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What changed in United Homes Group, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of United Homes Group, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+335 added−322 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-14)

Top changes in United Homes Group, Inc.'s 2025 10-K

335 paragraphs added · 322 removed · 232 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

54 edited+13 added−7 removed58 unchanged
Biggest changeYear Ended December 31, Period Over Period % Change 2024 2023 Market Net new orders Starts Closings Net new orders Starts Closings Net new orders Starts Closings Coastal 252 214 218 150 145 216 68 % 48 % 1 % Midlands 736 575 733 755 689 827 (3) % (17) % (11) % Upstate 348 272 407 364 398 333 (4) % (32) % 22 % Rosewood 32 55 39 24 1 7 33 % NM NM Raleigh 31 46 34 3 15 — NM NM NM Total 1,399 1,162 1,431 1,296 1,248 1,383 8 % (7) % 3 % __________________________________ NM - Not Meaningful The following table presents information concerning UHG’s net new orders, cancellation rate and ending backlog for the years ended December 31, 2024 and 2023.
Biggest changeYear Ended December 31, Period over period % change 2025 2024 Market Net new orders Starts Closings Net new orders Starts Closings Net new orders Starts Closings Midlands 608 714 572 736 575 733 (17) % 24 % (22) % Coastal 203 223 216 252 214 218 (19) % 4 % (1) % Upstate 327 397 318 348 272 407 (6) % 46 % (22) % Rosewood 55 60 52 32 55 39 72 % 9 % 33 % Raleigh 34 25 34 31 46 34 10 % (46) % — % Total 1,227 1,419 1,192 1,399 1,162 1,431 (12) % 22 % (17) % 9 Table of Contents The following table presents information concerning UHG’s net new orders, cancellation rate and ending backlog for the years ended December 31, 2025 and 2024.
Local jurisdictions may also pass moratoriums on development or issuing building permits that can affect the supply of lots to UHG. While UHG will generally purchase developed and entitled lots from related party developers, third-party developers and land banks, these lots may be subject to subsequent restrictions and regulations by local authorities, which can increase costs.
Local jurisdictions may also pass moratoriums on development or issuing building permits that can affect the supply of lots to UHG. While UHG will generally purchase developed and entitled lots from third-party developers, related party developers and land banks, these lots may be subject to subsequent restrictions and regulations by local authorities, which can increase costs.
Backlog, Net new orders and Closings For reporting purposes, a “new order” occurs when a buyer has been pre-approved by a mortgage lender, has signed a sales contract with UHG, and has placed a deposit towards the purchase of the home. A “start” occurs when a permit has been obtained and groundbreaking on a home is forthcoming.
Backlog, Net New Orders, Starts and Closings For reporting purposes, a “new order” occurs when a buyer has been pre-approved by a mortgage lender, has signed a sales contract with UHG, and has placed a deposit towards the purchase of the home. A “start” occurs when a permit has been obtained and groundbreaking on a home is forthcoming.
For reporting purposes, the total number of net new orders is reported as the number of new orders during the applicable period, minus the cancellation of existing contracts during that same period. Cancellation rate is determined by the total number of cancellations for the period divided by total number of new orders during the same period.
For reporting purposes, the total number of net new orders is reported as the number of new orders during the applicable period, minus the cancellation of existing contracts during that same period. Cancellation rate is determined by the total number of cancellations for the period divided by total number of gross new orders during the same period.
The homes are targeted for entry-level buyers, first, second, and third-time move-ups, and some custom builds. Entry-level homebuyers are typically seeking an economical path to home ownership and desire square footage, quality design and construction at affordable prices. First-time move-up homebuyers generally desire the opportunity to select and upgrade features in their homes.
The homes are targeted for entry-level, first, and second move-up buyers, with some third-time move-up buyers and custom builds. Entry-level homebuyers are typically seeking an economical path to home ownership and desire square footage, quality design and construction at affordable prices. First-time move-up homebuyers generally desire the opportunity to select and upgrade features in their homes.
See Note 4 - Segment reporting of the Notes to the Consolidated Financial Statements for further details. Pursuant to the Company’s land-light business model, finished lots are typically purchased through lot option contracts from third party and related party land developers or land bank partners.
See Note 3 - Segment Reporting of the Notes to the Consolidated Financial Statements for further details. Pursuant to the Company’s land-light business model, finished lots are typically purchased through lot option contracts from third party and related party land developers or land bank partners.
Some 11 Table of Contents of these laws and regulations directly apply to Homeowners Mortgage, while other obligations apply indirectly through its relationship with the MLOs. The states in which Homeowners Mortgage operates have corollary legal and regulatory regimes, as well as additional restrictions on the conduct of mortgage brokerage businesses that are specific to transactions within the given state.
Some of these laws and regulations directly apply to Homeowners Mortgage, while other obligations apply indirectly through its relationship with the MLOs. The states in which Homeowners Mortgage operates have corollary legal and regulatory regimes, as well as additional restrictions on the conduct of mortgage brokerage businesses that are specific to transactions within the given state.
UHG’s competition includes national, regional, and local homebuilders, as well as the individual home resale market and available rental housing. Homebuilders compete for, among other things, homebuyers, desirable lots, financing, raw materials and skilled labor. Competition for homebuyers is primarily based upon factors such as price, location, design, quality, and the reputation of the builder.
UHG’s competition includes national, regional, and local homebuilders, as well as the individual 10 Table of Contents home resale market and available rental housing. Homebuilders compete for, among other things, homebuyers, desirable lots, financing, raw materials and skilled labor. Competition for homebuyers is primarily based upon factors such as price, location, design, quality, and the reputation of the builder.
Finished lots are typically purchased through lot 7 Table of Contents option contracts with third party developers, related party developers or land bank partners. The Company typically posts deposits of 15 -20% of the total purchase price of the finished lots and has a staggered takedown schedule designed to match the expected sales pace for the community.
Finished lots are typically purchased through lot option contracts with third party developers, related party developers or land bank partners. The Company typically posts deposits of 15 - 20% of the total purchase price of the finished lots and has a staggered takedown schedule designed to match the expected sales pace for the community.
In addition, federal enforcement authority is vested with the Federal Trade Commission (FTC) and the United States Consumer Financial Protection Bureau (CFPB). Homeowners Mortgage is subject to both federal and state law, including regulations promulgated by federal financial regulators (mainly, the CFPB and Federal Reserve Board) and the state financial regulators, which implement these laws.
In addition, federal enforcement authority is vested with the Federal Trade Commission (“FTC”) and the United States Consumer Financial Protection Bureau (“CFPB”). Homeowners Mortgage is subject to both federal and state law, including regulations promulgated by federal financial regulators (mainly, the CFPB and Federal Reserve Board) and the state financial regulators, which implement these laws.
UHG expects the use of local government land-use regulation to restrict residential development will intensify in the future. Homeowners Mortgage, UHG’s joint-venture mortgage brokerage company, is subject to a wide array of federal and state statutes and regulations.
UHG expects the use of local government land-use regulation to restrict residential development will intensify in the future. 11 Table of Contents Homeowners Mortgage, UHG’s joint-venture mortgage brokerage company, is subject to a wide array of federal and state statutes and regulations.
The table below reports net new orders, starts, and closings in each of UHG’s primary markets for the years ended December 31, 2024 and 2023.
The table below reports net new orders, starts, and closings in each of UHG’s primary markets for the years ended December 31, 2025 and 2024.
In all of its markets, UHG has historically experienced similar variability in its results of operations and capital requirements from quarter to quarter due to the seasonal nature of the homebuilding industry. As a result, UHG’s revenue may fluctuate on a quarterly basis.
In all of its markets, UHG has historically experienced similar variability in its results of operations and capital requirements from quarter to quarter due to the seasonal nature of the homebuilding industry. Consequently, UHG’s revenue may fluctuate on a quarterly basis.
Beyond these laws and regulations, Homeowners Mortgage is subject to compliance with the terms of various governmental and government-sponsored enterprise (GSE) underwriting and compliance guides.
Beyond these laws and regulations, Homeowners Mortgage is subject to compliance with the terms of various governmental and government-sponsored enterprise (“GSE”) underwriting and compliance guides.
The Company’s divisions work with senior management throughout the underwriting process and, for potential investments that fit within the Company’s criteria, are given authority by the LIC to put deals under LOI with minimal capital requirements in order to perform an initial evaluation of the acquisition opportunity.
The Company’s divisions work with senior management throughout the underwriting process and, for potential investments that fit within the Company’s criteria, are given authority by the LIC to put deals under a letter of intent with minimal capital requirements in order to perform an initial evaluation of the acquisition opportunity.
Human Capital Resources and Organizational Culture UHG operates with a mission to lead the industry by delivering high quality homes with exceptional value with a focus on customer satisfaction. As of December 31, 2024, UHG had approximately 175 full-time team members.
Human Capital Resources and Organizational Culture UHG operates with a mission to lead the industry by delivering high quality homes with exceptional value and a focus on customer satisfaction. As of December 31, 2025, UHG had approximately 195 full-time team members.
Owned and Controlled Lots The following table presents UHG’s owned or controlled lots by market as of December 31, 2024 and 2023.
Owned and Controlled Lots The following table presents UHG’s owned or controlled lots by market as of December 31, 2025 and 2024.
UHG has extensive experience managing all phases of the construction process. Although UHG does not employ its own skilled tradespeople, such as plumbers, electricians and carpenters, UHG does employ project managers, area construction managers, and EVPs of construction to manage the construction process.
UHG has extensive experience managing all phases of the construction process. Although UHG does not employ its own skilled tradespeople, such as plumbers, electricians and carpenters, UHG does employ project managers, area and division construction managers, and Co-COOs to manage the construction process.
See “ Risk Factors ” for additional information regarding these risks. Seasonality The sale of both new and existing homes in the United States exhibit demonstrable seasonality over the course of a calendar year. This seasonality can be evidenced across multiple sources including, but not limited to, government data (U.S.
See “ Risk Factors ” for additional information regarding these risks. Seasonality The sale of both new and existing homes in the United States exhibit demonstrable seasonality over the course of a calendar year. This seasonality can be evidenced across multiple sources including, but not limited to, government data (e.g. U.S. Census Bureau), trade groups (e.g.
Census Bureau), trade groups (National Association of Realtors) and public company reports. Typically, prospective home buyers search for homes beginning in late winter to early spring, which in industry parlance is often referred to as the 10 Table of Contents “spring buying season.” As homes are constructed, those contracts are then closed upon through the summer into fall.
National Association of Realtors) and public company reports. Typically, prospective home buyers search for homes beginning in late winter to early spring, which in industry parlance is often referred to as the “spring buying season.” As homes are constructed, those contracts are then closed upon through the summer into fall.
It typically takes UHG between 90 and 120 days to construct a single-family home and typically longer for certain second move-up and higher-end homes.
It typically takes UHG between 70 and 100 days to construct a single-family home and typically longer for certain second move-up and higher-end homes.
Founded by Michael Nieri in 2004, UHG has closed approximately 15,000 homes since its inception. • Leading Share in Existing Markets and Close Proximity to Adjacent High-Growth Markets. According to the U.S.
Founded in 2004, UHG has closed approximately 16,000 homes since its inception. • Leading Share in Existing Markets and Close Proximity to Adjacent High-Growth Markets. According to the U.S.
Census Bureau, UHG’s home state of South Carolina experienced an estimated population growth of more than 13.5% from 2014 to 2024 exceeding the estimated national average of 6.6% over the same period of time. 5 Table of Contents UHG is based within 500 miles of some of the fastest growing markets in the U.S based on new home sales.
Census Bureau, UHG’s home state of South Carolina experienced an estimated population growth of more than 13.8% from 2015 to 2025 exceeding the estimated national average of 5.9% over the same period of time. UHG is based within 500 miles of some of the fastest growing markets in the U.S based on new home sales.
These conditions are expected to allow well-capitalized homebuilders with a meaningful presence in these markets to grow faster than industry averages. For UHG going forward, increased market share through growth in community count, higher sales pace per community and quicker inventory turnover count are expected to drive organic growth.
These conditions are expected to allow well-capitalized 6 Table of Contents homebuilders with a meaningful presence in these markets to grow faster than industry averages. For UHG going forward, increased market share through growth in community count and quicker inventory turnover count are expected to drive organic growth.
Beyond being a new source of revenue and EBITDA for UHG with little incremental expense or capital investment, Homeowners Mortgage, through its use of incentives, has helped improve buyer traffic conversion and reduce backlog cancellation rates. Operational Initiatives 6 Table of Contents UHG launched multi-faceted operational improvement initiatives in 2024.
Beyond being a source of revenue and EBITDA for UHG with little incremental expense or capital investment, Homeowners Mortgage, through its use of incentives, has helped improve buyer traffic conversion and reduce backlog cancellation rates. Operational Initiatives UHG continues to focus on its multi-faceted operational improvement initiatives that began in 2024.
As a mortgage broker, Homeowners Mortgage is primarily regulated by state financial services regulators: the South Carolina Department of Consumer Affairs (SCDCA), the South Carolina Board of Financial Institutions (SCBOFI), the North Carolina Commissioner of Banks (NCCOB), and the Georgia Department of Banking and Finance (GADBF).
As a mortgage broker, Homeowners Mortgage is primarily regulated by state financial services regulators: the South Carolina Department of Consumer Affairs (“SCDCA”), the South Carolina Board of Financial Institutions (“SCBOFI”), the North Carolina Commissioner of Banks (“NCCOB”), and the Georgia Department of Banking and Finance (“GADBF”).
While efficient marketing methods are important, real estate remains a complicated sales transaction and providing a potential buyer with access to a dedicated onsite sales representative who is an expert on the community is a key to the success of UHG’s sales process. Onsite sales representatives are typically local realtors who have contracted with UHG to provide this service.
While efficient marketing methods are important, real estate remains a complicated sales transaction and providing a potential buyer with access to a dedicated onsite sales representative who is an expert on the community is a key to the success of UHG’s sales process.
Homeowners Mortgage’s activities, advertising, disclosures to consumers, and its relationship with mortgage loan originators (MLOs) is subject to numerous federal laws, including the Real Estate Settlement Practices Act (RESPA) and its implementing regulation, Regulation X; the Truth in Lending Act (TILA) and Regulation Z; the Equal Credit Opportunity Act (ECOA) and Regulation B; the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act); the Home Mortgage Disclosure Act (HMDA) and Regulation C; the Gramm-Leach-Bliley Act (GLBA) and Regulation P; the Fair Credit Reporting Act (FCRA) and Regulation V; and the Mortgage Acts and Practices — Advertising Rule (MAP Rule) and Regulation N.
Homeowners Mortgage’s activities, advertising, disclosures to consumers, and its relationship with mortgage loan originators (“MLOs”) is subject to numerous federal laws, including the Real Estate Settlement Practices Act (“RESPA”) and its implementing regulation, Regulation X; the Truth in Lending Act (“TILA”) and Regulation Z; the Equal Credit Opportunity Act (“ECOA”) and Regulation B; the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act); the Home Mortgage Disclosure Act (“HMDA”) and Regulation C; the Gramm-Leach-Bliley Act (“GLBA”) and Regulation P; the Fair Credit Reporting Act (“FCRA”) and Regulation V; and the Mortgage Acts and Practices — Advertising Rule (“MAP Rule”) and Regulation N.
For contracts with land bank partners, UHG typically pays the development costs and is reimbursed the following month from the land bank partner. As of December 31, 2024, lot deposits relating to lot and land option contracts totaled $48.2 million, which controlled 7,565 option lots.
For contracts with land bank partners, UHG typically pays the development costs and is reimbursed the following month from the land bank partner. As of December 31, 2025, lot deposits relating to lot and land option contracts totaled $40.5 million, which controlled 6,941 option lots.
Year Ended December 31, 2024 2023 Net New Orders 1,399 1,296 Cancellation Rate 11.4 % 13.6 % As of December 31, 2024 2023 Backlog inventory 157 189 Backlog inventory - Value (in thousands) $58,300 $57,600 Materials, Procurement and Construction 9 Table of Contents UHG uses various materials and components and is dependent upon building material suppliers for a continuous flow of raw materials.
