As filed with the Securities and Exchange Commission on January 3, 2024

Registration No. 333-274379

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 3

to

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Smith Douglas Homes Corp.

(Exact name of registrant as specified in its charter)

Delaware	1531	93-1969003
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

110 Village Trail, Suite 215

Woodstock, Georgia 30188

Telephone: (770) 213-8067

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Brett Steele

General Counsel

110 Village Trail, Suite 215

Woodstock, Georgia 30188

Telephone: (770) 213-8067

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Marc D. Jaffe
Senet Bischoff
Benjamin J. Cohen
Latham & Watkins LLP
1271 Avenue of the Americas
New York, New York 10022
Telephone: (212) 906-1200
Fax: (212) 751-4864 Shane Tintle
Michael Kaplan
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
Telephone: (212) 450-4000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT IS DECLARED EFFECTIVE.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☒

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, January 3, 2024.

P R E L I M I N A R Y  P R O S P E C T U S

7,692,308 Shares

 

Smith Douglas Homes Corp.

Class A Common Stock

This is an initial public offering of shares of Class A common stock of Smith Douglas Homes Corp. We are offering 7,692,308 shares of Class A common stock.

Prior to this offering, there has been no public market for the Class A common stock. It is currently estimated that the initial public offering price per share of Class A common stock will be between $18.00 and $21.00. We have applied to list our Class A common stock on the Exchange (as defined below) under the symbol “SDHC.”

We will have two classes of common stock authorized after this offering: Class A common stock and Class B common stock. Each share of our Class A common stock entitles its holder to one vote per share and, until the Sunset Date (as defined below), each share of our Class B common stock entitles its holder to ten votes per share, in each case, on all matters presented to our stockholders generally. From and after the occurrence of the Sunset Date, each share of Class B common stock will entitle its holders to one vote per share on all matters presented to our stockholders generally. Immediately following the consummation of this offering, all of the outstanding shares of our Class B common stock will be held by our Continuing Equity Owners (as defined below), which will represent in the aggregate approximately 98.3% of the voting power of our outstanding common stock after this offering (or approximately 98.0% if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

We will be a holding company, and upon consummation of this offering and the application of proceeds therefrom, our principal asset will consist of LLC Interests (as defined below) we acquire directly from Smith Douglas Holdings LLC and from each Continuing Equity Owner, collectively representing an aggregate 15.0% economic interest in Smith Douglas Holdings LLC. The remaining 85.0% economic interest in Smith Douglas Holdings LLC will be owned by the Continuing Equity Owners through their ownership of LLC Interests, assuming no exercise of the underwriters' option to purchase additional shares of Class A common stock.

Smith Douglas Homes Corp. will be the sole managing member of Smith Douglas Holdings LLC. We will operate and control all of the business and affairs of Smith Douglas Holdings LLC and, through Smith Douglas Holdings LLC, conduct our business.

Following this offering, we will be a “controlled company” within the meaning of the corporate governance rules of the Exchange. See “Our organizational structure” and “Management—Controlled company exception.”

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), and will be subject to reduced disclosure and public reporting requirements. This prospectus complies with the requirements that apply to an issuer that is an emerging growth company.

See “Risk factors” beginning on page 27 to read about factors you should consider before buying shares of our Class A common stock.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

	Per Share	Total
Initial public offering price	$	$
Underwriting discount(1)	$	$
Proceeds, before expenses, to Smith Douglas Homes Corp.	$	$

(1)
We have agreed to reimburse the underwriters for certain expenses in connection with this offering. See “Underwriting (conflicts of interest).”

The underwriters have the option to purchase up to an additional 1,153,846 shares of Class A common stock from us at the initial price to public less the underwriting discount within 30 days of the date of this prospectus.

The underwriters expect to deliver the shares of Class A common stock against payment in New York, New York on    , 2024.

Book-Running Managers

J.P. Morgan	BofA Securities	RBC Capital Markets	Wells Fargo Securities
Wolfe | Nomura Alliance		Zelman Partners LLC

Co-Managers

Wedbush Securities Fifth Third Securities Regions Securities LLC Whelan Advisory Capital Markets

Prospectus dated     , 2024

 

 

 

 

 

Table of contents

Basis of presentation	ii
Prospectus summary	1
Risk factors	27
Cautionary note regarding forward-looking statements	64
Our organizational structure	66
Use of proceeds	70
Capitalization	72
Dividend policy	73
Dilution	74
Unaudited pro forma condensed consolidated financial information	76
Management’s discussion and analysis of financial condition and results of operations	88
Market opportunity	113
Business	140
Management	159
Executive compensation	165
Certain relationships and related person transactions	175
Principal stockholders	186
Description of capital stock	188
Shares eligible for future sale	194
Material U.S. federal income tax considerations to Non U.S. Holders of Class A common stock	196
Underwriting (conflicts of interest)	200
Legal matters	210
Experts	210
Changes in independent registered public accounting firm	210
Where you can find more information	211
Index to financial statements	F-1

We and the underwriters (and our and their respective affiliates) have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any related free writing prospectuses prepared by or on behalf of us or to which we have referred you. We and the underwriters (and our and their respective affiliates) take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters (and our and their respective affiliates) are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is current only as of its date regardless of the time of delivery of this prospectus or of any sale of our Class A common stock. Our business, financial condition, results of operations, and prospects may have changed since that date.

Through and including    , 2024 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

For investors outside the U.S.: We have not, and the underwriters have not, done anything that would permit this offering or the possession or distribution of this prospectus or any free writing prospectus we may provide to you in connection with this offering in any jurisdiction where action for purpose is required, other than in the United States. Persons outside the U.S. who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of Class A common stock and the distribution of this prospectus outside the U.S. See “Underwriting.”

i

Basis of presentation

Organizational structure

In connection with the closing of this offering, we will undertake certain organizational transactions to reorganize our corporate structure. Unless otherwise stated or the context otherwise requires, all information in this prospectus reflects the consummation of the organizational transactions described in the section titled “Our organizational structure” and this offering, and the application of the proceeds therefrom, which we refer to collectively as the “Transactions.”

See “Our organizational structure” for a diagram depicting our organizational structure after giving effect to the Transactions, including this offering.

Certain definitions

As used in this prospectus, unless the context otherwise requires, references to:

• “adjusted return on equity” or “adj. ROE” refers, for us, to pre-tax income attributable to Smith Douglas Holdings LLC tax effected for our anticipated 25% federal and state blended tax rate, assuming 100% public ownership to adjust for the impact of taxes on earnings attributable to Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in the periods presented, divided by average total equity (excluding the Devon Street Homes Acquisition). For the public company homebuilders, “adjusted return on equity” or “adj. ROE” refers to net income divided by average total equity.

• “adjusted return on inventory” refers to, unless stated otherwise, pre-tax income attributable to Smith Douglas Holdings LLC tax effected for our anticipated 25% federal and state blended tax rate, assuming 100% public ownership to adjust for the impact of taxes on earnings attributable to Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in the periods presented, divided by the average of current and prior period closing real estate inventory (excluding the Devon Street Homes Acquisition).

• “Average sales price” or “ASP” refers to the average sales price of either our homes closed, our new home orders, or our backlog homes (at period end).

• “average total equity” refers to average of current and prior period closing total equity.

• “Basis Adjustments” refers to an allocable share (and increases thereto) of existing tax basis, in Smith Douglas Holdings LLC’s assets and tax basis adjustments with respect to such assets resulting from (a) Smith Douglas Homes Corp.’s purchase of LLC Interests from Smith Douglas Holdings LLC and each Continuing Equity Owner in connection with the Transactions, as described under “Use of proceeds”, (b) any future redemptions or exchanges of LLC Interests from the Continuing Equity Owners, (c) certain distributions (or deemed distributions) by Smith Douglas Holdings LLC, and (d) payments made under the Tax Receivable Agreement.

• “construction cycle time” refers, unless stated otherwise, to the number of business days between the start of the construction of foundations in a home and quality acceptance.

• “CAGR” refers to compound annual growth rate.

• “Continuing Equity Owners” refers collectively to the owners of LLC Interests in Smith Douglas Holdings LLC prior to the consummation of the Transactions, who will also be holders of LLC Interests and our Class B common stock immediately following consummation of the Transactions, including the Founder Fund and GSB Holdings, who may, following the consummation of this offering, exchange at each of their respective options, in whole or in part from time to time, their LLC Interests, as applicable, for, at our election (determined solely by our independent directors (within the meaning of the Exchange rules) who are disinterested), cash or newly-issued shares of our Class A common stock as described in “Certain relationships and related person transactions—Smith Douglas LLC Agreement—Agreement in effect upon consummation of the Transactions.” In connection with an exchange of LLC Interests, a corresponding number of shares of Class B common stock shall be immediately and automatically transferred to Smith Douglas Homes Corp. for no consideration and canceled.

• “controlled lots” refers to lots that are either owned or held under an option to be acquired for the relevant time frame set forth in the option contracts.

• “Devon Street Homes” refers to Devon Street Homes, L.P.

ii

• “Devon Street Homes Acquisition” refers to the transaction consummated on July 31, 2023, pursuant to which we acquired substantially all of the assets of Devon Street Homes. See “Management’s discussion and analysis of financial condition and results of operations—Devon Street Homes Acquisition.”

• “Exchange” refers to the New York Stock Exchange.

