As
filed with the U.S. Securities and Exchange Commission on May 11, 2023
Registration
No. 333-271550
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment No. 1 to
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
Harbor
Custom Development, Inc.
(Exact
Name of Registrant as Specified in Its Charter)
| Washington |
|
1531 |
|
46-4827436 |
(State
or Other Jurisdiction of
Incorporation
or Organization) |
|
(Primary
Standard Industrial
Classification
Code Number) |
|
(I.R.S.
Employer
Identification
Number) |
1201
Pacific Avenue, Suite 1200
Tacoma,
Washington 98402
(253)
649-0636
(Address,
including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Sterling
Griffin, Chief Executive Officer and President
Harbor
Custom Development, Inc.
1201
Pacific Avenue, Suite 1200
Tacoma,
Washington 98402
(253)
649-0636
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies
to:
Lynne
Bolduc, Esq.
Josephine
Rachelle Aranda, Esq. |
|
Robert
F. Charron, Esq. |
| Fitzgerald
Kreditor Bolduc Risbrough, LLP |
|
Ellenoff
Grossman & Schole LLP |
| 2
Park Plaza, Suite 850 |
|
1345
Avenue of the Americas |
| Irvine,
California 92614 |
|
New
York, New York 10105 |
| (949)
788-8900 |
|
(212)
370-1300 |
Approximate
date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 check the following box: ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate
by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large
accelerated filer |
|
☐ |
|
Accelerated
filer |
|
☐ |
| Non-accelerated
filer |
|
☒ |
|
Smaller
reporting company |
|
☒ |
| |
|
|
|
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 7(a)(2)(B) of the Securities Act. ☐
The
Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective
in accordance with Section 8(a) of the Act or until the registration statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
The
information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration
statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities
and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
| PRELIMINARY
PROSPECTUS |
|
SUBJECT
TO COMPLETION |
|
DATED
MAY 11, 2023 |
Up
to 2,087,683 Shares of Common Stock
Pre-Funded
Warrants to Purchase up to 2,087,683 Shares of Common Stock
(and shares of common stock underlying the Pre-Funded Warrants)
Warrants
to Purchase up to 2,087,683 Shares of Common Stock
(and shares of common stock underlying the Warrants)
Placement
Agent Warrants to Purchase up to 125,261 Shares of Common Stock
(and shares of common stock underlying the Placement Agent Warrants)
Harbor
Custom Development, Inc.
Harbor
Custom Development, Inc., a Washington corporation (“Harbor,” “HCDI,” the “Company,” “we,”
“us,” or “our”) is offering up to 2,087,683 shares of common stock, together with warrants to purchase
up to 2,087,683 shares of common stock at an assumed combined public offering price of $4.79 per share and warrant, which
is equal to the closing price per share of our common stock on the Nasdaq Capital Market (“Nasdaq”) on May 9, 2023
(and the shares issuable from time to time upon exercise of the warrants) pursuant to this prospectus. The shares of common stock and
warrants will be separately issued, but the shares of common stock and warrants will be issued to purchasers in the ratio of one-to-one.
Each warrant will have an exercise price of $4.79 per share, will be exercisable upon issuance, and will expire five years
from the date of issuance.
We
are also offering up to 2,087,683 pre-funded warrants to those purchasers whose purchase of shares of common stock in this offering
would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at
the election of the purchaser, 9.99%) of our outstanding common stock following the consummation of this offering in lieu of the shares
of our common stock that would result in ownership in excess of 4.99% (or, at the election of the purchaser, 9.99%). Each pre-funded
warrant will be exercisable for one share of common stock at an exercise price of $0.0001 per share. Each pre-funded warrant is being
issued together with the same warrant described above being issued with each share common stock. For each pre-funded warrant we sell,
the number of shares of common stock we are offering will be decreased on a one-for-one basis. The assumed combined public offering price
for each such pre-funded warrant, together with a warrant, is $4.7899 which is equal to the closing price per share of our common
stock on Nasdaq on May 9, 2023 less the $0.0001 per share exercise price of each such pre-funded warrant. Each pre-funded warrant
will be immediately exercisable and will expire when exercised in full. The pre-funded warrants and warrants are immediately separable
and will be issued separately in this offering.
We
have engaged H.C. Wainwright & Co., LLC, or the placement agent, to act as our exclusive placement agent in connection with
this offering. The placement agent has agreed to use its reasonable best efforts to arrange for the sale of the securities offered by
this prospectus. The placement agent is not purchasing or selling any of the securities we are offering and the placement agent is not
required to arrange the purchase or sale of any specific number or dollar amount of securities. We have agreed to pay to the placement
agent the placement agent fees set forth in the table below, which assumes that we sell all of the securities offered by this prospectus.
There is no arrangement for funds to be received in escrow, trust, or similar arrangement. There is no minimum number of shares of common
stock or pre-funded warrants and warrants or minimum aggregate amount of proceeds that is a condition for this offering to close. We
may sell fewer than all of the shares of common stock and pre-funded warrants (and accompanying warrants) offered hereby, which may significantly
reduce the amount of proceeds received by us, and investors in this offering will not receive a refund if we do not sell all of the securities
offered hereby. We will bear all costs associated with the offering. (See “Plan of Distribution.”)
Our
common stock is listed on Nasdaq under the symbol “HCDI.” On May 9, 2023, the closing price of our common stock as
reported on Nasdaq was $4.79. All share, warrant, and pre-funded warrant numbers are based on an assumed combined public offering
price of $4.79 per share (or $4.7899 per pre-funded warrant) and warrant.
There
is no established public trading market for the pre-funded warrants or warrants, and we do not expect such markets to develop. We do not intend to apply for listing of the pre-funded warrants or warrants on any securities exchange or other
nationally recognized trading system. Without an active trading market, the liquidity of the pre-funded warrants and warrants will be
limited.
The
final public offering price for the securities offered by this prospectus will be determined between us and the investors in this offering
at the time of pricing and may be at a discount to the current market price. Therefore, the assumed public offering price per share of
common stock, or pre-funded warrant, and accompanying warrant used throughout this prospectus may not be indicative of the final public
offering price for our common stock or pre-funded warrants, as applicable, and the accompanying warrants.
This
offering will terminate on May 31, 2023, unless we decide to terminate the offering (which we may do at any time in our discretion)
prior to that date. We will have one closing for all of the securities purchased in this offering. The combined public offering price
per share of common stock (or pre-funded warrant) and warrant will be fixed for the duration of this offering.
We
are an “emerging growth company” under the federal securities laws and have elected to comply with certain reduced public
company reporting requirements. (See “Prospectus Summary—Implications of Being an Emerging Growth Company.”)
Investing
in our securities involves a high degree of risk. Please carefully read the information under the headings “Risk Factors”
beginning on page 9 of this prospectus and “Item 1A – Risk Factors” of our most recent reports on Form 10-K or 10-Q
or under similar heading in any other document that is incorporated by reference in this prospectus before you invest in our securities.
| | |
Per Share of Common Stock and Accompanying Warrant | | |
Per Pre-Funded Warrant and Accompanying Warrant | | |
Total | |
| Public offering price | |
| | | |
| | | |
| | |
| Placement agent fees (1) | |
| | | |
| | | |
| | |
| Proceeds to us, before expenses (2) | |
| | | |
| | | |
| | |
| (1) |
We
have agreed to (i) pay the placement agent a cash fee up to 7.0% of the aggregate gross proceeds raised in this offering; and (ii)
pay the placement agent a management fee equal to 1.0% of the aggregate gross proceeds raised in this offering. We have also agreed
to reimburse the placement agent for certain expenses and closing costs. In addition, we have agreed to issue to the placement agent
warrants (“Placement Agent Warrants”) to purchase up to a number of shares of our common stock equal to 6.0% of the number
of shares of common stock and pre-funded warrants sold in this offering, at an exercise price equal to 125% of the public offering
price per share of common stock and accompanying warrant. (See “Plan of Distribution” for additional information and
a description of the compensation payable to the placement agent.) |
| |
|
| (2) |
Because
there is no minimum number of securities or amount of proceeds required as a condition to closing in this offering, the actual public
offering amount, placement agent fees, and proceeds to us, if any, are not presently determinable and may be substantially less than
the total maximum offering amounts set forth above. (See “Plan of Distribution” for more information.) |
Neither
the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or disapproved of these securities
or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
delivery of the shares of common stock and any pre-funded warrants and warrants to purchasers in this offering is expected to be made
on or about [ ], 2023.
H.C. Wainwright & Co.
The
date of this prospectus is May [ ], 2023
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
As
used in this prospectus, unless the context otherwise requires or indicates, references to “the Company,” “we,”
“our,” “ourselves,” and “us” refer to Harbor Custom Development, Inc. and its subsidiaries and affiliates,
formerly known as Harbor Custom Homes, Inc., and including our predecessor, Harbor Custom Homes, LLC; and references to “Harbor
LLC” or “our predecessor” refer to Harbor Custom Homes, LLC and (except for financial statement information, except
as otherwise noted) its predecessors and affiliates.
This
prospectus describes the specific details regarding this offering and the terms and conditions of our securities being offered hereby
and the risks of investing in our securities. You should rely only on the information contained in this prospectus and any prospectus
supplement or post-effective amendment to the registration statement of which this prospectus forms a part that may contain material
information relating to these offerings. The prospectus supplement or post-effective amendment may also add, update, or change information
contained in this prospectus with respect to that offering. If there is any inconsistency between the information in this prospectus
and the applicable prospectus supplement or post-effective amendment, you should rely on the prospectus supplement or post-effective
amendment, as applicable. Before purchasing any securities, you should carefully read this prospectus, any post-effective amendment,
and any applicable prospectus supplement, together with the additional information described in the “Where You Can Find More Information”
section of this prospectus.
We
have not authorized anyone to provide you with additional or different information. If anyone provides you with additional, different,
or inconsistent information, you should not rely on it. We take no responsibility for, and can provide no assurance as to, the reliability
of any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby and only under
circumstances and in jurisdictions where it is lawful to do so. We are not making an offer of these securities in any state, country,
or other jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus, any post-effective
amendment, and any applicable prospectus supplement to this prospectus is accurate as of any date other than the date of the applicable
document regardless of its time of delivery or the time of any sales of our securities. Our business, financial condition, results of
operations and cash flows may have changed since the date of the applicable document.
You
should not interpret the contents of this prospectus, any post-effective amendment and any applicable prospectus supplement to this prospectus
to be legal, tax advice, business, or financial advice. You should consult with your own advisors for that type of advice and consult
with them about the legal, tax, business, financial, and other issues that you should consider before investing in our securities.
MARKET
AND INDUSTRY DATA
This
prospectus includes industry and trade association data, forecasts, and information that we have prepared based, in part, upon data,
forecasts, and information obtained from independent trade associations, industry publications and surveys, government agencies, and
other independent information publicly available to us. Statements as to our market position are based on market data currently available
to us. Industry publications, surveys, and forecasts generally state that the information contained therein has been obtained from sources
believed to be reliable. Although we believe these sources are reliable, we have not independently verified the information obtained
from these sources. Some data is also based on our good faith estimates, which are derived from management’s knowledge of the industry
and independent sources. In addition, forward-looking information obtained from these sources is subject to the same qualifications and
the additional uncertainties regarding the other forward-looking statements in this prospectus.
