Heritage Global secures $4.1 million loan for new headquarters

Heritage Global Inc (NASDAQ:HGBL). has entered into a Mortgage Loan Agreement with C3bank, National Association for a $4.1 million term loan. The loan will fund the purchase of a property that will serve as the company’s new corporate headquarters and additional space for operations.

Heritage Nancy Ridge LLC, a wholly owned subsidiary of Heritage Global, is the borrower under the agreement, which was finalized on February 6, 2025. The property, located at 6130 Nancy Ridge Drive in San Diego, California, will also provide future warehouse and office space for Heritage Global Partners (NYSE:GLP), Inc., a subsidiary operating the Auction and Liquidation segment of the company. With a current ratio of 1.78, the company’s strong liquidity position supports this strategic expansion.

The loan has a maturity date of February 5, 2035, with an initial interest rate of 6.500% for the first three years. Subsequently, the interest will be variable, based on the one-month Term SOFR plus a 2.250% margin. The agreement includes a prepayment fee structure decreasing from three percent in the first year to one percent in the third year if prepayments are made.

Heritage Global, acting as the guarantor, has secured the loan with the Nancy Ridge Property. The Mortgage Loan Agreement mandates compliance with various affirmative covenants, including record maintenance, insurance coverage, and adherence to governmental requirements. It also establishes several financial covenants and imposes certain restrictions.

This new financial obligation is part of the company’s strategic initiative to consolidate its corporate functions and expand operational capacities. The information about this transaction is based on the latest SEC filing by Heritage Global Inc. For deeper insights into Heritage Global’s financial health and growth potential, including 10+ additional ProTips and comprehensive valuation metrics, visit InvestingPro.

In other recent news, Heritage Global Inc. has finalized the financial compensation structure for its Chief Financial Officer, Brian Cobb. The company’s Compensation Committee set a compensation plan that outlines Cobb’s salary and potential bonuses through 2028. As per the plan, Cobb will receive an annual base salary of $300,000 from 2025 to 2028, along with performance-based cash bonuses. A 20% bonus of his annual base salary is contingent on performance metrics, with a focus on risk management and leadership in mergers and acquisitions. Additional bonuses of 10% of his base salary are dependent on the company’s net operating income surpassing specific thresholds.

As part of the long-term incentive strategy, Cobb received a restricted stock award of 125,000 shares under the 2022 Heritage Global Inc. Equity Incentive Plan. These shares will vest incrementally each year from 2025 through 2028. This plan underscores the company’s commitment to retaining key executives and incentivizing their contribution to the company’s financial and operational goals. These are recent developments in the company’s executive compensation strategy.

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