• “Founder Fund” refers to The Bradbury Family Trust II A U/A/D December 29, 2015, for which our founder and Executive Chairman, Tom Bradbury, is co-trustee.

• “GSB Holdings” refers to GSB Holdings LLC, for which our Chief Executive Officer, President, and Vice Chairman, Greg Bennett, is the sole member.

• “inventory turnover” refers, unless stated otherwise, to cost of sales divided by the average of current and prior period real estate inventory.

• “LLC Interests” refers to the membership units of Smith Douglas Holdings LLC, including those that we purchase with the net proceeds from this offering.

• “pro forma for the Transactions” refers, unless stated otherwise, to the unaudited condensed consolidated financial information of Smith Douglas Homes Corp. giving pro forma effect to the Transactions, including the offering and sale of 7,692,308 shares of Class A common stock in this offering at an initial public offering price of $19.50 per share, which is the midpoint of the price range set forth on the cover page of this prospectus and the proposed use of proceeds.

• “public company homebuilders” refers to Beazer Homes USA, Inc., Century Communities, Inc., Dream Finders Homes, Inc., D.R. Horton, Inc., Green Brick Partners, Inc., KB Home, Landsea Homes Corp., Lennar Corporation, LGI Homes, Inc., M.D.C. Holdings, Inc., Meritage Homes Corporation, M/I Homes, Inc., NVR, Inc., PulteGroup, Inc., Taylor Morrison Home Corporation, Toll Brothers, Inc., and TRI Pointe Group, Inc.

• “Section 704(c) Allocations” refers to disproportionate allocations (if any) of income and gain from inventory property held by Smith Douglas Holdings LLC as of the date of this offering under Section 704(c) of the Internal Revenue Code of 1986, as amended (the “Code”), resulting from our acquisition of LLC Interests from Smith Douglas Holdings LLC including in connection with the Transactions.

• “Sunset Date” refers to the date upon which the aggregate number of shares of Class B common stock then outstanding is less than 10% of the aggregate number of shares of Class A common stock and Class B common stock then outstanding.

• “Smith Douglas LLC Agreement” refers, as applicable, to Smith Douglas Holdings LLC’s amended and restated limited liability company agreement, as currently in effect, or to the amended and restated limited liability company agreement effective prior to the consummation of this offering, and as such agreement may thereafter be amended and/or restated.

• “Tax Receivable Agreement” refers to the Tax Receivable Agreement to be entered into by and among Smith Douglas Homes Corp., Smith Douglas Holdings LLC and the Continuing Equity Owners in connection with this offering, pursuant to which, among other things, Smith Douglas Homes Corp. will be required to pay to each Continuing Equity Owner 85% of certain tax benefits, if any, that it realizes (or in certain cases is deemed to realize) as a result of the tax benefits provided by Basis Adjustments, Section 704(c) Allocations, and certain other tax benefits (such as interest deductions) covered by the Tax Receivable Agreement as described in “Certain relationships and related person transactions—Tax Receivable Agreement.”

• “Transactions” refers to the organizational transactions described in the section titled “Our organizational structure” and this offering, and the application of the net proceeds therefrom.

• “we,” “us,” “our,” the “Company,” “Smith Douglas,” and similar references refer: (i) following the consummation of the Transactions, including this offering, to Smith Douglas Homes Corp., and, unless otherwise stated, all of its direct and indirect subsidiaries, including Smith Douglas Holdings LLC, and (ii) prior to the completion of the Transactions, including this offering, to Smith Douglas Holdings LLC.

Smith Douglas Homes Corp. will be a holding company and the sole managing member of Smith Douglas Holdings LLC, and upon consummation of the Transactions, its principal asset will consist of LLC Interests.

iii

Presentation of financial information

Smith Douglas Holdings LLC is the accounting predecessor of Smith Douglas Homes Corp. for financial reporting purposes. Smith Douglas Homes Corp. will be the audited financial reporting entity following this offering. Accordingly, this prospectus contains the following historical financial statements:

• Smith Douglas Homes Corp. Other than the inception balance sheet, dated as of June 20, 2023 and the interim financial statements as of September 30, 2023, the historical financial information of Smith Douglas Homes Corp. has not been included in this prospectus as it is a newly incorporated entity, has had no business transactions or activities to date, besides our initial capitalization.

• Smith Douglas Holdings LLC. Because Smith Douglas Homes Corp. will have no interest in any operations other than those of Smith Douglas Holdings LLC, the historical financial information included in this prospectus is that of Smith Douglas Holdings LLC.

Certain monetary amounts, percentages, and other figures included in this prospectus have been subject to rounding adjustments. Percentage amounts included in this prospectus have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this prospectus may vary from those obtained by performing the same calculations using the figures in our consolidated financial statements included elsewhere in this prospectus. Certain other amounts that appear in this prospectus may not sum due to rounding.

Key terms and performance indicators used in this prospectus; non-GAAP financial measures

Throughout this prospectus, we use a number of key terms and provide a number of key performance indicators and non-GAAP financial measures used by management. Please see “Management’s discussion and analysis of financial condition and results of operations—Key metrics and non-GAAP financial measures” for definitions and further information about why and how we calculate key performance indicators and non-GAAP financial measures, including a reconciliation of the following:

• adjusted home closing gross profit, defined as home closing revenue less cost of home closings, excluding capitalized interest charged to cost of home closings, impairment charges and adjustments resulting from the application of purchase accounting included in cost of sales, if applicable;

• adjusted home closing gross margin, defined as adjusted home closing gross profit as a percentage of home closing revenue;

• adjusted net income, defined as net income adjusted for the income tax expense effect of the pass-through entity taxable income of Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in periods presented. This assumption uses an effective tax rate of 25% for pass-through taxable income, which is our anticipated federal and state blended tax rate as a public company;

• EBITDA, defined as net income before (i) interest income, (ii) capitalized interest charged to cost of home closings, (iii) interest expense, (iv) income tax expense, and (v) depreciation; and

• EBITDA margin, defined as EBITDA as a percentage of home closing revenue.

We use non-GAAP financial measures, such as adjusted home closing gross profit, adjusted home closing gross margin, adjusted net income, EBITDA, and EBITDA margin, to supplement financial information presented in accordance with generally accepted accounting principles in the U.S. (“GAAP”). We believe that excluding certain items from our GAAP results allows management to better understand our consolidated financial performance from period to period and better project our future consolidated financial performance, as applicable, as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Moreover, we believe these non-GAAP financial measures provide our stakeholders with useful information to help them evaluate our operating results and make more meaningful period to period comparisons. There are limitations to the use of the non-GAAP financial measures presented in this prospectus. For example, our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes. See “Prospectus summary—Summary historical and pro forma condensed consolidated financial and other data” and “Management’s discussion and analysis of financial condition and results of operations.”

iv

Trademarks

This prospectus includes our trademarks and trade names which are protected under applicable intellectual property laws and are our property. This prospectus also contains trademarks, trade names, and service marks of other companies, which are the property of their respective owners. Solely for convenience, trademarks, trade names, and service marks referred to in this prospectus may appear without the ®, ™ or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent permitted under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names, and service marks. We do not intend our use or display of other parties’ trademarks, trade names, or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

Market and industry data

Unless otherwise indicated, information contained in this prospectus concerning our industry, competitive position, and the markets in which we operate is based on information from independent industry and research organizations, other third-party sources, and management estimates. Management estimates are derived from publicly available information released by independent industry analysts and other third-party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data, and our experience in, and knowledge of, such industry and markets, which we believe to be reasonable. In addition, projections, assumptions, and estimates of the future performance of the industry in which we operate and our future performance are necessarily subject to uncertainty and risk due to a variety of factors, including those described in “Risk factors” and “Cautionary note regarding forward-looking statements.” These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

Throughout this prospectus, we refer to our key performance indicators and non-GAAP financial measures of our public company homebuilder peers. There are limitations to the use of these comparisons presented in this prospectus. For example, our key performance indictors and non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Our public company homebuilder peers do not all have the same fiscal year end, and we generally refer to publicly available information for the fiscal year end or to the trailing 12 month period, where appropriate.

The sources of certain statistical data, estimates, and forecasts contained in this prospectus are in the market study prepared for us by John Burns Research and Consulting, LLC (“JBREC”), an independent research provider and consulting firm, based on the most recent data available as of August 2023. We have paid JBREC a fee of $56,600 for its services, plus an amount charged at an hourly rate for additional information we may require from JBREC from time to time in connection with its services. Such information is included in this prospectus in reliance on JBREC’s authority as an expert on such matters. Any forecasts prepared by JBREC are based on data (including third-party data), models and the experience of various professionals and on various assumptions (including completeness and accuracy of third-party data), all of which are subject to change without notice. See “Market opportunity” and “Experts” in this prospectus for additional information.

v

Prospectus summary

This summary highlights selected information included elsewhere in this prospectus. This summary does not contain all of the information that you should consider before deciding to invest in our Class A common stock. You should read the entire prospectus carefully, including the “Risk factors,” “Management’s discussion and analysis of financial condition and results of operations” and our consolidated financial statements, and the related notes included elsewhere in this prospectus, before making an investment decision. Some of the statements in this prospectus constitute forward-looking statements. See “Cautionary note regarding forward-looking statements.”