Year Ended December 31, 2025 2024 Net new orders 1,227 1,399 Cancellation rate 13.0 % 11.4 % As of December 31, 2025 2024 Backlog inventory 192 157 Backlog inventory - Value (in thousands) $68,100 $58,300 Materials, Procurement and Construction UHG uses various materials and components and is dependent upon building material suppliers for a continuous flow of raw materials.
These programs, such as those operated by the Federal Housing Administration (FHA), the Veterans Benefits Administration (VA), the United States Department of Agriculture (USDA), the Federal National Mortgage Association (FNMA/Fannie Mae), the Government National Mortgage Association (GNMA/Ginnie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC/Freddie Mac) promulgate regulations and guidelines pursuant to which they will originate or guarantee mortgage loans.
These programs, such as those operated by the Federal Housing Administration (“FHA”), the Veterans Benefits Administration (“VA”), the United States Department of Agriculture (“USDA”), the Federal National Mortgage Association (“FNMA/Fannie Mae”), the Government National Mortgage Association (“GNMA/Ginnie Mae”), and the Federal Home Loan Mortgage Corporation (“FHLMC/Freddie Mac”) promulgate regulations and guidelines pursuant to which they will originate or guarantee mortgage loans.
State financial regulators oversee the licensing of Homeowners Mortgage as a mortgage broker. Homeowners Mortgage maintains a Mortgage Broker License in North Carolina and South Carolina and a Mortgage Broker/Processor License/Registration in Georgia.
State financial regulators oversee the licensing of Homeowners Mortgage as a mortgage broker. Homeowners Mortgage maintains a Mortgage Broker License in Florida, a Mortgage Lender License in Georgia, North Carolina, and Tennessee, a Consumer Credit License in Alabama and a Mortgage Broker/Lender/Servicer License in South Carolina.
The Company has increased the use of data and analytics to better align its investments with market demands. Due to UHG’s extensive history, the Company has strong relationships with both local land owners and developers in its markets. The Company’s land acquisition process is headed by UHG’s local division leadership with the collaboration of various resources across the company.
UHG utilizes a comprehensive land underwriting process and has increased the use of data and analytics to better align its investments with market demands. Due to UHG’s extensive history, the Company has strong relationships with both local land owners and developers in its markets.
Second-time move-up homebuyers generally seek larger floorplans with a higher level of finish with the ability to upgrade additional features. Third-time move-up homebuyers are similar to second-time move-ups but desire a higher level of finish and top-shelf options and upgrades.
Second-time move-up homebuyers generally seek larger floorplans with a higher level of finish with the ability to upgrade additional features.
The main products for GSH South Carolina include entry-level and first-move-up homes, catering to a wide range of buyers transitioning into homeownership or seeking to upgrade from their initial purchase. • Rosewood - This segment consists of UHG’s operations focused on delivering second and third move-up homes in the South Carolina market.
UHG is currently organized into three segments: • GSH South Carolina - This segment represents the Company’s homebuilding operations in South Carolina and a small amount of operations in Georgia. The main products for GSH South Carolina include entry-level and first-move-up homes, catering to a wide range of buyers transitioning into homeownership or seeking to upgrade from their initial purchase.
UHG management continuously looks for accretive sources of EBITDA growth, not just in product line opportunities, but also in opportunities to drive additional EBITDA from existing operations.
UHG expects to continue to explore opportunities in the BTR sector from time to time to augment its core for-sale business. • Ancillary Revenue Growth Opportunities. UHG management continuously looks for accretive sources of EBITDA growth, not just in product line opportunities, but also in opportunities to drive additional EBITDA from existing operations.
As of December 31, 2023, lot deposits relating to lot and land option contracts totaled $33.0 million, which controlled 8,653 option lots.
As of December 31, 2024, lot deposits relating to lot and land option contracts totaled $48.2 million, which controlled 7,565 option lots.
Through an increased use of data, analytics, and standardization of processes, the Company expects to improve profitability and returns over time. While there are eight distinct workstreams related to these operational initiatives, the Company believes the following should have the largest impact on profitability in the near term: • Product Improvement.
Through an increased use of data, analytics, and standardization of processes, the Company expects to sustain improvements in profitability and returns over time as a result of these initiatives. While the Company’s strategy will evolve and change over time, the Company believes the following will continue to have the largest impact on profitability in the near term: • Product Improvement.
One area of strength in UHG’s digital marketing has been to leverage virtual home tours of inventory and model homes, which has been particularly effective in selling homes to buyers moving into UHG’s markets from other regions of the country. 8 Table of Contents While digital marketing is a key component of the UHG home sales process, most homebuyers will ultimately want to visit a UHG product in person prior to purchasing.
One area of strength in UHG’s digital marketing has been to leverage virtual home tours of inventory and model homes, which has been particularly effective in selling homes to buyers moving into UHG’s markets from other regions of the country.
UHG has a Land Investment Committee (“LIC”) which includes the interim Chief Executive Officer, President, Chief Operating Officer, and Chief Financial Officer of the Company. The LIC is responsible for approval of all new investments.
The Company’s land acquisition process is headed by UHG’s local division leadership with the collaboration of various resources across the company. UHG has a Land Investment Committee (“LIC”) which includes the Chief Executive Officer and President, Co-Chief Operating Officers (“Co-COOs”), and Chief Financial Officer of the Company. The LIC is responsible for approval of all new investments.
Overview UHG designs, builds and sells homes in high growth markets, including South Carolina, North Carolina, and Georgia. UHG employs a land-light operating strategy, with a focus on the design, construction and sale of entry-level, first, second and third move-up single-family houses.
UHG employs a land-light operating strategy, with a focus on the design, construction and sale of entry-level, first, second and third move-up single-family houses. UHG principally builds detached single-family houses, and, to a lesser extent, attached single-family houses, including duplex houses and town houses.
Land under development represented zero and 5% of total inventory as of December 31, 2024 and 2023, respectively. Homebuilding, Marketing and Sales Process UHG is a production builder, primarily focused on entry-level, first, and second move-up homebuyers, with some third move-up and custom construction.
As of December 31, 2025 As of December 31, 2024 Owned Real Estate Inventory Status % of Owned Real Estate Inventory % of Owned Real Estate Inventory Homes under construction and finished homes 80% 85% Developed lots and pre-acquisition land costs 20% 15% Total 100% 100% 8 Table of Contents Homebuilding, Marketing and Sales Process UHG is a production builder, primarily focused on entry-level, first, and second move-up homebuyers, with some third move-up and custom construction.
The Company operates a land-light business model which minimizes its upfront capital commitment to a deposit and seeks to avoid the financial commitment of land development, which requires significant capital expenditures over an extended timeframe. UHG utilizes a comprehensive land underwriting process and will continue to add to its land acquisition teams.
UHG remains focused on controlling anywhere from 4 - 5 years of high-quality land positions in its markets. The Company operates a land-light business model which minimizes its upfront capital commitment to a deposit and seeks to avoid the financial commitment of land development, which requires significant capital expenditures over an extended timeframe.
Further, the Company’s land light strategy often employs the use of third-party capital, which has led the Company to increase the hurdle rate requirements on future land investments. UHG Products and Customers UHG’s Homes and Homebuyers UHG’s homebuilding business is driven by its commitment to building high quality homes at affordable prices in attractive locations, while delivering excellent customer service.
UHG Products and Customers UHG’s Homes and Homebuyers UHG’s homebuilding business is driven by its commitment to building high quality homes at affordable prices in attractive locations, while delivering excellent customer service.
Item 1. Business Unless the context otherwise requires, for purposes of this section, the terms “we,” “us,” “the Company” or “UHG” refer to GSH and its subsidiaries prior to the Business Combination and to UHG and its subsidiaries, after giving effect to the Business Combination.
Item 1. Business Unless the context otherwise requires, for purposes of this section, the terms “we,” “us,” “the Company” or “UHG” refer to United Homes Group, Inc. and its subsidiaries. Overview UHG designs, builds and sells homes in high growth markets, including South Carolina, North Carolina, and Georgia.
As of December 31, 2024 As of December 31, 2023 Market/Division Owned Controlled Total Owned Controlled Total Midlands 67 4,733 4,800 110 5,018 5,128 Coastal 17 1,204 1,221 76 1,066 1,142 Upstate 7 1,383 1,390 39 2,195 2,234 Rosewood 15 180 195 124 159 283 Raleigh 19 65 84 46 215 261 Total 125 7,565 7,690 395 8,653 9,048 Owned Real Estate Inventory Status The following table presents UHG’s owned real estate inventory status as of December 31, 2024 and 2023.
As of December 31, 2025 As of December 31, 2024 Market/Division Owned Controlled Total Owned Controlled Total Midlands 151 3,935 4,086 67 4,733 4,800 Coastal 59 1,499 1,558 17 1,204 1,221 Upstate 11 1,352 1,363 7 1,383 1,390 Rosewood 38 109 147 15 180 195 Raleigh 25 46 71 19 65 84 Total 284 6,941 7,225 125 7,565 7,690 Owned Real Estate Inventory Status The following table presents UHG’s owned real estate inventory status as of December 31, 2025 and 2024.
UHG maintains model homes in most developments for potential buyers to see in-person the quality and design features of UHG’s homes, as well as the different options that may be available. Onsite sales representatives are present seven days a week in UHG developments to answer questions and provide potential homebuyers with a point-of-sale contact.
While digital marketing is a key component of the UHG home sales process, most homebuyers will ultimately want to visit a UHG product in person prior to purchasing. UHG maintains model homes in most developments for potential buyers to see in-person the quality and design features of UHG’s homes, as well as the different options that may be available.
UHG’s existing product set, geared towards entry-level and first-time move-up buyers, is highly consistent with the rental product desired by institutional cap ital. UHG expects to continue to explore opportunities in the BTR sector from time to time to augment its core for-sale business. • Ancillary Revenue Growth Opportunities.
Further, newly constructed rental homes tend to come with lower maintenance costs and higher rents than older homes. UHG’s existing product set, geared towards entry-level and first-time move-up buyers, is highly consistent with the rental product desired by institutional cap ital.
The Company has launched a formalized program aimed at reducing direct construction costs through the renegotiation and rebidding of major supplier, vendor, and subcontractor agreements. Combined with the product repositioning, lower costs and a higher level of standardization going forward is aimed at improving gross margin. • Comprehensive Land Underwriting.
The Company expects to offer new product lines going forward as well. • Lowering Construction Costs. The Company has implemented an ongoing program aimed at reducing direct construction costs through the renegotiation and rebidding of major supplier, vendor, and subcontractor agreements.
UHG has and will continue to make investments in land opportunities for future communities. The Company has and will continue to add to its team in this area and has increased the use of data and analytics to better align its communities and homes with market opportunities.
The Company has also increased the use of data and analytics to better align its communities and homes with market opportunities. Further, the Company’s land light strategy often employs the use of third-party capital, which has led the Company to increase the hurdle rate requirements on future land investments.
UHG also puts a great deal of effort into maintaining good relationships with local real estate professionals in its target markets. UHG believes that this gives it a competitive advantage over other builders who rely almost solely on in-house marketing efforts.
Onsite sales representatives are typically local realtors who have contracted with UHG to provide this service, however the Company began transitioning to in-house sales representatives in certain markets in 2025. UHG also puts a great deal of effort into maintaining good relationships with local real estate professionals in its target markets.
Institutional owners of residential rental homes are increasingly turning to homebuilders to help meet the need for more housing supply. Further, newly constructed rental homes tend to come with lower maintenance costs and higher rents than older homes.
UHG and its predecessors have demonstrated an ability to capitalize on these trends for more than 20 years. • Build to Rent (“BTR”) Relationships. Institutional owners of residential rental homes are increasingly turning to homebuilders to help meet the need for more housing supply.
UHG has undertaken a comprehensive review of its portfolio of house plans, rationalizing its offering, refreshing designs, and offering new customization options to buyers. The Company expects the refreshed offering to accelerate sales activity, increase pre-sales, and reduce the number of finished homes in inventory, resulting in a lower need for incentives and increased profitability from options and upgrades.
UHG performed a comprehensive review of its portfolio of house plans that resulted in refreshed designs and new customization options offered to buyers. These refreshed house plans comprised a meaningful part of closings in the second half of the 2025. The Company has observed its refreshed offerings drive accelerated sales activity and increased pre-sales.
Land Acquisition Strategy Obtaining control of high-quality land positions is critical to the Company’s overall success, especially the Company’s growth and profitability. UHG remains focused on controlling anywhere from 4 - 5 years of high-quality land positions in its markets.
Third-time move-up homebuyers are similar to second-time move-ups but desire a higher level of finish and top-shelf options and upgrades. 7 Table of Contents Land Acquisition Strategy Obtaining control of high-quality land positions is critical to the Company’s overall success, especially the Company’s growth and profitability.
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UHG principally builds detached single-family houses, and, to a lesser extent, attached single-family houses, including duplex houses and town houses.
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South Carolina operations span the Upstate, Midlands, and Coastal regions, with a smaller presence in Georgia. • Rosewood - This segment consists of UHG’s operations focused on delivering second and third move-up homes in the South Carolina market.
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UHG is currently organized into three segments: • GSH South Carolina - This segment represents GSH’s homebuilding operations in South Carolina and a small amount of operations in Georgia.
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As of December 31, 2025, 96% of approximately 7,200 owned or controlled lots were controlled through lot option contracts. Strategic Alternatives and the Merger Agreement On May 19, 2025, UHG announced that it had initiated a review of strategic alternatives in order to explore ways to maximize shareholder value.
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As of December 31, 2024, 98% of approximately 7,700 controlled lots were controlled through lot option contracts. Market Opportunity UHG believes that there is a significant housing shortage in the United States.
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On October 20, 2025, the Company reported that this review had concluded.
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UHG and its predecessors have demonstrated an ability to capitalize on these trends for more than 20 years. • Accretive Mergers and Acquisitions (M&A). Homebuilding is a business that benefits from scale, where the benefits of operating as a larger entity can result in lower costs and higher margins.
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After evaluating a full range of strategic alternatives, including a potential sale, merger or other transaction, the special committee of independent directors that was constituted for this purpose unanimously determined that, in light of current macroeconomic conditions, continuing to execute on the Company’s strategic plan as an independent, public company was in the best interests of the Company and its stockholders at that time.
Removed
Further, UHG believes that the changing macroeconomic environment has resulted in an increased willingness of smaller builders to explore partnerships with larger organizations. Through January 2024, UHG completed three acquisitions, allowing the Company to further grow operations in the upstate and coastal regions of South Carolina, and expand operations into Raleigh, NC. • Build to Rent (BTR) Relationships.
Added
Concurrently, director James P. Clements resigned from the board, effective immediately , and five of the Company’s other directors notified the Company of their intent to resign from the Board no later than November 14, 2025. The reasons for such resignations were set forth in greater detail in the Company’s Form 8-K filed on October 20, 2025.
Removed
Construction has begun on many of these revised plans and the Company expects they will comprise a meaningful part of closings by mid-2025. The Company expects to offer new product lines going forward as well. • Lowering Construction Costs.
Added
Following these announcements, directors Robert Dozier Jr., Jason Enoch, and Alan Levine informed the Company of their willingness to remain on the Board and applicable committees beyond November 14, 2025, to ensure an orderly transition and help maintain compliance with the requirements under Nasdaq Listing Rule 5605. Director Nikki Haley and director James M.
Removed
As of December 31, 2024 As of December 31, 2023 Owned Real Estate Inventory Status % of Owned Real Estate Inventory % of Owned Real Estate Inventory Homes under construction and finished homes 85% 81% Developed lots, land under development, and pre-acquisition costs (1) 15% 19% Total 100% 100% ______________________________ (1) On a limited basis, the Company acquires raw parcels of land already zoned for its intended use to develop into finished lots, typically as a result of business acquisitions.
Added
Pirrello resigned from the Board effective as of November 7, 2025.
Added
On February 22, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Stanley Martin Homes, LLC (“Parent”) and Union MergeCo, Inc., its wholly owned subsidiary (“Merger Sub”), pursuant to which the subsidiary will merge with and into the Company, with the Company continuing as the surviving corporation and becoming a wholly owned subsidiary of Parent (the “Merger”).
