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 2022-06-30

 2023-03-28

 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington,
D.C. 20549

 FORM
 10-K/A

 (Amendment
No. 1)

 ANNUAL
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the fiscal year ended December 31, 2022

 OR

 TRANSITION
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from__to

 Commission
file number 001-39266

 Harbor
Custom Development, Inc.

 (Exact
name of registrant as specified in its charter)

 Washington

 46-4827436

 (State
 of organization)

 (I.R.S.
 Employer Identification No.)

 1201
Pacific Avenue, Suite 1200

 Tacoma,
 Washington 98402

 (Address
of principal executive offices)

 (253) 649-0636

 Registrant's
telephone number, including area code

 Securities
registered pursuant to Section 12(b) of the Act:

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of each exchange on which registered

 Common
 Stock

 HCDI *

 The
 Nasdaq Stock Market LLC

 Series
 A Cumulative Convertible Preferred Stock

 HCDIP *

 The
 Nasdaq Stock Market LLC

 Warrants

 HCDIW *

 The
 Nasdaq Stock Market LLC

 Warrants

 HCDIZ *

 The
 Nasdaq Stock Market LLC

 *
 As of the date of this
 filing, Form 25-NSE to remove our securities from being listed on The Nasdaq Stock Market LLC has not yet been filed with the
 Securities and Exchange Commission.

 Securities
registered pursuant to Section 12(g) of the Act: None

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2)
has been subject to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," accelerated filer" and "smaller reporting 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 13(a) of the Exchange Act.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive o cers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 The
aggregate market value of voting stock held by non-affiliates of the Registrant on June 30, 2022, based on the closing price of $27.80
for shares of the Registrant's common stock as reported by the Nasdaq Stock Market LLC, was approximately $ 15.6 million. Shares
of common stock beneficially owned by each executive officer, director, and holder of more than 10% of our common stock have been excluded
in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination
for other purposes.

 The
registrant had outstanding 719,152 shares of common stock as of March 28, 2023.

 Auditor
 Name

 Auditor
 Location

 Auditor
 Firm ID

 Rosenberg
 Rich Baker Berman P.A.

 Somerset,
 New Jersey

 EXPLANATORY
NOTE

 References
to the "Company," "HCDI," "we," "us," and "our" refer to Harbor Custom Development,
Inc. and its consolidated subsidiaries, unless the context requires otherwise.

 This
Amendment No. 1 on Form 10-K/A (the "Amendment") amends the Annual Report on Form 10-K (the "Annual Report")
of the Company for the fiscal year ended December 31, 2022, as filed with the Securities and Exchange Commission (the "SEC")
on March 31, 2023. Specifically, this Amendment amends and restates Part II, Item 9A, "Controls and Procedures" in its entirety:
(1) to include management's annual report on internal control over financial reporting as required by Item 308(a) of Regulation
S-K, and (2) in light of the Company's inadvertent omission of the foregoing, to amend the Company's determination regarding
the effectiveness of the Company's disclosure controls and procedures as ineffective as of December 31, 2022.

 The
Company failed to include management's annual report on internal control over financial reporting in the Annual Report when it
was originally filed on March 31, 2023 as it had previously relied on an exemption established by the SEC for newly public companies
that did not require such disclosure. The omission of the disclosure had no impact on the consolidated financial statements and other
disclosures contained in the Annual Report. Management was aware of its responsibility for establishing adequate internal controls over
financial reporting at that time, had such internal controls in place at that time, and complied with the procedures established by the
internal controls framework; the specific disclosure item was merely inadvertently omitted from the Annual Report. However, due to this
omission, the Company has determined that it did not maintain effective disclosure controls and procedures and did not maintain effective
internal controls over financial reporting as of December 31, 2022.

 Except
as described above, no other changes have been made to the Annual Report. The Annual Report continues to speak as of the original filing
date of the Annual Report. This Amendment to the Annual Report is only being filed to revise Item 9A and does not change the previously
reported financial statements or any of the other disclosures contained in the Annual Report originally filed on March 31, 2023. The
Company has not updated or amended any other disclosures contained therein to reflect any events which occurred after March 31, 2023.
other than as expressly indicated in this Amendment. In addition, the Exhibit Index in Item 15 of Part IV of the Annual Report is hereby
amended and restated in its entirety and currently dated certifications required under Section 302 of the Sarbanes-Oxley Act of 2002
are filed as exhibits to this Amendment. Because no financial statements are contained within this Amendment, we are not filing currently
dated certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 ITEM
9A. CONTROLS AND PROCEDURES

