LEGH 10-K & 10-Q changes, risk factors and insider trading

The following discussion should be read in conjunction with the financial statements and accompanying notes and the information contained in other sections of this Form 10-K. It contains forward-looking statements that involve risks and uncertainties, and is based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Our actual results could differ materially from those anticipated by our management in these forward-looking statements as a result of various factors, including those discussed in this Form 10-K and in our Registration Statement on Form S-1, particularly under the heading “Risk Factors.” Dollar amounts are in thousands unless otherwise noted.

Legacy Housing Corporation builds, sells and finances manufactured homes and “tinyTiny housesHouses” that are distributed through a network of independent retailers and company-owned stores and are sold directly to manufactured housing communities. We are one of the largest producers of manufactured homes in the United States. With current operations focused primarily in the southern United States, we offer our customers an array of quality homes ranging in size from approximately 395 to 2,667 square feet consisting of 1 to 5 bedrooms, with 1 to 31/2 bathrooms. Our homes range in price, at retail, from approximately $33$47,000 to $180.$200,000. During 2024,2025, we sold 2,4711,703 homeunits sections(comprising 2,253 floors) (which are entire homes or single floors that are combined to create complete homes) and in 2023,2024, we sold 2,8772,129 homeunits sections.(comprising 2,471 floors).

TheWe Company hashave one reportable segment. All of our activities are interrelated, and each activity is dependent and assessed based on how each of the activities of theour Companycompany supports the others. For example, the sale of manufactured homes includes coordinating or providing transportation for dealers. We also provide financing options for customers to facilitate home sales. Accordingly, all significant operating and strategic decisions by the chiefco-chief operating decision maker,makers, the Executive Chairman and Chief Executive Officer, are based upon analyses of our company as one operating segment.

Our homes are marketed under our premier “Legacy” brand name and currently are sold primarily across 15 states through a network of over 12580 independent retail locations, 1314 company-owned retail locations and through direct sales to owners of manufactured home communities. OurOf 13our 14 company-owned retail locations, including 1213 Heritage Housing stores and one Tiny House Outlet stores exclusively sell our homes. One company-owned location operates under the AmeriCasa name and sells both our homes and those of several other manufacturers. During the years ended December 31, 20242025 and 2023,2024, no independent retailer accounted for 10% or more of our product sales. Approximately 44% of our 2025 product sales were attributable to our independent retail distributors, 21% to our company-owned retail locations and 35% directly to owners of manufactured housing communities. Approximately 38% of our 2024 product sales were attributable to our independent retail distributors, 17% to our company-owned retail locations and 45% directly to owners of manufactured housing communities. Approximately 51% of our 2023 product sales were attributable to our independent retail distributors, 12% to our company-owned retail locations and 37% directly to owners of manufactured housing communities.

The following table shows the states in which we sold most of our manufactured homes and the approximate percentage of thistheir sales to our total product sales:

The allowance for loan losses is comprised of two components: the general reserve and specific reserves. Our calculation of the general reserve considers the historical loss rate for the last three years, adjusted for the estimated loss discovery period and any qualitative factors both internal and external to our company. Specific reserves are determined based on probable losses on specific classified impaired loans. For further information, see Note 2, Summary of Significant Accounting Policies, to our December 31, 20242025 financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, of this Form-10K.Form 10-K.

MHP Notes are stated at amounts due from customers net of allowance for loan losses. We determine the allowance by considering several factors including the aging of the past due balance, the customer’s payment history, and our previous loss history. We establish an allowance reserve composed of specific and general reserve amounts that are deemed to be uncollectible.at risk. Historically we have not experienced material losses on the MHP Notes.

Other notes receivable are stated at amounts due from customers net of allowance for loan losses. We determine the allowance by considering several factors including the aging of the past due balance, the customer’s payment history, and our previous loss history. We establish an allowance reserve composed of specific and general reserve amounts that are deemed to be uncollectible.at risk. Historically we have not experienced material losses on the Other notes receivable.