We
believe our internal research is reliable, even though such research has not been verified by any independent sources. While we are not
aware of any misstatements regarding our industry data presented herein, our estimates involve risks and uncertainties and are subject
to change based on various factors, including those discussed under the heading “Risk Factors” in this prospectus.
Trademarks
used in this prospectus are the property of their respective owners, although for presentational convenience we may not use the ®
or the ™ symbols to identify such trademarks. In addition, certain market and industry data has been obtained from publicly available
industry publications. These sources generally state that the information they provide has been obtained from sources believed to be
reliable, but that the accuracy and completeness of the information are not guaranteed. We have not independently verified the data obtained
from these sources. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications
and additional uncertainties regarding the other forward-looking statements in this prospectus.
PROSPECTUS
SUMMARY
This
summary highlights information contained elsewhere in this prospectus, but it does not contain all of the information that you may consider
important in making your investment decision. For a more complete understanding of us and this offering, you should read and carefully
consider the entire prospectus and the documents incorporated by reference herein, including the more detailed information set forth
under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”
and our audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended
December 31, 2022, which is incorporated by reference herein.
Our
Company
Harbor
Custom Development, Inc. is a real estate development company involved in all aspects of the land development cycle, including land acquisition,
entitlements, development, construction of project infrastructure, single and multi-family vertical construction, marketing, and sales
of various residential projects in Washington, California, Texas, and Florida.
As
a land developer and builder of apartments, single-family luxury homes, and townhomes, our business strategy is to acquire and develop
land strategically based on an understanding of population growth patterns, entitlement restrictions and land use evaluation, infrastructure
development, and geo-economic forces. We endeavor to acquire land with scenic views or convenient access to freeways and public transportation
to develop and sell residential lots, new home communities, townhomes, and multi-story apartment properties within a 20- to 60-minute
commute of some of the nation’s fastest-growing metro employment corridors.
Our
portfolio of land, lots, home plans, and entitled multi-family plats, coupled with low inventory of residential and multi-family housing
in our principal geographic areas, provide an opportunity for us to increase revenue and overall market share. In addition to our single-family
residential projects, we build and sell townhomes and apartments and have completed or substantially completed construction of several
multi-family sites in Washington.
For
the years ended December 31, 2022, and December 31, 2021, our total revenues were $55.4 million and $72.4 million, respectively. As of
December 31, 2022, and December 31, 2021, our backlogs of fully executed contracts for the sale of developed residential lots and single-family
homes were $8.4 million and $13.7 million, respectively. Our fee build backlogs as of December 31, 2022, and December 31, 2021, were
$0.8 million and $10.0 million, respectively.
We
are a general contractor and construct single-family homes, townhomes, and apartments utilizing a base of employees in conjunction with
third-party subcontractors.
Property
As
of the date of this prospectus, we own or control 23 communities in Washington, Texas, California, and Florida, containing approximately
2,700 lots in various stages of development. The following table summarizes certain key metrics of the residential properties we own
or control:
| Project
Name | |
Location | |
Total
Units | |
Unsold
Units | |
Business
Plan | |
Status |
| Bridgeview Trails | |
| Washington | | |
| 138 | | |
| 138 | | |
Develop + Sell Land or Build +
Sell Apartments | |
| Owned | |
| Broadmoor Commons | |
| Washington | | |
| 18 | | |
| 18 | | |
Build + Sell Apartments | |
| Controlled | |
| Fircrest Ridge | |
| Washington | | |
| 145 | | |
| 145 | | |
Develop + Sell Apartments | |
| Controlled | |
| Grandis Pond | |
| Washington | | |
| 997 | | |
| 997 | | |
Develop + Sell Lots | |
| Controlled | |
| Horizon at Semiahmoo | |
| Washington | | |
| 143 | | |
| 72 | | |
Develop + Sell Lots | |
| Owned | |
| Inverness | |
| Washington | | |
| 63 | | |
| 63 | | |
Develop + Sell Lots/Build + Sell Apartments | |
| Owned | |
| Meadowscape | |
| Washington | | |
| 177 | | |
| 177 | | |
Build + Sell Apartments | |
| Owned | |
| Mill’s Crossing | |
| Washington | | |
| 36 | | |
| 36 | | |
Build + Sell Apartments | |
| Owned | |
| Olympic Sunset | |
| Washington | | |
| 228 | | |
| 228 | | |
Build + Sell Apartments | |
| Owned | |
| Pacific Ridge | |
| Washington | | |
| 80 | | |
| 80 | | |
Build + Sell Apartments | |
| Owned | |
| Stanwood | |
| Washington | | |
| 225 | | |
| 225 | | |
Build + Sell Apartments + Townhomes | |
| Controlled | |
| Wyndstone | |
| Washington | | |
| 76 | | |
| 76 | | |
Build + Sell Apartments | |
| Owned | |
| Darkhorse | |
| California | | |
| 68 | | |
| 61 | | |
Sell Lots | |
| Owned | |
| Winding Lane | |
| California | | |
| 22 | | |
| 11 | | |
Sell Lots | |
| Owned | |
| Punta Gorda | |
| Florida | | |
| 180 | | |
| 180 | | |
Sell Entitled Land | |
| Owned | |
| Bunker Ranch | |
| Texas | | |
| 4 | | |
| 1 | | |
Build + Sell Homes | |
| Owned | |
| Cimarron Hills | |
| Texas | | |
| 5 | | |
| 5 | | |
Build + Sell Homes | |
| Owned | |
| Creek’s Edge | |
| Texas | | |
| 2 | | |
| 2 | | |
Build + Sell Homes | |
| Owned | |
| Flintrock Falls | |
| Texas | | |
| 1 | | |
| 1 | | |
Build + Sell Homes | |
| Owned | |
| Siena Creek | |
| Texas | | |
| 35 | | |
| 31 | | |
Sell Lots/Build + Sell Homes | |
| Owned | |
| Stone House | |
| Texas | | |
| 68 | | |
| 68 | | |
Develop + Sell Lots/ Build + Sell Homes | |
| Owned | |
| Summit Rock | |
| Texas | | |
| 108 | | |
| 76 | | |
Sell Lots/ Build + Sell Homes | |
| Owned | |
| The Trails of HSB | |
| Texas | | |
| 10 | | |
| 8 | | |
Sell Lots/ Build + Sell Homes | |
| Owned | |
Strategy
Our
strategy is driven by the following:
Offer
Diversified Product Portfolio from Single to Multi-family Communities
Our
expertise allows for a diversified product strategy that enables us to better serve a wide range of buyers, adapt quickly to changing
market conditions, and optimize performance and returns while strategically reducing portfolio risk. We are equipped to build to the
surrounding communities’ needs, including single-family homes, townhomes, and apartments.
Provide
Superior Quality and an Excellent Homeowner Experience
Our
operating philosophy is to provide our homeowners a positive and memorable experience. We seek to maximize customer satisfaction by offering
beautiful homes built with quality materials and exceptional craftsmanship, thoughtfully designed floor plans, and located within a 20-
to 60-minute commute from major metropolitan areas. We engineer our homes for energy-efficiency, which reduces the homeowner’s
environmental impact and energy costs. Our competitive edge in the selling process focuses on the home’s features, design, and
premium locations with scenic views. Our goal is to not just build houses, but to create desirable communities through superior design,
location, and execution.
New
homebuyers’ needs are met across multiple communities and price points by maintaining a substantial inventory of ready-to-build
lots and designer home plans. From move-up buyers needing more space for their growing families or $1.5 million-plus luxury homes, our
business model enables buyers to overcome inventory shortages and pricing challenges in high-growth metropolitan markets.
Provide
Diverse Products for Multi-family Living with Superior Quality
We
began a strategic transition of our inventory into multi-family housing in 2021 with the understanding the active U.S. housing market
over the past few years would eventually slow down. Our product-agnostic building model provides us the flexibility to accommodate the
current rapidly changing market conditions and related risks. We are equipped to build to the surrounding communities’ needs, from,
move-up and luxury homebuyers, or renters looking for an apartment to institutional investors searching for large tracts of entitled
land, developed lots, or multi-family apartment projects. This flexible business model provides a competitive advantage and differentiates
us from our peers.
Focus
on Efficient Operations
We
strive to control costs through a planning process. Detailed budgets are prepared for all cost categories. Budgets are monitored throughout
the building process as we continue to revisit and update the budget on an ongoing basis. Many components are provided by subcontractors
and significant effort is expended to assure that scopes of work are complete and inclusive. Contract variances and change orders are
closely scrutinized for appropriateness. At the sale and closing of each home in a project, the estimated and final margins are compared,
and variances are identified and investigated to better control costs on future homes in the project. However, even with our extensive
planning and budget processes, there may be factors beyond our control that may lead to unanticipated costs.
Strategic
Partnerships/Cost Control
Our
business model is flexible and facilitates partnering with companies that specialize in their local markets, including residential builders,
general contractors, and land developers. By partnering with these specialists, our cost structure can be closely managed. Further, all
internal shared services are centralized at our corporate office in Washington. Centralized functions include accounting, finance, operations,
legal, human resources, information technology, marketing, transaction coordination, and permitting. Centralizing these essential functions
keeps our infrastructure costs under tight control.
Our
Markets
Our
business strategy is focused on the acquisition of land for development purposes and the design, construction, and sale of residential
lots, single-family homes, townhomes, and apartments in Washington, California, Florida, and Texas.
Our
Products
We
offer a diverse portfolio of finished lots, single-family homes and multi-family communities, including townhomes, and apartments. Being
product-agnostic provides us great flexibility to maintain appropriate consumer product and price level diversification for our specific
markets. We focus on underserved consumer groups for each of our locations while attempting to diversify as to not overly concentrate
our land portfolio in any one area. Building at multiple price points enables us to quickly adjust to changing consumer and market demands.
Buyer profiles are developed for each market, and our communities are designed with the specific needs of those buyers in mind.
Land
Acquisition and Development Process
We
execute an integrated business model to monetize land during three distinct stages of the development cycle. As a result, risks may be
mitigated by providing multiple exit points for our real estate assets.
| |
● |
Sale
of Entitled Land – Property sold following the controlling jurisdiction’s approval of a permitted residential use
or other use, as applicable. |
| |
● |
Sale
of Developed Lots - Property sold after infrastructure is completed, including roads, sidewalks, and utilities. |
| |
● |
Sale
of Completed Building Product – Property sold following the construction of a single-family home, townhome, or apartment. |
We
also provide services as a fee build offering to construct the required infrastructure so that houses can be developed on the lots.
Our
acquisition process generally includes the following steps to reduce development and market cycle risk:
| |
● |
review
of the status of entitlements and other governmental processing, including title reviews; |
| |
● |
complete
due diligence on the land parcel prior to committing to the acquisition; |
| |
● |
prepare
detailed budgets for all cost categories; |
| |
● |
complete
environmental reviews and third-party market studies; and |
| |
● |
evaluate
economic feasibility within the context of the above strategies. |
Before
purchasing large land tracts, we often engage outside engineers and consultants to help review the proposed acquisition and assist with
community and home design.