 Evaluation
of Disclosure Controls and Procedures

 Our
management, under the supervision of our Interim Chief Executive Officer and President and Chief Accounting Officer performed an evaluation
(the "Evaluation") of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of the end of the period covered by this Annual Report. Disclosure controls and procedures include, without limitation,
controls and procedures designed to provide a reasonable level of assurance that information required to be disclosed by us in the reports
that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the
SEC's rules and forms, and is accumulated and communicated to our management, including our Interim Chief Executive Officer and
President and Chief Accounting Officer (our principal executive officer and principal financial and accounting officers, respectively)
or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 As
further described below, our management believes that they have remediated certain internal weaknesses that were present during the year
ended December 31, 2021. However, while that assessment was included in our Annual Report when it was originally filed on March 31, 2023,
we inadvertently failed to include management's annual report on internal control over financial reporting in the Annual Report.
Previously, we relied on an exemption established by the SEC for newly public companies that allowed us to exclude management's
report on internal control over financial reporting. As further explained in the Explanatory Note, we have amended this Annual Report
to now include our management's report on internal control over financial reporting.

 In
light of the foregoing inadvertent omission of the management's report, our Interim Chief Executive Officer and President and Chief
Accounting Officer concluded that our disclosure controls and procedures were operating ineffectively as of December 31, 2022.

 Management's
Annual Report on Internal Control Over Financial Reporting

 Management
is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act and for performing an assessment of the effectiveness of internal control over financial reporting
as of December 31, 2022. Our internal control over financial reporting is a process under the supervision of our Interim Chief Executive
Officer and President and Chief Accounting Officer (our principal executive and principal financial and accounting officers, respectively),
and effected by our Board of Directors, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with U.S. generally accepted accounting principles ("GAAP").

 Our
internal control over financial reporting includes those policies and procedures that:

 (i)

 pertain
 to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets
 of the Company;

 (ii)

 provide
 reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
 U.S. GAAP, and that receipts and expenditures are being made only in accordance with authorizations of the Company's management
 and Board of Directors; and

 (iii)

 provide
 reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's
 assets that could have a material effect on the financial statements.

 Management,
including our Interim Chief Executive Officer and President and Chief Accounting Officer, does not expect that our internal controls
will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact
that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent
limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances
of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods is subject to the risk
that those internal controls may become inadequate because of changes in business conditions or that the degree of compliance with the
policies or procedures may deteriorate.

 Management
performed an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2022 based on the framework
in Internal Control — Integrated Framework issued by the 2013 Committee of Sponsoring Organizations of the Treadway Commission
("COSO"). Based on our evaluation under such framework, management determined that our internal control over financial reporting
was ineffective as of December 31, 2022. The ineffectiveness of our internal control over financial reporting was due to our inadvertent
omission to include management's report on internal control over financial reporting in the Annual Report, which we have identified
as a material weakness. A material weakness is a deficiency or a combination of control deficiencies in internal control over financial
reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will
not be prevented or detected on a timely basis. Notwithstanding our identification of this omission as a material weakness, it had no
impact on the consolidated financial statements contained in the Annual Report.

 Remediation
Status and Plan

 In
our Annual Report on Form 10-K for the year ended December 31, 2021, we identified a material weakness in internal control over financial
reporting relating to diluted earnings per share as indicated in our amended 2021 Annual Report on Form 10-K/A filed on May 2, 2022 as
well as the third quarter 2021 Quarterly Report on Form 10-Q/A, filed with the SEC on May 2, 2022, both of which were restated within
the year ended December 31, 2022. Management improved the system of evaluating and implementing the accounting standards that apply to
our financial statements and has significantly enhanced our accounting team through the hirings of a Director of Accounting, Senior Manager
of SEC Reporting, Senior Finance Manager, and Tax Manager. We also provided additional training to our personnel and engaged a nationally
recognized third-party accounting firm with whom our management and accounting personnel can consult regarding the application of complex
accounting transactions. Management monitored the improvements made to the overall control environment during the first two quarters
of the year and sufficiently tested the effectiveness of internal controls surrounding diluted earnings per share during the second quarter
of 2022. Based on this evaluation, our Interim Chief Executive Officer and President and Chief Accounting Officer concluded that this
material weakness has been remediated as of December 31, 2022.

 Management
plans to remediate the inadvertent omission highlighted in this Amendment by enhancing review processes within our reporting structure
to ensure comprehensive reviews of all filing requirements and filings for completeness and accuracy.

 This
Annual Report does not include an attestation report from our independent registered public accounting firm regarding internal control
over financial reporting as this management's report is not subject to attestation by our independent registered public accounting
firm due to an exemption established by rules of the SEC for emerging growth companies as defined in the JOBS Act.