Added
At the effective time of the Merger (the “Effective Time”), each share of the Company’s Class A and Class B common stock that is issued and outstanding as of immediately prior to the Effective Time (other than shares to be canceled pursuant to the Merger Agreement and any shares held by stockholders who properly exercise dissenters’ rights under applicable law) will be converted into the right to 5 Table of Contents receive $1.18 in cash per share, without interest (the “Per Share Amount”).
Added
The Merger is expected to be completed in the second quarter of 2026 and is subject to customary closing conditions. If the Merger is consummated, the Company’s common stock and warrants will be delisted from the Nasdaq Global Market and deregistered under the Securities Exchange Act of 1934, as amended, and the Company will become a privately held company.
Added
Refer to Note 21 - Subsequent Events of the Notes to the Consolidated Financial Statements and “Part I-Item 1A. Risk Factors” for additional information. Market Opportunity UHG believes that there is a significant housing shortage in the United States.
Added
Combined with the product repositioning, lower costs and a higher level of standardization going forward are aimed at improving competitiveness in our markets. • Comprehensive Land Underwriting. The Company maintains a Land Investment Committee which is responsible for approval of all new investments and follows established processes in its review and underwriting of potential investment opportunities.
Added
Onsite sales representatives are present in UHG developments to answer questions and provide potential homebuyers with a point-of-sale contact.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

77 edited+44 added−30 removed260 unchanged
Biggest changeUHG is a “controlled company” within the meaning of the applicable rules of Nasdaq and, as a result, may qualify for exemptions from certain corporate governance requirements. If UHG relies on these exemptions, its stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.
Biggest changeIf UHG relies on these exemptions, its stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements. Michael Nieri and the Nieri Trusts control a majority of the voting power of the outstanding UHG Common Shares, and UHG is therefore a “controlled company” within the meaning of applicable rules of Nasdaq.
UHG does not typically receive a return of its deposit upon expiration or termination of the contract unless it is due to seller default or a force majeure event.
UHG does not typically receive a return of its deposit upon expiration or termination of the contract unless it is due to seller default or a force majeure event.
The Syndicated Line also contains affirmative, negative, 23 Table of Contents and financial covenants, including (a) a minimum tangible net worth of no less than the sum of (i) $70 million, (ii) 25% of positive consolidated earnings earned in any fiscal quarter, (iii) 100% of new equity contributed to the Borrower (as defined in the Wells Fargo Facility), (iv) 100% of any increase in tangible net worth resulting from an equity issuance upon the conversion or exchange of any security constituting indebtedness that is convertible or exchangeable, or is being converted or exchanged, for equity interests, and (v) 100% of the amount of any repurchase of equity interests in the Company; (b) a maximum leverage covenant that prohibits the leverage ratio from exceeding 2.25 to 1.00, except for up to two quarterly measurement periods in which the ratio shall not exceed 2.50 to 1.00 during the period beginning on August 2, 2024 and ending on December 31, 2025; (c) a minimum debt service coverage ratio of no less than 1.50 to 1.00 for the period from and after June 30, 2024 until June 30, 2025, and a minimum of 2.00 to 1.00 thereafter, provided that a minimum debt service coverage ratio of no less than 1.35 to 1.00 will be permitted for up to two quarterly measurement periods during the period beginning on August 2, 2024 and ending on June 30, 2025; (d) a minimum liquidity amount of not less than $37,500,000 from and after June 30, 2024, provided that during any period in which the debt service coverage ratio is less than 1.50 to 1.00, the minimum liquidity threshold will be at least the greater of (i) $45,000,000, or (ii) an amount equal to 1.50x the trailing twelve month interest incurred; and (e) unrestricted cash of not less than $15,000,000 at all times.
The Syndicated Line also contains affirmative, negative, and financial covenants, including (a) a minimum tangible net worth of no less than the sum of (i) $70 million, (ii) 25% of positive consolidated earnings earned in any fiscal quarter, (iii) 100% of new equity contributed to the Borrower (as defined in the Wells Fargo Facility), (iv) 100% of any increase in tangible net worth resulting from an equity issuance upon the conversion or exchange of any security constituting indebtedness that is convertible or exchangeable, or is being converted or exchanged, for equity interests, and (v) 100% of the amount of any repurchase of equity interests in the Company; (b) a maximum leverage covenant that prohibits the leverage ratio from exceeding 2.25 to 1.00, except for up to two quarterly measurement periods in which the ratio shall not exceed 2.50 to 1.00 during the period beginning on August 2, 2024 and ending on December 31, 2025; (c) a minimum debt service coverage ratio of no less than 1.50 to 1.00 for the period from and after June 30, 2024 until June 30, 2025, and a minimum of 2.00 to 1.00 thereafter, provided that a minimum debt service coverage ratio of no less than 1.35 to 1.00 will be permitted for up to two quarterly measurement periods during the period beginning on August 2, 2024 and ending on June 30, 2025; (d) a minimum liquidity amount of not less than $37,500,000 from and after June 30, 2024, provided that during any period in which the debt service coverage 25 Table of Contents ratio is less than 1.50 to 1.00, the minimum liquidity threshold will be at least the greater of (i) $45,000,000, or (ii) an amount equal to 1.50x the trailing twelve month interest incurred; and (e) unrestricted cash of not less than $15,000,000 at all times.
Factors affecting the trading price of UHG’s securities may include: • actual or anticipated fluctuations in UHG’s quarterly financial results or the quarterly financial results of companies perceived to be similar to it; • changes in the market’s expectations about UHG’s operating results; • success or entry of competitors; • UHG’s operating results failing to meet the expectation of securities analysts or investors in a particular period; • changes in financial estimates and recommendations by securities analysts concerning UHG or the homebuilding industry in general; • operating and share price performance of other companies that investors deem comparable to UHG; • changes in laws and regulations affecting UHG’s business; • UHG’s ability to meet compliance requirements; • commencement of, or involvement in, litigation involving UHG; • changes in UHG’s capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of UHG’s shares of common stock available for public sale; • any major change in the Board of Directors or management; • sales of substantial amounts of UHG’s shares of common stock by its directors, executive officers or significant stockholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations, and acts of war or terrorism, inflation and market liquidity.
Factors affecting the trading price of UHG’s securities may include: • the pendency of the Merger; • actual or anticipated fluctuations in UHG’s quarterly financial results or the quarterly financial results of companies perceived to be similar to it; • changes in the market’s expectations about UHG’s operating results; • success or entry of competitors; • UHG’s operating results failing to meet the expectation of securities analysts or investors in a particular period; • changes in financial estimates and recommendations by securities analysts concerning UHG or the homebuilding industry in general; • operating and share price performance of other companies that investors deem comparable to UHG; • changes in laws and regulations affecting UHG’s business; • UHG’s ability to meet compliance requirements; • commencement of, or involvement in, litigation involving UHG; • changes in UHG’s capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of UHG’s shares of common stock available for public sale; • any major change in the Board of Directors or management; • sales of substantial amounts of UHG’s shares of common stock by its directors, executive officers or significant stockholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations, and acts of war or terrorism, inflation and market liquidity.
For example, the Tax Cuts and Jobs Act, which became effective January 1, 2018, contained substantial changes to the Internal Revenue Code of 1986, as amended (the “Code”), including (i) limitations on the ability of UHG’s homebuyers to deduct property taxes, (ii) limitations on the ability of UHG’s homebuyers to deduct mortgage interest and (iii) limitations on the ability of UHG’s homebuyers to deduct state and local income taxes.
For example, the Tax Cuts and Jobs Act, which became effective January 1, 2018, contained substantial changes to the Internal Revenue Code of 1986, as amended (the “Code”), including (i) limitations on the ability of homebuyers to deduct property taxes, (ii) limitations on the ability of homebuyers to deduct mortgage interest and (iii) limitations on the ability of homebuyers to deduct state and local income taxes.
The existence of any material weakness in UHG’s internal control over financial reporting could also result in errors in UHG’s financial statements that could require UHG to restate its financial statements, cause it to fail to meet its reporting obligations, subject it to investigations from regulatory authorities or cause stockholders to lose confidence in its reported financial information, all of which could materially and adversely affect UHG. 31 Table of Contents If securities or industry analysts do not publish or cease publishing research or reports about UHG, its business, or its market, or if they change their recommendations regarding the Class A common stock of UHG adversely, then the price and trading volume of the Class A common stock could decline.
The existence of any material weakness in UHG’s internal control over financial reporting could also result in errors in UHG’s financial statements that could require UHG to restate its financial statements, cause it to fail to meet its reporting obligations, subject it to investigations from regulatory authorities or cause stockholders to lose confidence in its reported financial information, all of which could materially and adversely affect UHG. 32 Table of Contents If securities or industry analysts do not publish or cease publishing research or reports about UHG, its business, or its market, or if they change their recommendations regarding the Class A common stock of UHG adversely, then the price and trading volume of the Class A common stock could decline.
Additionally, these initiatives will require allocation of both financial and operational resources, and management and key employees may be required to focus on one or more of these initiatives and may give less focus to UHG’s day-to-day operations, which could negatively impact UHG’s overall business performance.
Additionally, these initiatives require allocation of both financial and operational resources, and management and key employees may be required to focus on one or more of these initiatives and may give less focus to UHG’s day-to-day operations, which could negatively impact UHG’s overall business performance.
Additionally, if Homeowners Mortgage is unable to broker mortgages for any reason going forward, its customers may experience significant mortgage loan funding issues, which could have a negative impact on UHG’s homebuilding business. 19 Table of Contents UHG’s business could be materially and adversely disrupted by an epidemic or pandemic, or similar public threat, or fear of such an event, and the measures that federal, state and local governments and other authorities implement to address it.
Additionally, if Homeowners Mortgage is unable to broker mortgages for any reason going forward, its customers may experience significant mortgage loan funding issues, which could have a negative impact on UHG’s homebuilding business. 21 Table of Contents UHG’s business could be materially and adversely disrupted by an epidemic or pandemic, or similar public threat, or fear of such an event, and the measures that federal, state and local governments and other authorities implement to address it.
UHG is subject to laws, regulations and rules enacted by national, regional and local governments and Nasdaq. In particular, UHG is required to comply with certain SEC, Nasdaq and other legal or regulatory requirements of businesses 32 Table of Contents providing financial services. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly.
UHG is subject to laws, regulations and rules enacted by national, regional and local governments and Nasdaq. In particular, UHG is required to comply with certain SEC, Nasdaq and other legal or regulatory requirements of businesses 33 Table of Contents providing financial services. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly.
For example, UHG has recorded intangible assets, including goodwill, in connection with the acquisition of selected assets of Herring Homes, LLC and Creekside Custom Homes, LLC (which were accounted for as a business combination) and acquisition of common stock of Rosewood Communities, Inc. totaling $10.7 million as of December 31, 2024.
For example, UHG has recorded intangible assets, including goodwill, in connection with the acquisition of selected assets of Herring Homes, LLC and Creekside Custom Homes, LLC (which were accounted for as a business combination) and acquisition of common stock of Rosewood Communities, Inc. totaling $10.7 million as of December 31, 2025.
If UHG defaults on one or more of its debt agreements, it could have a material adverse effect on UHG’s business, prospects, liquidity, financial condition and results of operations. Failure to further extend the Wells Fargo Facility in 2027 could have a material adverse effect on UHG’s ability to meet the financing requirements of its business.
If UHG defaults on one or more of its debt agreements, it could have a material adverse effect on UHG’s business, prospects, liquidity, financial condition and results of operations. Failure to further extend the Wells Fargo Facility beyond 2027 could have a material adverse effect on UHG’s ability to meet the financing requirements of its business.
If, at such time, UHG is unable to extend the Wells Fargo Facility or find a new source of borrowing on acceptable terms, UHG will be required to pay down the amounts outstanding under the Wells Fargo Facility, which may require UHG to sell assets, seek additional equity financing (which will result in additional dilution to stockholders) or reduce or delay capital expenditures, any of which could have a material adverse effect on UHG’s operations and financial condition.
If UHG is unable to extend the Wells Fargo Facility or find a new source of borrowing on acceptable terms, UHG will be required to pay down the amounts outstanding under the Wells Fargo Facility, which may require UHG to sell assets, seek additional equity financing (which will result in additional dilution to stockholders) or reduce or delay capital expenditures, any of which could have a material adverse effect on UHG’s operations and financial condition.
Nieri and the Nieri Trusts will likely effectively control all matters submitted to the stockholders, including the election of directors, amendments of organizational documents, compensation matters, and any merger, consolidation, sale of all or substantially all of UHG’s assets, or other major corporate transaction requiring stockholder approval. Even if Mr.
Nieri and the Nieri Trusts will likely effectively control all matters submitted to the stockholders, including the election of directors, amendments of organizational documents, compensation matters, and any merger, consolidation, sale of all or substantially all of UHG’s assets, or other major corporate transaction requiring stockholder approval, including the Merger. Mr.
Additionally, UHG could incur substantial costs, penalties and damages, including back pay, unpaid benefits, taxes, expense reimbursement and attorneys’ fees in defending future challenges to its employment classification or compensation practices. 17 Table of Contents UHG is required to obtain performance bonds and other government approvals, the unavailability of which could adversely affect its results of operations and cash flows.
Additionally, UHG could incur substantial costs, penalties and damages, including back pay, unpaid benefits, taxes, expense reimbursement and attorneys’ fees in defending future challenges to its employment classification or compensation practices. UHG is required to obtain performance bonds and other government approvals, the unavailability of which could adversely affect its results of operations and cash flows.
Moreover, in a highly inflationary environment, UHG’s cost of capital, labor, and materials can increase, and the purchasing power of its cash resources can decline, which could have an adverse impact on its business or financial results. 13 Table of Contents Alternatively, a significant period of deflation could cause a decrease in overall spending and borrowing levels.
Moreover, in a highly inflationary environment, UHG’s cost of capital, labor, and materials can increase, and the purchasing power of its cash resources can decline, which could have an adverse impact on its business or financial results. Alternatively, a significant period of deflation could cause a decrease in overall spending and borrowing levels.
Government restrictions, standards, or regulations intended to reduce greenhouse gas emissions or potential climate change impacts are likely to result in restrictions on land development in certain areas and may increase energy, transportation, or raw material costs, which could reduce UHG’s profit margins and adversely affect its results of operations.
Government restrictions, standards, or regulations intended to reduce greenhouse gas emissions or potential climate change impacts are likely to result in restrictions on land development in certain areas and may increase energy, 24 Table of Contents transportation, or raw material costs, which could reduce UHG’s profit margins and adversely affect its results of operations.
Any difficulty in obtaining sufficient capital for planned construction expenditures could cause project delays and any such delay could result in cost increases and may adversely affect UHG’s sales and future results of operations and cash flows. 25 Table of Contents UHG may be unable to obtain additional financing to fund its operations and growth.
Any difficulty in obtaining sufficient capital for planned construction expenditures could cause project delays and any such delay could result in cost increases and may adversely affect UHG’s sales and future results of operations and cash flows. UHG may be unable to obtain additional financing to fund its operations and growth.
An increase in the level of UHG’s home order cancellations could have a negative impact on its business, prospects, liquidity, financial condition and results of operations. Tax law changes that increase the costs of owning a home could prevent potential customers from buying UHG’s homes and adversely affect its business or financial results.
An increase in the level of UHG’s home order cancellations could have a negative impact on its business, prospects, liquidity, financial condition and results of operations. 17 Table of Contents Tax law changes that increase the costs of owning a home could prevent potential customers from buying UHG’s homes and adversely affect its business or financial results.
Negative publicity may result in a decrease in operating results that could lead to a decline in the price of UHG’s securities and cause stockholders to lose all or a portion of their investment. Changes in accounting rules, assumptions and/or judgments could materially and adversely affect UHG.
Negative publicity may result in a decrease in operating results that could lead to a decline in the price of UHG’s securities and cause stockholders to lose all or a portion of their investment. 35 Table of Contents Changes in accounting rules, assumptions and/or judgments could materially and adversely affect UHG.
UHG may be forced to write down or write off assets, including intangible assets such as goodwill, restructure operations, or incur impairment or other charges that could result in losses, including due to factors outside of UHG’s business and control.
UHG may be forced to write down or write off assets, including intangible assets such as goodwill, restructure operations, or incur impairment or other charges that could result in losses, including due to factors outside of UHG’s 18 Table of Contents business and control.