Home
Building, Marketing, and Sales Process
Our
philosophy is to develop beautiful and practical living spaces for the growing communities we serve. Our strategy is to acquire land
with scenic views or convenient access to freeways and public transportation to develop and sell residential lots, new home communities,
and multi-story apartment properties within a 20- to 60-minute commute of the nation’s fastest-growing metro employment corridors.
Our floorplans support the modern family’s lifestyle by providing flexible spaces, outdoor living, one and two-story homes, main-floor
living with master bedroom suites on the first floor, and luxury finishes to appeal to universal design needs. Our homes are engineered
for energy-efficiency to reduce impact on the environment and lower energy costs to our homebuyers.
Our
multi-family construction often offers comparable finishes to a new construction home, featuring quartz countertops, stainless steel
kitchen appliances, in-unit washer and dryer, and premium flooring. The floorplans are designed to support the communities we serve,
including but not limited to, studios, one bedroom with one bath, two bedrooms with two baths, and a loft feature. Many communities offer
recreational buildings for tenants to gather with neighbors, and entertain their families.
We
utilize strategic partnerships with local real estate brokers and property management companies who specialize in their local markets.
These partnerships keep our cost structure low while leveraging local market expertise. We sell our homes, land, and apartments through
independent real estate brokers and sales representatives who assist potential buyers by providing them with basic floor plans, price
information, development and construction timetables, and property tours. We rent our multi-family properties through property management
companies who assist potential renters by providing them with floor plans, pricing information, tours of the apartments, and screening
and processing applications.
Our
marketing objective is to increase leads for potential homebuyers and tenants through strategic and dynamic marketing campaigns, including
weekend and offsite signage, streaming and cable TV ads, printed collateral, public relations, and comprehensive digital marketing ads
across various social media platforms and Google.
Our
multi-family communities are constructed to satisfy market demand for available rental housing, and construction is generally facilitated
when financing is secured. We begin renting the units once we have acquired occupancy permits with the intention to sell the project
during construction or upon complete build-out of the project and rental stabilization.
Customer
Relations, Quality Control, and Warranty Programs
We
maintain or engage customer service staff whose role includes providing a positive experience for each customer throughout the pre-sale,
sale, building, closing, and post-closing periods. We also provide post-sale customer support. Our quality and service initiatives include
providing purchasers with a comprehensive walk-through of their home or apartment prior to closing.
We
provide each homeowner with product warranties covering workmanship and materials for one year from the time of closing and warranties
covering structural systems for six years from the time of closing in connection with our general liability insurance policy.
Materials
When
constructing our projects, we use various materials and components. The typical build time for our single-family homes is six to 12 months,
and for our multi-family communities is 18 to 24 months, during which time materials are subject to price fluctuations.
Seasonality
We
experience seasonal variations in our quarterly operating results and capital requirements. We typically experience the highest new home
order activity in the spring and summer, although this activity also highly depends on the number of active selling communities, the
timing of new community openings, and other market factors. We generally deliver more homes in the second half of the year as spring
and summer home orders convert to home deliveries. Because of this seasonality, home starts, construction costs, and related cash outflows
have historically been highest in the second and third quarters, and the majority of cash receipts from home deliveries occur during
the second half of the year. We expect this seasonal pattern to continue over the long-term, although it may be affected by volatility
in the homebuilding industry.
While
the leasing side of multi-family communities can experience some seasonality during the winter holiday months, the construction side
typically doesn’t show seasonality patterns. The building process typically takes 18 to 24 months, depending on the size of the
project, the site development scope, and other project or market factors.
Summary
Risk Factors
An
investment in our securities involves risks. You should consider carefully the risks discussed below and described more fully along with
other risks under “Risk Factors” in this prospectus and included in our Annual Report on Form 10-K for the year ended December
31, 2022, which is incorporated by reference herein, before investing in our securities.
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Adverse
changes in general economic conditions could reduce the demand for homes and, as a result, could have a material adverse effect on
us. |
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Our
long-term growth depends upon our ability to successfully identify and acquire desirable land parcels for residential build-out. |
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If
homebuyers are not able to obtain suitable financing, our results of operations may decline. |
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Difficulty
in obtaining sufficient capital could result in an inability to acquire land for our developments or increased costs and delays in
the completion of development projects. |
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Our
operating performance is subject to risks associated with the real estate industry. |
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Failure
to manage land acquisition and development and construction processes could result in significant cost overruns or errors in valuing
sites. |
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We
are an “emerging growth company” and, as a result of the reduced disclosure and governance requirements available to
emerging growth companies, our securities may be less attractive to investors. |
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The
rising cost of materials due to supply chain constraints has increased our costs of construction. |
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Purchasers who purchase our securities in this offering
pursuant to a securities purchase agreement may have rights not available to purchasers that purchase without the benefit of a securities
purchase agreement.
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The warrants and pre-funded warrants
are speculative, do not confer any rights of share of common stock ownership on their holders,
such as voting rights or the right to receive dividends, but rather merely represent the
right to acquire shares of common stock at a fixed price. |
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There is no established public trading market for the
warrants or pre-funded warrants and we do not expect such markets to develop, so their liquidity will be limited. |
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If you purchase our securities in this offering, you
may incur immediate and substantial dilution in the book value of your shares. |
Corporate
Information
We
were formed as a Washington limited liability company in February 2014 and converted into a Washington corporation pursuant to the Washington
Business Corporation Act (the “WBCA”) effective October 1, 2018. We changed our name from Harbor Custom Homes, Inc. to Harbor
Custom Development, Inc. on August 1, 2019. We own the registered trademark of “Harbor Custom Homes” in the United States.
Our
principal executive offices are located at 1201 Pacific Avenue, Suite 1200. Tacoma, Washington 98402. Our main telephone number is (253)
649-0636. Our website is www.harborcustomdev.com. The information contained on, or that can be accessed through, our website is not incorporated
by reference and is not a part of this prospectus.
Implications
of Being an Emerging Growth Company
We
are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”),
and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
that are not “emerging growth companies.” These provisions include, among other matters:
| ● |
an
exemption from the auditor attestation requirement in the assessment of the emerging growth company’s internal control over
financial reporting; |
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reduced
disclosure about the emerging growth company’s executive compensation arrangements; and |
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no
requirement to seek non-binding advisory votes on executive compensation or golden parachute arrangements. |
We
have elected to adopt the reduced disclosure requirements available to emerging growth companies. As a result of these elections, the
information that we provide in this prospectus may be different than the information you may receive from other public companies.
We
would cease to be an “emerging growth company” upon the earliest of: (i) the end of the fiscal year following the fifth anniversary
of our Initial Public Offering (as defined below), (ii) the first fiscal year after our annual gross revenues are $1.235 billion or more,
(iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities
or (iv) as of the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700,000,000 as
of the end of the second quarter of that fiscal year.
Recent
Developments
On
May 9, 2023, Sterling Griffin, our Chairman of the Board of Directors, Chief Executive Officer and President gave
notice that he will retire from all roles effective as of July 12, 2023 (the “Transition Date”). In order to provide for
a smooth transition of his role, Mr. Griffin has agreed to serve in a new, non-executive role of Strategic Advisor, effective as of
July 12, 2023 through January 12, 2025. During such transition period, Mr. Griffin will be paid monthly compensation of $27,777.77
and may receive performance fees for closing sales of certain specified multifamily projects. Mr. Griffin’s retirement is not
due to any disagreement with any matter related to our operations, policies, or practices. Mr. Griffin will not stand for
re-election as a director on our board of directors at our upcoming Annual Shareholder
Meeting.
The
Board expects to appoint Jeffrey Habersetzer, our current Chief Operating Officer, General Counsel, and Corporate Secretary, as Interim
Chief Executive Officer and Interim President of the Company, effective as of July 12, 2023, to succeed Mr. Griffin with terms to be
determined by the Board.
The
Board expects to appoint Lance Brown, our current Chief Financial Officer, as Interim Chief Operating Officer to succeed Mr.
Habersetzer, effective as of July 12, 2023. The terms of Mr. Brown’s Employment Agreement will not change other
than to add his new title and duties as Interim Chief Operating Officer effective July 12, 2023.
THE
OFFERING
| Common
Stock Offered |
|
Up
to 2,087,683 shares of common stock based on an assumed combined public offering price of $4.79 per share of common
stock and accompanying warrant, which is the closing price of our common stock on Nasdaq on May 9, 2023. |
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|
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| Pre-Funded
Warrants Offered |
|
We
are also offering to certain purchasers whose purchase of shares of common stock in this offering would otherwise result in the purchaser,
together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser,
9.99%) of our outstanding common stock immediately following the consummation of this offering, the opportunity to purchase, if such
purchasers so choose, pre-funded warrants to purchase shares of common stock, in lieu of shares of common stock that would otherwise
result in any such purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding
common stock. Each pre-funded warrant will be exercisable for one share of our common stock. The purchase price of each pre-funded
warrant and accompanying warrant will equal the price at which the share of common stock and accompanying warrant are being sold
to the public in this offering, minus $0.0001, and the exercise price of each pre-funded warrant will be $0.0001
per share. The pre-funded warrants will be exercisable immediately and may be exercised at any time until all of the pre-funded warrants
are exercised in full. This offering also relates to the shares of common stock issuable upon exercise of any pre-funded warrants
sold in this offering. For each pre-funded warrant we sell, the number of shares of common stock we are offering will be decreased
on a one-for-one basis. Because we will issue a warrant for each share of our common stock and for each pre-funded warrant to purchase
one share of our common stock sold in this offering, the number of warrants sold in this offering will not change as a result of
a change in the mix of the shares of our common stock and pre-funded warrants sold. |
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|
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| Warrants
Offered |
|
Warrants
to purchase up to an aggregate of 2,087,683 shares of our common stock, based on the sale of our common stock at an assumed
combined public offering price of $4.79 per share of common stock and accompanying warrant, which is the closing price of
our common stock on Nasdaq on May 9, 2023. Each share of our common stock and each pre-funded warrant to purchase one share
of our common stock is being sold together with a warrant to purchase one share of our common stock. Each warrant will have an exercise
price of $4.79 per share (representing 100% of the price at which a share of common stock and accompanying warrant are sold
to the public in this offering), will be immediately exercisable upon issuance and will expire on the five year anniversary
of the original issuance date. The shares of common stock and pre-funded warrants, and the accompanying warrants, as the case may
be, can only be purchased together in this offering but will be issued separately and will be immediately separable upon issuance.
This prospectus also relates to the offering of the shares of common stock issuable upon exercise of the warrants. |
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|
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| Placement
Agent Warrants |
|
The
registration statement of which this prospectus is a part also registers for sale the Placement Agent Warrants to purchase up to
125,261 shares of common stock (equal to 6.0% of the total number of shares of common stock and pre-funded warrants sold in
this offering) to the placement agent as a portion of the compensation payable to the placement agent in connection with this offering.