Dealer financed receivables are stated at amounts due from customers net of allowance for loan losses. We determine the allowance by considering several factors including the aging of the past due balance, the customer’s payment history, and our previous loss history. We establish a general reserveand specific reserves for amounts that are deemed to be uncollectible.at risk. Historically we have not experienced material losses on the Dealer financed receivables.

Revenue from homes sold to independent retailers that are not financed and not under an inventory finance arrangement generally is recognized upon execution of a sales contract and when the home is shipped, at which time title passes to the independent retailer and collectability is reasonably assured.probable. These types of homes are generally either paid for prior to shipment or floor plan financed through a third party lender by the independent retailer through standard industry arrangements, which can include repurchase agreements.

Revenue from homes sold to mobile home parks under commercial loan programs involving funds provided by our company is recognized when the home is shipped, at which time title passes to the customer and a sales and financing contract is executed, down payment received, and collectability is reasonably assured.probable.

Revenue from direct retail sales through company-owned retail locations generally is recognized when the customer has entered into a legally binding sales contract, payment is received, the home is delivered at the customer’s site, title has transferred, and collection is reasonably assured.probable. Retail sales financed by us are recognized as revenue upon the execution of a sales and financing contract, receipt of a down payment and delivery of the home to the final customer, at which time title passes and collectability is reasonably assured.probable.

Consumer, MHPMHP, and dealer loans interest income increased $3.8$2.5 million, or 10.1%,6.1%, from 20232024 to 20242025 due to growth in our loan portfolios. BetweenFrom December 31, 2024 andto December 31, 20232025, our consumer loan portfolio increased by $17.6$24.7 million, our MHP loan portfolio increaseddecreased by $24.5$9.9 million, and our dealer finance notes balancedecreased didby not$5.9 change.million. The change in the balance of our MHP loan portfolio is primarily due a settlement agreement we reached with a significant borrower, as discussed in Note 5, Notes Receivable from Mobile Home Parks, to ourparks Decemberpaying 31,off 2024their financialnotes statements included in Part II, Item 8, Financial Statementsearly, and Supplementarycurrent Data,loans consisting of thisfewer Form-10K,homes whichper resulted in reclassifying balances from Other notes receivable, net to Notes receivable from mobile home parks on our balance sheet.loan.

Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, service feesfees, and other miscellaneous income and increaseddecreased $7.0$9.7 million, or 106.3%,71.0%, primarily due to $8.9$8.8 million decrease in land sales related to the Forest Hollow mobile home communitysales, and the property in Marble Falls, Texas, $0.5 million in rental income from our mobile home park properties, partially offset by a $1.5$1.0 million decrease in forfeited deposits, a $0.6 million decrease in rental income from leased mobile homes and a $0.3 million decrease in other miscellaneous revenue.deposits.

The cost of product sales decreased $9.6$5.2 million, or 9.7%,5.8%, in 20242025 as compared to 2023.2024. The decrease in costs is primarily related to a decrease in the number of units sold.sold offset by increases to raw material costs and the impact of tariffs. The cost of other sales was $8.2$1.7 million in 2025 which is a $6.5 million decrease from 2024 and primarily reflectsrelated theto costsignificant associated with our2024 land sales.sale revenue.

Selling, general and administrative expenses decreasedincreased $1.1$6 million, or 4.4%,26%, in 20242025 as compared to 2023.2024, not including dealer incentive expense added to SG&A in 2025. This decreaseincrease was primarily due to a $1.4$500,000 million decreaseincrease in warranty costs, a $0.4$400,000 million decreaseincrease in consulting and professional fees, a $1.0 million increase in legal costs, and a $0.4$4.5 million decreaseincrease in salariesloan andloss benefits costs,provision, partially offset by a $0.4net million$800,000 increasedecrease in realpayroll estate taxescost and a net $0.7 million$300,000 increase in other miscellaneous costs.