UHG’s Amended and Restated Certificate of Incorporation provides that unless UHG consents to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action brought by a stockholder on behalf of UHG, (ii) any claim of breach of a fiduciary duty owed by any of UHG’s directors, officers, stockholders, or employees, (iii) any claim against 28 Table of Contents UHG arising under its charter or bylaws or the DGCL and (iv) any claim against UHG governed by the internal affairs doctrine.
UHG’s Amended and Restated Certificate of Incorporation provides that unless UHG consents to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action brought by a stockholder on behalf of UHG, (ii) any claim of breach of a fiduciary duty owed by any of UHG’s directors, officers, stockholders, or employees, (iii) any claim against UHG arising under its charter or bylaws or the Delaware General Corporation Law and (iv) any claim against UHG governed by the internal affairs doctrine.
Rising interest rates, decreased availability of mortgage financing, reduced access to certain mortgage programs, higher down payment requirements or increased monthly mortgage costs, among other factors, may lead to reduced demand for UHG’s homes and mortgage loans.
Rising interest rates, decreased availability of mortgage financing, reduced access to certain mortgage programs, higher down payment requirements or increased monthly mortgage costs, among other factors, may lead to reduced 16 Table of Contents demand for UHG’s homes and mortgage loans.
UHG’s computer systems are subject to damage or interruption from power outages, computer attacks by hackers, viruses, catastrophes, hardware and software failures and breach of data security protocols by its personnel or third-party service providers.
UHG’s computer systems are subject to damage or interruption 34 Table of Contents from power outages, computer attacks by hackers, viruses, catastrophes, hardware and software failures and breach of data security protocols by its personnel or third-party service providers.
The Board of Directors determines UHG’s operational policies, investment guidelines, and business and growth strategies. The Board of Directors may make changes to, or approve transactions that deviate from, those policies, guidelines, and strategies without a vote of, or notice to, stockholders.
The Board of Directors determines UHG’s operational policies, investment guidelines, and business and growth strategies. The Board of Directors may make changes to, or approve transactions that deviate from, those policies, 29 Table of Contents guidelines, and strategies without a vote of, or notice to, stockholders.
In the United States, the coverage offered and the availability of general liability insurance for construction defects is currently limited and is costly. As a result, an increasing number of UHG’s subcontractors in the United States may be unable to obtain insurance.
The coverage offered and the availability of general liability insurance for construction defects is currently limited and is costly. As a result, an increasing number of UHG’s subcontractors may be unable to obtain insurance.
Each of these events could reduce demand for UHG’s homes and adversely impact its business, prospects, liquidity, financial condition and results of operations. 34 Table of Contents Negative publicity may affect UHG’s business performance and could affect its stock price.
Each of these events could reduce demand for UHG’s homes and adversely impact its business, prospects, liquidity, financial condition and results of operations. Negative publicity may affect UHG’s business performance and could affect its stock price.
Potential changes, if any, with respect to such classification could have a significant effect on UHG’s operating model. Further, the costs associated with any such potential changes could have a significant effect on UHG’s results of operations and financial condition if it were unable to pass through an increase in price corresponding to such increased costs to its customers.
Further, the costs associated with any such potential changes could have a significant effect on UHG’s results of operations and financial condition if it were unable to pass through an increase in price corresponding to such increased costs to its customers.
Adverse developments affecting financial institutions, including bank failures, could adversely affect UHG’s liquidity and financial performance. Additionally if such banks or financial institutions, or any substitute or additional banks or financial institutions, participate in the Wells Fargo Facility, adverse developments may result in such bank or financial instituting defaulting under such facility.
Adverse 27 Table of Contents developments affecting financial institutions, including bank failures, could adversely affect UHG’s liquidity and financial performance. Additionally if such banks or financial institutions, or any substitute or additional banks or financial institutions, participate in the Wells Fargo Facility, adverse developments may result in such bank or financial instituting defaulting under such facility.
The factors that affect its ability to generate cash can also affect its ability to raise additional funds for these purposes through the sale of debt or equity, the refinancing of debt or the 24 Table of Contents sale of assets.
The factors that affect its ability to generate cash can also affect its ability to raise additional funds for these purposes through the sale of debt or equity, the refinancing of debt or the sale of assets.
The Wells Fargo Facility has a stated maturity date in 2027, which date may be extended by one year upon UHG’s request and subject to the terms of the Wells Fargo Facility.
The Wells Fargo Facility has a stated maturity date in 2027, which date may be extended by one year upon UHG’s request and subject to the consent of the extending lenders and the other terms of the Wells Fargo Facility.
UHG is an “emerging growth company” and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, its securities may be less attractive to investors.
UHG is an “emerging growth company” and a “smaller reporting company” and, as a result of the reduced disclosure and governance requirements applicable to such companies, its securities may be less attractive to investors.
The secondary market for mortgage loans continues to primarily prefer securities backed by Fannie Mae, Freddie Mac or the Government National Mortgage Association (“Ginnie Mae”), and UHG believes the liquidity these agencies provide to the mortgage industry is important to the housing market.
The secondary market for mortgage loans continues to primarily prefer securities backed by Fannie Mae, Freddie Mac or Ginnie Mae, and UHG believes the liquidity these agencies provide to the mortgage industry is important to the housing market.
UHG cannot assure its shareholders that it will not be a USRPHC in the future. If UHG is a USRPHC at any time during a Non-U.S. holder’s holding period in its shares of Class A common stock, a Non-U.S.
UHG believes it is a USRPHC as of the year ended December 31, 2025. UHG cannot assure its shareholders that it will not be a USRPHC in the future. If UHG is a USRPHC at any time during a Non-U.S. holder’s holding period in its shares of Class A common stock, a Non-U.S.
Significant tariffs or other restrictions placed on raw materials that UHG uses in its homebuilding operation, such as lumber or steel, could cause the cost of home construction to increase, and UHG may not be able to pass these increased costs along to homebuyers.
Significant tariffs or other restrictions placed on raw materials that UHG uses in its homebuilding operation, such as lumber or steel, could cause the cost of home construction to increase, and UHG may not be able to pass these increased costs along to homebuyers, which could adversely impact the number of homes sold by UHG and UHG’s margins.
As of December 31, 2024, UHG’s consolidated homebuilding debt was approximately $50.2 million, of which was secured by inventory pursuant to the Syndicated Line with Wells Fargo (as defined herein), and carried a weighted average interest rate of 8.41% as of December 31, 2024.
As of December 31, 2025, UHG’s consolidated homebuilding debt was approximately $78.2 million, of which was secured by inventory pursuant to the Syndicated Line with Wells Fargo (as defined herein), and carried a weighted average interest rate of 7.48% as of December 31, 2025.
Nieri’s and the Nieri Trusts’ concentration of stock ownership, may have the effect of depriving the UHG’s stockholders of an opportunity to sell their shares at a premium over prevailing market prices and make it more difficult to replace directors and management.
Nieri’s and the Nieri Trusts’ concentration of stock ownership, may have the effect of depriving UHG’s stockholders of an opportunity to sell their shares at a premium over prevailing market prices and make it more difficult to replace directors and management. Following the execution of the Merger Agreement, on February 22, 2026, Mr.
In addition, an important segment of UHG’s customer base consists of first-time and second-time move-up buyers, who often purchase homes subject to contingencies related to the sale of their existing homes, and therefore will be affected by downturn in the resale market. Further, UHG also competes with the resale, or “previously owned,” home market.
In addition, an important segment of UHG’s customer base consists of first-time and second-time move-up buyers, who often purchase homes subject to contingencies related to the sale of their existing homes, and therefore will be affected by downturn in the resale market.
If mortgage rates continue at current levels or climb further, the ability of prospective homebuyers to finance home purchases may be adversely affected and, as a result, UHG’s business, operating results and financial condition may be adversely affected.
UHG cannot predict whether mortgage rates will continue to climb, remain at the current levels, or fall. If mortgage rates continue at current levels or increase, the ability of prospective homebuyers to finance home purchases may be adversely affected and, as a result, UHG’s business, operating results and financial condition may be adversely affected.
UHG cannot make any assurances that it will be able to maintain compliance with these covenants in the future and, if UHG fails to do so, that UHG will be able to obtain waivers from the lenders and/or amend the covenants.
The terms of any future indebtedness UHG may incur could include more restrictive covenants. UHG cannot make any assurances that it will be able to maintain compliance with these covenants in the future and, if UHG fails to do so, that UHG will be able to obtain waivers from the lenders and/or amend the covenants.
UHG relies on accounting, financial and operational management information systems to conduct its operations. Any disruption in these systems, or the systems of affiliates and other third parties that UHG conducts business with, could adversely affect UHG’s ability to conduct its business.
Any disruption in these systems, or the systems of affiliates and other third parties that UHG conducts business with, could adversely affect UHG’s ability to conduct its business.
UHG is an “emerging growth company,” as defined in the JOBS Act, and it is eligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including, but not limited to, a requirement to present only two years of audited financial statements, an exemption from the auditor attestation requirement of Section 404 of the Sarbanes-Oxley Act, reduced disclosure about executive compensation arrangements pursuant to the rules applicable to smaller reporting companies, and no requirement to seek non-binding advisory votes on executive compensation or golden parachute arrangements.
In addition, as an emerging growth company, UHG is eligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including, but not limited to, an exemption from the auditor attestation requirement of Section 404 of the Sarbanes-Oxley Act, reduced disclosure about executive compensation arrangements, and no requirement to seek non-binding advisory votes on executive compensation or golden parachute arrangements.
UHG’s strategic and operational initiatives, including those aimed at increasing profitability and driving returns, are subject to various risks and uncertainties, and UHG may not be able to implement the initiatives successfully. UHG launched multi-faceted operational improvement initiatives in 2024 and expects to continue to be engaged in those initiatives throughout 2025. See Item 1.
UHG’s strategic and operational initiatives, including those aimed at increasing profitability and driving returns, are subject to various risks and uncertainties, and UHG may not be able to implement the initiatives successfully. UHG launched multi-faceted operational improvement initiatives in 2024 which continued throughout 2025. See Item 1. Business, for further discussion of certain of these initiatives.
There are currently no shares of preferred stock issued and outstanding. The issuance of preferred stock in the future may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded UHG’s common stock.
The issuance of preferred stock in the future may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded UHG’s common stock.
There is no guarantee that the warrants will be in the money at any given time prior to their expiration, and as such, the warrants may expire worthless. General Risk Factors 33 Table of Contents An information systems interruption or breach in security could adversely affect UHG.
There is no guarantee that the warrants will be in the money at any given time prior to their expiration, and as such, the warrants may expire worthless. General Risk Factors An information systems interruption or breach in security could adversely affect UHG. UHG relies on accounting, financial and operational management information systems to conduct its operations.
These provisions include: • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of UHG’s stockholders; • a denial of the right of stockholders to call a special meeting; • a vote of 66 2/3% required to approve certain amendments to the Amended and Restated Certificate of Incorporation and the Bylaws; and • the designation of Delaware as the exclusive forum for certain disputes.
These provisions include: • if the holders of Class B common shares no longer hold at least a majority in voting power of UHG’s outstanding common shares, a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of UHG’s stockholders; • if the holders of Class B common shares no longer hold at least a majority in voting power of UHG’s outstanding common shares, a denial of the right of stockholders to call a special meeting; 30 Table of Contents • a vote of 66 2/3% required to approve certain amendments to the Amended and Restated Certificate of Incorporation and the Bylaws; and • the designation of Delaware as the exclusive forum for certain disputes.
UHG’s financing arrangements contain a number of restrictive covenants that impose significant operating and financial restrictions on UHG and may limit UHG’s ability to engage in acts that may be in UHG’s long-term best interest, including, among other things, restrictions on UHG’s ability to, in certain instances: • incur or guarantee additional indebtedness, except in accordance with the terms of UHG’s financing arrangements; • declare or pay dividends and make other distributions on, or redeem or repurchase, capital stock of UHG; and • make acquisitions of all or substantially all of the assets of another person, except in accordance with UHG’s financing arrangements.
UHG’s financing arrangements contain a number of restrictive covenants that impose significant operating and financial restrictions on UHG and may limit UHG’s ability to engage in acts that may be in UHG’s long-term best interest, including, among other things, restrictions on UHG’s ability to, in certain instances: • incur or guarantee additional indebtedness, except in accordance with the terms of UHG’s financing arrangements; • declare or pay dividends and make other distributions on, or redeem or repurchase, capital stock of UHG; and • make acquisitions of all or substantially all of the assets of another person, except in accordance with UHG’s financing arrangements. 26 Table of Contents As a result of these restrictions, UHG will be limited as to how it conducts its business and may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities.
UHG may also issue up to 21,886,379 shares of Class A common stock in connection with the earnout related to the Business Combination, and may issue shares of Class A common stock in connection with equity based awards, 5,569,803 of which were outstanding as of December 31, 2024 (such equity-based compensatory awards are generally subject to vesting requirements).
UHG may also issue up to 21,886,379 shares of Class A common stock upon the achievement of certain earnout conditions, and may issue shares of Class A common stock in connection with equity based awards, 6,216,615 of which were outstanding as of December 31, 2025 (such equity-based compensatory awards are generally subject to vesting requirements).
Such a failure could generate significant negative publicity and have a corresponding impact on UHG’s reputation, its relationships with relevant regulatory agencies, governmental authorities and local communities, which in turn could have a material adverse effect on its business, prospects, liquidity, financial condition and results of operations.
Such a failure could generate significant negative publicity and have a corresponding impact on UHG’s reputation, its relationships with relevant regulatory agencies, governmental authorities and local communities, which in turn could have a material adverse effect on its business, prospects, liquidity, financial condition and results of operations. 20 Table of Contents UHG may not be able to compete effectively against competitors in the homebuilding industry.
UHG may not be able to compete effectively against competitors in the homebuilding industry. 18 Table of Contents UHG operates in a very competitive environment which is characterized by competition from a number of other homebuilders in each market in which it operates. Additionally, there are relatively low barriers to entry into the business.
UHG operates in a very competitive environment which is characterized by competition from a number of other homebuilders in each market in which it operates. Additionally, there are relatively low barriers to entry into the business.
There can be no assurance that legislative, judicial, administrative or regulatory (including tax) authorities will not introduce proposals or assert interpretations of existing rules and regulations that would change the independent contractor classification of any individual or vendor currently characterized as independent contractors doing business with UHG.
There can be no assurance that legislative, judicial, administrative or regulatory (including tax) authorities will not introduce proposals or assert interpretations of existing rules and regulations that would change the independent contractor classification of any individual or vendor currently characterized as independent contractors doing business with UHG. 19 Table of Contents Potential changes, if any, with respect to such classification could have a significant effect on UHG’s operating model.
If these initiatives under-perform expectations or are unsuccessful, UHG may incur significant expenses or write-offs of inventory, other assets or intangible assets such as goodwill and company brand, which would adversely affect UHG’s business and financial results.
Any of these initiatives could also expose UHG to material liabilities not discovered in the due diligence process and may lead to litigation. If these initiatives under-perform expectations or are unsuccessful, UHG may incur significant expenses or write-offs of inventory, other assets or intangible assets such as goodwill and company brand, which would adversely affect UHG’s business and financial results.
Business, for further discussion of certain of these initiatives. UHG’s ability to successfully execute these initiatives is subject to various risks and uncertainties and there can be no assurance regarding the timing of or extent to which UHG will realize the anticipated benefits, if at all.
UHG’s ability to successfully execute these initiatives is subject to various risks and uncertainties and there can be no assurance regarding the timing of or extent to which UHG will realize the anticipated benefits, if at all. These risks could result in operational inefficiencies or other unforeseen complications that may adversely affect UHG’s business operations.
Even though these charges may be non-cash items and not have an immediate impact on UHG’s liquidity, the fact that UHG reports charges of this 16 Table of Contents nature could contribute to negative market perceptions about UHG or its securities. Accordingly, UHG’s securities could suffer a reduction in value.
In addition, unexpected risks may arise and previously known risks may materialize in a manner not consistent with UHG’s risk analysis. Even though these charges may be non-cash items and not have an immediate impact on UHG’s liquidity, the fact that UHG reports charges of this nature could contribute to negative market perceptions about UHG or its securities.