Our company

We are one of the nation’s fastest growing private homebuilders by number of closings and are engaged in the design, construction, and sale of single-family homes in some of the highest growth and most desirable markets in the Southeastern and Southern United States. We employ an efficient land-light, production focused, and conservatively leveraged business model, which we believe results in a compelling combination of strong home closing gross margins, construction cycle times, and returns. Our communities are primarily targeted to entry-level and empty-nest homebuyers. We offer our homebuyers an attractive value proposition by providing a personalized home buying experience at affordable price points. With the goal of becoming one of the most dominant homebuilders in the Southeastern and Southern United States, we intend to grow operations within our existing footprint and to expand into new markets where we can most effectively implement our business strategy and maximize our profit and returns.

Pursuant to our land-light business model, we typically purchase finished lots through lot-option contracts from third-party land developers or land bankers. Our lot acquisition strategy reduces our up-front capital requirements and generally provides for “just-in-time” lot delivery, which closely aligns with our pace of home orders and home starts. We believe our lot acquisition strategy reduces our operating and financial risk relative to other homebuilders that own a higher percentage of their land supply on balance sheet. As of both September 30, 2023 and December 31, 2022, 96% of our unstarted controlled lots were controlled through finished lot option contracts. Our strategy and focus on capital efficiency has delivered strong risk-adjusted returns, as evidenced by our adjusted return on equity and adjusted return on inventory of 63% and 57%, respectively, for the 12 months ended September 30, 2023, excluding our Houston segment acquired pursuant to the Devon Street Homes Acquisition, and of 81% and 75%, respectively, for the year ended December 31, 2022.

We are a disciplined, process driven, and schedule-oriented company. We utilize a single database ERP system called SMART Builder (that we nonexclusively license from an entity affiliated with the Founder Fund) that is fully integrated with our homebuilding operations. Through SMART Builder, we manage all aspects of our construction process and work-flow scheduling in real-time, enhancing our operating efficiency and helping us generate higher returns for our stockholders. Additionally, we approach our homebuilding operations through a partnership-oriented and relationship-based process called Rteam. The key tenet of Rteam is to enhance the collaboration, visibility, and mutual accountability between us and our key business partners, including the developers, suppliers, and trade partners within our production model. The Rteam process is the foundation of our operational success and the key driver of our current strong construction cycle times of approximately 64 business days and high inventory turnover rate of 3.8x for the year ended December 31, 2022. The combination of our production efficiency and real-time construction management capabilities allows us to generate strong home closing gross margins, which were 29% for both the nine months ended September 30, 2023 and the year ended December 31, 2022.

We pride ourselves on offering our homebuyers a personalized, affordable luxury buying experience at attractive prices. For the nine months ended September 30, 2023, our ASP of homes closed was approximately $333,000, providing an attractive price point for our target homebuyers with starting base prices below Federal Housing Administration (“FHA”) loan limits. We construct most of our homes on a pre-sold basis, where our homebuyers choose their homes based on a select number of value-engineered floor plans and are offered flexibility on the selection of home options. The SMART Builder system and Rteam process allows this optionality for homebuyers based on just-in-time modifications. As a result of our differentiated value proposition and efficient construction cycle times, we believe we typically achieve a high level of homebuyer satisfaction and experience low cancellation rates, which were 9% and 11% for the nine months ended September 30, 2023 and for the year ended December 31, 2022, respectively.

1

Our geographic footprint is concentrated in markets that demonstrate strong population and employment growth trends, favorable migration patterns, and desirable lifestyle and weather conditions. Our operations are currently organized into six geographical segments; our reportable segments include Atlanta (which includes certain Atlanta suburbs like Dalton, GA), Raleigh, Charlotte, Nashville, Alabama (which consists of both Birmingham and Huntsville), and Houston. Each of our markets is experiencing strong momentum in housing demand drivers relative to historic averages, and we believe there is significant opportunity to expand our presence in each of our respective markets.

We intend to utilize proceeds from this offering to continue the expansion of our communities and the overall growth of our platform. We have demonstrated significant growth since our inception in 2008, joining the Builder Magazine Top 100 list as the 83^rd largest builder based on number of closings in 2014 and have grown to be ranked as the 38^th largest builder for closings in 2022. Additionally, based off of the Builder Magazine Top 100 list, we believe we are the second largest private builder founded after 2007 and sixth largest builder overall founded after 2007, each based on 2022 home closings. During the year ended December 31, 2022, we closed 2,200 homes as compared to 526 homes in the year ended December 31, 2015, representing a 23% CAGR over the last seven years. In the same period, our revenue grew at a 32% CAGR from $109.3 million to $755.4 million.

Our history

Our founder and Executive Chairman, Tom Bradbury, has almost 50 years of experience in the homebuilding industry. Before founding Smith Douglas Homes, Mr. Bradbury founded Colony Homes in 1975, and built it into one of the largest and most recognized homebuilders in the Southeastern United States in the 1990s and early 2000s. Our President, Chief Executive Officer, and Vice Chairman, Greg Bennett, worked alongside Mr. Bradbury at Colony Homes as Region President, where he helped drive the growth of the company. While running Colony Homes, Mr. Bradbury and Mr. Bennett developed and refined the disciplined operating philosophy and integrated ERP system (SMART Builder) that we nonexclusively license for use today. Like Smith Douglas Homes, Colony Homes catered to the entry-level homebuyer segment, and it had peak closings of over 2,200 homes in 2001 before its eventual sale to KB Home in 2003.

In 2008, in the wake of the Global Financial Crisis, Mr. Bradbury saw a unique opportunity to re-enter the homebuilding industry, creating Smith Douglas Homes and breaking ground on its first home in Atlanta, Georgia. In 2014, we surpassed 500 cumulative closings in Atlanta and began to establish our regional presence with an organic expansion into the Raleigh market followed by Birmingham in 2016, and Charlotte and Nashville in 2017. In 2017, across all our existing markets, we delivered over 1,000 homes and generated approximately $240.3 million of home closing revenue.

In 2020, we continued to scale within our markets, completing over 900 annual home closings in Atlanta while also closing on over 200 homes in each of our other markets. In addition, in that year we continued our organic expansion by entering the Huntsville market. In 2023, we were ranked the second largest private builder by 2022 closings by the Atlanta Real Estate Forum, and in 2022 Atlanta became our first market to account for over 1,000 home closings in a calendar year. During the year ended December 31, 2022, we closed 2,200 homes across all our markets while surpassing 10,000 cumulative home closings.

As part of the next phase of our growth, we intend to expand operations within the Southern United States. On July 31, 2023, we acquired substantially all of the assets of Devon Street Homes, a high-quality regional homebuilder based in Houston, Texas that closed 324 homes in 2022. We believe the acquisition of Devon Street Homes will create a launching point for our company within the Texas market and will allow us to pursue expansion opportunities across the Southern United States. See “Management’s discussion and analysis of financial condition and results of operations—Devon Street Homes Acquisition.”

2

 

(1)
Based on Builder Magazine’s Top 100 list; achievements correspond to the year the ranking was based on.

(2)
Purchase price of $82.9 million, primarily from cash on hand, availability under the Existing Credit Facility (as defined below), a three-year promissory note in the principal amount of $5.0 million payable to the seller, and approximately $3.0 million contingent consideration to the seller. We do not intend to use the proceeds from this offering for the payment of any outstanding amounts under the APA (as defined below) that may be paid pursuant to the contingent consideration. See “Management’s discussion and analysis of financial condition and results of operations—Devon Street Homes Acquisition.”

Market opportunity

The U.S. housing market is proving to be resilient, driven by favorable supply and demand characteristics. The strong demand for housing during the pandemic, aided by above-average household formation, began to slow as mortgage rates rose in response to high levels of inflation. The demand for housing in the Southeast and Texas accelerated during the pandemic, with strong in-migration to these regions partially attributable to work-from-home opportunities. According to the U.S. Census Bureau, the number of single-family home permits issued fell to 852,800 for the year ended July 2023, which is 8.4% below the 1980-2019 average. The employment sector remains solid, recovering all jobs lost during the early months of the pandemic, and continuing to show year-over-year growth. A lack of available housing supply and affordability challenges brought on by rising prices and mortgage rates led to seasonally adjusted new home sales declining to 714,000 transactions in the year ended July 2023, according to the U.S. Census Bureau.

 

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For the existing home market, the national affordability is significantly worse than the historical normal level, owing to the level of increase in home prices since the beginning of the pandemic and the more-recent increase in mortgage rates. The median existing single-family home price was $406,700 in July 2023, according to the National Association of REALTORS. Nationally, for-sale housing is overpriced by approximately 36%, with housing costs comprising nearly 44% of incomes as of July 2023, well above a more normal ratio of 31%. Supply of listed existing homes for the year ended July 2023 totaled just over three months. While this near-record-low level has likely been affected by greater efficiencies in the resale process, it is still a low number compared to the 1983-2019 average of 6.7 months. A lack of supply in the existing home market—just 3.3 months of supply of homes for sale as of July 2023—has provided a boost to the new home market and has kept prices from significant correction in the existing home market. In July 2023, the Burns Home Value Index had risen 1.2% year-over-year, after rising an estimated 37.7% from February 2020 to May 2022.

Our markets and metropolitan areas include Atlanta (which includes certain suburbs of Atlanta such as Dalton, GA), Birmingham, Charlotte, Houston, Huntsville, Nashville, and Raleigh-Durham.