Dealer incentive expense decreasedincreased $1.5$1.3 million, or 258.7%136% in 20242025 as compared to 2023.2024. Beginning in 2025, dealer incentive expense is reported as a component of SG&A (previously classified separately).

Other income (expense), net increaseddecrease by $8.3$9.3 million in 2024,2025, as compared to 2023.2024. We had aan $8.5$8.3 million increasedecrease in Miscellaneous, netNet primarily due to (i)increases specific to 2024 gains related to the settlement agreement described above,in (ii)Note 7, a gain onfrom the sale of property in Georgia, (iii) gains related to properties acquired through foreclosure and (iv) reversals of certain balance sheet liabilities. We had a $0.4$1.2 million decrease in interest income on Other notes and a $0.2$700 million decreaseincrease in interest expense.

We believe that cash flow from operations and cash at December 31, 2024,2025 and availability on our lines of credit will be sufficient to fund our operations and provide for growth for the next 12 to 18 months and into the foreseeable future. On July 28, 2023, we terminated our credit agreement with Capital One, N.A. and entered into a new credit agreement with Prosperity Bank that expanded and extended our credit availability (seeSee Lines of Credit, belowbelow.).

We maintain cash balances in bank accounts that may, at times, exceed federally insured limits. We have not incurred any losses from such accountsaccounts, and management considers the risk of loss to be minimal. As of December 31, 2024,2025, we had approximately $1.1$8.5 million in cash,cash and cash equivalents, compared to $0.7$1.1 million as of December 31, 2023.2024. We consider all cash and highly liquid investments with an original maturity of three months or less to be cash equivalents.

Net cash used in investing activities of $6.7$22.1 million in 20242025 was primarily attributable to $5.5$19.0 million ofassociated originationswith relatedthe toAmeriCasa loansacquisition, we$9.0 mademillion to third partiesused for theproperty, developmentplant, of manufactured housing parks, and $9.2 million in improvementsequipment, and development relatedas towell property,as plantnotes receivable originations and equipment.advances Theseof were$1.6 million. This was offset by $6.4$7.2 million ofassociated with collections related to loans we made to third parties for the development of manufacturednotes housing parks and proceeds of $1.6 million from the sale of property.receivable.

In November 2022, our Board of Directors approved a share repurchase program to authorize the repurchase of up to $10.0 million of the Company’s common stock. On August 6, 2024, our Board of Directors authorized the repurchase of an additional $10.0 million of the Company’s common stock under the share repurchase program. We repurchasedpurchased 262,530346,406 shares of common stock for $5,398$7.6 million in the open market during the year ended December 31, 2024.2025. AsAll repurchase programs have expired as of DecemberOctober 31, 2024, we had a remaining authorization of approximately $14,602. Between January 1, 2025 and March 10, 2025 we repurchased 29,385 shares of common stock for $674 in the open market2025.

On July 28, 2023, the Company entered into a new Credit Agreement (the “Revolver”), by and among the Company as borrower, the financial institutions from time to time party thereto, as lenders, and Prosperity Bank as administrative agent. Subsequently, the Company repaid in full the balance due on its prior line of credit with Capital One, N.A. and all commitments under this prior line of credit were terminated. The Revolver provides for a four-year senior secured revolving credit facility with an initial commitment of $50,000$50.0 million and an additional $25,000$25.0 million commitment under an accordion feature. The Revolver is secured by the Company’s consumer loans receivables and all escrow accounts associated with the consumer loans receivables. At the Company's option, borrowings will bear interest at a per annum rate equal to, (i) Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin of 2.5% or 2.75% based upon the Company's average quarterly borrowings under the Revolver or (ii) a base rate plus an applicable margin of 2.5% or 2.75% based upon the Company's average quarterly borrowings under the Revolver. The Company paid certain arrangement fees and other fees in connection with the Revolver of approximately $271,$271,000, which were capitalized as unamortized debt issuance costs and included in Prepaid expenses and other current assets in the accompanying balance sheets and are amortized to interest expense over the life of the Revolver. The Revolver matures July 28, 2027.