Difficulties with appraisal valuations in relation to the proposed sales price of UHG’s homes could force UHG to reduce the price of its homes for sale. UHG’s home sales may require an appraisal of each home value before closing. Appraisals are professional judgments of the market value of the property and are based on a variety of market factors.
Accordingly, UHG’s securities could suffer a reduction in value. Difficulties with appraisal valuations in relation to the proposed sales price of UHG’s homes could force UHG to reduce the price of its homes for sale. UHG’s home sales may require an appraisal of each home value before closing.
If the property meets UHG’s development requirements and successfully exits the initial inspection and due diligence period, the deposit becomes non-refundable (except for certain circumstances such as seller default and force majeure events), and UHG proceeds under the finished lot option contract with the lots available to it for purchase on a staggered takedown schedule, which is designed to mirror UHG’s expected home orders.
The forfeiture of land contract deposits or inventory impairments may result in a loss that could have a material adverse effect on UHG’s profitability, ability to service its debt obligations, and future cash flows. 15 Table of Contents If the property meets UHG’s development requirements and successfully exits the initial inspection and due diligence period, the deposit becomes non-refundable (except for certain circumstances such as seller default and force majeure events), and UHG proceeds under the finished lot option contract with the lots available to it for purchase on a staggered takedown schedule, which is designed to mirror UHG’s expected home orders.
Any land shortages or any decrease in the supply of suitable land at reasonable prices could limit UHG’s ability to develop new communities or result in increased lot deposit requirements or land costs.
Any land shortages or any decrease in the supply of suitable land at reasonable prices could limit UHG’s ability to develop new communities or result in increased lot deposit requirements or land costs. UHG may not be able to pass any increased land costs to its customers, which could adversely impact UHG’s revenues, earnings and margins.
Government agencies also routinely initiate audits, reviews or investigations of developers and homebuilders’ business practices to ensure compliance with these laws and regulations, which could cause UHG to incur costs or create other disruptions in its business that can be significant. 22 Table of Contents Under various environmental laws, current or former owners of real estate, as well as certain other categories of parties, may be required to investigate and clean up hazardous or toxic substances or petroleum product releases, and may be held liable to a governmental entity or to third parties for related damages, including for bodily injury, and for investigation or clean-up costs incurred by such parties in connection with the contamination.
Under various environmental laws, current or former owners of real estate, as well as certain other categories of parties, may be required to investigate and clean up hazardous or toxic substances or petroleum product releases, and may be held liable to a governmental entity or to third parties for related damages, including for bodily injury, and for investigation or clean-up costs incurred by such parties in connection with the contamination.
Furthermore, to the extent UHG’s business grows or significantly changes, UHG’s internal controls may become more complex, and UHG could require significantly more resources to ensure its internal controls remain effective.
Furthermore, to the extent UHG’s business grows or significantly changes, UHG’s internal controls may become more complex, and UHG could require significantly more resources to ensure its internal controls remain effective. If UHG identifies material weaknesses in the future, it could negatively impact UHG’s operations or the market value of its common stock.
UHG may not be able to pass any increased land costs to its customers, which could adversely impact UHG’s revenues, earnings and margins. 12 Table of Contents UHG considers a lot controlled when it holds an option to acquire the applicable lot for the relevant timeframe set forth in the option contract, in addition to lots that are owned or controlled by related parties and which UHG expects to obtain the contractual right to acquire.
UHG considers a lot controlled when it holds an option to acquire the applicable lot for the relevant timeframe set forth in the option contract, in addition to lots that are owned or controlled by related parties and which UHG expects to obtain the contractual right to acquire.
Although UHG has already hired additional employees to assist it in complying with these requirements, UHG may need to hire more employees in the future or engage outside consultants, which will increase UHG’s operating expenses.
If UHG is required to hire additional employees or engage outside consultants to assist it in complying with these requirements, UHG’s operating expenses will increase.
UHG has not obtained and does not expect to obtain key man life insurance that would provide it with proceeds in the event of death or disability of any of its key personnel. 27 Table of Contents UHG’s corporate organizational documents and provisions of state law to which it is subject contain certain provisions that could have an anti-takeover effect and may delay, make more difficult, or prevent an attempted acquisition that stockholders may favor or an attempted replacement of the Board of Directors or management.
UHG’s corporate organizational documents and provisions of state law to which it is subject contain certain provisions that could have an anti-takeover effect and may delay, make more difficult, or prevent an attempted acquisition that stockholders may favor or an attempted replacement of the Board of Directors or management.
Supply shortages and other risks related to acquiring lots, building materials and skilled labor could increase UHG’s costs and delay deliveries causing an adverse effect on UHG’s business or financial results.
If costs to resolve future warranty and construction defect claims exceed UHG’s estimates, its financial results and liquidity could be adversely affected. 23 Table of Contents Supply shortages and other risks related to acquiring lots, building materials and skilled labor could increase UHG’s costs and delay deliveries causing an adverse effect on UHG’s business or financial results.
All of the above risks could have a material adverse effect on UHG’s business, prospects, liquidity, financial condition and results of operations. UHG may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and stock price.
Further, any delays, cost overruns, or implementation difficulties could negatively impact the expected results of these initiatives. UHG may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and stock price.
Item 1A. Risk Factors Risks Related to UHG’s Business UHG’s inability to successfully identify, secure and control an adequate inventory of lots at reasonable prices could adversely impact UHG’s operations. The results of UHG’s homebuilding operations depend in part upon UHG’s continuing ability to successfully identify, control and acquire an adequate number of homebuilding lots in desirable locations.
The results of UHG’s homebuilding operations depend in part upon UHG’s continuing ability to successfully identify, control and acquire an adequate number of homebuilding lots in desirable locations.
Changes in U.S. trade policies and retaliatory responses from other countries may significantly increase the costs or limit supplies of building materials and products used in UHG’s homes. The state of relationships between other countries and the U.S. with respect to trade policies, taxes, government relations and tariffs may impact UHG’s business.
The state of relationships between other countries and the U.S. with respect to trade policies, taxes, government relations and tariffs may impact UHG’s business.
The difficulties facing these buyers in selling their homes during periods of economic downturn may adversely affect UHG’s sales, and moreover, 20 Table of Contents during such periods UHG may need to reduce its sale prices and offer greater incentives to buyers to compete for sales, which may reduce its margins.
The difficulties facing these buyers in selling their homes during periods of economic downturn may adversely affect UHG’s sales, and moreover, during such periods UHG may need to reduce its sale prices and offer greater incentives to buyers to compete for sales, which may reduce its margins. 22 Table of Contents In the past, the federal government’s fiscal and trade policies and economic stimulus actions have created uncertainty in the financial markets and caused volatility in interest rates, which impacted business and consumer behavior, particularly in the real estate industry.
The federal government has taken on a significant role in supporting mortgage lending through its conservatorship of the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”), both of which purchase home mortgages and mortgage-backed securities (MBS) originated by mortgage lenders, and its insurance of mortgages originated by lenders through the Federal Housing Administration (“FHA”) and Veterans Administration (“VA”).
The federal government has taken on a significant role in supporting mortgage lending through its conservatorship of Fannie Mae and Freddie Mac, both of which purchase home mortgages and mortgage-backed securities (“MBS”) originated by mortgage lenders, and its insurance of mortgages originated by lenders through the FHA and VA.
If housing demand declines, UHG may have to sell homes for a lower profit margin or record inventory impairment charges on its lots, and some of those write-downs could be material. 14 Table of Contents Increases in UHG’s home cancellation rate could have a negative impact on its home sales revenue and gross profit.
In addition, inventory carrying costs can be significant and can result in losses in a poorly performing community or market. If housing demand declines, UHG may have to sell homes for a lower profit margin or record inventory impairment charges on its lots, and some of those write-downs could be material.
If UHG’s efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against UHG and its business may be harmed.
If UHG’s efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against UHG and its business may be harmed. 31 Table of Contents UHG also expects that these new rules and regulations will make it more expensive for UHG to obtain director and officer liability insurance, and UHG may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
UHG may issue additional shares of common or preferred stock (including upon the exercise of warrants), which would dilute the interest of UHG’s stockholders and may present other risks. 29 Table of Contents As of December 31, 2024, UHG had outstanding (i) public warrants and private placement warrants to purchase up to an aggregate of 11,591,663 shares of Class A common stock, and (ii) warrants to purchase up to 746,947 shares of Class A common stock that were issued in connection with warrant agreements of GSH that existed prior to the Business Combination.
As of December 31, 2025, UHG had outstanding (i) public warrants and private placement warrants to purchase up to an aggregate of 11,591,663 shares of Class A common stock, and (ii) warrants to purchase up to 746,947 shares of Class A common stock that were issued in connection with warrant agreements.
The issuance of additional shares of common stock may significantly dilute the equity interest of existing investors and increase the number of shares eligible for resale in the public market. Sales of a substantial number of such shares in the public markets may adversely affect the market price of UHG’s listed securities.
During the pendency of the Merger, UHG's ability to issue additional securities is restricted by the Merger Agreement. The issuance of additional shares of common stock may significantly dilute the equity interest of existing investors and increase the number of shares eligible for resale in the public market.
To the extent UHG is not able to adequately manage the pace of development and lot takedown scheduling, UHG’s results of operations could be adversely affected.
UHG’s land bank option contracts often include provisions under which delays in land development and/or longer land takedown periods cause UHG to incur additional cost. To the extent UHG is not able to adequately manage the pace of development and lot takedown scheduling, UHG’s results of operations could be adversely affected.
Mortgage interest rates have generally trended downward for the last several decades and reached historic lows in the summer of 2020, which made the homes UHG sells more affordable. However, more recently, mortgage interest rates have abruptly climbed, and UHG cannot predict whether they will continue to climb, remain at the current levels, or fall.
Mortgage interest rates have generally trended downward for the last several decades and reached historic lows in the summer of 2020, which made the homes UHG sells more affordable. Mortgage rates climbed abruptly beginning in 2022 before stabilizing and decreasing slightly in recent years.
These conflicts of interest may result in transactions whose terms or outcomes are less favorable to UHG than would otherwise be the case without such arrangements with related party land developers. 26 Table of Contents The dual class structure of UHG’s common stock has the effect of concentrating voting power with UHG’s Executive Chairman, which may effectively eliminate the ability of holders of UHG’s Class A common stock to influence the outcome of important transactions, including a change in control.
The dual class structure of UHG’s common stock has the effect of concentrating voting power with UHG’s Executive Chairman, which may effectively eliminate the ability of holders of UHG’s Class A common stock to influence the outcome of important transactions, including a change in control.
UHG has elected to adopt these reduced disclosure requirements. UHG could be an emerging growth company until the last day of the fiscal year following the fifth anniversary of the Initial Public Offering (January 25, 2026), although a variety of circumstances could cause it to lose that status earlier.
UHG could be an emerging growth company until December 31, 2026 (the last day of the fiscal year following the fifth anniversary of the Initial Public Offering (January 25, 2026)), although UHG could lose that status earlier in the event it were to issue non-convertible debt securities exceeding $1.0 billion prior to December 31, 2026.
UHG’s backlog reflects sales contracts with homebuyers for homes that have not yet been delivered.
Increases in UHG’s home cancellation rate could have a negative impact on its home sales revenue and gross profit. UHG’s backlog reflects sales contracts with homebuyers for homes that have not yet been delivered.
There can be no assurance that coverage will not be further restricted or become more costly. If costs to resolve future warranty and construction defect claims exceed UHG’s estimates, its financial results and liquidity could be adversely affected.
There can be no assurance that coverage will not be further restricted or become more costly.
Removed
The forfeiture of land contract deposits or inventory impairments may result in a loss that could have a material adverse effect on UHG’s profitability, ability to service its debt obligations, and future cash flows.
Added
Item 1A. Risk Factors The following risks, which should be considered carefully with the information provided elsewhere in this report, could materially adversely affect UHG’s business, financial condition or results of operations.
Removed
In addition, inventory carrying costs can be significant and can result in losses in a poorly performing community or market.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese policies go through an internal review process and are approved by appropriate members of management. Managing Material Risks & Integrated Overall Risk Management UHG has integrated cybersecurity risk management into its broader risk management framework. This integration ensures that cybersecurity considerations are an integral part of UHG’s decision-making process.
Biggest changeManaging Material Risks & Integrated Overall Risk Management UHG has integrated cybersecurity risk management into its broader risk management framework. This integration ensures that cybersecurity considerations are an integral part of UHG’s decision-making process. Members of UHG’s management work closely with the IT department to continuously evaluate and address cybersecurity risks in alignment with UHG’s business objectives and operational needs.
The Audit Committee conducts an annual review of the company’s cybersecurity posture and the effectiveness of its risk management 36 Table of Contents strategies. This review helps in identifying areas for improvement and ensuring the alignment of cybersecurity efforts with the overall risk management framework.
The Audit Committee conducts an annual review of the company’s cybersecurity posture and the effectiveness of its risk management strategies. This review helps in identifying areas for improvement and ensuring the alignment of cybersecurity efforts with the overall risk management framework.
If a security event is alerted, upper management and the incident response team are notified and the steps identified in the Incident Response Plan, or IRP, are initiated. This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
In the event a security incident is alerted, upper management and the incident response team will be notified and the steps identified in the Incident Response Plan, or IRP, will be initiated. This plan 36 Table of Contents includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
In addition, UHG has a set of company-wide policies and procedures that directly or indirectly relate to cybersecurity, such as policies related to encryption standards, antivirus protection, remote access, multifactor authentication, confidential information and the use of the internet, social media, email and wireless devices.
In addition, UHG has a set of company-wide policies and procedures that directly or indirectly relate to cybersecurity, such as policies related to antivirus protection, remote access, multifactor authentication, confidential information and the use of the internet, social media, email and wireless devices. These policies go through an internal review process and are approved by appropriate members of management.
UHG conducts assessments of all third-party providers and maintains ongoing reviews to ensure compliance with its cybersecurity standards. The internal business owners of the hosted applications are required to document user access reviews at least annually and provide from the vendor a System and Organization Controls (SOC) 1 or SOC 2 report.
The internal business owners of the hosted applications are required to document user access reviews at least annually and provide from the vendor a System and Organization Controls (SOC) 1 or SOC 2 report.
In addition to collaboration with various third parties, all of UHG’s employees are required to complete cybersecurity training at least once every three years and also have access to more frequent cybersecurity training through online training courses. Oversee Third Party Risk 35 Table of Contents UHG utilizes various third-party software applications in the functioning of its core business.
In addition to collaboration with various third parties, all of UHG’s employees are required to complete cybersecurity training at least once every year. Oversee Third Party Risk UHG utilizes various third-party software applications in the functioning of its core business. UHG conducts assessments of all third-party providers and maintains ongoing reviews to ensure compliance with its cybersecurity standards.
These third-party relationships enable UHG to leverage specialized knowledge and insights, to ensure UHG’s cybersecurity strategies and processes are aligned with industry best practices.
Engage Third Parties on Risk Management Recognizing the complexity and evolving nature of cybersecurity threats, UHG’s IT personnel incorporate external resources and advisors as needed on cybersecurity planning, reporting, and monitoring. These third-party relationships enable UHG to leverage specialized knowledge and insights to ensure UHG’s cybersecurity strategies and processes are aligned with industry best practices.
Removed
Members of UHG’s management work closely with the IT department to continuously evaluate and address cybersecurity risks in alignment with UHG’s business objectives and operational needs. Engage Third Parties on Risk Management Recognizing the complexity and evolving nature of cybersecurity threats, UHG’s IT personnel incorporate external resources and advisors as needed on cybersecurity planning, reporting, and monitoring.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSee “Business - Land Acquisition Strategy and Development Process - Owned and Controlled Lots” for a summary of the other properties that UHG owned or controlled as of December 31, 2024.
Biggest changeSee “Business - Land Acquisition Strategy and Development Process - Owned and Controlled Lots” for a summary of the other properties that UHG owned or controlled as of December 31, 2025. 37 Table of Contents
Item 2. Properties UHG leases approximately 28,500 square feet of office space in Chapin, South Carolina for its corporate headquarters. In addition, UHG leases local offices in Myrtle Beach, South Carolina, Mauldin, South Carolina, and Raleigh, North Carolina to meet operational needs. The South Carolina segment also owns a local office in Greer, South Carolina.