The Placement Agent Warrants will be immediately exercisable upon issuance, have an exercise price of $5.9875 (125% of the assumed
public offering price per share of common stock and warrant). The Placement Agent Warrants expire on the five year anniversary
of the commencement of sales of this offering. The Placement Agent Warrants and the shares of common stock underlying the Placement
Agent Warrants are being registered hereby. (See “Plan of Distribution.”) |
| Shares
of Common Stock Outstanding Prior to this Offering |
|
732,260
shares. |
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| Shares
of Common Stock Outstanding After this Offering |
|
2,819,943
shares (assuming we sell only shares of common
stock and no pre-funded warrants and assuming no exercise of the warrants). |
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| Use
of Proceeds |
|
We
estimate that the net proceeds from this offering will be approximately $8,850,000, based on an assumed combined public offering
price of $4.79 per share of common stock and accompanying warrant which was the closing price of our common stock on Nasdaq
on May 9, 2023, and excluding the proceeds, if any, from the exercise of the warrants in this offering. We currently intend
to use the net proceeds from this offering to secure real estate entitlements and complete real estate construction and development,
payment towards the balance of a loan with one of our lenders, and working capital. (See “Use of Proceeds.”) |
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| Lock-Up
Agreements |
|
We
and our directors, officers, and certain of our principal shareholders have agreed not to offer for sale, issue, sell, contract to
sell, pledge, or otherwise dispose of any of our shares of common stock or securities convertible into shares of common stock for
a period of 30 days after the closing of the offering. See (“Plan of Distribution”). |
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| Dividend
Policy |
|
We
have never declared or paid any cash dividends on our shares of common stock. We do not anticipate paying any cash dividends on our
shares of common stock in the foreseeable future. |
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| Risk
Factors |
|
An
investment in our securities involves a high degree of risk. You should read this prospectus carefully, including the section
titled “Risk Factors” and in Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended
December 31, 2022, which is incorporated herein by reference, along with the combined and condensed consolidated financial statements
and the related notes to those statements before investing in our securities. |
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| Nasdaq Symbol |
|
Our
shares of common stock are listed on the Nasdaq Capital Market under the symbol “HCDI.” There is no established trading market for the warrants or the pre-funded warrants, and we do not expect a trading
market to develop. We do not intend to list the warrants or the pre-funded warrants on any securities exchange or other trading market.
Without a trading market, the liquidity of the warrants and pre-funded warrants will be extremely limited. |
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The
outstanding share information in the table above is based on 732,260 shares of our common stock outstanding as of May 10,
2023, assumes no sale of any pre-funded warrants and no exercise of the warrants and Placement Agent Warrants issued as part of the offering,
and
| ● |
excludes
1,055,584 shares of our common stock issuable upon the exercise of outstanding Series A Preferred Shares; |
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|
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excludes
208,800 shares of our common stock issuable upon the exercise of outstanding warrants at an exercise price of $100.00 per share of
common stock (HCDIW); 12,000 warrants to purchase Series A Preferred Shares, which, when exercised, are convertible into approximately
3,333 shares of common stock, subject to adjustment; 690,000 shares of our common stock issuable upon the exercise of outstanding
warrants at an exercise price of $59.40 per share of common stock (HCDIZ); and 25,543 shares of our common stock issuable upon the
exercise of outstanding warrants at a weighted average exercise price of $85.01 per share of common stock; |
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|
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excludes
options to purchase 36,872 shares of common stock at a weighted average exercise price of $41.86 granted under our 2018 Equity Incentive
Plan as of the date of this prospectus; |
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includes
10,735 vested shares of common stock issued under our 2020 Restricted Stock Plan as of the date of this prospectus; |
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excludes
11,520 shares of common stock issued but not vested under our 2020 Restricted Stock Plan as of the date of this prospectus; |
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excludes
133,784 shares of our common stock reserved for future issuance in connection with awards under our 2018 Equity Incentive Plan; and |
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excludes
135,000 shares of our common stock reserved for future issuance in connection with awards under our 2020 Restricted Stock Plan. |
RISK
FACTORS
An
investment in our securities involves a high degree of risk and should be considered highly speculative. Before making an investment
decision, you should carefully consider the risks described in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the
year ended December 31, 2022, together with the other information set forth in this prospectus, and in the other documents that we include
or incorporate by reference into this prospectus, as updated by our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other
filings we make with the SEC, the risk factors described under the caption “Risk Factors” in any applicable prospectus supplement
and any risk factors set forth in our other filings with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended, or the Exchange Act. For more information about our SEC filings, please see “Where You Can Find More Information”
and “Incorporation by Reference.”
The
risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us
or that we currently deem immaterial may also affect our operations. If any of the risks actually occur, our business, prospects, liquidity,
financial condition, and results of operations could be materially and adversely affected, in which case the trading price of our securities
could decline significantly, and you could lose all or part of your investment. Some statements in this prospectus, including statements
in the risk factors, constitute forward-looking statements. Please refer to the section entitled “Cautionary Note Concerning Forward-Looking
Statements.”
In
addition to the risk factors below related to this offering we hereby incorporate by reference all of our risk factors included in our
Annual Report on Form 10-K for the year ended December 31, 2022.
Risks
Related to this Offering
An
investment in our securities is speculative and could result in a loss of your entire investment.
An
investment in our securities is speculative and involves a high degree of risk. There is no assurance that investors will obtain any
return on their investment. You should not purchase the securities if you cannot afford the loss of your entire investment.
This
is a best efforts offering, no minimum amount of securities is required to be sold, and we may not raise the amount of capital we believe
is required for our business plans, including our near-term business plans.
The
placement agent has agreed to use its reasonable best efforts to solicit offers to purchase the securities in this offering. The placement
agent has no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number or dollar
amount of the securities. There is no required minimum number of securities that must be sold as a condition to completion of this offering.
Because there is no minimum offering amount required as a condition to the closing of this offering, the actual offering amount, placement
agent fees, and proceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth above.
We may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us, and
investors in this offering will not receive a refund in the event that we do not sell an amount of securities sufficient to support our
continued operations, including our near-term continued operations. Thus, we may not raise the amount of capital we believe is required
for our operations in the short-term and may need to raise additional funds, which may not be available or available on terms acceptable
to us.
Investors
who purchase our securities in this offering pursuant to a securities purchase agreement may have rights not available to investors that
purchase without the benefit of a securities purchase agreement.
In
addition to rights and remedies available to all investors in this offering under federal securities and state law, the investors that
enter into a securities purchase agreement will also be able to bring claims of breach of contract against us. The ability to pursue
a claim for breach of contract provides those investors with the means to enforce the covenants uniquely available to them under the
securities purchase agreement including, but not limited to: (i) timely delivery of securities; (ii) agreement to not enter into variable
rate financings for one year from closing, subject to certain exceptions; (iii) agreement to not enter into any financings for
30 days from closing; and (iv) indemnification for breach of contract.
There
is no public market for the pre-funded warrants or warrants being offered by us in this offering.
There
is no established public trading market for the pre-funded warrants and we do not expect a market to develop. In addition, we do not
intend to apply to list the pre-funded warrants or warrants on any national securities exchange or other nationally recognized trading
system. Without an active market, the liquidity of the pre-funded warrants or warrants will be limited.
The
warrants and pre-funded warrants are speculative in nature.
The
warrants and pre-funded warrants offered hereby do not confer any rights of share of common stock ownership on their holders, such as
voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of common stock at a fixed price.
Specifically, commencing on the date of issuance, holders of the warrants may acquire the shares of common stock issuable upon exercise
of such warrants at an exercise price of $4.79 per share of common stock, and holders of the pre-funded warrants may acquire the
shares of common stock issuable upon exercise of such warrants at an exercise price of $0.0001 per share of common stock. Moreover, following
this offering, the market value of the warrants and pre-funded warrants is uncertain and there can be no assurance that the market value
of the warrants or pre-funded warrants will equal or exceed their respective public offering prices. There can be no assurance that the
market price of the shares of common stock will ever equal or exceed the exercise price of the warrants or pre-funded warrants, and consequently,
whether it will ever be profitable for holders of warrants to exercise the warrants or for holders of the pre-funded warrants to exercise
the pre-funded warrants.
Holders
of the warrants and pre-funded warrants offered hereby will have no rights as common stockholders with respect to the shares our
common stock underlying the warrants and pre-funded warrants until such holders exercise such warrants and acquire our
common stock, except as otherwise provided in the warrants and pre-funded warrants.
Until
holders of the warrants and the pre-funded warrants acquire shares of our common stock upon exercise thereof, such holders will have
no rights with respect to the shares of our common stock underlying such warrants, except to the extent that holders of such warrants
will have certain rights to participate in distributions or dividends paid on our common stock as set forth in the warrants and pre-funded warrants.
Upon exercise of the warrants and the pre-funded warrants, the holders will be entitled to exercise the rights of a common stockholder
only as to matters for which the record date occurs after the exercise date.
Provisions
of the warrants and pre-funded warrants offered by this prospectus could discourage an acquisition of us by a third party.
Certain
provisions of the warrants and pre-funded warrants offered by this prospectus could make it more difficult or expensive for a third party
to acquire us. Such warrants and pre-funded warrants prohibit us from engaging in certain transactions constituting “fundamental
transactions” unless, among other things, the surviving entity assumes our obligations under the warrants and pre-funded warrants.
Further, the warrants and pre-funded warrants provide that, in the event of certain transactions constituting “fundamental transactions,”
with some exception, holders of such the warrants and pre-funded warrants will have the right, at their option, to require us to repurchase
such the warrants and pre-funded warrants at a price described in the warrants and pre-funded warrants. These and other provisions of
the warrants and pre-funded warrants offered by this prospectus could prevent or deter a third party from acquiring us even where the
acquisition could be beneficial to you.
We
have broad discretion in the use of the net proceeds from this offering and may not use them effectively.
Our
management will have broad discretion in the application of the net proceeds, including for any of the purposes described in the section
of this prospectus entitled “Use of Proceeds.” You will be relying on the judgment of our management with regard to the use
of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the net proceeds
are being used appropriately. The failure by our management to apply these funds effectively could result in financial losses that could
have a material adverse effect on our business, cause the price of our securities to decline and delay the development of our product
candidates. Pending the application of these funds, we may invest the net proceeds from this offering in a manner that does not produce
income or that loses value.
CAUTIONARY
NOTE CONCERNING FORWARD-LOOKING STATEMENTS
Various
statements contained in this prospectus, including those that express a belief, expectation, or intention, as well as those that are
not statements of historical fact, are forward-looking statements. These forward-looking statements may include projections and estimates
concerning the timing and success of specific projects and our future production, revenues, income, and capital spending. Our forward-looking
statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,”
“expect,” “intend,” “anticipate,” “potential,” “plan,” “goal”
or other words that convey the uncertainty of future events or outcomes. The forward-looking statements in this prospectus speak only
as of the date of this prospectus, and we disclaim any obligation to update these statements unless required by law, and we caution you
not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events.