For the year ended December 31, 20242025 and 2023,2024, interest expense under the Revolver was $689$27,000 and $930,$689,000, respectively. The outstanding balance of the Revolver as of December 31, 20242025 and 20232024 was $0 and $23,680,$0, respectively. The interest rate in effect as of December 31, 20242025 and 20232024 for the Revolver was 7.61%6.69% and 7.95%,7.61%, respectively. The amount of available credit under the Revolver was $50,000$50.0 and $26,320million as of December 31, 20242025 and 2023,2024, respectively. The Revolver requires the Company to comply with certain financial and non-financial covenants. As of December 31, 2024,2025, the Company was in compliance with all financial covenants, including that it maintainmaintains a maximum leverage ratio of no more than 1.00 to 1.00 and a minimum fixed charge coverage ratio of no less than 1.75 to 1.00.

We build, sell and finance manufactured homes and “Tiny Houses” that are distributed through a network of independent retailers and company-owned stores and are sold directly to manufactured housing communities. We are one of the largest producers of manufactured homes in the United States. With current operations focused primarily in the southern United States, we offer our customers an array of quality homes ranging in size from approximately 395 to 2,667 square feet consisting of 1 to 5 bedrooms, with 1 to 31/23½ bathrooms. Our homes range in price, at retail, from approximately $47,000 to $200,000. For the three months ended MarchJune 31,30, 2026 and 2025 we sold 312718 (consisting of 364774 floors) and 350564 units (consisting of 427697 floors) (which are entire homes or single floors that are combined to create complete homes), respectively. For the six months ended June 30, 2026 and 2025 we sold 1,030 (consisting of 1,138 floors) and 914 units (consisting of 1,124 floors), respectively.

We believe our companyCompany is one of the most vertically integrated in the manufactured housing industry, allowing us to offer a complete solution to our customers. We manufacture custom-made homes using quality materials, distribute those homes through our expansive network of independent retailers and company-owned distribution locations and provide tailored financing solutions for our customers. Our homes are constructed in the United States at one of our three manufacturing facilities in accordance with the construction and safety standards of the U.S. Department of Housing and Urban Development (“HUD”). Our factories employ high-volume production techniques that allow us to produce up to, on average, approximately 70 home sections, or 60 fully-completed homes depending on product mix, in total per week. We use quality materials and operate our own component manufacturing facilities for many of the items used in the construction of our homes. Each home can be configured according to a variety of floor plans and equipped with features such as fireplaces, central air conditioning and state-of-the-art kitchens. While substantially all of the homes we sell are constructed at our three manufacturing facilities, we also purchase a limited number of homes at wholesale from third-party manufacturers for resale. These purchased homes have historically represented approximately 50 units per quarter but exceeded 100 units during the three months ended June 30, 2026.

Our homes are marketed under our premier “Legacy” brand name and currently are sold primarily across 15 states through a large network of independent retail locations, 14 company-owned retail locations and through direct sales to owners of manufactured home communities. Our 14 company-owned retail locations,locations includingconsist of 13 Heritage Housing storesstores, and one Tiny House Outlet storewhich exclusively sell our homes.homes, Oneand company-ownedone location that operates under the AmeriCasa name and sells both our homes and those of several other manufacturers.

For the threesix months ended MarchJune 31,30, 2026, approximately 42%65% of our manufactured homes were sold in Texas, followed by 7%4% per-stateper state in Ohio and Georgia, and 3% per state in Oklahoma, North Carolina, Kentucky, and Ohio, 6% inKansas, Florida, and 4%Illinois. per-stateThe inremaining Oklahoma,12% Georgia,sold andare Newfrom Mexico.thirteen other states.