 Changes
in Internal Control over Financial Reporting

 Other
than the enhancements to internal controls related to diluted earnings per share, there was no change in our internal control over financial
reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(f) of the Exchange Act that occurred during
the period covered by this Annual Report that has materially affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

 ITEM
15. EXHIBITS

 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

 3.2

 Articles of Amendment of Articles of Incorporation of the Registrant dated December 7, 2018

 S-1

 3.2

 3.3

 Articles of Amendment of Articles of Incorporation of the Registrant dated August 1, 2019

 S-1

 3.3

 3.4

 2nd Amended and Restated Bylaws of the Registrant, dated January 15, 2020

 S-1

 3.4

 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

 3.1

 3/03/2023

 4.1

 2018 Incentive and Non-Statutory Stock Option Plan, dated November 19, 2018

 S-1

 4.1

 4.2

 2020 Restricted Stock Plan, dated October 13, 2020

 10.1

 11/16/2020

 4.3

 Certificate of Designation of 8.0% Series A Cumulative Convertible Preferred Stock, dated June 8, 2021

 3.1

 6/10/2021

 4.4

 Warrant Agency Agreement between the Registrant and Mountain Share Transfer, Inc., dated June 11, 2021

 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

 4.1

 10/08/2021

 4.7

 Description of Capital Stock

 4.7

 10.1

 Director Agreement between the Registrant and Richard Schmidtke, dated October 17, 2018

 S-1

 10.4

 10.2

 Independent Director Agreement with Larry Swets, dated March 22, 2020

 S-1

 10.11

 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

 10.22

 3/31/2021

 10.6

 SoundEquity, Inc. Loan Package, dated October 4-5, 2021

 10.25

 3/31/2021

 10.7

 Promissory Note with Sound Capital Loans, LLC, dated January 22, 2021

 10.26

 3/31/2021

 10.8

 Lease Agreement with University Street Properties I, LLC, dated July 27, 2021

 10.13

 3/24/2022

 10.9

 Offer of Employment to Lance Brown dated November 1, 2021.

 10.14

 3/24/2022

 10.10

 Loan Agreement with BankUnited, N.A., dated March 7, 2022

 1.1

 3/10/2022

 10.11

 Security Agreement with BankUnited, N.A., dated March 7, 2022

 1.2

 3/10/2022

 10.12

 Revolving Line of Credit Promissory Note with BankUnited, N.A, dated March 7, 2022

 1.3

 3/10/2022

 10.15

 Employment Agreement with Sterling Griffin, dated May 26, 2022

 10.15

 10.16

 Employment Agreement with Jeffrey Habersetzer, dated May 26, 2022

 10.16

 10.17

 Amended Loan Agreement with BankUnited N.A., dated February 22, 2023

 10.17

 23.1

 Consent of Rosenberg Rich Baker Berman, P.A.

 *

 31.1

 Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 *

 31.2

 Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 *

 32.1

 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 32.1

 101.
 INS

 Instance Document

 101.
 SCH

 Taxonomy Extension Schema Document

 101.
 CAL

 Taxonomy Extension Calculation Linkbase Document

 101.
 DEF

 Taxonomy Extension definition Linkbase Document

 101.
 LAB

 Taxonomy Extension Label Linkbase Document

 101.
 PRE

 Taxonomy Extension Presentation Linkbase Document

 Cover

 SIGNATURES

 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

 HARBOR
 CUSTOM DEVELOPMENT, INC.

 Date:
 January 18, 2024

 By

 /s/
 Jeffrey Habersetzer

 Jeffrey
 Habersetzer

 Interim
 Chief Executive Officer and Interim President

 (Principal
 Executive Officer)

 Date:
 January 18, 2024

 By

 /s/
 Yoshi Niino

 Yoshi
 Niino

 Chief
 Accounting Officer

 (Principal
 Financial and Accounting Officer)

 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/
 Jeffrey Habersetzer

 Interim
 Chief Executive Officer and Interim President

 Jeffrey
 Habersetzer

 (Principal
 Executive Officer)

 /s/
 Yoshi Niino

 Chief
 Accounting Officer

 Yoshi
 Niino

 (Principal
 Financial and Accounting Officer)

 /s/
 Dennis Wong

 Director

 Dennis
 Wong

 /s/
 Karen Bryant

 Director

 Karen
 Bryant

 /s/
 Chris Corr

 Director

 Chris
 Corr

 /s/
 D. David Chandler

 Director

 D.
 David Chandler