Item 2. Properties UHG leases approximately 28,500 square feet of office space in Chapin, South Carolina for its corporate headquarters. In addition, UHG leases local offices in Myrtle Beach, South Carolina, Mauldin, South Carolina, and Raleigh, North Carolina to meet operational needs. The Rosewood segment also owns a local office in Greer, South Carolina.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures Not applicable. 37 Table of Contents PART II
Biggest changeMine Safety Disclosures Not applicable. 38 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn addition, the ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness the company or its subsidiaries incur. UHG does not anticipate declaring any cash dividends to holders of the Class A common shares in the foreseeable future. Item 6. Reserved
Biggest changeIn addition, the ability to pay dividends is restricted by the Merger Agreement and may be limited by covenants of any existing and future outstanding indebtedness the company or its subsidiaries incur. UHG does not anticipate declaring any cash dividends to holders of the Class A common shares in the foreseeable future. Item 6. Reserved
UHG’s Class B common shares and private warrants are not listed or traded on any exchange. As of March 10, 2025, there were 53 holders of record of UHG’s Class A common shares, 5 holders of record of UHG’s Class B common shares, 1 holder of record of UHG’s public warrants, and 1 holder of record of UHG’s private warrants.
UHG’s Class B common shares and private warrants are not listed or traded on any exchange. As of March 10, 2026, there were 40 holders of record of UHG’s Class A common shares, 5 holders of record of UHG’s Class B common shares, 1 holder of record of UHG’s public warrants, and 4 holders of record of UHG’s private warrants.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFluctuations in the fair value of derivative liabilities as a result of Level 3 inputs may impact the comparability of UHG’s results of operations. 40 Table of Contents Results of Operations Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table presents summary results of operations for the periods indicated: Year Ended December 31, Amount Change 2024 2023 % Change Statements of Operations Revenue, net of sales discounts $ 463,714,017 $ 421,474,101 $ 42,239,916 10.0 % Cost of sales 383,883,751 341,748,481 42,135,270 12.4 % Selling, general and administrative expense 74,699,741 65,094,444 9,605,297 14.7 % Other expense, net (12,482,940) (3,762,613) (8,720,327) NM Equity in net earnings from investment in joint venture 1,528,984 1,244,091 284,893 22.9 % Loss on extinguishment of Convertible Notes (45,642,497) — (45,642,497) NM Change in fair value of derivative liabilities 88,652,980 115,904,646 (27,251,666) (23.5) % Income before taxes $ 37,187,052 $ 128,017,300 $ (90,830,248) (71.0) % Income tax (benefit) expense (9,718,688) 2,957,016 (12,675,704) NM Net income $ 46,905,740 $ 125,060,284 $ (78,154,544) (62.5) % Other Financial and Operating Data: Active communities at end of period (a) 46 61 (15) (24.6) % Home closings 1,431 1,383 48 3.5 % Average sales price of homes closed (b) $ 329,111 $ 315,718 $ 13,393 4.2 % Net new orders (units) 1,399 1,296 103 7.9 % Cancellation rate 11.4 % 13.6 % (2.2) % (16.2) % Backlog 157 189 (32) (16.9) % Gross profit $ 79,830,266 $ 79,725,620 $ 104,646 0.1 % Gross profit % (c) 17.2 % 18.9 % (1.7) % (9.0) % Adjusted gross profit (d) $ 92,407,360 $ 90,080,976 $ 2,326,384 2.6 % Adjusted gross profit % (c) 19.9 % 21.4 % (1.5) % (7.0) % EBITDA (d) $ 60,431,172 $ 144,815,138 $ (84,383,966) (58.3) % EBITDA margin % (c) 13.0 % 34.4 % (21.3) % (62.1) % Adjusted EBITDA (d) $ 31,636,133 $ 40,470,122 $ (8,833,989) (21.8) % Adjusted EBITDA margin % (c) 6.8 % 9.6 % (2.8) % (29.2) % ______________________________ NM - Not Meaningful (a) UHG had 13 communities in closeout as of the year ended December 31, 2024 and 7 communities in closeout as of the year ended December 31, 2023.
Biggest changeAccordingly, the resulting income tax expense for 2025 may impact the comparability of the Company’s results of operations for the periods presented. 41 Table of Contents Results of Operations Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 The following table presents summary results of operations for the periods indicated (dollar amounts in thousands except average sales price): Year Ended December 31, Period over period 2025 2024 Change ($) Change (%) Statements of Operations Revenue, net of sales discounts $ 406,692 $ 463,714 $ (57,022) (12.3) % Cost of sales 334,955 383,884 (48,929) (12.7) % Selling, general and administrative expense 71,766 74,700 (2,934) (3.9) % Other expense, net (9,326) (12,483) 3,157 (25.3) % Equity in net earnings from investment in joint venture 1,057 1,529 (472) (30.9) % Goodwill impairment (1,147) — (1,147) NM Loss on extinguishment of Convertible Notes — (45,642) 45,642 NM Change in fair value of derivative liabilities 9,940 88,653 (78,713) (88.8) % Income before taxes $ 495 $ 37,187 $ (36,692) (98.7) % Income tax expense (benefit) 16,747 (9,719) 26,466 (272.3) % Net (loss) income $ (16,252) $ 46,906 $ (63,158) (134.6) % Other Financial and Operating Data: Active communities at end of period (a) 57 46 11 23.9 % Home closings 1,192 1,431 (239) (16.7) % Average sales price of homes closed (b) $ 341,314 $ 329,111 $ 12,203 3.7 % Net new orders (units) 1,227 1,399 (172) (12.3) % Cancellation rate 13.0 % 11.4 % 1.6 % 14.4 % Backlog 192 157 35 22.3 % Gross profit $ 71,737 $ 79,830 $ (8,093) (10.1) % Gross margin (c) 17.6 % 17.2 % 0.4 % 2.3 % Adjusted gross profit (d) $ 80,127 $ 92,407 $ (12,280) (13.3) % Adjusted gross margin (c) 19.7 % 19.9 % (0.2) % (1.0) % EBITDA (d) $ 18,013 $ 60,432 $ (42,419) (70.2) % EBITDA margin (c) 4.4 % 13.0 % (8.6) % (66.2) % Adjusted EBITDA (d) $ 22,543 $ 31,636 $ (9,093) (28.7) % Adjusted EBITDA margin (c) 5.5 % 6.8 % (1.3) % (19.1) % ______________________________ NM - Not Meaningful (a) UHG had 8 communities in closeout as of the year ended December 31, 2025 and 13 communities in closeout as of the year ended December 31, 2024.
The legal obligation and economic loss resulting from a cancellation or termination is limited to the amount of the deposits paid pursuant to such option contracts as well as capitalized pre-acquisition costs such as lot option fees paid to the land bank partner.
The legal obligation and economic loss resulting from a cancellation or termination is limited to the amount of the deposits paid pursuant to such option contracts as well as capitalized pre-acquisition land costs such as lot option fees paid to the land bank partner.
To address uncertainty in these budgets, UHG assesses, updates and revises project budgets on a regular basis, utilizing the most current information available to estimate home construction and land development costs. Developed lot costs are typically allocated to individual residential lots on a per lot basis based on specific costs incurred for the acquisition of the lot.
To address uncertainty in these budgets, UHG assesses, updates and revises project budgets on a regular basis, utilizing the most current information available to estimate home construction and land development costs. Developed lot and pre-acquisition land costs are typically allocated to individual residential lots on a per lot basis based on specific costs incurred for the acquisition of the lot.
Adjusted gross profit, EBITDA, adjusted EBITDA, and EBITDA margin are not financial measures under generally accepted accounting principles in the United States of America (“GAAP”). See “ Non-GAAP Financial Measures ” for an explanation of how UHG computes these non-GAAP financial measures and for reconciliations to the most directly comparable GAAP financial measure.
Adjusted gross profit, EBITDA, and adjusted EBITDA are not financial measures under generally accepted accounting principles in the United States of America (“GAAP”). See “ Non-GAAP Financial Measures ” for an explanation of how UHG computes these non-GAAP financial measures and for reconciliations to the most directly comparable GAAP financial measure.
For grants that include graded vesting and either a market or performance condition, the Company utilizes the graded vesting method to recognize compensation expense. The Company accounts for forfeitures when they occur. The Company’s stock warrant awards do not contain a service condition and are expensed on the grant date.
For grants that include graded vesting and either a market or performance condition, the Company utilizes the graded vesting method to recognize compensation expense. The Company accounts for forfeitures when they occur. The Company’s stock warrant awards do not contain a service condition and were expensed on the grant date.
UHG generally relies upon its revolving lines of credit to fund building costs, and timing of draws is such that UHG may from time to time be in receipt of funds from the Syndicated Line in advance of such funds being utilized.
UHG generally relies upon its syndicated line of credit to fund building costs, and timing of draws is such that UHG may from time to time be in receipt of funds from the Syndicated Line in advance of such funds being utilized.
The Company employs a land-light lot operating strategy, with a focus on the design, construction and sale of entry-level, first, second and third move-up single-family houses. UHG principally builds detached single-family houses, and, to a lesser extent, attached single-family houses, including duplex houses and town houses.
The Company employs a land-light lot operating strategy, with a focus on the design, construction and sale of entry-level, first, second and some third-time move-up single-family houses and custom builds. UHG principally builds detached single-family houses, and, to a lesser extent, attached single-family houses, including duplex houses and town houses.
Stock-Based Compensation As of December 31, 2024, the Company has four types of stock-based compensation outstanding: stock options, restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”) with a market condition and stock warrants.
Stock-Based Compensation As of December 31, 2025, the Company has four types of stock-based compensation outstanding: stock options, restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”) with a market condition and stock warrants.
The first step is a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that 48 Table of Contents the fair value of a reporting unit is less than its carrying amount.
The first step is a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount.
UHG’s pipeline as of December 31, 2024 consists of approximately 7,700 lots, which includes lots that UHG may acquire from third party lot option contracts or land bank option contracts, in addition to lots that are owned or controlled by related parties and which UHG expects to obtain the contractual right to acquire.
UHG’s pipeline as of December 31, 2025 consists of approximately 7,200 lots, which includes lots that UHG may acquire from third party lot option contracts or land bank option contracts, in addition to lots that are owned or controlled by related parties and which UHG expects to obtain the contractual right to acquire.
UHG’s pipeline as of December 31, 2024 consists of approximately 7,700 lots, which includes lots that are owned or controlled by related parties, and which UHG expects to obtain the contractual right to acquire, in addition to lots that UHG may acquire from third party lot option contracts or land bank option contracts.
UHG’s pipeline as of December 31, 2025 consists of approximately 7,200 lots, which includes lots that UHG may acquire from third party lot option contracts or land bank option contracts, in addition to lots that are owned or controlled by related parties, and which UHG expects to obtain the contractual right to acquire.
The Company defines EBITDA as net income before (i) capitalized interest expensed in cost of sales, (ii) interest expensed in other (expense) income, net, (iii) 43 Table of Contents depreciation and amortization, and (iv) taxes.
The Company defines EBITDA as net income before (i) capitalized interest expensed in cost of sales, (ii) interest expensed in other (expense) income, net, (iii) depreciation and amortization, and (iv) taxes.
While UHG’s significant accounting policies are more fully described in Note 3 - Summary of significant accounting policies of the Notes to the Consolidated Financial Statements contained in this report, UHG believes the following topics reflect the critical accounting policies and the more significant judgment and estimates used in the preparation of the Consolidated Financial Statements.
While UHG’s significant accounting policies are more fully described in Note 1 - Nature of Business and Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements contained in this report, UHG believes the following topics reflect the critical accounting policies and the more significant judgment and estimates used in the preparation of the consolidated financial statements.
Kennedy Lewis Credit Agreement In 2024, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, GSH, Kennedy Lewis Agency Partners, LLC, as administrative agent, and the lenders party thereto (the “Lenders”) pursuant to which the Lenders thereunder funded a $70,000,000 subordinated loan (“Term Loan”), the proceeds of which were used to redeem the outstanding convertible promissory notes from the Selling Stockholders.
Term Loan In 2024, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, GSH, Kennedy Lewis Agency Partners, LLC, as administrative agent, and the lenders party thereto (the “Lenders”) pursuant to which the Lenders thereunder funded a $70.0 million subordinated term loan, the proceeds of which were used to redeem the outstanding convertible promissory notes from the Selling Stockholders.
As of December 31, 2024 , the Syndicated Line had a weighted average interest rate of 8.41% and will mature on August 2, 2027 except with respect to two non-extending lenders which represent $73.3 million of the committed amount and will mature August 10, 2026.
As of December 31, 2025 , the Syndicated Line had a weighted average interest rate of 7.48% and will mature on August 2, 2027 except with respect to two non-extending lenders which represent $73.3 million of the committed amount and will mature August 10, 2026.
Under ASC 815, derivative liabilities are marked to market each reporting period with changes recognized on the Condensed Consolidated Statement of Operations. The overall increase is primarily attributable to changes in the fair value of the Earnout Shares, which fluctuates each period due to changes in the Company's stock price.
Under ASC 815, Derivatives and Hedging, derivative liabilities are marked to market each reporting period with changes recognized on the consolidated statements of operations. The overall increase is primarily attributable to changes in the fair value of the Earnout Shares, which fluctuates each period due to changes in the Company's stock price.
The Company had $96.4 million of availability under the Syndicated Line, based on its borrowing base of $147.4 million. The borrowing base up to the aggregate commitment generates availability in accordance with the value of the collateral at a given point.
The Company had $56.4 million of availability under the Syndicated Line, based on its borrowing base of $136.0 million. The borrowing base up to the aggregate commitment generates availability in accordance with the value of the collateral at a given point.
These instruments were recognized as a derivative liability in accordance with ASC 815 starting in 2023, and are marked to market at the end of each reporting period. With the exception of the public warrants, the fair values of each derivative liability are determined using Level 3 inputs.
These instruments were recognized as derivative liabilities in accordance with ASC 815, Derivatives and Hedging and are marked to market at the end of each reporting period. With the exception of the public warrants, the fair values of each derivative liability are determined using Level 3 inputs.
Since its founding in 2004, UHG has delivered approximately 15,000 homes and currently builds in 46 active subdivisions at prices that generally range from approximately $200,000 to approximately $600,000.
Since its founding in 2004, UHG has delivered over 16,000 homes and currently builds in 57 active subdivisions at prices that generally range from approximately $200,000 to approximately $600,000.
UHG believes that its current cash holdings, as well as cash generated from continuing operations, cash available under the Syndicated Line, and cash obtained from land banking arrangements, will be sufficient to satisfy its short term and long term cash requirements for working capital to support its daily operations and meet current commitments under its contractual obligations.
UHG believes that its current cash holdings including cash generated from continuing operations and cash available under the Syndicated Line will be sufficient to satisfy its short term and long term cash requirements for working capital to support its daily operations and meet current commitments under its contractual obligations.
Control is considered to be transferred to the customer at the time of closing when the title and possession of the home are received by the homebuyer. Little to no estimation is involved in recognizing such revenues. Revenue is reported net of any discounts and incentives.
Control is considered to be transferred to the customer at the time of closing when the title and possession of the home are received by the homebuyer. Little to no estimation is involved in recognizing such revenues.
In determining these costs, UHG compiles project budgets that are based on a variety of assumptions, including future construction schedules and costs to be incurred.
Construction and land costs are comprised of direct and allocated costs, including estimated future costs. In determining these costs, UHG compiles project budgets that are based on a variety of assumptions, including future construction schedules and costs to be incurred.
The Term Loan has an outstanding balance of $67,150,116 as of December 31, 2024, and matures on the earlier of December 11, 2030, the maturity date under the Company’s Second Amended and Restated Credit Agreement, or the acceleration of indebtedness under the Syndicated Line. The weighted average interest rate of the loan was 11.70% as of December 31, 2024.
The term loan has an outstanding balance of $67.5 million as of December 31, 2025, and matures on the earlier of December 11, 2030, the maturity date under the Company’s Second Amended and Restated Credit Agreement, or the acceleration of indebtedness under the Syndicated Line. The weighted average interest rate of the loan was 11.52% as of December 31, 2025.
The following table presents a reconciliation of adjusted gross profit to the GAAP financial measure of gross profit for each of the periods indicated.
The following table presents a reconciliation of adjusted gross profit to the GAAP financial measure of gross profit for each of the periods indicated (in thousands, except percentages).