We offer three types of financing solutions to our customers. We provide inventory financing for our independent retailers who purchase homes from us and then sell them to consumers. We provide consumer financing for our products which are sold to end-users through both independent and company-owned retail locations. We also provide financing solutions to manufactured housing community owners that buy our products for use in their manufactured housing communities. Our ability to offer competitive financing options at our retail locations provides us with several competitive advantages and allows us to capture sales which may not have otherwise occurred without our ability to offer consumer financing.

Comparison of Three Months ended MarchJune 31,30, 2026 and 2025 (in thousands)

Product sales primarily consist of direct sales, commercial sales, inventory finance sales, retail store sales and retailworkforce storehousing sales. Product sales decreasedincreased $2.7$15.4 million, or 11.3%,40.0%, during the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025. This decreaseincrease was driven primarily by athe decreasecommencement inof unitdeliveries volumesunder shipped,the primarilyworkforce-housing inorder described above, together with higher commercial sales, partially offset by lower inventory finance sales.

Net revenue attributable to our factory-built housing consisted of the following during the three months ended MarchJune 31,30, 2026,2026 and 2025:

Consumer, MHP and dealer loans interest income increased $0.6 million, or 6.2%5.4%, during the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025, with essentially all of the gainincrease comingdriven fromprimarily by consumer loan portfolio interest as MHP and dealer interest gradually decreased.interest.

Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, portfolio service revenue, park rental income, storage fees, and other miscellaneous incomeincome, which increased $0.8$0.2 million, or 106.6%,25.0%, during the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025. This increase was2025, primarily due to higher land sales associated with the sale of a $1small millionland increaseparcel in landCelina, sales.TX.

Inventories, net increased $10.5$4.1 million from $39.9 million at December 31, 2025 to $50.4$43.9 million at MarchJune 31,30, 2026, driven primarily by an increase in finished goods inventory. The increase in finished goods inventory reflects,to insupport part,continued production, including units producedremaining duringto thebe firstdelivered quarter of 2026 in connection withunder the workforce-housing customer order described above for which deliveries are expected to begin during the second quarter of 2026.above.

Selling, general and administrative expenses decreasedincreased $0.5$1.2 million, or 8.3%,21.1%, during the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025. WeThe hadincrease was driven primarily by a $0.6$0.9 million increase in loanprofessional portfolioand lossconsulting fees, a $0.2 million increase in Heritage Housing payroll, a $0.2 million increase in service and warranty costs, and a combined $0.3 million increase in corporate general payroll and healthcare benefits expense, partially offset by a $0.3 million decrease in incentive compensation and a $0.1 million increasedecrease in property tax expense offset by a $0.7 million decrease in payroll health benefit expense, $0.6 million decrease in payroll corp & general expense, and a $0.2 million decrease in legal expense.tax.

Other income (expense) decreased $0.5$1.0 million, or 44.2%,101.2%, during the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025.2025, Theprimarily majoritydue to lower non-operating interest income and increased non-operating expense associated with the write-off of thea decreasepartial cameownership frominterest in a $0.3mobile millionhome feepark alocated customerin paidCorpus duringChristi, the three months ended March 31, 2025 for breaking a contract by not purchasing homes.Texas.

Income tax expense decreased $0.4$0.1 million during the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025 due to a decrease in income before tax as well as the purchase of tax credits at a discount during the three months ended March 31, 2026.2025. The effective tax rate for the three months ended MarchJune 31,30, 2026 was 16.1%11.2%, compared to 17.3% for the same period in 2025, and differs from the federal statutory rate of 21% primarily due to athe federal energy-efficient-home tax credit for energy efficient construction and federalthe reversal of certain uncertain tax creditsposition purchasedaccruals at a discount byduring the Company in the three months ending March 31, 2026. The effective tax rate for the three months ended March 31, 2025 was 19.3%.quarter.

We believe that cash flow from operations and cash at MarchJune 31,30, 2026, and availability on our lines of credit will be sufficient to fund our operations and provide for growth for the next 12 to 18 months and into the foreseeable future. See Lines of Credit, below, for additional information.