Atlanta, Georgia

We entered the Atlanta market in 2008 when we broke ground on our first home. The Atlanta market is the 8th-largest metro area in the United States by population. The average population growth rate over the last five years has been 1.1%, which is nearly three times the national average of 0.4% annually for the same period. As of June 2023, the number of households increased 1.4% from June 2022 to reach about 2.35 million total households in the Atlanta metropolitan statistical area (the “MSA”). As of 2021, there were about 1.52 million owner-occupied single-family homes in Atlanta, accounting for 62.0% of the total housing stock. From 2012 through 2021, new home sales volume experienced strong annual growth by an average of 14.4%. As of June 2023, the median new home price was $461,900, about flat YOY. The median resale price for a detached home was $383,100 as of June 2023, up 0.6% from June 2022.

Birmingham, Alabama

We first entered the Birmingham market, which is the 50^th-largest metro area in the United States by population, in 2016. The average population growth rate over the last five years has been 0.2%, which is below the national average of 0.4% annually for the same period. As of June 2023, the number of households increased by 0.6% from June 2022 to reach about 476,700 total households in the Birmingham MSA. As of 2021, there were about 307,000 owner-occupied single-family homes in Birmingham, accounting for 62.3% of the total housing stock. From 2012 to 2021, new home sales volume experienced strong annual growth by an average of 24.2%. As of June 2023, the median new home price was $294,300, down 25.5% from June 2022. The median resale price for a detached home was $238,000 as of June 2023, down 6.2% from June 2022.

Charlotte, North Carolina

We expanded our operations into the Charlotte market in 2017. The Charlotte market is the 23rd-largest metro area in the United States by population. The average population growth rate over the last five years has been 1.7%, which is above the national average of 0.4% annually for the same period. As of June 2023, the number of households increased 2.2% from June 2022 to reach about 1.10 million total households in the Charlotte MSA. As of 2021, there were about 698,980 owner-occupied single-family homes in Charlotte, accounting for 61.3% of the total housing stock. New home sales peaked in 2021, reaching 14,888 sales. Although sales numbers have softened since 2021 due to the rise in rates, the Charlotte MSA had 13,720 new home sales, up 0.2% year-over-year as of June 2023. As of June 2023, the median new home price was $409,600, 6.2% lower than June 2022. The median resale price for a detached home was $392,500 as of June 2023, 3.0% higher than June 2022.

Houston, Texas

As part of the next phase of our growth, we intend to expand operations within the Southern United States. We entered the Houston market pursuant to the consummation of the Devon Street Homes Acquisition on July 31, 2023. See “Management’s discussion and analysis of financial condition and results of operations—Devon Street Homes Acquisition.” The Houston market is the 5th-largest metro area in the United States by population. The average population growth rate over the last five years has been 1.3%, which is greater than three times the national average of 0.4% annually for the same period. As of June 2023, the number of households increased

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2.1% from June 2022 to reach about 2.70 million total households in the Houston MSA. As of 2021, there were about 1.60 million owner-occupied single-family homes in Houston, accounting for 56.6% of the total housing stock. From 2019 through 2021, new home sales volume experienced strong annual growth by an average of 11.8% before declining 4.4% in 2022 as interest rates rose. As of June 2023, the median new home price was $313,000, 1.8% lower than June 2022. The median resale price for a single-family home was $342,200 as of June 2023, down 2.5% from June 2022.

Huntsville, Alabama

We first entered the Huntsville market, which is the 124th-largest metro area in the United States by population, in 2020. Huntsville’s growth rate has averaged 2.0% per year from 2017 through 2022, peaking at 2.3% in 2020. As of June 2023, the number of households increased 1.8% from June 2022 to reach about 210,200 total households in the Huntsville MSA. As of 2021, there were about 146,180 owner-occupied single-family homes in Huntsville, accounting for 67.2% of the total housing stock. Annual new home sales had risen from 1,361 in 2013 to 3,720 in 2021, before dropping 2.8% in 2022 as interest rates rose. As of June 2023, the median new home price was $346,000, down 1.3% from June 2022. The median resale price for a detached home was $280,800 as of June 2023, essentially flat from June 2022.

Nashville, Tennessee

We expanded our operations into the Nashville market in 2017 and, according to Builder Magazine, we are currently the tenth largest builder in Nashville. The Nashville market is the 36th-largest metro area in the United States by population. The average population growth rate over the last five years has been 1.5%, which is above the national average of 0.4% annually for the same period. As of June 2023, the number of households increased 2.6% from June 2022 to reach about 853,900 total households in Nashville. As of 2021, there were about 531,300 owner-occupied single-family homes in Nashville, accounting for 61.8% of the total housing stock. New home sales increased by an annual average of 13.3% and the median new home price appreciated by an annual average of 5.7% from 2011 through 2021, but sales volume did decline by 6.9% in 2022 as mortgage interest rates spiked. As of June 2023, the median new home price was $508,200, up 2.2% from June 2022. The current median resale price for a detached home is $456,000, down 0.5% from a year ago.

Raleigh-Durham, North Carolina

We first entered the Raleigh-Durham market in 2016. The Raleigh-Durham market is the 32nd-largest metro area in the United States by population. The average population growth rate over the last five years has been 1.9%, which is nearly five times the national average of 0.4% annually for the same period. As of April 2023, the number of households increased 2.3% from June 2022 to reach about 845,100 total households in the Raleigh-Durham MSA. As of 2021, there were about 510,000 owner-occupied single-family homes in Raleigh-Durham, accounting for 60.6% of the total housing stock. From 2012 through 2022, new home sales volume experienced strong annual growth of an average of 8.0%. As of June 2023, the median new home price was $463,700, down 1.8% from June 2022. The median resale price for a detached home was $466,200 as of June 2023, up 3.7% from June 2022.

JBREC projects that the long-term overall housing demand remains strong, with an estimated 17.1 million housing units required in the 10 years through 2030 to meet the demand generated by net new household formations, second homes, replacement of existing units, and to bring a better balance to housing demand and supply dynamics. These projections assume normal housing affordability conditions; prolonged housing affordability challenges would reduce housing demand.

The largest five-year age cohort in the United States turns 31-35 in 2023, and the median age of a first-time homebuyer is 36 years old, according to the National Association of REALTORS 2022 Profile of Home Buyers and Sellers. As housing affordability has posed challenges for many potential homebuyers, pent-up demand for home buying does exist in the market today. Given U.S. birth trends, JBREC projects this home-buying-age cohort should continue to grow over the next one to two decades, though overall growth levels will also depend on immigration trends.

Our competitive strengths

We strive to generate consistent growth and strong risk-adjusted returns for our stockholders through our attractive operational and financial profile supported by our combination of operating efficiencies, a land-light business model, and a conservative balance sheet. Our track record of successful financial performance and

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growth is driven by our relentless focus on optimizing our homebuilding operations and the efficient use of our capital. We believe the following strengths create a significant competitive advantage as we execute upon our business strategy and pursue future growth.

Efficient, schedule driven manufacturing platform that drives strong construction cycle times and robust home closing gross margins

We maintain a highly efficient homebuilding production model which results in robust home closing gross margins and profitability. We achieved home closing gross margins of 29% for both the nine months ended September 30, 2023 and the year ended December 31, 2022, which were among the highest in the public homebuilding sector, and also currently average a construction cycle time of approximately 64 business days. We achieve economies of scale across our production model by offering a consistent set of core floor plan options across all our markets. For the nine months ended September 30, 2023, for example, over 93% of our closings were derived from fewer than 30 floor plans. We also seek to further improve our production efficiencies through the continuity of the trade partner construction teams we utilize across multiple job sites. This continuity increases trade partner familiarity with our floor plans and building materials, which in turn increases productivity and allows us to target a minimum of one home start a day per Rteam. We believe our Rteam philosophy is the foundation of our operational success and places significant focus on accountability and collaboration, emphasizing a mindset of shared success whereby each partner's contribution is critical to the success of everyone else and the overall success of a project. To further facilitate our efficient homebuilding operations, we utilize an ERP system, SMART Builder, which is a real-time, schedule driven, single database that manages our entire homebuilding construction ecosystem, including sales, purchasing, scheduling, production, accounting, and servicing. The combination of all of the above factors allows us to operate efficiently and ultimately supports our ability to drive our low cycle times, high inventory turnover and strong margins and returns.

 

Land-light business model that allows for both risk mitigation and enhanced returns

Core to our success is the capital efficient, land-light operating strategy we have employed since our inception. We believe this approach mitigates risk and, consistent with our efficiency focused culture, enhances our returns. We primarily acquire finished lots from reputable third-party land developers and land bankers through lot-option contracts, thereby avoiding the financial requirements and risks associated with land ownership and land development. Our primary obligation and potential economic risk for failure to perform under our lot-option contracts is typically

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limited to the amount of our deposit. Additionally, we aim to limit our balance sheet risk by typically keeping less than two months of finished lots on our balance sheet at any given time. By utilizing a “just-in-time” approach to lot acquisitions, we reduce our up-front capital commitments and in turn drive higher inventory turnover and returns. As of September 30, 2023, we controlled 10,279 lots through option contracts, representing 96% of our total unstarted controlled lots, compared to an average of 49% for public company homebuilders. Our inventory turnover was 3.0x for the 12 months ended September 30, 2023, excluding our Houston segment acquired pursuant to the Devon Street Homes Acquisition, and 3.8x for the year ended December 31, 2022, compared to an average inventory turnover of 1.2x and 1.3x, respectively, for the same periods, for public company homebuilders. Our adjusted return on equity and adjusted return on inventory was 63% and 57%, respectively, for the 12 months ended September 30, 2023, excluding our Houston segment acquired pursuant to the Devon Street Homes Acquisition, and 81% and 75%, respectively, for the year ended December 31, 2022, compared to the averages of 21% and 18%, respectively, for the 12 months ended September 30, 2023, and 28% and 24%, respectively, for the year ended December 31, 2022, for public company homebuilders.

