HENNESSY ADVISORS INC Commitments Disclosure
| (10) | Commitments and Contingencies |
In addition to the operating leases discussed in Note 7 in this Item 8, “Financial Statements and Supplementary Data,” the Company has contractual expense ratio limitations in place with respect to the Hennessy Midstream Fund, the Hennessy Technology Fund, and the Hennessy Sustainable ETF. Such contractual expense ratio limitations will expire February 28, 2026, unless extended. Total fees waived during fiscal years 2025 and 2024 were $0.20 million and $0.18 million, respectively. To date, the Company has only waived fees based on contractual obligations but has the ability to waive fees at its discretion. Any decision to waive fees would apply only on a going forward basis.
In November 2024, the Company entered into a settlement agreement with respect to employment-related claims made by a former employee in fiscal year 2024. The Company believed the settlement provided for an efficient and effective resolution to the matter. The Company has employment practices liability insurance for such claims, and therefore paid the amount of the settlement not covered by the employment practices liability insurance.
The Company has no other commitments and no significant contingencies with original terms in excess of one year.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 3, 2025 | Showing above |
| 2024 | Dec 11, 2024 | |
| 2023 | Dec 7, 2023 | |
| 2022 | Dec 7, 2022 | |
| 2021 | Nov 24, 2021 | |
| 2020 | Dec 1, 2020 | |
| 2019 | Dec 3, 2019 | |
| 2018 | Nov 28, 2018 | |
| 2017 | Dec 4, 2017 | |
| 2016 | Dec 1, 2016 | |
| 2015 | Nov 30, 2015 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.