As of December 31, 2024, the Company had outstanding surety bonds and letters of credit totaling $7.6 million and $0.7 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.
As of December 31, 2025, the Company had outstanding surety bonds and letters of credit totaling $9.1 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.
Gross profit for the year ended December 31, 2024 was $79.8 million, an increase of $0.1 million, or 0.1%, from $79.7 million for the year ended December 31, 2023. Gross profit as a percentage of revenue for the year ended December 31, 2024 was 17.2%, a decrease of 1.7%, as compared to 18.9% for the year ended December 31, 2023.
Gross profit for the year ended December 31, 2025 was $71.7 million, a decrease of $8.1 million, from $79.8 million for the year ended December 31, 2024. Gross profit as a percentage of revenue for the year ended December 31, 2025 was 17.6%, an increase of 0.4%, as compared to 17.2% for the year ended December 31, 2024.
Income Tax (Benefit) Expense: Income tax (benefit) expense for the year ended December 31, 2024 was a benefit of $9.7 million as compared to an expense of $3.0 million for the year ended December 31, 2023. The Company's estimated annual effective tax rate as of December 31, 2024 is (26.1)% as compared to 2.4% as of December 31, 2023 .
Income Tax Expense (Benefit): Income tax expense for the year ended December 31, 2025 was $16.7 million as compared to an income tax benefit of $9.7 million for the year ended December 31, 2024. The Company's estimated annual effective tax rate as of December 31, 2025 is 3,351.3% as compared to (26.1)% as of December 31, 2024.
The Company financed the transaction, in part, by entering into a Credit Agreement 44 Table of Contents with a third party that provides for a Term Loan of $70.0 million. This transaction is expected to result in reduced interest expense. Refer to Note 9 - Debt and Note 14 - Convertible Notes payable for additional information.
The Company financed the transaction, in part, by entering into a Credit Agreement with a third party that provides for a term loan of $70.0 million . Refer to Note 9 - Debt and Note 14 - Convertible Notes Payable for additional information.
For the definition of adjusted gross profit and a reconciliation to UHG’s most directly comparable financial measure calculated and presented in accordance with GAAP, see “Non-GAAP Financial Measures.” S elling, General and Administrative Expense: Selling, general and administrative expense for the year ended December 31, 2024 was $74.7 million, an increase of $9.6 million, or 14.7%, from $65.1 million for the year ended December 31, 2023.
For the definition of adjusted gross profit and a reconciliation to UHG’s most directly comparable financial measure calculated and presented in accordance with GAAP, see “Non-GAAP Financial Measures.” S elling, General and Administrative Expense: Selling, general and administrative expense for the year ended December 31, 2025 was $71.8 million, a decrease of $2.9 million, from $74.7 million for the year ended December 31, 2024.
Financing Activities Net cash used in financing activities was $34.0 million for the year ended December 31, 2024, as compared to net cash provided by financing activities of $40.5 million for the year ended December 31, 2023. The difference in cash flows year over year is $74.5 million.
Financing Activities Net cash provided by financing activities was $21.6 million for the year ended December 31, 2025, as compared to net cash used in financing activities of $34.0 million for the year ended December 31, 2024. The difference in cash flows year over year is $55.6 million.
Capital Resources Wells Fargo Syndication The Syndicated Line provides for an aggregate commitment of up to $220.0 million, of which the Company had outstanding borrowings of $50.2 million as of December 31, 2024 . The Syndicated Line also includes a $2.0 million letter of credit sub-facility under the same terms and conditions.
Capital Resources Syndicated Line of Credit The Syndicated Line provides for an aggregate commitment of up to $220.0 million, subject to borrowing base limitations, of which the Company had outstanding borrowings of $78.2 million as of December 31, 2025 . The Syndicated Line also includes a $2.0 million letter of credit sub-facility under the same terms and conditions.
Loss on extinguishment of Convertible Notes: Loss on extinguishment of Convertible Notes for the year ended December 31, 2024 was $45.6 million and is a result of the redemption of the Convertible Notes that occurred in December 2024.
Loss on Extinguishment of Convertible Notes: Loss on extinguishment of Convertible Notes for the year ended December 31, 2024 was $45.6 million and is attributable to the redemption of the Convertible Notes that occurred in 43 Table of Contents December 2024.
Investing Activities Net cash used in investing activities was $12.6 million for the year ended December 31, 2024, as compared to $24.3 million for the year ended December 31, 2023. The difference in cash flows year over year is $11.7 million.
Investing Activities Net cash used in investing activities was $1.9 million for the year ended December 31, 2025, as compared to $12.6 million for the year ended December 31, 2024. The difference in cash flows year over year is $10.7 million.
If they do not meet this criteria the transaction is accounted for as an asset acquisition. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognized in profit or loss immediately.
If they meet this criteria, the Company accounts for the transaction as a business acquisition. If they do not meet this criteria the transaction is accounted for as an asset acquisition. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment.
Earnout Shares The Earnout Shares were recognized at fair value on the Closing Date and are subsequently remeasured at each reporting date with changes in fair value recorded in the Company’s Consolidated Statements of Operations.
Derivative liabilities are recognized at fair value and are subsequently remeasured at each reporting date with changes in fair value recorded in the Company’s consolidated statements of operations.
The risk of loss pertaining to the aggregate purchase price of contractual commitments resulting from non-performance under finished lot purchase agreements is limited to approximately $48.2 million in Lot deposits and $4.7 million of capitalized pre-acquisition costs in Inventories as of December 31, 2024.
The risk of loss pertaining to the aggregate purchase price of contractual commitments resulting from non-performance under finished lot purchase agreements is limited to approximately $40.5 million in lot deposits and $13.5 million of capitalized pre-acquisition land costs as of December 31, 2025.
For definitions of adjusted gross profit, EBITDA and adjusted EBITDA and a reconciliation to the most directly comparable financial measures calculated and presented in accordance with GAAP, see “ Non-GAAP Financial Measures. ” Revenues: Revenues for the year ended December 31, 2024 were $463.7 million, an increase of $42.2 million, or 10.0%, from $421.5 million for the year ended December 31, 2023.
For definitions of adjusted gross profit, EBITDA and adjusted EBITDA and a reconciliation to the most directly comparable financial measures calculated and presented in accordance with GAAP, see “ Non-GAAP Financial Measures. ” Revenues: Revenues for the year ended December 31, 2025 were $406.7 million, a decrease of $57.0 million, from $463.7 million for the year ended December 31, 2024.
At the time construction of the home begins, developed lot costs are transferred to homes under construction within inventory. Sold units are expensed to cost of sales based on a specific identification basis. Cost of sales consists of specific construction costs of each home, estimated warranty costs, allocated developed lot costs, and closing costs applicable to the home.
At the time construction of the home begins, developed lot and pre-acquisition land costs are transferred to homes under construction within inventory. Sold units are expensed to cost of sales based on a specific identification basis.
As of December 31, 2024, UHG had approximately $22.6 million in cash and cash equivalents, a decrease of $34.1 million, or 60.1%, from $56.7 million as of December 31, 2023. As of December 31, 2024 and 2023, UHG had approximately $96.4 million and $24.4 million, respectively, in unused committed capacity, calculated in accordance with the Syndicated Line.
As of December 31, 2025, UHG had approximately $24.4 million in cash and cash equivalents, an increase of $1.8 million, from $22.6 million as of December 31, 2024. As of December 31, 2025 and 2024, UHG had approximately $56.4 million and $96.4 million, respectively, in unused committed capacity, calculated in accordance with the Syndicated Line.
The Company defines adjusted gross profit as gross profit excluding the effects of capitalized interest expensed in cost of sales, amortization included in homebuilding cost of sales (primarily adjustments resulting from the application of purchase accounting in connection with acquisitions), severance expense in cost of sales, abandoned project costs, and non-recurring remediation costs.
The Company defines adjusted gross profit as gross profit excluding the effects of capitalized interest expensed in cost of sales, amortization included in homebuilding cost of sales, abandoned project costs, severance expense in cost of sales, and non-recurring remediation costs.
Equity in Net Earnings from Investment in Joint Venture: Equity in net earnings from investment in joint venture for the year ended December 31, 2024 was $1.5 million, an increase of $0.3 million, as compared to $1.2 million for the year ended December 31, 2023.
Equity in Net Earnings from Investment in Joint Venture: Equity in net earnings from investment in joint venture for the year ended December 31, 2025 was $1.1 million, a decrease of $0.4 million, as compared to $1.5 million for the year ended December 31, 2024.
The Company defines adjusted EBITDA as EBITDA before stock-based compensation expense, transaction cost expense, non-recurring loss on disposal of leasehold improvements, non-recurring remediation costs, amortization included in homebuilding cost of sales (adjustments resulting from the application of purchase accounting in connection with acquisitions), severance expense, abandoned project costs, loss on extinguishment of Convertible Notes, and change in fair value of derivative liabilities.
The Company defines adjusted EBITDA as EBITDA before stock-based compensation expense, transaction cost expense, amortization included in homebuilding cost of sales, severance expense, abandoned project costs, goodwill impairment, change in fair value of derivative liabilities, loss on extinguishment of Convertible Notes, and non-recurring remediation costs.
The difference in cash flows year over year is $12.8 million.
The difference in cash flows year over year is $35.0 million.
The models used to fair value the derivative liabilities rely on significant assumptions and inputs, including the Company’s stock price, which may cause volatility in the fair value each reporting period.
The models used to fair value the derivative liabilities rely on significant assumptions and inputs, including the Company’s stock price, which may cause volatility in the fair value each reporting period. Fluctuations in the fair value of derivative liabilities as a result of Level 3 inputs may impact the comparability of UHG’s results of operations.
Under ASC 805 a business combination occurs when an entity obtains control of a “business.” The Company determines whether or not the gross assets acquired meet the definition of a business. If they meet this criteria, the Company accounts for the transaction as a business acquisition.
Business Acquisitions and Valuation of Contingent Consideration The Company accounts for business acquisitions using the acquisition method. Under ASC 805, Business Combinations , a business combination occurs when an entity obtains control of a “business.” The Company determines whether or not the gross assets acquired meet the definition of a business.
Revenue Recognition UHG recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers . Home sale transactions typically have a single performance obligation to deliver a completed home to the homebuyer which is generally satisfied when control of the home is transferred to the customer.
Revenue Recognition UHG recognizes revenue upon meeting its performance obligations. Home sale transactions typically have a single performance obligation to deliver a completed home to the homebuyer which is generally satisfied at a point in time when control of the home is transferred to the customer.
The majority of the loss on extinguishment is attributable to the make-whole payment of $37.1 million. Change in Fair Value of Derivative Liabilities: Change in fair value of derivative liabilities for the year ended December 31, 2024 was a gain of $88.7 million as compared to a gain of $115.9 million for the year ended December 31, 2023.
Change in Fair Value of Derivative Liabilities: Change in fair value of derivative liabilities for the year ended December 31, 2025 was a gain of $9.9 million as compared to a gain of $88.7 million for the year ended December 31, 2024.
At the time of closing, costs that were incurred as part of the construction of the home but not paid at the time of closing are accrued. The accrual is recorded within Cost of sales.
UHG records rebates with certain suppliers as a reduction in cost of sales based on a specific identification basis. At the time of closing, costs that were incurred as part of the construction of the home but not paid at the time of closing are accrued. The accrual is recorded within cost of sales.
Goodwill Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired and liabilities assumed in business acquisitions. In accordance with ASC 350, the Company analyzes goodwill for impairment on at least an annual basis as of October 1 of each year using a two-step process.
In accordance with ASC 350, Intangibles-Goodwill and Other, the Company analyzes goodwill for impairment on at least an annual basis as of October 1 of each year using a two-step process.
Adjusted Gross Profit: Adjusted gross profit for the year ended December 31, 2024 was $92.4 million, an increase of $2.3 million, or 2.6%, as compared to $90.1 million for the year ended December 31, 2023.
Adjusted Gross Profit: Adjusted gross profit for the year ended December 31, 2025 was $80.1 million, a decrease of $12.3 million, as compared to $92.4 million for the year ended December 31, 2024.
Refer to Note 9 - Debt of the Notes to the Consolidated Financial Statements contained in this report for additional information. The Credit Agreement contains various customary representations, warranties by the Company and covenants that are described in Note 9 - Debt of the Notes to the Consolidated Financial Statements contained in this report.
Additional details regarding the amendment and the term loan are provided in Note 9 - Debt of the Notes to the Consolidated Financial Statements included in this report. The term loan includes customary representations, warranties, and covenants by the Company that are described in Note 9 - Debt of the Notes to the Consolidated Financial Statements contained in this report.
Revenues from home sales in which the buyer retains title to the homesite while UHG builds the home are recognized based on the percentage of completion of the home construction as that is considered to represent the transfer of control. Percentage of completion is based on costs incurred as compared to total estimated project costs.
Revenue is reported net of any discounts and incentives. 49 Table of Contents Revenues from home sales in which the buyer retains title to the homesite while UHG builds the home are recognized over time based on the percentage of completion of the home construction as that is considered to represent the transfer of control.
Backlog: Backlog consists of homes sold but not yet closed with customers. Backlog represents the number of homes in backlog from the previous period plus sales of homes during the current period less cancellations of existing sales contracts and home closings during the current period.
Backlog represents the number of homes in backlog from the previous period plus sales of homes during the current period less cancellations of existing sales contracts and home closings during the current period. A portion of the homes in backlog will not result in homes delivered due to cancellations.
Cancellation Rate: The cancellation rate is the total cancellations during the period divided by the total number of new sales for homes during the period. The cancellation rate for the year ended December 31, 2024 was 11.4% , a decrease of 2.2% , from 13.6% for the year ended December 31, 2023.
Net new orders for the year ended December 31, 2025 were 1,227 units, a decrease of 172 units, from 1,399 units for the year ended December 31, 2024. Cancellation Rate: The cancellation rate is the total cancellations during the period divided by the total number of new sales for homes during the period.
Its critical accounting estimates are those that it believes have the most significant impact to the presentation of its financial position and results of operations and that require the most difficult, subjective or complex judgments. In many cases, the accounting treatment of a transaction is specifically dictated by GAAP without the need for the application of judgment.
Critical Accounting Policies and Estimates UHG prepared the consolidated financial statements in accordance with GAAP. Its critical accounting estimates are those that it believes have the most significant impact to the presentation of its financial position and results of operations and that require the most difficult, subjective or complex judgments.
Cash flows generated by UHG’s projects can differ materially in timing from its results of operations, as these depend upon the stage in the life cycle of each project.
The Company’s liquidity and profitability could be adversely impacted by continued operational headwinds or future events of default on the Company’s existing debt. Cash flows used in and generated by UHG’s projects can differ materially in timing from its results of operations, as these depend upon the stage in the life cycle of each project.
Year Ended December 31, 2024 2023 Revenue, net of sales discounts $ 463,714,017 $ 421,474,101 Cost of sales 383,883,751 341,748,481 Gross profit $ 79,830,266 $ 79,725,620 Interest expense in cost of sales 8,563,039 9,385,970 Amortization in homebuilding cost of sales (a) 3,049,453 442,231 Severance expense in cost of sales 347,680 — Abandoned project costs 507,500 — Non-recurring remediation costs 109,422 527,155 Adjusted gross profit $ 92,407,360 $ 90,080,976 Gross profit % (b) 17.2 % 18.9 % Adjusted gross profit % (b) 19.9 % 21.4 % ______________________________ (a) Represents expense recognized resulting from purchase accounting adjustments (b) Calculated as a percentage of revenue EBITDA and Adjusted EBITDA Earnings before interest, taxes, depreciation and amortization, or EBITDA, and adjusted EBITDA are supplemental non-GAAP financial measures used by management of the Company.
Year Ended December 31, 2025 2024 Revenue, net of sales discounts $ 406,692 $ 463,714 Cost of sales 334,955 383,884 Gross profit $ 71,737 $ 79,830 Interest expense in cost of sales 5,648 8,563 Amortization in homebuilding cost of sales (a) 2,668 3,049 Abandoned project costs 74 508 Severance expense in cost of sales — 348 Non-recurring remediation costs — 109 Adjusted gross profit $ 80,127 $ 92,407 Gross margin (b) 17.6 % 17.2 % Adjusted gross margin (b) 19.7 % 19.9 % ______________________________ (a) Represents expense recognized resulting from purchase accounting adjustments (b) Calculated as a percentage of revenue EBITDA and Adjusted EBITDA Earnings before interest, taxes, depreciation and amortization, or EBITDA, and adjusted EBITDA are supplemental non-GAAP financial measures used by management of the Company.