Established presence in attractive, high growth markets

We are focused on favorable, high growth housing markets primarily in the Southeastern and Southern United States. Since establishing our initial presence in Atlanta, we have steadily expanded our footprint into Raleigh, Birmingham, Charlotte, Nashville, Huntsville, and Houston over the last nine years. Our markets exhibit attractive demographic trends, including high employment growth, strong supply and demand fundamentals, positive net migration, home price appreciation, favorable land pricing, and low costs of living, which we believe will support the long-term growth of new home orders. According to JBREC, the majority of our markets rank among the top ten in the Southeast for positive net migration over the last year. We believe the combination of these compelling trends and our strong presence within these markets will help facilitate the execution of our growth strategy.

 

Scalable platform well positioned to expand in existing and new markets

Since our inception in 2008, we have expanded our homebuilding operations through consistent organic growth. We utilize our management team’s deep industry knowledge, disciplined underwriting and project management capabilities, and our scalable, process-driven, schedule-oriented platform to grow in submarkets within our existing footprint as well as enter new markets. In Atlanta, we have rapidly and profitably grown our presence, celebrating our 5,000^th cumulative closing in 2020. We have successfully scaled our business while maintaining strong margins by targeting markets where we can replicate our land-light strategy and Rteam production model, and also leverage our strong relationships with local developers, suppliers, and municipalities to grow communities. For the year ended December 31, 2022, we closed 2,200 homes, achieving a 23% CAGR on closed homes from 2015 to 2022. Among homebuilders that began operations after 2007, based off of the Builder Magazine Top 100 list, we believe we are the sixth largest homebuilder in the country and the second largest private builder, each based on number of 2022 home closings, which further highlights our platform’s ability to scale. Going forward, we intend to apply our management team’s strong execution capabilities to capitalize on growth opportunities within our existing markets and new markets.

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Differentiated ability to offer a personalized homebuying experience to price-conscious homebuyers

Through our efficient and differentiated operating approach, we have the ability to offer our target homebuyers a personalized affordable luxury buying experience. As part of our home offerings, we provide homebuyers a wide range of value engineered exterior and interior options. Additionally, because we offer a consistent, optimized set of floor plans and home options across our markets, we can reduce costs, shorten construction cycle times, and ultimately deliver a high-quality personalized home at an attractive price point, which averaged approximately $333,000 on homes closed during the nine months ended September 30, 2023. Combined, our compelling value, high level of personalization, and superior home construction times have resulted in one of the lowest cancellation rates amongst all the public company homebuilders, which were 9% and 11% for the nine months ended September 30, 2023 and for the year ended December 31, 2022, respectively, meaningfully below public company homebuilders’ average of 15% and 21%, respectively, for the same periods. We believe our ability to offer a personalized buying experience at an affordable price point will continue to create meaningful differentiation in the market for us.

Veteran management team with track record of success and significant public company experience

We benefit from a seasoned management team with a long history of generating consistent positive financial results and strong returns for stockholders. Our management team averages over 25 years of industry experience, with many of our executives and upper management having previously held senior roles at other public homebuilder companies, including KB Home, WCI Communities, Beazer Homes, Meritage Homes, Pulte, and NVR. Our founder and Executive Chairman, Tom Bradbury, is a long-time industry veteran who previously founded Colony Homes. Under his leadership, Colony Homes grew into one of the largest homebuilders in the Southeastern United States focused on entry-level homebuyers and was ultimately sold to KB Home in 2003. Our President, Chief Executive Officer, and Vice Chairman, Greg Bennett, has spent most of his career working alongside Mr. Bradbury, starting in 1986 and through his last position as Region President of Colony Homes prior to its sale to KB Home. In 2004, Greg founded his own homebuilding company, Greg Bennett Homes, which he operated until he joined Smith Douglas Homes in 2015. Our Executive Vice President and Chief Financial Officer, Russell Devendorf, has previously served as Chief Financial Officer at WCI Communities, where he helped spearhead the restructuring and turnaround of the company from 2008 to its successful initial public offering in 2013 and its eventual sale to Lennar in 2017. Our management’s experience adds a level of expertise, governance, and accountability that we believe is distinct for companies of our size. After the consummation of this offering, in the aggregate, management will continue to own 85.0% of outstanding common stock, assuming no exercise of the underwriters' option to purchase additional shares of Class A common stock, creating long-term alignment of interests between management and stockholders.

Conservative balance sheet and liquidity, with substantial capacity to drive growth

We maintain a conservatively leveraged and flexible balance sheet which reflects our efficiency-minded operating philosophy. As of September 30, 2023 and December 31, 2022, respectively, our debt-to-book capitalization was 29% and 8%, and our net-debt-to-net book capitalization was 26% and (10)%. We maintain significant liquidity,

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with $10.4 million of cash and cash equivalents on hand and $85.0 million of undrawn capacity under the Existing Credit Facility (exclusive of outstanding letters of credit) as of September 30, 2023. Following this transaction, we believe our enhanced liquidity position will allow us to react nimbly to market conditions and to pursue attractive organic growth or acquisition opportunities.

Our strategy

We expect to execute on the strategies below to establish our legacy as one of the country’s leading homebuilders and to continue driving consistent growth, operating efficiency, and strong returns while delivering high-quality, personalized homes to homebuyers at affordable price points. Through the execution of our business strategy, we will strive to expand our platform and become a top homebuilder in the United States.

Capitalize on our land-light capital strategy to efficiently build new communities and drive superior risk-adjusted returns

We intend to continue our land-light lot acquisition strategy to support future growth while maintaining strong equity returns. We believe this approach, combined with our primarily pre-selling / build-to-order strategy, allows us to efficiently build new communities while also limiting our operational and financial risk during various economic cycles. Without the financial and operational risks of undeveloped land ownership, we create an even flow of lot purchases, better aligning the pace of home orders and home starts. Furthermore, to drive greater inventory turnover, we utilize financial incentive structures within our market divisions to target no more than approximately two months of finished lots and four months of started lots at any given time. We have utilized the land-light business model since our inception in 2008 and have forged strong relationships with land developers and land bankers that span multiple markets, which we believe give us an advantage when sourcing and executing lot option contracts. Supported by these enduring relationships, we believe our land-light strategy differentiates us from peers and allows us to consistently achieve attractive risk-adjusted returns.

Increase presence and market share within our existing markets

Our focused strategy of targeting entry-level and empty-nest homebuyers in our preferred markets has been at the core of our historical expansion and these homebuyer groups will continue to be our primary target demographic. We leverage our strong relationships with local developers, suppliers, municipalities, and land bankers to give us deeper access in our existing markets to increase land positions and community count. We have experienced rapid organic growth since our inception in 2008, expanding our geographic presence from our headquarters in Atlanta, a market where we are currently one of the largest homebuilders, to six additional key markets with robust growth outlooks: Raleigh, Charlotte, Birmingham, Houston, Huntsville, and Nashville. We believe there remains significant opportunity to increase market share and meaningfully grow within our existing markets, driving economies of scale and overall platform growth.

Opportunistically expand to new markets

We see attractive growth opportunities, particularly in the Southeastern and Southern United States, and intend to opportunistically expand into new geographies through organic growth and platform acquisitions. We evaluate potential market expansion opportunities using a set of robust strategic market criteria, including availability of land and unmet demand in suburban-plus areas, as well as the ability to pursue a similar lot option strategy, house plans, and construction process while leveraging our Rteam philosophy. As part of our new market expansion strategy, we target establishing critical scale of at least 200 annual starts within the first two years of entering a new market in order to maximize our Rteam efficiency. Furthermore, we will selectively evaluate external growth opportunities where we can accretively gain scale in a market and enhance our position for future growth. For example, our acquisition of Devon Street Homes has helped us enter the highly attractive Houston market, providing us immediate scale and positioning us to grow organically in neighboring Texas markets over time. Looking ahead, we will continue to pursue attractive market expansion opportunities that align with our strategy.

Continue to target our key entry-level and empty-nest homebuyer demographics

Our strategy is to target the entry-level and empty-nest demographics in the Southeastern and Southern regions of the U.S. We believe the fundamental drivers at both the national level and, more specifically, in our local markets have created an increased demand for entry-level priced homes, which we believe makes us well positioned to fulfill this

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demand as a result of our ASP of homes closed, which was approximately $333,000 for the nine months ended September 30, 2023 and one of the lowest among public company homebuilders. According to a 2023 National Association of Home Builders (“NAHB”) housing affordability analysis, 73% of households cannot afford a median-priced single-family home (which was equal to $418,000 in 2022). By targeting lower price point offerings, we are able to drive demand despite broader affordability concerns. We operate in attractive market segments, where there is consistent demand for homes as homebuyers look for alternatives to renting, especially with rising rental rates. We believe homebuyers appreciate our value proposition created by the combination of our home affordability and the level of personalization we provide. Furthermore, in the current environment, the recent rise in interest rates has created a significant affordability problem, making our price points even more attractive. In addition, we have significant experience working across multiple mortgage types including, but not limited to, FHA, USDA, and conventional mortgages, which allows us to offer financing support tailored to the needs of our homebuyers.