While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business,
economic, competitive, regulatory, and other risks, contingencies, and uncertainties, most of which are difficult to predict and many
of which are beyond our control. The following factors, among others, may cause our actual results, performance, or achievements to differ
materially from any future results, performance or achievements expressed or implied by these forward-looking statements:
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economic
changes either nationally or in the markets in which we operate, including declines in employment, volatility of mortgage interest
rates, and inflation; |
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changes
in assumptions used to make industry forecasts; |
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continued
volatility and uncertainty in the credit markets and broader financial markets; |
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our
future operating results and financial condition; |
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our
business operations; |
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changes
in our business and investment strategy; |
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availability
of land to acquire and our ability to acquire such land on favorable terms or at all; |
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availability,
terms, and deployment of capital; |
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shortages
of or increased prices for labor, land, or raw materials used in housing construction; |
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delays
in land development or home construction resulting from adverse weather conditions or other events outside our control; |
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the
cost and availability of insurance and surety bonds; |
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changes
in, or the failure or inability to comply with, governmental laws and regulations; |
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the
timing of receipt of regulatory approvals and the opening of projects; |
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the
degree and nature of our competition; |
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our
leverage and debt service obligations; |
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general
volatility of the capital markets and the lack of a public market for shares of our securities; |
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availability
of qualified personnel and our ability to retain our key personnel; |
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our
financial performance; |
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our
expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act; |
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our
expected use of the proceeds from this offering; and |
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additional
factors discussed under the section captioned “Risk Factors,” and within the “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and “Our Business” section of our Annual Report on Form
10-K for the year ended December 31, 2022 and any Quarterly Report on Form 10-Q incorporated by reference in this prospectus and
in the section of any related prospectus supplement titled “Risk Factors.” |
These
forward-looking statements reflect our management’s beliefs and views with respect to future events and are based on estimates
and assumptions as of the date of this prospectus and are subject to risks and uncertainties. We discuss many of these risks in greater
detail under “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge
from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business
or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any
forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
You
should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement
of which this prospectus forms a part with the understanding that our actual future results, levels of activity, performance and achievements
may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
The
forward-looking statements made in this prospectus relate only to events as of the date on which such statements are made. We undertake
no obligation to update any forward-looking statements after the date of this prospectus or to conform such statements to actual results
or revised expectations, except as required by law.
USE
OF PROCEEDS
We
estimate that the net proceeds from this offering will be approximately $8,850,000, assuming a combined public offering price
per share of common stock and accompanying warrant of $4.79, the closing price of our common stock on Nasdaq on May 9,
2023, after deducting the placement agent fees and estimated offering expenses payable by us, assuming the sale of all of the securities
offered under this prospectus and no sale of any fixed combinations of pre-funded warrants and warrants offered hereunder. If the accompanying
warrants are exercised in full for cash, the established net proceeds will increase to $18,850,000. However, because this is a
best efforts offering and there is no minimum offering amount required as a condition to the closing of this offering, the actual offering
amount, the placement agent’s fees, and net proceeds to us are not presently determinable and may be substantially less than the
maximum amounts set forth on the cover page of this prospectus.
We
intend to use of proceeds from this offering for (1) real estate entitlements and real estate construction and development; (2) payment
towards the balance of our loan with BankUnited N.A. (“BankUnited”); and (3) working capital and general corporate purposes.
Real
Estate Entitlements and Real Estate Construction and Development. We intend to use a portion of the proceeds from this offering to
secure real estate entitlements and for new developments and construction of existing properties in Western Washington and Austin, Texas.
BankUnited.
On February 23, 2023, we entered into an Amendment to the Loan Agreement (the “Amendment”) with BankUnited to restructure
our Loan Agreement dated March 7, 2020 (the “Loan Agreement”), which loan then consisted of a $24,613,051 principal balance
plus any accrued interest (the “Loan”). Pursuant to the Amendment, we agreed, among other things to remit 25% of the net
proceeds of any public offering of any class of stock to BankUnited, in order to pay down our Loan; therefore 25% of the net proceeds
of this offering will be paid to BankUnited.
Working
Capital. Working capital and general corporate purposes may include amounts required to pay officers’ salaries, professional
fees, ongoing public reporting costs, office-related expenses and other corporate expenses, including interest and overhead.
The
expected use of net proceeds from this offering represents management’s estimates based upon current business and economic conditions.
The amounts and timing of our actual use of net proceeds will vary depending on numerous factors. As a result,
management will have broad discretion in the application of the net proceeds, and investors will be relying on our
judgment regarding the application of the net proceeds of this offering. Although we do not contemplate changes in the proposed
use of proceeds, to the extent we find that adjustment is required for other uses by reason of existing business conditions, the use
of proceeds may be adjusted. We reserve the right to use the net proceeds we receive in the offering in any manner we consider to be appropriate, which could
differ materially from those outlined above as a result of several factors including those set forth under “Risk Factors”
and elsewhere in this prospectus.
DESCRIPTION
OF CAPITAL STOCK
For
a description of our capital stock, including our common stock (HCDI), Series A preferred stock (HCDIP), and existing warrants (HCDIW,
HCDIZ), and the material terms of our Articles of Incorporation, as amended, and Bylaws, as amended, see our Annual Report on Form 10-K
for the year ended December 31, 2022 filed with the SEC and Exhibit 4.7 thereto, entitled Description of Capital Stock, and incorporated
by reference in this prospectus. For instructions on how to find copies of the filings incorporated by reference in this prospectus,
see “Where You Can Find More Information.”
DESCRIPTION
OF SECURITIES WE ARE OFFERING
We
are offering up to 2,087,683 shares of our common stock and warrants to purchase up to 2,087,683 shares of common stock.
We are also offering up to 2,087,683 pre-funded warrants to those purchasers whose purchase of shares of common stock in this
offering would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99%
(or, at the election of the purchaser, 9.99%) of our outstanding shares of common stock following the consummation of this offering in
lieu of the shares of common stock that would result in such excess ownership. For each pre-funded warrant we sell, the number of shares
of common stock we are offering will be decreased on a one-for-one basis. Each pre-funded warrant will be exercisable for one share of
common stock. No warrant for fractional shares of common stock will be issued, rather warrants will be issued only for whole shares of
common stock. We are also registering the shares of common stock issuable from time to time upon exercise of the pre-funded warrants
and warrants offered hereby.
Common
Stock
The
material terms and provisions of our common stock are described under the caption “Description of Capital Stock” in our Annual
Report on Form 10-K for the year ended December 31, 2022 filed with the SEC and Exhibit 4.7 thereto, entitled Description of Capital
Stock, and incorporated by reference in this prospectus
Warrants
The
following is a summary of certain terms and provisions of the warrants that are being offered hereby is not complete and is subject to,
and qualified in its entirety by, the provisions of the warrant, the form of which will be filed as an exhibit to the registration statement
of which this prospectus forms a part.
Prospective
investors should carefully review the terms and provisions of the form of warrant for a complete description of the terms and conditions
of the warrants.
Duration
and Exercise Price
Each
warrant offered hereby will have an exercise price equal to $4.79. The warrants will be immediately exercisable and may be exercised
until the five year anniversary of the issuance date. The exercise price and number of shares of common stock issuable upon exercise
is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting our common
stock and the exercise price. The warrants will be issued separately from the common stock or pre-funded warrants, respectively, and may be transferred separately immediately
thereafter. The warrants will be issued in certificated form only.
Exercisability
The
warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice
accompanied by payment in full for the number of shares of our common stock purchased upon such exercise (except in the case of a cashless
exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of such holder’s warrants to
the extent that the holder would own more than 4.99% of the outstanding common stock immediately after exercise, except that upon at
least 61 days’ prior notice from the holder to us, the holder may increase the amount of ownership of outstanding stock after exercising
the holder’s warrants up to 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the
exercise, as such percentage ownership is determined in accordance with the terms of the warrants.
Cashless
Exercise
If,
at the time a holder exercises its warrants, a registration statement registering the issuance or resale of the shares of common stock
underlying the warrants under the Securities Act is not then effective or available for the issuance of such shares, then in lieu of
making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder
may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according
to a formula set forth in the warrant.
Fundamental
Transactions
In
the event of any fundamental transaction, as described in the warrants and generally including any merger or consolidation with or into
another entity, sale of all or substantially all of our assets, tender offer or exchange offer, or reclassification of our common stock,
then upon any subsequent exercise of a warrant, the holder will have the right to receive as alternative consideration, for each share
of our common stock that would have been issuable upon such exercise immediately prior to the occurrence of such fundamental transaction,
the number of shares of common stock of the successor or acquiring corporation or of our company, if it is the surviving corporation,
and any additional consideration receivable upon or as a result of such transaction by a holder of the number of shares of our common
stock for which the warrant is exercisable immediately prior to such event. Notwithstanding the foregoing, in the event of a fundamental
transaction, the holders of the warrants have the right to require us or a successor entity to redeem the warrants for cash in the amount
of the Black-Scholes Value (as defined in each warrant) of the remaining unexercised portion of the warrants on the date of the consummation
of such fundamental transaction, concurrently with or within 30 days following the consummation of a fundamental transaction.
However,
in the event of a fundamental transaction which is not in our control, including a fundamental transaction not approved by our board
of directors, the holders of the warrants will only be entitled to receive from us or our successor entity, as of the date of consummation
of such fundamental transaction the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the
unexercised portion of the warrant that is being offered and paid to the holders of our common stock in connection with the fundamental
transaction, whether that consideration is in the form of cash, stock or any combination of cash and stock, or whether the holders of
our common stock are given the choice to receive alternative forms of consideration in connection with the fundamental transaction.
Transferability
Subject
to applicable laws, a warrant may be transferred at the option of the holder upon surrender of the warrant to us together with the appropriate
instruments of transfer.
Fractional
Shares
No
fractional shares of common stock will be issued upon the exercise of the warrants. Rather, the number of shares of common stock to be
issued will, at our election, either be rounded up to the nearest whole number or we will pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the exercise price.
Trading
Market
There
is no established trading market for the warrants, and we do not expect an active trading market to develop. We do not intend to apply
to list the warrants on any securities exchange or other trading market. Without a trading market, the liquidity of the warrants will
be extremely limited.
Right
as a Stockholder
Except
as otherwise provided in the warrants or by virtue of the holder’s ownership of shares of our common stock, such holder of warrants
does not have the rights or privileges of a holder of our common stock, including any voting rights, until such holder exercises such
holder’s warrants.
Waivers
and Amendments
No
term of the warrants may be amended or waived without the written consent of the holders of the warrants purchased in this offering.
Pre-funded
Warrants
The
following summary of certain terms and provisions of the pre-funded warrants that are being offered hereby is not complete and is subject
to, and qualified in its entirety by, the provisions of the pre-funded warrant, the form of which will be filed as an exhibit to the
registration statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions
of the form of pre-funded warrant for a complete description of the terms and conditions of the pre-funded warrants.
Duration
and Exercise Price
Each
pre-funded warrant offered hereby will have an initial exercise price per share of common stock equal to $0.0001. The pre-funded
warrants will be immediately exercisable and will expire when exercised in full. The exercise price and number of shares of common stock
issuable upon exercise is subject to appropriate adjustment in the event of share dividends, share splits, reorganizations or similar
events affecting our shares of common stock and the exercise price. The pre-funded warrants will be issued in certificated form only.
Exercisability
The
pre-funded warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise
notice accompanied by payment in full for the number of shares of common stock purchased upon such exercise (except in the case of a
cashless exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of the pre-funded warrant
to the extent that the holder would own more than 4.99% of the outstanding shares of common stock immediately after exercise, except
that upon at least 61 days’ prior notice from the holder to us, the holder may increase the amount of beneficial ownership of outstanding
shares after exercising the holder’s pre-funded warrants up to 9.99% of the number of our shares of common stock outstanding immediately
after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the pre-funded warrants.
