Current Report Filing (8-k)
March 10 2022 - 06:14AM
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): March 7, 2022
Harbor
Custom Development, Inc.
(Exact
name of registrant as specified in its charter)
Washington |
|
001-39266 |
|
46-4827436 |
(State
or other jurisdiction
of
incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification
No.) |
11505
Burnham Dr., Suite 301
Gig
Harbor, Washington 98332
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code (253) 649-0636
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of Each Class |
|
Trading
Symbol(s) |
|
Name
of Each Exchange on Which Registered |
Common
Stock |
|
HCDI |
|
The
Nasdaq Stock Market LLC |
Series
A Cumulative Convertible Preferred Stock |
|
HCDIP |
|
The
Nasdaq Stock Market LLC |
Warrants |
|
HCDIW |
|
The
Nasdaq Stock Market LLC |
Warrants |
|
HCDIZ |
|
The
Nasdaq Stock Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item
1.01. Entry into a Material Definitive Agreement
Loan
Agreement
On
March 7, 2022, Harbor Custom Development, Inc., a Washington corporation (the “Company”), entered into a loan agreement (the
“Loan Agreement”) with BankUnited, N.A., a national banking association (the “Lender”), pursuant to which the
Company requested the Lender to establish a $25,000,000 revolving credit facility in favor of the Company (the “Secured Revolving
Line of Credit”) and Lender agreed to establish the Secured Revolving Line of Credit in favor of Company on the following terms:
|
● |
Committed
Amount – $25,000,000 to be used for general working capital needs, including real estate investments |
|
● |
Applicable
Interest Rate – Secured Overnight Financing Rate (SOFR) plus 4.75% |
|
● |
Maturity
Date – March 7, 2024 |
|
● |
Optional
Extension to Maturity Date – March 7, 2025 |
|
● |
Loan
secured in favor of Lender with a junior lien security interest by all Company assets in the event of default |
|
● |
Monthly
interest payments only until Maturity Date |
|
● |
No
prepayment penalty |
|
● |
Piper
Sandler acted as the Company’s financial advisor and received a 3% fee for the transaction |
The
foregoing description of the Loan Agreement is qualified in its entirety by reference to the Loan Agreement, a copy of which is attached
hereto as Exhibit 1.1 and is hereby incorporated by reference into this Item 1.01. |
|
Security
Agreement
In
connection with the Loan Agreement, the Company entered into a Security Agreement on March 7, 2022 (the “Security Agreement”).
The Security Agreement sets forth the terms of collection of the debt in the event of a default as defined in the aforementioned Loan
Agreement.
The
foregoing description of the Security Agreement is qualified in its entirety by reference to the Security Agreement, a copy of which
is attached hereto as Exhibit 1.2 and is hereby incorporated by reference into this Item 1.01. |
|
Revolving
Line of Credit Promissory Note
In
connection with the Loan Agreement, the Company entered into a Revolving Line of Credit Promissory Note on March 7, 2022 (the “Promissory
Note”). The Promissory Note sets forth the terms of repayment of the loan as described in the aforementioned Loan Agreement.
The
foregoing description of the Revolving Line of Credit Promissory Note is qualified in its
entirety by reference to the Revolving Line of Credit Promissory Note, a copy of which is
attached hereto as Exhibit 1.3 and is hereby incorporated by reference into this Item 1.01.
|
Item
8.01. Other Events.
On
March 9, 2022, the Company issued a press release announcing the closing of the Secured Revolving Line of Credit with BankUnited, N.A.
A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item
9.01 Financial Statements and Exhibits
(d)
Exhibits.
The
following exhibits are filed with this Current Report on Form 8-K:
Exhibit
Number |
|
Description |
1.1 |
|
Loan Agreement, dated March 7, 2022, by and between Harbor Custom Development, Inc. and BankUnited, N.A. |
1.2 |
|
Security Agreement, dated March 7, 2022, by and between Harbor Custom Development, Inc. and BankUnited, N.A. |
1.3 |
|
Revolving Line of Credit Promissory Note, dated March 7, 2022, by Harbor Custom Development, Inc. |
99.1 |
|
Press Release of Harbor Custom Development, Inc., dated March 9, 2022 |
104 |
|
Cover
Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date:
March 9, 2022 |
Harbor
Custom Development, Inc. |
|
|
|
|
By: |
/s/
Jeff Habersetzer |
|
|
Jeff
Habersetzer |
|
|
Chief
Operating Officer, Secretary, and General Counsel |
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