We maintain cash balances in bank accounts that may, at times, exceed federally insured limits. We have not incurred any losses from such accounts, and management considers the risk of loss to be minimal. As of MarchJune 31,30, 2026, we had approximately $14.1$29.0 million in cash, compared to $8.5 million as of December 31, 2025. We consider all cash and highly liquid investments with an original maturity of three months or less to be cash equivalents.

Comparison of Cash Flow Activities from MarchJune 31,30, 2025 to MarchJune 31,30, 2026

Net cash provided by operating activities was $7.0$24.4 million during the threesix months ended MarchJune 31,30, 2026, compared to net cash of $4.9$11.0 million provided by operating activities during the threesix months ended MarchJune 31,30, 2025, an increase of approximately $2.1$13.4 million. This change was primarily a result of cash provided from net income of $10.9$34.4 millionmillion, augmentedincreased by positive non cashnon-cash adjustments of $1.4$1.1 million. Non-cash adjustments included increases to operating cash due to increasedfrom depreciation and amortization expense, the provision for accounts and notes receivable, and lossthe from salewriteoff of propertyinvestment in Corpus AmeriCasa, offset by decreases to operating cash from amortization of deferred revenuerevenue, andLoss from sale of property, deferred income taxes.taxes, and share based compensation expense. Changes in operating assets and liabilities reduced net cash provided by operations by $5.4$11.1 million. Decreases to net cash provided by operations from changes in assets and liabilities weremillion, primarily theas a result of increases toin the consumer loan portfolio, notes receivable MHP portfolio, inventories,inventory, and other assets, astogether well aswith decreases toin accounts payable and accrued liabilities and the dealer incentive liability. These were partially offset by a $5.6$3.9 million decrease in accounts receivablereceivable, primarily related to a federal income tax refund, a decrease in the dealer inventory loan portfolio, and a $9.3$10.7 million increase in customer deposits. Approximately $7.1 million of the increase in customer deposits was attributable to a non-refundable advance deposit received during the first quarter of 2026 from a single customer in connection with a large order of manufactured homes intended for use as workforce housing. Production of the related units commenced during the first quarter of 2026, no units had shipped as of March 31, 2026, andhousing; deliveries areunder expectedthat toorder begincommenced during the second quarter of 2026.

Net cash used in investing activities was $0.7$2.3 million for the threesix months ended MarchJune 31,30, 2026 compared to $2.0$3.1 million net cash used in investing activities for the threesix months ended MarchJune 31,30, 2025. Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 was primarily attributable to $1.5$6.6 million used in development of property and purchases of machinery and equipmentequipment, as well as $0.4$0.8 million related to the issuance and modification of notes receivable. This was offset by increases to net cash from investing activities of $1.0$1.3 million from the sale of property, $0.2$3.7 million from notes receivable collections, and $0.1 million from purchased loan collections.

Net cash used in financing activities was $0.7$1.7 million for the threesix months ended MarchJune 31,30, 2026 compared to $0.7$6.4 million net cash used in financing activities for the threesix months ended MarchJune 31,30, 2025. Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 was primarily attributable to $0.6$0.7 million of stock repurchases and net payments of $0.1$1.0 million on lines of credit.

