Commitments and Contingencies

Leases

The Company leases certain office space and equipment under non-cancelable operating lease agreements, which expire at various dates through 2026. Certain of the leases contain escalation clauses and provide for the pass-through of increases in operating expenses and real estate taxes. Rent related to leases that have escalation clauses is recognized on a straight-line basis. Resulting deferred rent charges are included in other long-term liabilities and were $0.4 million at September 30, 2019.

Future minimum payments under the leases as of September 30, 2019, are as follows:


Year Ending September 30,	Operating Lease Payments		Capital Lease Payments		Total
	(in thousands)
2020	$	5,572	$	52	$	5,624
2021	3,551		53		$	3,604
2022	2,279		53		$	2,332
2023	1,500		54		$	1,554
2024	545		160		$	705
Total future minimum lease payments	$	13,447	$	372	$	13,819

Rent expense for the years ended September 30, 2019 and 2018, was $5.9 million and $10.7 million, respectively.

Contingencies

During the year ended September 30, 2019, the Company determined that it was probable that a liability would result from a sales tax audit performed by the State of California. The liability was $0.6 million, including interest and penalties, and is recorded as a component of Accrued expenses and other current liabilities in the consolidated balance sheets as of September 30, 2019. The liability was paid in the first quarter of fiscal 2020.

Historical Timeline

Fiscal Year	Filed
2020	Dec 8, 2020	Showing above
2019	Dec 10, 2019

2018	Dec 6, 2018

2017	Dec 7, 2017

2016	Nov 21, 2016

2015	Nov 23, 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.

LIQUIDITY SERVICES INC Commitments Disclosure

Historical Timeline

About Commitments Disclosures

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