Purchasers of pre-funded warrants in this offering may also elect prior to the issuance of the pre-funded warrants to have the initial
exercise limitation set at 9.99% of our outstanding shares of common stock.
Cashless
Exercise
In
lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price,
the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined
according to a formula set forth in the pre-funded warrants.
Fractional
Shares
No
fractional shares of common stock will be issued upon the exercise of the pre-funded warrants. Rather, at our election, the number of
shares of common stock to be issued will be rounded up to the nearest whole number or we will pay a cash adjustment in an amount equal
to such fraction multiplied by the exercise price.
Transferability
Subject
to applicable laws, a pre-funded warrant may be transferred at the option of the holder upon surrender of the pre-funded warrants to
us together with the appropriate instruments of transfer.
Trading
Market
There
is no trading market available for the pre-funded warrants on any securities exchange or nationally recognized trading system, and we
do not expect a trading market to develop. We do not intend to list the pre-funded warrants on any securities exchange or nationally
recognized trading market. Without a trading market, the liquidity of the pre-funded warrants will be extremely limited. The shares of
common stock issuable upon exercise of the pre-funded warrants are currently traded on Nasdaq under the symbol “HCDI.”
Right
as a Shareholder
Except
as otherwise provided in the pre-funded warrants or by virtue of such holder’s ownership of shares of common stock, the holders
of the pre-funded warrants do not have the rights or privileges of holders of our shares of common stock, including any voting rights,
until they exercise their pre-funded warrants. The pre-funded warrants will provide that holders have the right to participate in distributions
or dividends paid on our shares of common stock.
Fundamental
Transaction
In
the event of a fundamental transaction, as described in the pre-funded warrants and generally including any reorganization, recapitalization
or reclassification of our shares of common stock, the sale, transfer or other disposition of all or substantially all of our properties
or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding securities, or
any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding shares of securities, the
holders of the pre-funded warrants will be entitled to receive upon exercise of the pre-funded warrants the kind and amount of securities,
cash or other property that the holders would have received had they exercised the pre-funded warrants immediately prior to such fundamental
transaction on a net exercise basis.
PLAN
OF DISTRIBUTION
We
engaged H.C. Wainwright & Co., LLC (“Wainwright” or the “placement
agent”) to act as our exclusive placement agent to solicit offers to purchase the securities offered by this prospectus on a reasonable
best efforts basis. Wainwright is not purchasing or selling any securities, nor are they required to arrange for the purchase
and sale of any specific number or dollar amount of securities, other than to use their “reasonable best efforts” to arrange
for the sale of the securities by us. Therefore, we may not sell the entire amount of securities being offered. There is no minimum amount
of proceeds that is a condition to closing of this offering. Wainwright may engage one or more sub-placement agents or selected
dealers to assist with the offering. Investors purchasing securities offered hereby will have the option to execute a securities purchase
agreement with us. In addition to rights and remedies available to all investors in this offering under federal securities and state
law, the investors which enter into a securities purchase agreement will also be able to bring claims of breach of contract against us.
The ability to pursue a claim for breach of contract is material to larger investors in this offering as a means to enforce the following
covenants uniquely available to them under the securities purchase agreement, including but not limited to: (i) a covenant to not enter
into variable rate financings for a period of one year following the closing of the offering; and (ii) a covenant to not enter
into any equity financings for 30 days from closing of the offering, subject to certain exceptions.
The
nature of the representations, warranties and covenants in the securities purchase agreements shall include:
| |
● |
standard
issuer representations and warranties on matters such as organization, qualification, authorization, no conflict, no governmental
filings required, current in SEC filings, no litigation, labor or other compliance issues, environmental, intellectual property and
title matters and compliance with various laws such as the Foreign Corrupt Practices Act; and |
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|
|
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covenants
regarding matters such as registration of warrant shares, no integration with other offerings, filing of an 8-K to disclose entering
into these securities purchase agreements, no shareholder rights plans, no material non-public information, use of proceeds, indemnification
of investors, reservation and listing of common stock, and no subsequent equity sales for 30 days. |
This
offering will terminate on May 31, 2023, unless we decide to terminate the offering (which we may do at any time in our discretion)
prior to that date. We will have one closing for all the securities purchased in this offering. The combined public offering price per
share (or pre-funded warrant) and warrants will be fixed for the duration of this offering.
Fees
and Expenses
The
following table shows the per share and accompanying warrant, and per pre-funded and accompanying warrant, and total placement agent
fees we will pay in connection with the sale of the securities in this offering.
| | |
Per
Share of Common Stock and Accompanying Warrant | | |
Per
Pre- Funded Warrant and Accompanying Warrant | | |
Total | |
| Public offering price | |
$ | | | |
$ | | | |
$ | | |
| Placement agent fees | |
$ | | | |
$ | | | |
$ | | |
| Proceeds to us, before expenses | |
$ | | | |
$ | | | |
$ | | |
We
have agreed to pay the placement agent a total cash fee up to (i) 7.0% of the gross proceeds of this offering; and (ii) a management
fee equal to 1.0% of the gross proceeds raised in this offering. We will also pay the placement agent $50,000 for non-accountable expense;
up to $100,000 for its legal counsel and other out-of-pocket expenses; and will reimburse the placement agent for costs related to any
escrow agent or clearing agent up to $15,950, as applicable. We estimate the total offering expenses of this offering that will be payable
by us, excluding the placement agent fees and expenses, will be approximately $350,000. After deducting the placement agent fees
and our estimated offering expenses, we expect the net proceeds from this offering to be approximately $8,850,000.
Placement
Agent Warrants
We
have also agreed to issue to the placement agent, or its designees, warrants to purchase that number of shares of common stock of the
Company equal to 6.0% of the aggregate number of shares of common stock (and pre-funded warrants) placed in this offering. The Placement
Agent Warrants will have a term of five years and an exercise price equal to 125% of the public offering price per share and accompanying
warrant. Pursuant to FINRA Rule 5110(e), the Placement Agent Warrants and any shares of common stock issued upon exercise of the Placement
Agent Warrants shall not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative,
put or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days
immediately following the date of commencement of sales of this offering, except the transfer of any security: (i) by operation of law
or by reason of reorganization of the issuer; (ii) to any FINRA member firm participating in the offering and the officers, partners,
registered persons or affiliates thereof, if all securities so transferred remain subject to the lock-up restriction set forth above
for the remainder of the time period; (iii) if the aggregate amount of our securities held by the placement agent or related persons
does not exceed 1% of the securities being offered; (iv) that is beneficially owned on a pro-rata basis by all equity owners of an investment
fund, provided that no participating member manages or otherwise directs investments by the fund and the participating members in the
aggregate do not own more than 10% of the equity in the fund; (v) the exercise or conversion of any security, if all securities remain
subject to the lock-up restriction set forth above for the remainder of the time period; (vi) if we meet the registration requirements
of Forms S-3, F-3, or F-10; or (vii) back to us in a transaction exempt from registration with the SEC. The Placement Agent Warrants
and the shares of common stock underlying the Placement Agent Warrants are registered on the registration statement of which this prospectus
forms a part.
Right
of First Refusal
In
addition, we have granted a right of first refusal to the placement agent pursuant to which it has the right to act as the exclusive
book-running manager, underwriter, or placement agent, as applicable, if the Company or its subsidiaries decides to raise funds by means
of a public offering (including at-the-market facility) or a private placement or any other capital-raising financing of equity, equity-linked
or debt securities at any time prior to the 12 month anniversary following the consummation of this offering.
Tail
We
have also agreed to pay the placement agent a tail fee equal to the cash and warrant compensation in this offering, if any investor,
who was contacted or introduced to us by the placement agent during the term of its engagement, provides us with capital in any public
or private offering or other financing or capital raising transaction during the 12 month period following expiration or termination
of our engagement of the placement agent.
Determination
of Offering Price
The
combined public offering price per share and warrant and the combined public offering price per pre-funded warrant and warrant we are
offering and the exercise prices and other terms of the warrants and pre-funded warrants were negotiated between us and the investors,
in consultation with the placement agent based on the trading of our common stock prior to this offering, among other things. Other factors
considered in determining the public offering prices of the securities we are offering and the exercise prices and other terms of the
warrants and pre-funded warrants include the history and prospects of our company, the stage of development of our business, our business plans for
the future and the extent to which they have been implemented, an assessment of our management, general conditions of the securities
markets at the time of the offering and such other factors as were deemed relevant.
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is Mountain Share Transfer, LLC.
Listing
Our
common stock is currently listed on Nasdaq under the symbol “HCDI.” On May 9, 2023, the closing price per share of
our common stock was $4.79. There is no established public trading market for the warrants and pre-funded warrants, and we do
not expect such markets to develop. In addition, we do not intend to apply to list the pre-funded warrants or warrants on any national
securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the pre-funded
warrants and warrants will be limited.
Indemnification
We
have agreed to indemnify the placement agent against certain liabilities, including certain liabilities arising under the Securities
Act, or to contribute to payments that the placement agent may be required to make for these liabilities.
Regulation
M
The
placement agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act and any fees received
by it and any profit realized on the sale of the securities by it while acting as principal might be deemed to be underwriting discounts
or commissions under the Securities Act. The placement agent will be required to comply with the requirements of the Securities Act and
the Exchange Act, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may
limit the timing of purchases and sales of our securities by the placement agent. Under these rules and regulations, the placement agent
may not engage in any stabilization activity in connection with our securities; and (ii) bid for or purchase any of our securities or
attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until they have completed
their participation in the distribution.
Other
Relationships
From
time to time, the placement agent may provide in the future, various advisory, investment and commercial banking, and other services
to us in the ordinary course of business, for which it may receive customary fees and commissions. Except as disclosed in this prospectus,
we have no present arrangements with the placement agent for any services.
Electronic
Offer, Sale, and Distribution of Securities
A
prospectus in electronic format may be made available on the websites maintained by the placement agent, if any, participating in this
offering and the placement agent may distribute prospectuses electronically. Other than the prospectus in electronic format, the information
on these websites is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved
or endorsed by us or the placement agent, and should not be relied upon by investors.
LEGAL
MATTERS
Certain
legal matters in connection with this offering, including the validity of the common stock and Warrants offered hereby, will be passed
upon for us by FitzGerald Kreditor Bolduc Risbrough LLP, Irvine, California. Certain legal matters in connection with this offering will
be passed upon for the placement agent by Ellenoff Grossman & Schole LLP, New York, New York.
EXPERTS
Our
consolidated financial statements as of and for the years ended December 31, 2022 and 2021, incorporated by reference in this prospectus have been
so included in reliance on the report of Rosenberg Rich Baker Berman, P.A., an independent registered public accounting firm, given upon
the authority of such firm as experts in accounting and auditing.
MATERIAL
CHANGES
There
have been no material changes in our affairs since the end of the fiscal year ended that have not been described in a Form 10-Q or Form
8-K under the Exchange Act.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the SEC a registration statement on Form S-1 under the Securities Act, with respect to the shares of our common stock
being offered by this prospectus. This prospectus, which constitutes part of that registration statement, does not contain all of the
information set forth in the registration statement or the exhibits and schedules which are part of the registration statement. Some
items included in the registration statement are omitted from the prospectus in accordance with the rules and regulations of the SEC.
