Company: HGBL
Filing Date: 2025-02-12
Form Type: 8-K
Source: 0000950170-25-018808
Chunk: 0

Company: Heritage Global Inc.
Filing Date: 2025-02-12
Form: 8-K
Item: Item 1.01
Chunk 0
---
Item 1.01.

Entry into a Material Definitive Agreement.

On February 6, 2025, Heritage Nancy Ridge LLC (“ Heritage Nancy Ridge”), an indirect and wholly owned subsidiary of Heritage Global Inc. (the “ Company”) entered into a promissory note, a business loan agreement and commercial security agreement (collectively, the “ Mortgage Loan Agreement”) with C3bank, National Association (the “ Lender”). The Mortgage Loan Agreement provides for a $4.1 million term loan (the “ Mortgage”). Heritage Nancy Ridge intends to use the proceeds of the Mortgage to purchase real property and the building located at 6130 Nancy Ridge Drive in San Diego, California (the “ Nancy Ridge Property”), which will be used as the Company’s future corporate headquarters and as future warehouse and office space for the operations of Heritage Global Partners, Inc., a subsidiary of the Company that operates the Auction and Liquidation segment of the Company.

The maturity date of the Mortgage Loan Agreement is February 5, 2035. The Mortgage Loan Agreement sets the interest rate to accrue at a rate of 6.500% for the first three years of the Mortgage. For the remainder of the term, the Mortgage Loan Agreement sets the interest rate spread and interest rate floor to accrue at a variable interest rate, which is based on the one-month Term SOFR as published daily by CME Group, plus a margin of 2.250%. Additionally, the Mortgage Loan Agreement provides that in the event of prepayment, Heritage Nancy Ridge shall pay the Lender a prepayment fee during the first year of the Mortgage equal to three percent (3%) of the amount prepaid, followed by two percent (2%) of the amount prepaid in year two of the Mortgage, and one percent (1%) of the amount prepaid in year three of the Mortgage.

Heritage Ridge Nancy is the borrower and the Company is the guarantor under the Mortgage Loan Agreement. The Mortgage Loan Agreement is secured by a security interest in the Nancy Ridge Property.

The Mortgage Loan Agreement contains customary affirmative covenants regarding, among other things, the maintenance of records, maintenance of certain insurance coverage, compliance with governmental requirements and maintenance of several financial covenants. The Mortgage Loan Agreement also contains certain customary financial covenants and negative covenants.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.