Company: SDHC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001982518-25-000020
Chunk: 75

Company: Smith Douglas Homes Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 75
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2025, the Company recognized a lot option contract abandonment charge of $0.7 million in the Central reporting segment, which is included within other expense (income), net in the accompanying unaudited condensed consolidated statements of income. No lot option contract abandonment charges were recognized during the three months ended March 31, 2024. 

Note 4 ‑ Investments in unconsolidated entities:

The Company has non‑controlling equity interests in various entities for which the Company applies the equity method of accounting. As of March 31, 2025, the Company had equity method investments in two entities engaged in the development and sale of lots, one entity engaged in providing mortgage broker services to our homebuyers, and one entity engaged in providing title insurance services to our homebuyers. The Company’s proportionate share of the entities’ income was approximately $0.2 million and $0.2 million during the three months ended March 31, 2025 and 2024, respectively. The entities distributed approximately $0.3 million and $0.2 million to the Company during the three months ended March 31, 2025 and 2024, respectively. The Company did not contribute any amounts to the entities during the three months ended March 31, 2024 and contributed approximately $1.1 million to the entities during the three months ended 

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March 31, 2025. Investments in unconsolidated entities totaled approximately $2.0 million and $1.0 million as of March 31, 2025 and December 31, 2024, respectively, which are included within other assets in the accompanying unaudited condensed consolidated balance sheets. 

Note 5 ‑ Notes payable:

As of March 31, 2025, the Company has a $250.0 million unsecured revolving credit facility that was entered into concurrently with the IPO (the Amended Credit Facility), which replaced the previous $175.0 million unsecured revolving credit facility. The Amended Credit Facility matures in January 2027, except that the Company may request a one-year extension of such maturity date. The Amended Credit Facility also includes a $100.0 million accordion feature, subject to additional commitments, and provides that up to $20.0 million may be used for letters of credit.The borrowings and letters of credit outstanding under the Amended Credit Facility may not exceed the borrowing base as defined in the Amended Credit Facility. The borrowing base primarily consists of a percentage