For further information with respect to us and the securities offered in this prospectus, we refer you to the registration statement
and the accompanying exhibits.
A
copy of the registration statement and the accompanying exhibits and any other document we file may be inspected without charge at the
public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549, and copies of all or any part of the
registration statement may be obtained from this office upon the payment of the fees prescribed by the SEC. The public may obtain information
on the operation of the public reference facilities in Washington, D.C. by calling the SEC at 1-800-SEC-0330. Our filings with the SEC
are available to the public from the SEC’s website at www.sec.gov.
We
are subject to the information and periodic reporting requirements of the Exchange Act, applicable to a company with securities registered
pursuant to Section 12 of the Exchange Act. In accordance therewith, we will file proxy statements, periodic information, and other information
with the SEC. All documents filed with the SEC are available for inspection and copying at the public reference room and website of the
SEC referred to above. We maintain a website at www.harborcustomdev.com. You may access our reports, proxy statements and other information
free of charge at this website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the
SEC. The information contained in, or that can be accessed through, our website is not incorporated by reference and is not a part of
this prospectus.
INCORPORATION
OF DOCUMENTS BY REFERENCE
The
SEC allows us to incorporate by reference the information we file with it, which means that we can disclose important information to
you by referring you to another document that we have filed separately with the SEC. We hereby incorporate by reference the following
information and documents into this prospectus:
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Our
Annual Report on Form
10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 31, 2023; |
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|
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Our
Current Reports on Form 8-K filed with the SEC on January
25, 2023; February
17, 2023; February
23, 2023; February
24, 2023; March
3, 2023; March
8, 2023; March
21, 2023; March
31, 2023; May 10, 2023; and May 11, 2023; and |
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|
|
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Our
Proxy Statement on Schedule
14 A filed with the SEC on January 4, 2023. |
Information
in several of the documents referred to above that are incorporated by reference in this prospectus was filed prior to the 1-for-20 reverse
split of our common stock pursuant to the filing of Articles of Amendment to our Articles of Incorporation with the Washington Secretary
of State on March 1, 2023, and does not reflect the effects of such reverse stock split. Our Annual Report on Form 10-K for the fiscal
year ended December 31, 2022 and all Quarterly and Current Reports thereafter do reflect the effects of such reverse stock split.
This
prospectus forms part of a registration statement on Form S-1 that we filed with the SEC. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits to the registration statement or the documents incorporated by reference
herein and therein. For further information with respect to us and the securities that we are offering under this prospectus, we refer
you to the registration statement and the exhibits and schedules filed as a part of the registration statement and the documents incorporated
by reference herein and therein. You should rely only on the information incorporated by reference or provided in this prospectus and
registration statement. We have not authorized anyone else to provide you with different information. You should not assume that the
information in this prospectus and the documents incorporated by reference herein and therein is accurate as of any date other than the
respective dates thereof.
We
also incorporate by reference into this prospectus additional documents that we may file with the SEC under Sections 13(a), 13(c), 14,
or 15(d) of the Exchange Act after the date hereof but before the completion or termination of this offering (excluding any information
not deemed “filed” with the SEC). Any statement contained in a previously filed document is deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained in this prospectus or in a subsequently filed document incorporated
by reference herein modifies or supersedes the statement, and any statement contained in this prospectus is deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement contained in a subsequently filed document incorporated by
reference herein modifies or supersedes the statement.
Any
information in any of the foregoing documents will automatically be deemed to be modified or superseded to the extent that information
in this prospectus or in a later filed document that is incorporated or deemed to be incorporated herein by reference modifies or replaces
such information.
Upon
written or oral request, we will provide you without charge a copy of any or all of the documents that are incorporated by reference
into this prospectus, including exhibits which are specifically incorporated by reference into such documents. Requests should be directed
to: Harbor Custom Development, Inc., Attention: Investor Relations, 1201 Pacific Avenue, Suite 1200. Tacoma, Washington 98402, telephone
(253) 649-0636. You may also view such documents on our website under the “Investor Relations” tab on www.harborcustomdev.com.
The information found on our website, or that may be accessed by links on our website, is not part of this prospectus. We have included
our website address solely as an inactive textual reference. Investors should not rely on any such information in deciding whether to
purchase our securities.
The
SEC maintains an internet website that contains reports, proxy and information statements and other information regarding the issuers
that file electronically with the SEC, including the Company, and can be accessed free of charge on the SEC’s website, http://www.sec.gov.
Up
to 2,087,683 Shares of Common Stock
Pre-Funded
Warrants to Purchase up to 2,087,683 Shares of Common Stock
(and shares of common stock underlying the Pre-Funded Warrants)
Warrants
to Purchase up to 2,087,683 Shares of Common Stock
(and shares of common stock underlying the Warrants)
Placement
Agent Warrants to Purchase up to 125,261 Shares of Common Stock
(and shares of common stock underlying the Placement Agent Warrants)
Harbor
Custom Development, Inc.
PROSPECTUS
H.C.Wainwright & Co.
[ ], 2023
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution.
The
following table sets forth the costs and expenses, other than placement agent fees and commissions, payable in connection with
the sale of the securities being registered. All amounts shown are estimates, except the U.S. Securities and Exchange Commission registration
fee and Financial Industry Regulatory Authority filing fee.
| Description | |
Amount | |
| U.S. Securities and Exchange Commission registration fee | |
$ | 2,300 | |
| Financial Industry Regulatory Authority filing fee | |
$ | 3,600 | |
| Accounting fees and expenses | |
$ | 75,000 | |
| Legal fees and expenses | |
$ | 175,000 | |
| Transfer agent and registrar fees and expenses | |
$ | 10,000 | |
| Printing expenses | |
$ | 10,000 | |
| Non-accountable expenses of the Placement Agent | |
$ | 50,000 | |
| Escrow or Clearing Agent | |
$ | 16,000 | |
| Miscellaneous | |
$ | 8,100 | |
| Total | |
$ | 350,000 | |
Item
14. Indemnification of Directors and Officers.
We
may indemnify any person who is, or is threatened to be made, a party to any action, suit or proceeding, whether civil, criminal, administrative,
or investigative, and whether formal or informal, and whether by or in the right of us or its shareholders or by any other party, by
reason of the fact that the person is, as such terms are defined in the Bylaws, a Director, Officer-Director, or Subsidiary Outside Director
against judgements, penalties or penalty taxes, fines, settlements (even if paid or payable to us or our shareholders or to, as such
term is defined in the Bylaws, a Subsidiary Corporation) and reasonable expenses, including attorneys’ fees, actually incurred
in connection with such action, suit or proceeding unless the liability and expenses were on account of conduct adjudged by a court having
jurisdiction, from which there is no further right to appeal, based upon clear and convincing evidence, or Finally Adjudged, to be an
act or omission that involve intentional misconduct or a knowing violation of law, conduct violating Section 23B.08.310 of the Washington
Business Corporation Act, as amended, or participation in any transaction from which the person will personally receive a benefit in
money, property or services to which the person is not legally entitled. Such expenses reasonably incurred will be paid or reimbursed
by us, upon request of such person, in advance of the final disposition of such action, suit or proceeding upon receipt by us of a written,
unsecured promise by the person to repay such amount if, upon final adjudication, such person is not entitled to indemnification.
Our
Bylaws further provide that we will provide indemnification and advancement of expenses in connection with either an administrative proceeding
or civil action instituted by a federal banking agency to the extent permitted, and in the manner prescribed by, any state or federal
laws or regulations applicable to us, or any formal policies adopted by a regulatory agency having jurisdiction over us.
To
the extent that indemnification for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”),
may be permitted to our directors and officers, we have been advised that, in the opinion of the Securities and Exchange Commission,
this indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. Finally, our ability
to provide indemnification to our directors and officers is limited by federal banking laws and regulations.
Section
23B.08.320 of the Washington Business Corporation Act, as amended, provides that articles of incorporation may contain provisions not
inconsistent with law that eliminate or limit the personal liability of a director to the corporation or its shareholders for monetary
damages for conduct as a director, provided that such provisions shall not eliminate or limit the liability of a director for acts or
omissions that involve intentional misconduct by a director or a knowing violation of law by a director, for conduct violating Section
23B.08.310 of the Washington Business Corporation Act, as amended, or for any transaction from which the director will personally receive
a benefit in money, property, or services to which the director is not legally entitled. No such provision shall eliminate or limit the
liability of a director for any act or omission occurring prior to the date when such provision becomes effective.
The
Bylaws provide that no Director, Officer-Director, former Director, or former Officer-Director will be personally liable to us or our
shareholders for monetary damages for conduct as a Director or Officer-Director occurring after the effective date of Article 10 of the
Articles of Incorporation, unless the conduct is Finally Adjudged.
Item
15. Recent Sales of Unregistered Securities.
Set
forth below is information regarding securities issued by us for the three year period prior to the date of this prospectus.
(a)
Issuance of Capital Stock.
On
May 15, 2020, we entered into a debt conversion agreement with Olympic Views, LLC “Olympic”), whereby we agreed to convert
approximately $496,956 of outstanding indebtedness and $54,956 of accrued interest we owe to Olympic into 4,142 shares of our common stock at the price of $120
per share, which conversion occurred immediately following the determination of the public offering price per share of our common stock
sold in the Initial Public Offering. Sterling Griffin, our Chief Executive Officer and President, previously owned 50% of Olympic. Olympic
is an accredited investor for purposes of Rule 501 of Regulation D. Mr. Griffin sold 100% of his membership interests in Olympic on December
2, 2020.
On
August 10, 2020, our Chief Executive Officer and President, Sterling Griffin transferred 26,789 shares of his common stock into an irrevocable
trust entitled The Griffin Investment Trust. Neither Mr. Griffin nor his spouse nor anyone else whose ownership may be considered as
beneficial owners with Mr. and Mrs. Griffin are a trustee or beneficiary of The Griffin Investment Trust.
On
March 17, 2021, we issued 2,253 shares of common stock to an option holder pursuant to an exercise of their stock options under the 2018
Stock Option Plan.
During
the year ended December 31, 2020, we issued an aggregate of 1,700 shares of common stock to the members of the Board of Directors pursuant
to our 2020 Restricted Stock Plan.
During
the year ended December 31, 2021, we issued an aggregate of 9,000 shares of common stock to the members of the Board of Directors pursuant
to our 2020 Restricted Stock Plan.
On
February 28, 2022, we issued 406 shares of common stock to an option holder pursuant to an exercise of their stock options under the
2018 Stock Option Plan.
On
April 4, 2022, we issued 676 shares of common stock to an option holder pursuant to an exercise of their stock options under the 2018
Stock Option Plan.
During
the year ended December 31, 2022, we issued an aggregate of 11,555 shares of common stock to our executive officers pursuant to our 2020
Restricted Stock Plan.
The
offers, sales and issuances of securities listed above were deemed exempt from registration under Section 4(a)(2) of the Securities Act
or Regulation D promulgated thereunder in that the issuance of securities were made to accredited investors and did not involve a public
offering. The recipients of such securities in each of these transactions represented their intention to acquire the securities for investment
purposes only and not with a view to or for sale in connection with any distribution thereof.
