Harbor Custom Development Inc. filed SEC Form 8-K: Events That Accelerate or Increase a Direct Financial Obligation
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Item 2.04. Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On November 30, 2023, Harbor Custom Development, Inc., a Washington corporation (the “Company”), received a notice of event of default for failure to make payment of $8,000,000 of principal and $55,555.56 of prorated interest due on November 25, 2023 pursuant to the Company’s Loan Agreement with Fratelli’s LLC (the “Lender”), dated May 23, 2022 (the “Loan”). All amounts are now due and payable under the Loan. Additionally, a default interest rate of 18% is in effect as of the date of default.
Additionally, as previously reported on November 27, 2023, the Company failed to make a payment when due pursuant to the Company’s Loan Agreement with BankUnited, N.A. (the “Lender”), dated March 7, 2022 (the “Loan”) and the Amendment to the Loan Agreement, dated February 22, 2023 (the “Amendment”). On December 4, 2023, the Company received a notice of event of default and acceleration of all amounts due under the Loan from the Lender. According to the Lender, the principal amount due is $14,197,706.88 plus interest of $111,992.10 as of December 4, 2023 (the “Debt”). The Debt will accrue additional interest at the default rate from December 4, 2023, which rate floats at the contract rate plus 3%, until the Debt is paid in full.
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.
| Harbor Custom Development, Inc. | ||
| Date: December 6, 2023 | By: | /s/ Jeff Habersetzer |
| Jeff Habersetzer | ||
| Interim Chief Executive Officer and Interim President | ||