Focus on delivering a personalized build-to-order experience at attractive price points

We believe a key differentiator of our business is how we redefine affordable luxury for the homebuilding sector. Our home offerings address the strong market demand for an affordable luxury experience that provides homebuyer personalization, through an a-la-carte approach to various home design options, without sacrificing affordability. Our unique affordable luxury business model is designed to balance an optimized and value-driven homebuyer experience with operational efficiency. We have invested significant resources in perfecting approximately 30 value-engineered floor plans that our homebuyers have used in over 93% of total homes closed across all our markets for the nine months ended September 30, 2023. The streamlined floor plans and strong scheduling adherence allow us to offer high-quality homes at affordable prices with short turnaround times. Going forward, we will continue to provide a select variety of home layout options and amenities for our homebuyers in a streamlined and cost-effective manner. Lastly, we also consider our homebuyers’ living experience after buying a home in one of our communities, so we have structured our lot and land acquisition strategy to maximize streetscapes and create an efficient community layout. We believe this compelling value proposition provides meaningful differentiation in the market, increasing the demand for our homes relative to our competitors, who do not offer the same level of personalization and value at comparable price points. With our approach to offering affordable luxury in the homebuilding space, we intend to continue to expand our brand to reach more homebuyers with our unique value proposition.

Continue to utilize strong cash flow generation to grow platform and drive high return on equity

We operate a highly efficient business model that has consistently generated strong margins and significant cash flow. Our margin and cash flow profile has historically enabled us to simultaneously expand our business, maintain a conservative, durable balance sheet, and return capital to stockholders, which has in turn resulted in strong equity returns. We intend to continue utilizing a nimble and balanced capital allocation strategy that prioritizes the growth of our platform, increased profitability, and the strength of our balance sheet while targeting a consistent, high return on equity for our stockholders. This allows us to maintain long-term balance sheet durability to withstand multiple cycles and to execute operational and acquisition strategies when access to capital is scarce.

We believe this offering will diversify our access to capital and enhance our already strong liquidity position, further supporting our robust future growth plans and providing us with the flexibility to opportunistically deploy capital. We plan to continue to be prudent with our use of leverage, which we believe is key to the long-term growth and financial stability of our business.

Recent developments

Estimated preliminary operational results for the fourth quarter and fiscal year ended December 31, 2023

We are currently in the process of finalizing our consolidated financial results for our fourth quarter and fiscal year ended December 31, 2023 and, therefore, our actual results for these periods are not yet available and have not been audited. Presented below are certain estimated preliminary operational results for the fourth quarter and fiscal year ended December 31, 2023 that are subject to change pending finalization. As such, our actual results may differ materially from the estimated preliminary results presented in this prospectus and will not be finalized until after we complete our normal year-end accounting procedures, which will occur after the consummation of this offering. Our preliminary results set forth below reflect our management’s best estimate of the impact of events during the year and are based on the information currently available to us as of the date of this prospectus.

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Accordingly, undue reliance should not be placed on these preliminary estimates. These preliminary estimates are not necessarily indicative of any future period and should be read together with “Risk factors,” “Special note regarding forward-looking statements,” “Unaudited pro forma condensed consolidated financial information,” and “Management’s discussion and analysis of financial condition and results of operations” and our financial statements and related notes included elsewhere in this prospectus.

Based on currently available information, we believe our home closings for the three months ended December 31, 2023 totaled 654 homes, representing a 5% increase as compared to 625 homes in the same period in 2022. We believe that we had 2,297 total home closings for the year ended December 31, 2023, a 4% increase over the 2,200 home closings in the same period in 2022. We believe our Houston division, which we entered through our acquisition of Devon Street Homes on July 31, 2023, accounted for 63 and 94 home closings for the three months and year ended December 31, 2023, respectively. For more information on the Devon Street Homes Acquisition, see “Management’s discussion and analysis of financial condition and results of operations—Devon Street Homes Acquisition.”

Based on currently available information, we believe our net new home orders for the three months ended December 31, 2023, totaled 525 homes, representing a 24% increase as compared to 424 homes in the same period in 2022. We believe our net new home orders totaled 2,369 homes for the year ended December 31, 2023, representing a 23% increase as compared to 1,928 homes in the same period in 2022. We believe our Houston division accounted for 85 and 146 net new home orders for the three months and year ended December 31, 2023, respectively.

Based on currently available information, we believe our net new home orders in October 2023, November 2023 and December 2023 were 168, 139 and 218, respectively. We believe the improving rate environment during December had a direct impact on the 57% increase in net new home orders as compared to November. In the comparable period during fiscal year 2022, net new home orders increased 32% from November to December.

Our backlog as of December 31, 2023 totaled 912 homes, representing a 18% increase as compared to 771 homes as of December 31, 2022.

Concurrent Credit Facility Amendment

Concurrently with, and conditioned upon, the closing of this offering, Smith Douglas Holdings LLC and certain of our wholly-owned subsidiaries intend to enter into an amended and restated revolving credit facility (the “Amended Credit Facility”) which will replace the $175.0 million unsecured revolving credit facility with Wells Fargo Bank, National Association, as administrative agent for the lenders party thereto (the “Lenders”), and the Lenders, dated as of October 28, 2021, as amended to date, (the “Existing Credit Facility,” as amended and restated, the “Amended Credit Facility”). Smith Douglas Holdings LLC is not party to the Existing Credit Facility. Smith Douglas Homes Corp. is not a party to the Existing Credit Facility and, subject to satisfaction of certain conditions set forth in the Amended Credit Facility, will not be a party to the Amended Credit Facility. The Amended Credit Facility is conditioned upon the closing of this offering and certain other customary conditions to effectiveness, however, this offering is not contingent upon the effectiveness of the Amended Credit Facility. The Amended Credit Facility will, among other things, increase the aggregate principal amount of the revolving credit commitments to $250.0 million and extend the maturity date to the date that is three years after the closing of the Amended Credit Facility. There is no guarantee that we will enter into the Amended Credit Facility on the terms described herein or at all.

We intend to use a portion of the net proceeds from this offering to repay $71.0 million outstanding under our Existing Credit Facility (the “Debt Repayment” and together with the Amended Credit Facility, the “Refinancing”). As of September 30, 2023, outstanding borrowings under the Existing Credit Facility totaled $71.0 million with no outstanding letters of credit. Following the Refinancing, we will be free to draw on the Amended Credit Facility’s $250.0 million unsecured revolver. See “Use of proceeds” and “Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources—Existing Credit Facility” And “Management’s discussion and analysis of financial condition and results of operation—Liquidity and capital resources—Amended Credit Facility.”

Summary risk factors

Participating in this offering involves substantial risk. Our ability to execute our strategy is also subject to certain risks. The risks described under the heading “Risk factors” included elsewhere in this prospectus may cause us not to realize the full benefits of our strengths or may cause us to be unable to successfully execute all or part of our strategy. Some of the most significant challenges and risks we face include the following:

• our inability to successfully identify, secure, and control an adequate inventory of lots at reasonable prices;

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• the tightening of mortgage lending standards and mortgage financing requirements;

• the housing market may not continue to grow at the same rate, or may decline;

• the availability, skill, and performance of trade partners;

• a shortage or increase in the costs of building materials could delay or increase the cost of home construction;

• efforts to impose joint employer liability on us for labor, safety, or worker’s compensation law violations committed by our trade partners;

• volatility in the credit and capital markets may impact our cost of capital and our ability to access necessary financing and the difficulty in obtaining sufficient capital could prevent us from acquiring lots for our development or increase costs and delays in the completion of our homebuilding expenditures;

• no market currently exists for our Class A common stock, and an active, liquid trading market for our Class A common stock may not develop, which may cause our Class A common stock to trade at a discount from the initial offering price and make it difficult for you to sell the Class A common stock you purchase;

• we cannot predict the effect our dual class structure may have on the market price of our Class A common stock;

• the Tax Receivable Agreement requires us to make cash payments to the Continuing Equity Owners in respect of certain tax benefits to which we may become entitled, and we expect that such payments will be substantial;

• our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the Continuing Equity Owners that will not benefit holders of our Class A common stock to the same extent that it will benefit the Continuing Equity Owners; and

• the significant influence the Continuing Equity Owners will have over us after the Transactions, including control over decisions that require the approval of stockholders.

Before you invest in our Class A common stock, you should carefully consider all the information in this prospectus, including matters set forth under the heading “Risk factors.”

