 9:00 a.m. (Pacific Time).
Format: It will be a completely virtual meeting held via a live audio webcast at www.virtualshareholdermeeting.com/HGBL2026. No physical meeting will take place.
Record Date: Shareholders must own their shares as of the close of business on April 6, 2026, to be entitled to vote.
Accessing Materials: The Proxy Statement, proxy card, and the 2025 Annual Report (Form 10-K) are available for free at www.proxyvote.com.

👉 Why it matters: The Company emphasizes that whether or not a shareholder plans to attend, they are strongly encouraged to vote their shares in advance to ensure their votes are counted.

🏛️ The Proposals for Shareholder Vote 🗳️

The Annual Meeting has three primary purposes requiring shareholder action: electing directors, approving the auditor, and transacting other business. The Board has clearly defined what votes are required for each proposal.

Election of Directors (Proposal No. 1): Shareholders must vote to elect Michael Hexner and William Burnham as Class II directors.
- Board Recommendation: The Board of Directors recommends voting "FOR" the election of both nominees.
- Vote Required: Election requires receiving affirmative votes from a plurality of the shares voting (meaning they only need to receive more votes than any other single candidate).
Ratification of Auditor (Proposal No. 2): Shareholders vote to ratify the appointment of UHY LLP as the Company’s independent auditor for the fiscal year ending December 31, 2026.
- Board Recommendation: The Board recommends voting "FOR" this ratification.
- Vote Required: This requires the affirmative vote of a majority of the votes entitled to be cast by shareholders present at the meeting.

👥 Director & Committee Oversight Structure ⚙️

The Board of Directors oversees the Company’s operations but does not participate in daily management. The governance structure relies on specialized committees to ensure compliance and oversight.

Board Composition: The Board has 7 directors. Of those, 2 are female and 5 are male.
Committee Structure:
- Audit Committee: Composed solely of independent directors. It is chaired by Kelly Sharpe. Its primary role is overseeing the integrity of financial statements and the independent accountants.
- Compensation Committee: Also composed solely of independent directors, chaired by Michael Hexner. Its function is to approve and review executive compensation to ensure it aligns with corporate goals.
- Corporate Governance Committee: This committee ensures the Company adheres to policies and guidelines.
Independence: The Board determined that each director, other than Messrs. Dove and Ludwig, is "independent" according to Nasdaq rules, which is crucial for objective oversight.
Meeting Attendance: The Board met four times in 2025. All directors attended 100% of the meetings during 2025, with the exception of director Michael Hexner who was absent (with notice) at the May 1, 2025 meeting.

🥇 Compensation Philosophy & Policies 💵

The compensation philosophy is detailed and highly goal-oriented, aiming to link executive success directly to shareholder value. The Company uses a mix of base salaries, bonuses, and equity incentives.

Core Principles: Compensation should strengthen the link between pay, performance, and cash/equity.
- The program emphasizes "variable, at-risk earnings" that depend on achieving specified corporate and business unit goals.
- It is designed to encourage executives to ensure their potential personal return aligns with the maximum return to shareholders.
Compensation Elements: The compensation is generally composed of three parts: Base Salary, Performance Bonuses, and Equity Incentives.
- Base Salary: For 2025, Ross Dove's salary was $425,000 (the same as 2024). David Ludwig's salary was $400,000 (also steady).
- Performance Bonuses: These are tied to operational and financial goals.
  - Ross Dove (2025): Received a performance-based award of $116,718 (paid 100% in cash). He was eligible for an award range based on operating income (from $30,000 to $1,800,000).
  - David Ludwig (2025): Earned a cash bonus of $621,587, which was 12% of the net operating income of the Financial Assets Division.
  - Nicholas Dove (2025): Earned a cash bonus of $292,559, which was 10% of the net operating income of the Industrial Assets Division.
Equity Incentives: The Company transitioned from using stock options to Restricted Stock Awards as the predominant form of stock-based compensation since 2022.
- Recent Grants: In 2024 and 2025, Mr. Ross Dove received restricted stock grants:
  - March 7, 2024: 76,850 shares (vested in full on March 7, 2025).
  - March 6, 2025: 44,355 shares (vested in full on March 6, 2026).

💰 Executive Compensation Deep Dive 📈

This section details the quantitative payment structure and analyses how compensation paid compares to financial results.

Summary Compensation (Total):
- Ross Dove: In 2025, total compensation was $649,338. In 2024, it was $944,974.
- David Ludwig: In 2025, total compensation was $1,021,587. In 2024, it was $1,445,594.
- Nicholas Dove: In 2025, total compensation was $542,559. In 2024, it was $569,222.
Payment Trends (2024 to 2025):
- Both the PEO and Non-PEO NEO average compensation actually paid decreased from 2024 to 2025.
- The Company notes that this change generally reflects cash bonuses tied to specific annual goals.
Pay vs. Performance: The filing provides a complex comparison (using the Dodd-Frank Act required calculation) comparing total compensation to "Compensation Actually Paid" and "Net Income."
- The analysis explicitly states that the company does not view net income as the primary performance measure for executive pay; instead, it focuses on operating income.
- The company notes that a decrease in net income from $5.2 million (2024) to $3.6 million (2025) was partly due to one-time adjustments to the valuation allowance against deferred tax assets.

📜 Governance and Compliance Policies 🛡️

The Company has multiple policies in place to protect its corporate governance and financial integrity. These policies address everything from insider trading to compensation clawbacks.

Code of Conduct: This code applies to all directors, officers, and employees. It mandates adherence to legal compliance, manages conflicts of interest, and protects corporate opportunities.
Anti-Hedging Policy: The Company prohibits all employees and directors from engaging in short-term or speculative stock transactions (like short sales, buying puts, or calls). All stock transactions must be cleared by the Corporate Secretary.
Compensation Clawback: Since 2023, the Company adopted the Recoupment Policy. This policy is a legal safeguard ensuring that if financial statements are restated due to material non-compliance, the company can force the recoupment of erroneously awarded incentive-based compensation from current and former executive officers.
Insider Trading Policies: The Board has adopted specific policies to ensure that all transactions involving Company stock by insiders are compliant with Nasdaq rules, promoting market trust.

🌐 Ways to Contact the Company 📞

The filing provides specific contacts for shareholder inquiries and board correspondence, ensuring shareholders know how to communicate with the Company's leadership.

General Corporate Inquiries:
- Website: www.hginc.com (Investor Relations section)
- Email: [email protected]
- Phone: (203) 972-9200
Board Correspondence: All formal correspondence for the Board must be addressed to the Secretary of Heritage Global at:
- Address: 6130 Nancy Ridge Drive, San Diego, California 92121

🧠 The Analogy

This Proxy Statement is like the instruction manual for a complex electronic voting booth (the Annual Meeting). It doesn't just tell you that you have to vote; it tells you who you are voting for (the nominees), why they are running (their expertise), how the votes count (plurality vs. majority), and what the rules are for voting (online, proxy, etc.). It guides the user through the entire process to ensure a legal and orderly corporate decision-making process.

🧩 Final Takeaway

This filing is a detailed governance document setting the rules for the 2026 Annual Meeting, requiring shareholders to vote on board members and the auditor. It emphasizes that the company’s compensation model is highly performance-driven, tying executive pay directly to operating income and long-term strategic goals.

HGBL Proxy Statement directs votes for 2026 Annual Meeting