Comstock Holding Companies, Inc. (NASDAQ:CHCI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01Entry into a Material Definitive Agreement.
The disclosure set forth in Item 2.03 is hereby incorporated into this item by reference.
Item 2.03Creation of a Direct Financial Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On March 19, 2020, Comstock Holding Companies, Inc. (the “CHCI” or the “Company”) entered into a Revolving Capital Line of Credit Agreement (the “Loan Documents”) with Comstock Development Services, L.C. (“Lender”), an entity wholly owned by Christopher Clemente, the Chief Executive Officer of CHCI, to which the Company secured a Ten Million Dollar ($10,000,000) capital line of credit (the “Loan”). Under the terms of the Loan Documents, the Loan provides for an initial variable interest rate of the WSJ Prime Rate plus one percent (1.00%) per annum on advances made under the Loan, payable monthly in arrears. The five-year term facility allows for interim draws that carry a maturity date of twelve (12) months from the initial date of the disbursement unless a longer initial term is agreed to by the Lender. The capital provided to the Company by the Loan will be utilized (i) to retire all of the Company’s ten percent (10%) corporate indebtedness maturing in 2020 owed to Comstock Growth Fund, L.C.; (ii) to secure additional investment opportunities; and (iii) for general corporate purposes.
The foregoing summary of the Loan Documents is qualified in its entirety by the provisions of the Loan Documents, which the Company intends to file with its Quarterly Report on Form 10-Q for the fiscal quarter ending March 31, 2020.