Summary of the Transactions

Smith Douglas Homes Corp., a Delaware corporation, was formed on June 20, 2023 and is the issuer of the Class A common stock offered by this prospectus. Prior to this offering, all of our business operations have been conducted through Smith Douglas Holdings LLC. Prior to the Transactions, we expect there will initially be one holder of common stock of Smith Douglas Homes Corp. We will consummate the following organizational transactions in connection with this offering:

• we will amend and restate the existing limited liability company agreement of Smith Douglas Holdings LLC, which will become effective prior to the consummation of this offering, to, among other things, (i) recapitalize all existing ownership interests in Smith Douglas Holdings LLC into 44,871,794 LLC Interests (before giving effect to the use of proceeds described below), (ii) appoint Smith Douglas Homes Corp. as the sole managing member of Smith Douglas Holdings LLC upon its acquisition of LLC Interests in connection with this offering, and (iii) provide certain redemption rights to the Continuing Equity Owners;

• we will amend and restate Smith Douglas Homes Corp.’s certificate of incorporation to, among other things, provide (i) for Class A common stock, with each share of our Class A common stock entitling its holder to one vote per share on all matters presented to our stockholders generally, (ii) for Class B common stock, with each share of our Class B common stock entitling its holder to ten votes per share on all matters presented to our stockholders generally prior to the Sunset Date and from and after the occurrence of the Sunset Date each share of our Class B common stock will entitle its holder to one vote per share on all matters presented to our stockholders generally, (iii) that shares of our Class B common stock may only be held by the Continuing Equity Owners and their respective permitted transferees as described in “Description of capital stock—Common Stock—Class B common stock;” and (iv) for preferred stock, which can be issued by our board in one or more series without stockholder approval;

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• we will issue 43,589,743 shares of our Class B common stock (after giving effect to the use of net proceeds as described below and assuming no exercise of the underwriters' option to purchase additional shares of Class A common stock) to the Continuing Equity Owners, which is equal to the number of LLC Interests held by such Continuing Equity Owners, at the time of such issuance of Class B common stock, for nominal consideration;

• we will issue 7,692,308 shares of our Class A common stock to the purchasers in this offering (or 8,846,154 shares if the underwriters exercise in full their option to purchase additional shares of Class A common stock) in exchange for net proceeds of approximately $139.5 million (or approximately $160.4 million if the underwriters exercise in full their option to purchase additional shares of Class A common stock) based upon an assumed initial public offering price of $19.50 per share (which is the midpoint of the estimated price range set forth on the cover page of this prospectus), less the underwriting discount;

• use of the net proceeds from this offering (i) to purchase 6,410,257 newly issued LLC Interests for approximately $116.3 million directly from Smith Douglas Holdings LLC at a price per unit equal to the initial public offering price per share of Class A common stock in this offering less the underwriting discount; and (ii) to purchase 1,282,051 LLC Interests from the Continuing Equity Owners on a pro rata basis for $23.2 million in aggregate (or 2,435,897 LLC Interests for $44.2 million in aggregate if the underwriters exercise in full their option to purchase additional shares of Class A common stock) at a price per unit equal to the initial public offering price per share of Class A common stock in this offering less the underwriting discount;

• Smith Douglas Holdings LLC intends to use the net proceeds from the sale of LLC Interests to Smith Douglas Homes Corp. (i) to repay approximately $71.0 million of borrowings outstanding under our Existing Credit Facility, (ii) redeem all outstanding Class C Units and Class D Units of Smith Douglas Holdings LLC at par in aggregate for $2.6 million, (iii) repay $1.2 million in notes payable to certain related parties and (iv) if any remain, for general corporate purposes as described under “Use of proceeds” and “Certain relationships and related person transactions;” and

• Smith Douglas Homes Corp. will enter into (i) the Registration Rights Agreement with our Continuing Equity Owners and (ii) the Tax Receivable Agreement with Smith Douglas Holdings LLC and the Continuing Equity Owners. For a description of the terms of the Registration Rights Agreement and the Tax Receivable Agreement, see “Certain relationships and related person transactions.”

Immediately following the consummation of the Transactions (including this offering and proposed use of proceeds):

• Smith Douglas Homes Corp. will be a holding company and its principal asset will consist of LLC Interests it acquires directly from Smith Douglas Holdings LLC and from each Continuing Equity Owner;

• Smith Douglas Homes Corp. will be the sole managing member of Smith Douglas Holdings LLC and will control the business and affairs of Smith Douglas Holdings LLC;

• Smith Douglas Homes Corp. will own, directly or indirectly, 7,692,308 LLC Interests of Smith Douglas Holdings LLC, representing approximately 15.0% of the economic interest in Smith Douglas Holdings LLC (or 8,846,154 LLC Interests, representing approximately 17.3% of the economic interest in Smith Douglas Holdings LLC if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

• the Continuing Equity Owners will own (i) 43,589,743 LLC Interests of Smith Douglas Holdings LLC, representing approximately 85.0% of the economic interest in Smith Douglas Holdings LLC (or 42,435,897 LLC Interests, representing approximately 82.7% of the economic interest in Smith Douglas Holdings LLC if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and (ii) 43,589,743 shares of Class B common stock of Smith Douglas Homes Corp., representing approximately 98.3% of the combined voting power of all of Smith Douglas Homes Corp.’s common stock (or 42,435,897 shares of Class B common stock of Smith Douglas Homes Corp., representing approximately 98.0% of the combined voting power if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

• the purchasers in this offering will own (i) 7,692,308 shares of Class A common stock of Smith Douglas Homes Corp. (or 8,846,154 shares of Class A common stock of Smith Douglas Homes Corp. if the underwriters exercise in full their option to purchase additional shares of Class A common stock), representing approximately 1.7% of the combined voting power of all of Smith Douglas Homes Corp.’s common stock and 100% of the economic interest in Smith Douglas Homes Corp. (or approximately 2.0% of the combined voting power and 100% of the economic interest if the underwriters exercise in full their option to purchase additional shares of Class A

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common stock), and (ii) through Smith Douglas Homes Corp.’s ownership of LLC Interests, indirectly will hold approximately 15.0% of the economic interest in Smith Douglas Holdings LLC (or approximately 17.3% of the economic interest in Smith Douglas Holdings LLC if the underwriters exercise in full their option to purchase additional shares of Class A common stock); and

• our Class A common stock and Class B common stock will have what is commonly referred to as a “high/low vote structure,” which means that shares of our Class B common stock will initially have ten votes per share and our Class A common stock will have one vote per share. Upon the occurrence of the Sunset Date, each share of Class B common stock will then be entitled to one vote per share. This high/low vote structure will enable the Continuing Equity Owners to control the outcome of matters submitted to our stockholders for approval, including the election of our directors, as well as the overall management and direction of our company. Furthermore, the Continuing Equity Owners will continue to exert a significant degree of influence, or actual control, over matters requiring stockholder approval. We believe that maintaining this control by the Continuing Equity Owners will help enable them to successfully guide the implementation of our Company’s growth strategies and strategic vision. Meanwhile, holders of our Class A common stock will have economic and voting rights similar to those of holders of common stock of non-Up-C structured public companies that have a high/low vote structure. See “Description of capital stock.”

As the sole managing member of Smith Douglas Holdings LLC, we will operate and control all of the business and affairs of Smith Douglas Holdings LLC and, through Smith Douglas Holdings LLC, conduct our business. Following the Transactions, including this offering, Smith Douglas Homes Corp. will control the management of Smith Douglas Holdings LLC as its sole managing member. As a result, Smith Douglas Homes Corp. will consolidate Smith Douglas Holdings LLC and record a significant non-controlling interest in a consolidated entity in Smith Douglas Homes Corp.’s consolidated financial statements for the economic interest in Smith Douglas Holdings LLC held by the Continuing Equity Owners.

Unless otherwise indicated, this prospectus assumes the shares of Class A common stock are offered at $19.50 per share (the midpoint of the estimated price range set forth on the cover page of this prospectus). For more information regarding the impact of the initial offering price on the share information included throughout this prospectus, see “The offering.”

Our corporate structure following this offering, as described below, is commonly referred to as an umbrella partnership-C corporation (“Up-C”) structure, which is often used by partnerships and limited liability companies when they undertake an initial public offering of their business. The Up-C structure will allow the Continuing Equity Owners to retain their equity ownership in Smith Douglas Holdings LLC following the offering and to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or “flow-through” entity, for U.S. federal income tax purposes. Investors in this offering will, by contrast, hold their equity ownership in Smith Douglas Homes Corp., a Delaware corporation that is a domestic corporation for U.S. federal income tax purposes, in the form of shares of Class A common stock. One of the tax benefits to the Continuing Equity Owners associated with this structure is that future taxable income of Smith Douglas Holdings LLC that is allocated to the Continuing Equity Owners will be taxed on a flow-through basis and, therefore, will not be subject to corporate taxes at the entity level. Additionally, because the Continuing Equity Owners may have their LLC Interests redeemed by Smith Douglas Holdings LLC (or at our option, directly exchanged by Smith Douglas Homes Corp.) for newly issued shares of our Class A common stock on a one-for-one basis (subject to customary adjustments, including for stock splits, stock dividends, and reclassifications) or, at our option, for cash, the Up-C structure also provides the Continuing Equity Owners with potential liquidity that holders of non-publicly traded limited liability companies are not typically afforded. In connection with any such redemption or exchange of LLC Interests, a corresponding number of shares of Class B common stock held by the relevant Continuing Equity Owner will automatically be transferred to Smith Douglas Homes Corp. for no consideration and be canceled. The Continuing Equity Owners and Smith Douglas Homes Corp. also each expect to benefit from the Up-C structure as a result of certain cash tax savings arising from redemptions or exchanges of the Continuing Equity Owner’s LLC Interests for Class A common stock or cash, and certain other tax benefits covered by the Tax Receivable Agreement discussed in “Certain relationships and related person transactions—Tax Receivable Agreement.” See “Risk factors—Risks related to our organizational structure.” In general, the Continuing Equity Owners expect to receive payments under the Tax Receivable Agreement in amounts equal to 85% of certain tax benefits, as described below, and

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Smith Douglas Homes Corp. expects to benefit in the form of cash tax savings in amounts equal to 15% of certain tax benefits, as described below. Any payments made by us to the Continuing Equity Owners under the Tax Receivable Agreement will reduce cash otherwise arising from such tax savings. We expect such payments will be substantial.