(b)
Option Grants.
During
the year ended December 31, 2020, we issued 10,690 options to a member of our Board of Directors and several employees. The options have
an exercise price of $44.40 to $130.00 per share, a term of five to ten years, and vest from February 7, 2021 through September 21, 2022.
During
the year ended December 31, 2020, we issued 88,335 warrants to purchase 4,417 shares of common stock. The warrants have an exercise price
of $7.50 per warrant, a term of five years, and a one-year vesting period.
During
the year ended December 31, 2021, we issued 400,000 warrants to purchase 20,000 shares of common stock. The warrants have an exercise
price of $3.75 per warrant, a term of five years, and a six-month vesting period.
During
the year ended December 31, 2021, we issued 7,000 options to several employees. The options have an exercise price of $55.20 to $68.20
per share, a term of ten years, and vest from February 23, 2023 through July 1, 2023.
During
the year ended December 31, 2022, we issued 19,600 options to employees. The options have an exercise price between $22.40 and $41.80
per share, a term of ten years, and vest over one or three years.
During
the year ended December 31, 2022, we issued 100,000 warrants to purchase 5,000 shares of common stock in connection with investor relation
services being performed. The warrants have an exercise price of $3.00 per warrant, a term of five years, and vest over three years.
The fair value of these warrants is $0.1 million as of December 31, 2022.
The
options described above were deemed exempt from registration in reliance on Section 4(a)(2) of the Securities Act or Rule 701 promulgated
thereunder as transactions pursuant to benefit plans and contracts relating to compensation as provided under Rule 701. The recipients
of such securities were our employees, directors or bona fide consultants and received the securities under our stock option plans.
Item
16. Exhibits and Financial Statement Schedules.
(a)
The following exhibits are filed as part of this Registration Statement and are numbered in accordance with Item 601 of Regulation S-K:
See
the Exhibit Index immediately preceding the Signature Page.
(b)
Financial Statement Schedules:
All
schedules for which provision is made in the applicable accounting regulations of the SEC are not required, are inapplicable, or the
information is included in the consolidated financial statements, and have therefore been omitted.
Item
17. Undertakings.
The
Registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933 (the “Securities Act”);
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i),
(1)(ii) and (1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained
in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), that are incorporated by reference in the registration statement, or is contained
in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b)
as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses
filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use.
(5)
That, for the purpose of determining liability of the Registrant under the Securities Act to any purchaser in the initial
distribution of the securities, the undersigned Registrant undertakes that in a primary offering of securities of the
undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to
the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such
purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by
the undersigned Registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant
or its securities provided by or on behalf of the undersigned Registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
(6)
The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of
the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (the “Exchange
Act”) (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(7)
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer, or controlling person in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The
undersigned Registrant hereby further undertakes that:
(1)
For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule
424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was
declared effective.
(2)
For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
EXHIBIT
INDEX
| Exhibit
No. |
|
Description |
|
Form |
|
Exhibit |
|
Filing
Date |
|
Filed
Herewith |
| |
|
|
|
|
|
|
|
|
|
|
| 3.1 |
|
Certificate
of Conversion and Articles of Incorporation of the Registrant dated October 1, 2018 |
|
S-1 |
|
3.1 |
|
3/31/2020 |
|
|
| 3.2 |
|
Articles
of Amendment of Articles of Incorporation of the Registrant dated December 7, 2018 |
|
S-1 |
|
3.2 |
|
3/31/2020 |
|
|
| 3.3 |
|
Articles
of Amendment of Articles of Incorporation of the Registrant dated August 1, 2019 |
|
S-1 |
|
3.3 |
|
3/31/2020 |
|
|
| 3.4 |
|
2nd
Amended and Restated Bylaws of the Registrant, dated January 15, 2020 |
|
S-1 |
|
3.4 |
|
3/31/2020 |
|
|
| 3.5 |
|
Articles
of Amendment of Articles of Incorporation of the Registrant, dated April 16, 2020 |
|
S-1 |
|
3.5 |
|
4/28/2020 |
|
|
| 3.6 |
|
Articles
of Amendment of Articles of Incorporation of the Registrant, dated March 1, 2023 |
|
8-K |
|
3.1 |
|
3/03/2023 |
|
|
| 4.1 |
|
2018
Incentive and Non-Statutory Stock Option Plan, dated November 19, 2018 |
|
S-1 |
|
4.1 |
|
3/31/2020 |
|
|
| 4.2 |
|
2020
Restricted Stock Plan, dated October 13, 2020 |
|
10-Q |
|
10.1 |
|
11/16/2020 |
|
|
| 4.3 |
|
Certificate
of Designation of 8.0% Series A Cumulative Convertible Preferred Stock, dated June 8, 2021 |
|
8-K |
|
3.1 |
|
6/10/2021 |
|
|
| 4.4 |
|
Warrant
Agency Agreement between the Registrant and Mountain Share Transfer, Inc., dated June 11, 2021 |
|
8-K |
|
4.1 |
|
6/14/2021 |
|
|
| 4.5 |
|
Certificate
of Amendment of Certificate of Designation of 8.0% Series A Cumulative Convertible Preferred Stock, dated August 13, 2021 |
|
S-1 |
|
3.7 |
|
9/10/2021 |
|
|
| 4.6 |
|
Warrant
Agency Agreement between the Registrant and Mountain Share Transfer, Inc., dated October 7, 2021 |
|
8-K |
|
4.1 |
|
10/08/2021 |
|
|
| 4.7 |
|
Description
of Capital Stock |
|
10-K |
|
4.7 |
|
3/31/2023 |
|
|
| 4.8 |
|
Form of Warrant |
|
|
|
|
|
|
|
X |
| 4.9 |
|
Form of Pre-funded Warrant |
|
|
|
|
|
|
|
X |
| 4.10 |
|
Form of Placement Agent Warrant |
|
|
|
|
|
|
|
X |
| 5.1 |
|
Opinion of FitzGerald Kreditor Bolduc Risbrough LLP |
|
|
|
|
|
|
|
X |
| 10.1 |
|
Director
Agreement between the Registrant and Richard Schmidtke, dated October 17, 2018 |
|
S-1 |
|
10.4 |
|
3/31/2020 |
|
|
| 10.2 |
|
Independent
Director Agreement with Larry Swets, dated March 22, 2020 |
|
S-1 |
|
10.11 |
|
3/31/2020 |
|
|
| 10.3 |
|
SoundEquity,
Inc. Loan Package, dated November 13, 2019 |
|
S-1 |
|
10.12 |
|
4/28/2020 |
|
|
| 10.4 |
|
Indemnification
Agreement with Larry Swets, dated June 1, 2020 |
|
S-1 |
|
10.17 |
|
6/19/2020 |
|
|
| 10.5 |
|
Lease
Agreement with Burnham Partners LLC, dated February 18, 2021 |
|
10-K |
|
10.22 |
|
3/31/2021 |
|
|
| 10.6 |
|
SoundEquity,
Inc. Loan Package, dated October 4-5, 2021 |
|
10-K |
|
10.25 |
|
3/31/2021 |
|
|
| 10.7 |
|
Promissory
Note with Sound Capital Loans, LLC, dated January 22, 2021 |
|
10-K |
|
10.26 |
|
3/31/2021 |
|
|
| 10.8 |
|
Lease
Agreement with University Street Properties I, LLC, dated July 27, 2021 |
|
10-K |
|
10.13 |
|
3/24/2023 |
|
|
| 10.9 |
|
Employment
Agreement with Lance Brown dated November 1, 2021. |
|
10-K |
|
10.14 |
|
3/24/2022 |
|
|
| 10.10 |
|
Loan
Agreement with BankUnited, N.A., dated March 7, 2022 |
|
8-K |
|
1.1 |
|
3/10/2023 |
|
|
| 10.11 |
|
Security
Agreement with BankUnited, N.A., dated March 7, 2022 |
|
8-K |
|
1.2 |
|
3/10/2023 |
|
|
| 10.12 |
|
Revolving
Line of Credit Promissory Note with Bank-United N.A., dated March 7, 2022 |
|
8-K |
|
1.3 |
|
3/10/2023 |
|
|
| 10.12 |
|
Employment
Agreement with Sterling Griffin, dated May 26, 2022 |
|
10-K |
|
10.15 |
|
3/31/2023 |
|
|
| 10.13 |
|
Employment
Agreement with Jeffrey Habersetzer, dated May 26, 2022 |
|
10-K |
|
10.16 |
|
3/31/2023 |
|
|
| 10.14 |
|
Amended
Loan Agreement with BankUnited N.A., dated February 22, 2023 |
|
10-K |
|
10.17 |
|
3/31/2023 |
|
|
| 10.15 |
|
Form of Securities Purchase Agreement |
|
|
|
|
|
|
|
X |
| 21.1 |
|
List of Subsidiaries |
|
S-1 |
|
21.1 |
|
4/18/23 |
|
|
| 23.1 |
|
Consent
of Rosenberg Rich Baker Berman, P.A. |
|
|
|
|
|
|
|
X |
| 23.2 |
|
Consent of FitzGerald Kreditor Bolduc Risbrough LLP (included in Exhibit 5) |
|
|
|
|
|
|
|
X |
| 24.1 |
|
Power of Attorney (included in signature page) |
|
S-1 |
|
24.1 |
|
4/18/23 |
|
|
| 107 |
|
Calculation of Filing Fee Table |
|
|
|
|
|
|
|
X |
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Tacoma, State of Washington, on May 11, 2023.
| |
Harbor
Custom Development, Inc. |
| |
|
|
| |
By:
|
/s/ Sterling Griffin |
| |
|
Sterling
Griffin |
| |
|
Chief
Executive Officer, President, and Chairman of the Board of Directors |
Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration Statement on Form S-1 has been signed by the following
persons in the capacities and on the dates indicated.
| Signature |
|
Title |
|
Date |
| |
|
|
|
|
| /s/ Sterling
Griffin |
|
Chief
Executive Officer, President, and Chairman of the Board of Directors |
|
May
11, 2023 |
| Sterling
Griffin |
|
(Principal
Executive Officer) |
|
|
| |
|
|
|
|
| * |
|
Chief
Financial Officer |
|
May
11, 2023 |
Lance
Brown |
|
(Principal
Financial Officer and Principal Accounting Officer) |
|
|
| |
|
|
|
|
| * |
|
Director |
|
May
11, 2023 |
| Karen
Bryant |
|
|
|
|
| |
|
|
|
|
| * |
|
Director |
|
May
11, 2023 |
| Dennis
Wong |
|
|
|
|
| |
|
|
|
|
| * |
|
Director |
|
May
11, 2023 |
| Wally
Walker |
|
|
|
|
| |
|
|
|
|
| * |
|
Director |
|
May
11, 2023 |
| Richard
Schmidtke |
|
|
|
|
| |
|
|
|
|
| * |
|
Director |
|
May
11, 2023 |
| Chris
Corr |
|
|
|
|
| |
|
|
|
|
| *
/s/ Sterling Griffin |
|
Director |
|
May 11, 2023 |
Sterling Griffin
Attorney-in-Fact |
|
|
|
|
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