Company: SDHC
Filing Date: 2025-03-21
Form Type: 10-K
Source: 0001982518-25-000007
Chunk: 1

Company: Smith Douglas Homes Corp.
Filing Date: 2025-03-21
Form: 10-K
Item: Item 9
Chunk 1
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 in ineffective design and implementation of IT-dependent controls. We believe that the material weakness is due to gaps in the sufficiency of IT resources, IT policies and procedures, and risk-assessment processes to identify and assess access and changes in certain IT environments that could impact internal controls over financial reporting.Notwithstanding our material weaknesses, we have concluded that the financial statements and other financial information included in this Annual Report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States. RemediationIn response to this material weakness in internal control over financial reporting related to ineffective ITGCs for key IT systems, the Company has taken and is continuing to take actions to remediate control failures related to user access, change management, and segregation of duties. Our remediation plan includes: •implementing a process for regular review of privileged access to key IT systems;•strengthening our IT policies and procedures;113

Table of contents•reassessing roles and responsibilities related to our key IT systems to ensure appropriate segregation of duties;•expanding the available resources at the Company with experience designing and implementing control activities, including ITGCs and automated controls, through hiring and use of third-party consultants and specialists; and •developing and implementing additional training addressing ITGCs.Our remediation plan can only be accomplished over time and will be continually reviewed to determine that it is achieving its objectives. We are committed to maintaining a strong internal control environment, and we expect to continue our efforts to ensure the material weakness described above is remediated. However, the material weakness cannot be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.As we continue to monitor the effectiveness of our internal control over financial reporting in the areas affected by the material weakness described above, we have and will continue to perform additional procedures prescribed by management, including the use of manual mitigating control procedures designed to ensure that our consolidated financial statements are fairly stated in all material respects. Auditor's Report on Internal Control Over Financial ReportingThis Annual Report on Form 10-K does not include an attestation report of internal controls from our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act.Changes in internal control over financial reportingOther than as described above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15