Company: UHG
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001830188-25-000065
Chunk: 97

Company: United Homes Group, Inc.
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 8
Chunk 97
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 business, certain regulatory agencies and municipalities require the Company to post surety bonds or letters of credit related to development projects. As of June 30, 2025, the Company had outstanding surety bonds and letters of credit totaling $9.2 million and $1.3 million, respectively. The Company believes it will fulfill its obligations under the related contracts and does not anticipate any material losses under these surety bonds or letters of credit.

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LitigationThe Company is subject to various claims and lawsuits that may arise primarily in the ordinary course of business, which consist mainly of construction defect claims. In the opinion of management, the disposition of these matters will not have a material adverse effect on the Company’s Condensed Consolidated Financial Statements. When the Company believes that a loss is probable and reasonably estimable, the Company will record an expense and corresponding contingent liability. As of the date of these Condensed Consolidated Financial Statements, management believes that the Company has not incurred a liability as a result of any claims, with the exception of the following:Rosewood proceedingsRosewood has been named as a co-defendant in a lawsuit alleging negligence/recklessness and breach of certain implied warranties arising out of Rosewood’s construction of homes in a subdivision prior to the Company’s acquisition of Rosewood. As of June 30, 2025, the Company and the plaintiffs have agreed in principle to settle this matter, the terms of which are being negotiated. As a result, the Company concluded that a loss is probable and reasonably estimable. Accordingly, the Company recorded an accrual in anticipation of the settlement of $0.2 million, which is included in Other accrued expenses and liabilities in the Condensed Consolidated Balance Sheet as of June 30, 2025.

Note 10 - Convertible Notes payableThe Company had previously issued Convertible Notes with an original principal amount of $80.0 million. On December 11, 2024 (“Redemption Date”), the Company redeemed the Convertible Notes and paid to the Convertible Note Investors (a) an aggregate of $70.0 million, plus accrued and unpaid interest through the Redemption Date, and (b) an aggregate of 10,168,850 shares of Class A Common Stock with a fair value of $4.41 per share. The Company financed the transaction, in part, by entering into the Credit Agreement with Kennedy Lewis. See Note 6 - Debt for further details. The Company accounted for the redemption as an extinguishment of debt in accordance with