On February 6, 2026, our Board of Directors authorized a new stock repurchase program under which the Company may repurchase up to $10.0 million of its outstanding common stock, par value $0.001 per share, from time to time through February 28, 2029. Repurchases may be made in the open market or through privately negotiated transactions, with the timing, manner, price and volume of any repurchases determined by the Company's Executive Chairman and Chief Executive Officer, or either of them, in their sole discretion, based on market conditions, the Company's cash reserves and cash flow, and the relative attractiveness of alternative uses of capital for operations, growth and share repurchases. Open market repurchases under the program are intended to be made in compliance with the non-exclusive safe harbor conditions of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. Shares repurchased under the program will be held as treasury shares. The program does not obligate the Company to acquire any particular amount of common stock, has no expiration date prior to February 28, 2029, and may be suspended, modified or discontinued at any time without prior notice. The Company has determined that repurchases under the program are permitted under the terms of its existing bank credit facilities and other indebtedness. During the three months ended March 31, 2026, the Company repurchased 30,740 shares of common stock for $573$0.7 million under this program. The Company made no repurchases in the three months ended June 30, 2026. As of MarchJune 31,30, 2026, the Company had a remaining authorization of approximately $9.4$9.3 million under this program.

On July 28, 2023, the Company entered into a Credit Agreement (the “Revolver”), by and among the Company as borrower, the financial institutions from time to time party thereto, as lenders, and Prosperity Bank as administrative agent. The Revolver provides for a four-year senior secured revolving credit facility with an initial commitment of $50 million and an additional $25 million commitment under an accordion feature. The Revolver is secured by the Company’s consumer loans receivables and all escrow accounts associated with the consumer loans receivables. At the Company's option, borrowings will bear interest at a per annum rate equal to,to (i) Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin of 2.5% or 2.75% based upon the Company's average quarterly borrowings under the Revolver or (ii) a base rate plus an applicable margin of 2.5% or 2.75% based upon the Company's average quarterly borrowings under the Revolver. The Company paid certain arrangement fees and other fees in connection with the Revolver of approximately $271, which were capitalized as unamortized debt issuance costs and included in Prepaid Expenses and Other Current Assets in the accompanying balance sheets and are amortized to interest expense over the life of the Revolver. The Revolver matures July 28, 2027.

For the three months ended MarchJune 31,30, 2026 and 2025, interest expense under the Revolver was $11$0 and $0,$3 thousand, respectively. The outstanding balance of the Revolver as of MarchJune 31,30, 2026 and December 31, 2025 was $0.9 million$0 and $0, respectively. The interest rate in effect as of MarchJune 31,30, 2026 and December 31, 2025 for the Revolver was 6.13% and 6.69%, respectively. The amount of available credit under the Revolver was $49.1$50 million and $50 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively. The Revolver requires the Company to comply with certain financial and non-financial covenants. As of MarchJune 31,30, 2026, the Company was in compliance with all financial covenants, including that it maintain a maximum leverage ratio of no more than 1.00 to 1.00 and a minimum fixed charge coverage ratio of no less than 1.75 to 1.00.

The following table is a summary of contractual cash obligations as of MarchJune 31,30, 2026:

Off BalanceOff-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, net sales, results of operations, liquidity or capital expenditures. However, we do have repurchase agreements with financial institutions providing inventory financing for independent retailers of our products. Under these agreements, we have agreed to repurchase homes at declining prices over the term of the agreement. Our obligation under these repurchase agreements ceases upon the purchase of the home by the retail customer. The maximum amount of our contingent obligations under such repurchase agreements was approximately $1.4$0.5 million and $0.8 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively, without reduction for the resale value of the homes. We may be required to honor contingent repurchase obligations in the future and may incur additional expenses as a consequence of these repurchase agreements. We consider our obligations on current contracts to be immaterial and accordingly we have not recorded any reserve for repurchase commitment as of MarchJune 31,30, 2026.

Critical accounting estimates are those that we believe are both significant and require us to make difficult, subjectivesubjective, or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates, and we might obtain different estimates if we used different assumptions or conditions. Our critical accounting estimates are identified and described in our Annual Report on Form 10-K for the year ended December 31, 2025. We discuss below the estimate areas in which there were material developments during the period covered by this report.

For information regarding recent accounting pronouncements, see Note 1 – Nature of Operations, Recent Accounting Pronouncements to our MarchJune 31,30, 2026 Financial Statements, included in Part I, Item 1, Financial Statements (Unaudited), of this Quarterly Report.