Company: UHG
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001830188-25-000036
Chunk: 83

Company: United Homes Group, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 83
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 the opinion of management, the disposition of these matters will not have a material adverse effect on the Company’s 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 Consolidated Financial Statements, management believes that the Company has not incurred a liability as a result of any claims.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. The Company is continuing to gather facts and evaluate the plaintiffs’ claims and possible defenses.The Company believes that a loss related to this matter is reasonably possible; however, the Company cannot estimate the amount or a range of reasonably possible losses for this matter, if any, at this time, due to several factors, including causation of certain of the plaintiff’s alleged damages. While the Company intends to defend against these claims, there can be no assurance that the ultimate resolution of this litigation will not have a material, adverse effect on the Condensed Consolidated Financial Statements.

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 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 ASC 405, Liabilities. As a result, on December 11, 2024 the Company recognized a loss on extinguishment of $45.6 million based on the difference between the total reacquisition price of the extinguished debt, including the make-whole amount of $37.1 million, and the net carrying amount of the Notes on the Redemption Date. There is no remaining debt balance associated with the Convertible Notes as of March 31, 2025 and December 31, 2024.Interest expense included within Other expense, net on the Condensed Consolid