For the year ended December 31, 2024, UHG generated net income 38 Table of Contents of approximately $46.9 million, which included a gain of $88.7 million related to the change in fair value of derivative liabilities and a loss of $45.6 million related to the extinguishment of Convertible Notes, gross profit of 17.2%, adjusted gross profit of 19.9%, and adjusted EBITDA margin of 6.8%, representing a decrease of $78.2 million, and percentage decreases of 1.7%, 1.5%, and 2.8%, respectively, from the year ended December 31, 2023.
For the year ended December 31, 2025, UHG generated a net loss of approximately $16.3 million, which included deferred tax expense of $20.4 million related to a valuation allowance against the Company's net deferred tax assets, partially offset by a gain of $9.9 million related to the change in fair value of derivative liabilities, gross margin of 17.6%, adjusted gross margin of 19.7%, and adjusted EBITDA margin of 5.5%, representing a decrease of $63.2 million, and a percentage increase of 0.4%, and decreases of 0.2%, and 1.3%, respectively, from the year ended December 31, 2024.
Transaction costs are expensed as incurred, except if related to the issuance of debt or equity securities. Any contingent consideration is measured at fair value at the date of acquisition and is based on expected cash flow of the acquisition target discounted over time using an observable market discount rate.
Any contingent consideration is measured at fair value at the date of acquisition and is based on expected cash flow of the acquisition target discounted over time using an observable market discount rate. The Company generally utilizes outside valuation experts to determine the amount of contingent consideration.
During the year ended December 31, 2024, cash flows used in financing activities was primarily due to net cash used of $2.9 million to redeem the Convertibles Notes and issue the Term Loan, net repayments of $28.3 million of homebuilding and land banking debt, and debt issuance costs of $2.8 million.
During the year ended December 31, 2024, net cash flows used in financing activities were primarily due to net cash used of $2.9 million to redeem the Convertibles Notes and issue the term loan, net repayments of $35.0 million to the Syndicated Line and other debt, and debt issuance costs of $2.8 million, partially offset by net proceeds of $6.7 million related to financing liabilities from real estate inventory not owned.
Recently Issued/Adopted Accounting Standards Refer to the sections titled “Recently Adopted Accounting Pronouncements” and “Recent Accounting Pronouncements Not Yet Adopted” in Note 3 of the Notes to the Consolidated Financial Statements contained in this report, for more information.
Recently Issued/Adopted Accounting Standards Refer to the sections titled “Recently Adopted Accounting Pronouncements” and “Recent Accounting Pronouncements Not Yet Adopted” in Note 1 of the Notes to the Consolidated Financial Statements contained in this report, for more information. 51 Table of Contents Off-Balance Sheet Arrangements Land-Light Acquisition Strategy The Company’s land-light strategy is accomplished in two ways - lot option contracts with third party and related party land developers and land bank option contracts.
Cash Flows Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table summarizes the Company’s cash flows for the periods indicated: Year Ended December 31, 2024 2023 Net cash flows provided by operating activities $ 15,443,642 $ 28,224,880 Net cash flows used in investing activities (12,586,245) (24,300,985) Net cash flows (used in) provided by financing activities (33,979,799) 40,508,741 Operating Activities Net cash provided by operating activities was $15.4 million for the year ended December 31, 2024, as compared to $28.2 million for the year ended December 31, 2023.
Cash Flows The following table summarizes the Company’s cash flows for the periods indicated (in thousands): 48 Table of Contents Year Ended December 31, 2025 2024 Net cash flows (used in) provided by operating activities $ (19,580) $ 15,444 Net cash flows used in investing activities (1,890) (12,586) Net cash flows provided by (used in) financing activities 21,640 (33,980) Operating Activities Net cash used in operating activities was $19.6 million for the year ended December 31, 2025, as compared to cash provided by operating activities of $15.4 million for the year ended December 31, 2024.
Real Estate Inventory and Cost of Home Sales Inventory includes pre-acquisition land costs, land under development, developed lots, homes under construction, and finished homes.
Percentage of completion is based on costs incurred as compared to total estimated project costs. Real Estate Inventory and Cost of Home Sales Inventory includes pre-acquisition land costs, land under development, developed lots, homes under construction, and finished homes. UHG relies on certain estimates to determine its construction and land development costs.
Year Ended December 31, 2024 2023 Net income $ 46,905,740 $ 125,060,284 Interest expense in cost of sales 8,563,039 9,385,970 Interest expense in other expense, net 12,438,514 6,042,358 Depreciation and amortization 1,945,296 1,217,778 Taxes (9,421,417) 3,108,748 EBITDA $ 60,431,172 $ 144,815,138 Stock-based compensation expense 6,475,649 7,019,183 Transaction cost expense 2,428,344 3,239,637 Non-recurring loss on disposal of leasehold improvements — 331,424 Non-recurring remediation costs 109,422 527,155 Amortization in homebuilding cost of sales (a) 3,049,453 442,231 Severance expense 1,645,076 — Abandoned project costs 507,500 — Loss on extinguishment of Convertible Notes 45,642,497 — Change in fair value of derivative liabilities (88,652,980) (115,904,646) Adjusted EBITDA $ 31,636,133 $ 40,470,122 EBITDA margin (b) 13.0 % 34.4 % Adjusted EBITDA margin (b) 6.8 % 9.6 % ______________________________ (a) Represents expense recognized resulting from purchase accounting adjustments (b) Calculated as a percentage of revenue Liquidity and Capital Resources Overview UHG funds its operations from its current cash holdings and cash flows generated by operating activities, as well as borrowings under the revolving credit facility (“Syndicated Line”), as further described below.
The following table presents a reconciliation of EBITDA and adjusted EBITDA to the GAAP financial measure of net income for each of the periods indicated (in thousands, except percentages). 46 Table of Contents Year Ended December 31, 2025 2024 Net (loss) income $ (16,252) $ 46,906 Interest expense in cost of sales 5,648 8,563 Interest expense in other expense, net 9,180 12,439 Depreciation and amortization 2,420 1,945 Taxes 17,017 (9,421) EBITDA $ 18,013 $ 60,432 Stock-based compensation expense 6,563 6,476 Transaction cost expense 3,893 2,428 Amortization in homebuilding cost of sales (a) 2,668 3,049 Severance expense 125 1,645 Abandoned project costs 74 508 Goodwill impairment 1,147 — Change in fair value of derivative liabilities (9,940) (88,653) Loss on extinguishment of Convertible Notes — 45,642 Non-recurring remediation costs — 109 Adjusted EBITDA $ 22,543 $ 31,636 EBITDA margin (b) 4.4 % 13.0 % Adjusted EBITDA margin (b) 5.5 % 6.8 % ______________________________ (a) Represents expense recognized resulting from purchase accounting adjustments (b) Calculated as a percentage of revenue Liquidity and Capital Resources Overview UHG funds its operations from its current cash holdings and cash flows generated by operating activities, as well as borrowings under the revolving credit facility (“Syndicated Line”), as further described below.
Refer to Note 3 - Summary of significant accounting policies of the Notes to the Consolidated Financial Statements for additional information related to those instruments that the Company accounts for as a derivative liability.
Refer to Note 5 - Fair Value Measurement, Note 9 - Debt, Note 15 - Stock-Based Compensation, Note 16 - Earnout Shares, Note 17 - Warrant Liability of the Notes to the Consolidated Financial Statements for additional information related to those instruments that the Company accounts for as a derivative liability.
The increase in selling, general and administrative expense was primarily attributable to an increase of $4.4 million in commission expense due to an increase in home closings and additional broker incentives, an increase of $3.9 million in salaries, wages, and related expenses due to increased headcount from corporate personnel as a public company and acquisitions, an increase of $1.2 million related to severance costs associated with the June 2024 workforce reduction, and an increase of $1.0 million in advertising costs, partially offset by a decrease in insurance expense.
The decrease in selling, general and administrative expense was primarily attributable to a $5.8 million decrease in commission expense due to less broker incentives and fewer closings, a $1.1 million reduction in severance expense related to the June 2024 RIF, partially offset by increases in transaction costs of $1.5 million , and salaries and wages of $2.6 million .
As of December 31, 2024, the future minimum lease payments required under these leases totaled $3.4 million, with $1.2 million payable within 12 months. Further information regarding the Company’s leases is provided in Note 13 - Commitments and contingencies of the Notes to the Consolidated Financial Statements contained in this report.
Further information regarding the Company’s leases is provided in Note 13 - Commitments and Contingencies of the Notes to the Consolidated Financial Statements contained in this report.
The Company generally utilizes outside valuation experts to determine the amount of contingent consideration. Contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognized in Other income (expense) in the Consolidated Statements of Operations.
Contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognized in Other income (expense) in the consolidated statements of operations. Goodwill Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired and liabilities assumed in business acquisitions.
UHG’s business verticals positioned to further drive the Company’s growth include its mortgage joint venture Homeowners Mortgage, LLC (the “Joint Venture”). UHG expects that continued operation of the Joint Venture will add to UHG’s revenue and EBITDA growth, improve buyer traffic conversion, and reduce backlog cancellation rates.
UHG intends to grow organically, both arising out of its historical operations which may include entry into new markets and growth in community count, and through expansion of its mortgage joint venture Homeowners Mortgage. UHG expects that continued operation of Homeowners Mortgage will add to UHG’s revenue and EBITDA growth, improve buyer traffic conversion, and reduce backlog cancellation rates.
As a result, UHG incurs significant cash outflows prior to the recognition of associated earnings. In later stages of projects, cash inflows could exceed UHG’s results of operations, as the cash outflows associated with land purchase and home construction and other expenses were previously incurred.
In later stages of projects, cash inflows could exceed UHG’s results of operations, as the cash outflows associated with land purchase and home construction and other expenses were previously incurred. 47 Table of Contents The Company’s strategy is to acquire developed lots through third party and related party land developers and land bank partners pursuant to lot purchase agreements and land banking arrangements.
Other Expense, Net: Total other expense, net for the year ended December 31, 2024 was an expense of $12.5 million, an increase of $8.7 million as compared to an expense of $3.8 million for the year ended December 31, 2023.
Other Expense, Net: Total other expense, net for the year ended December 31, 2025 was $9.3 million, a decrease of $3.2 million as compared to $12.5 million for the year ended December 31, 2024. The decrease was primarily driven by a $3.3 million reduction in interest expense due to the refinance of the Company’s corporate debt.
The Company’s strategy is to acquire developed lots through third party and related party land developers and land bank partners pursuant to lot option contracts. When entering into these contracts, the Company agrees to purchase finished lots at predetermined prices, time frames, and quantities that match expected selling pace in the community.
When entering into these contracts, the Company agrees to purchase finished lots at predetermined prices, time frames, and quantities that match expected selling pace in the community. Most lot purchase agreements require the Company to pay a nonrefundable cash deposit of approximately 15% - 20% of the agreed-upon fixed purchase price of the developed lots.
For the years ended December 31, 2024 and 2023, UHG had 1,399 and 1,296 net new orders, and generated approximately $463.7 million and $421.5 million in revenue on 1,431 and 1,383 closings, respectively. UHG’s strategy to grow its business is multifaceted. UHG expects to grow organically, both arising out of its historical operations and through expansion of its business verticals.
For the years ended December 31, 2025 and 2024, UHG had 1,227 and 1,399 net new orders, and generated approximately $406.7 million and $463.7 million in revenue on 1,192 and 1,431 closings, respectively.
In response to softer demand for new homes, UHG and the industry have introduced additional sales incentives, mostly in the form of buyer financing incentives such as mortgage rate buy downs, mortgage forward commitments, or cash incentives applied against closing costs.
In response to the current environment, the Company continues to provide discounts on base home prices and utilize various sales incentives, primarily in the form of buyer 39 Table of Contents financing incentives such as mortgage rate buy downs, mortgage forward commitments, or cash incentives applied against closing costs.
If the reporting unit’s carrying value exceeds its fair value, then an impairment loss is recognized for the amount of the excess of the carrying amount over the reporting unit’s fair value. There was no goodwill impairment recorded during the years ended December 31, 2024 and 2023 .
If the reporting unit’s carrying value exceeds its fair value, then an impairment loss is recognized for the amount of the excess of the carrying amount over the reporting unit’s fair value. During the fourth quarter of 2025, management identified indicators of goodwill impairment, such as, decline in market capitalization and reduced operating performance.
Inventories are carried at the lower of accumulated cost or net realizable value. UHG periodically reviews the performance and outlook of its inventories for indicators of potential impairment. 47 Table of Contents UHG records rebates with certain suppliers as a reduction in cost of sales based on a specific identification basis.
Cost of sales consists of specific construction costs of each home, estimated warranty costs, allocated developed lot costs, and closing costs applicable to the home. Inventories are carried at the lower of accumulated cost or net realizable value. UHG periodically reviews the performance and outlook of its inventories for indicators of potential impairment.
The decrease in net income is primarily attributable to the loss on extinguishment of Convertible Notes, change in fair value of derivative liabilities, an increase in selling, 42 Table of Contents general, and administrative expense, and a decrease in gross profit percentage, partially offset by an increase in income tax benefit.
The decrease was primarily due to a decrease in the change in fair value of derivative liabilities of $78.7 million and a decrease in gross profit of $8.1 million , partially offset by the loss on extinguishment of Convertible Notes in the prior period of $45.6 million and a $3.3 million reduction in interest expense in Other expense, net.
The office leases have a remaining lease term of up to five years, some of which include options to extend on a month-to-month basis, and some of which include options to terminate the lease. These options are excluded from the calculation of the ROU asset and lease liability until it is reasonably certain that the option will be exercised.
In addition, the Company leases certain model homes from related parties and third parties. The leases have a remaining lease term of up to three years, some of which include options to extend on a month-to-month basis, and some of which include options to terminate the lease.
The decrease in adjusted gross profit as a percentage of revenue was attributable to discounting of homes in an effort to accelerate sales, especially of finished inventory, and higher costs of sales which was driven by higher incentives. Adjusted gross profit is a non-GAAP financial measure.
The increase in gross profit as a percentage of revenue is attributable to a decrease in direct costs and interest as a percentage of revenue, partially offset by higher discounting.
During the second quarter of 2024, the Company settled the remaining private investor debt and recognized a loss on extinguishment of debt amounting to $0.1 million. Leases The Company leases several office spaces in South Carolina under operating lease agreements with related parties, and one office space in North Carolina with a third party.
As of December 31, 2025 , the Company was in compliance with all covenants set forth in the Credit Agreement. Leases The Company leases several office spaces in South Carolina under operating lease agreements with related parties, and one office space in North Carolina with a third party.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeTherefore, UHG is exposed to market risks related to fluctuations in interest rates on its outstanding debt under the Syndicated Line and Term Loan. As of December 31, 2024, UHG had $50.2 million and $67.2 million outstanding under the Syndicated Line and Term Loan, respectively, which carried weighted average interest rates of 8.41% and 11.70%, respectively.
Biggest changeTherefore, UHG is exposed to market risks related to fluctuations in interest rates on its outstanding debt under the Syndicated Line and term loan. As of December 31, 2025, UHG had $78.2 million and $67.5 million outstanding under the Syndicated Line and term loan, respectively, which carried weighted average interest rates of 7.48% and 11.52%, respectively.
In addition, 49 Table of Contents the interest rate on the borrowings under the Term Loan is based upon adjusted daily simple SOFR plus an applicable margin ranging between 675 basis points and 775 basis points, based upon UHG’s leverage ratio.
In addition, the interest rate on the borrowings under the term loan is based upon adjusted daily simple SOFR plus an applicable margin ranging between 675 basis points and 775 basis points, based upon UHG’s leverage ratio.
A 100 basis point increase in overall interest rates would negatively affect the Company’s net income by approximately $1.2 million. 50 Table of Contents
A 100 basis point increase in overall interest rates would negatively affect the Company’s net income by approximately $1.5 million. 52 Table of Contents

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