Company: SDHC
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001628280-25-049591
Chunk: 29

Company: Smith Douglas Homes Corp.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 1
Chunk 29
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 contract with the Company; and the ability to change or amend the existing option contract with the VIE. If the Company does not control such activities, the Company is not considered the primary beneficiary of the VIE. If the Company has the ability to control such activities, the Company would be the primary beneficiary of the VIE if it has an obligation to absorb losses or has the right to receive benefits that could potentially be significant to the VIE. As of September 30, 2025 and December 31, 2024, the Company was not identified as the primary beneficiary of any VIEs associated with option and purchase agreements. Therefore, no such VIEs required consolidation under ASC Topic 810.In all cases, creditors of the entities with which the Company has option agreements have no recourse against the Company and the maximum exposure to loss in option agreements is limited to the Company’s option deposits and any capitalized pre‑acquisition costs. In certain instances where the Company has entered into option agreements to purchase finished lots from a land banker, the Company may also enter into an agreement to complete the development of the lots on behalf of the land banker at a fixed cost. The Company may be at risk for items over budget related to the development of the property under option. Any unpaid amounts under these development agreements are recorded as development reimbursement receivables from land bankers and are included within other assets in the accompanying unaudited condensed consolidated balance sheets.The following provides a summary of the Company's interests in land option agreements (in thousands):September 30, 2025Deposits or InvestmentsRemaining Purchase PriceOption contracts$129,156 $1,368,364 Option contracts with unconsolidated entities8,286 28,713 Total option contracts$137,442 $1,397,077 December 31, 2024Deposits or InvestmentsRemaining Purchase PriceOption contracts$100,826 $1,094,040 Option contracts with unconsolidated entities2,800 13,674 Total option contracts$103,626 $1,107,714 For lot option contracts where the lot seller entity is not required to be consolidated under the variable interest model, the Company considers whether such contracts should be accounted for as financing arrangements. Lot option contracts that may be considered financing arrangements include those entered into with third‑party land banks or developers in conjunction with such third parties acquiring a specific land parcel(s) on the Company’s behalf, at the Company’s direction, and those with