As described below under “Certain relationships and related person transactions—Tax Receivable Agreement,” prior to the completion of this offering, we will enter into a Tax Receivable Agreement with Smith Douglas Holdings LLC and the Continuing Equity Owners that will provide for the payment by Smith Douglas Homes Corp. to the Continuing Equity Owners of 85% of the amount of tax benefits, if any, that Smith Douglas Homes Corp. actually realizes (or in some circumstances is deemed to realize) as a result of (i) Basis Adjustments, (ii) Section 704(c) Allocations, and (iii) certain tax benefits (such as interest deductions) arising from payments made under the Tax Receivable Agreement.

For more information regarding the Transactions and our structure, see “Our organizational structure.”

Ownership structure

The diagram below depicts our organizational structure after giving effect to the Transactions, including this offering and proposed use of proceeds, assuming no exercise by the underwriters of their option to purchase additional shares of Class A common stock.

 

(1)
Includes Founder Fund and GSB Holdings.

Smith Douglas Homes Corp., the issuer of the Class A common stock in this offering, was incorporated as a Delaware corporation on June 20, 2023. Our corporate headquarters are located at 110 Village Trail, Suite 215, Woodstock, Georgia 30188. Our telephone number is (770) 213-8067. Our principal website address is www.smithdouglas.com. The information on any of our websites is deemed not to be incorporated in this prospectus or to be part of this prospectus.

After giving effect to the Transactions, including this offering and proposed use of proceeds, Smith Douglas Homes Corp. will be a holding company whose principal asset will consist of 15.0% of the outstanding LLC Interests of Smith Douglas Holdings LLC (or 17.3% if the underwriters exercise in full their option to purchase additional shares of our Class A common stock).

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Implications of being an emerging growth company

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of certain reduced reporting and other requirements that are otherwise generally applicable to public companies. As a result:

• we are required to have only two years of audited financial statements and only two years of related selected financial data and management’s discussion and analysis of financial condition and results of operations disclosure;

• we are not required to engage an auditor to report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);

• we are not required to comply with the requirement of the Public Company Accounting Oversight Board (“PCAOB”), regarding the communication of critical audit matters in the auditor’s report on the financial statements;

• we are not required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay,” “say-on-frequency,” and “say-on-golden parachutes;” and

• we are not required to comply with certain disclosure requirements related to executive compensation, such as the requirement to present a comparison of our Chief Executive Officer’s compensation to our median employee compensation.

We may take advantage of these reduced reporting and other requirements until such time that we are no longer an emerging growth company. We will remain an emerging growth company until the earliest of: (i) the last day of the fiscal year following the fifth anniversary of the consummation of this offering; (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion; (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year; or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. We may choose to take advantage of some but not all of these reduced burdens. We have elected to adopt the reduced requirements with respect to our financial statements and the related selected financial data and “Management’s discussion and analysis of financial condition and results of operations” disclosure, including in this prospectus.

In addition, the JOBS Act permits an emerging growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have chosen to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards as required when they are adopted. This decision to opt out of the extended transition period is irrevocable.

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The offering

Issuer

Smith Douglas Homes Corp.

Shares of Class A common stock offered by us

7,692,308 shares (or 8,846,154 shares if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

Option to purchase additional shares of Class A common stock from us

The underwriters have an option to purchase an additional 1,153,846 shares of Class A common stock from us. The underwriters can exercise this option at any time within 30 days from the date of this prospectus.

Shares of Class A common stock to be outstanding immediately after this offering

7,692,308 shares, representing approximately 1.7% of the combined voting power of all of Smith Douglas Homes Corp.’s common stock (or 8,846,154 shares, representing approximately 2.0% of the combined voting power of all of Smith Douglas Homes Corp.’s common stock if the underwriters exercise in full their option to purchase additional shares of Class A common stock), 100% of the economic interest in Smith Douglas Homes Corp., and 15.0% of the indirect economic interest in Smith Douglas Holdings LLC (or 17.3% if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

Shares of Class B common stock to be outstanding immediately after this offering

43,589,743 shares, representing approximately 98.3% of the combined voting power of all of Smith Douglas Homes Corp.’s common stock (or 42,435,897 shares, representing approximately 98.0% of the combined voting power of all of Smith Douglas Homes Corp.’s common stock if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and no economic interest in Smith Douglas Homes Corp.

LLC Interests to be held by us immediately after this offering

7,692,308 LLC Interests, representing approximately 15.0% of the economic interest in Smith Douglas Holdings LLC (or  8,846,154 LLC Interests, representing approximately 17.3% of the economic interest in Smith Douglas Holdings LLC if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

LLC Interests to be held directly by the Continuing Equity Owners immediately after this offering

43,589,743 LLC Interests, representing approximately 85.0% of the economic interest in Smith Douglas Holdings LLC (or 42,435,897 LLC Interests, representing approximately 82.7% of the economic interest in Smith Douglas Holdings LLC if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

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Ratio of shares of Class A common stock to LLC Interests

The Smith Douglas LLC Agreement will require that we and Smith Douglas Holdings LLC at all times maintain a one-to-one ratio between the number of shares of Class A common stock issued by us and the number of LLC Interests owned by us.

Ratio of shares of Class B common stock to LLC Interests

Our amended and restated certificate of incorporation and the Smith Douglas LLC Agreement will require that we and Smith Douglas Holdings LLC at all times maintain a one-to-one ratio between the number of shares of Class B common stock owned by the Continuing Equity Owners and their respective permitted transferees and the number of LLC Interests owned by the Continuing Equity Owners and their respective permitted transferees. Immediately after the Transactions, the Continuing Equity Owners will together own 100% of the outstanding shares of our Class B common stock.

Permitted holders of shares of Class B common stock

Only the Continuing Equity Owners and the permitted transferees of Class B common stock as described in this prospectus will be permitted to hold shares of our Class B common stock. See “Certain relationships and related person transactions—Smith Douglas LLC Agreement—Agreement in effect upon consummation of the Transactions.”

Voting rights

Holders of shares of our Class A common stock and Class B common stock will vote together as a single class on all matters presented to stockholders for their vote or approval, except as otherwise required by law or our amended and restated certificate of incorporation. Each share of our Class A common stock entitles its holders to one vote per share and, until the Sunset Date, each share of our Class B common stock entitles its holders to ten votes per share on all matters presented to our stockholders generally. From and after the occurrence of the Sunset Date, each share of our Class B common stock will entitle its holders to one vote per share on all matters presented to our stockholders generally. See “Description of capital stock.”

Redemption rights of holders of LLC Interests

The Continuing Equity Owners may, subject to certain exceptions, from time to time at each of their options require Smith Douglas Holdings LLC to redeem all or a portion of their LLC Interests in exchange for, at our election (determined solely by our independent directors (within the meaning of the Exchange rules) who are disinterested), newly-issued shares of our Class A common stock on a one-for-one basis (subject to customary adjustments, including for stock splits, stock dividends, and reclassifications) or a cash payment equal to a volume weighted average market price of one share of our Class A common stock for each LLC Interest so redeemed, in each case, in accordance with the terms of the Smith Douglas

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LLC Agreement; provided that, at our election (determined solely by our independent directors (within the meaning of the Exchange rules) who are disinterested), we may effect a direct exchange by Smith Douglas Homes Corp. of such Class A common stock or such cash, as applicable, for such LLC Interests. Simultaneously with the payment of cash or shares of Class A common stock, as applicable, in connection with a redemption or exchange of LLC Interests pursuant to the terms of the Smith Douglas LLC Agreement, a number of shares of our Class B common stock registered in the name of the redeeming or exchanging Continuing Equity Owner and permitted transferees will automatically be transferred to us for no consideration on a one-for-one basis with the number of LLC Interests so redeemed or exchanged and such shares of Class B common stock will be canceled. See “Certain relationships and related person transactions—Smith Douglas LLC Agreement—Agreement in effect upon consummation of the Transactions.”

Use of proceeds

We estimate, based upon an assumed initial public offering price of $19.50 per share (which is the midpoint of the estimated price range set forth on the cover page of this prospectus), that we will receive net proceeds from this offering of approximately $139.5 million (or $160.4 million if the underwriters exercise in full their option to purchase additional shares of Class A common stock), after deducting the underwriting discount. We intend to use the net proceeds from this offering (i) to purchase 6,410,257 newly issued LLC Interests for approximately $116.3 million directly from Smith Douglas Holdings LLC at a price per unit equal to the initial public offering price per share of Class A common stock in this offering less the underwriting discount; and (ii) to purchase 1,282,051 LLC Interests from the Continuing Equity Owners on a pro rata basis for $23.2 million in aggregate (or 2,435,897 LLC Interests from the Continuing Equity Owners for $44.2 million in aggregate if the underwriters exercise in full their option to purchase additional shares of Class A common stock) at a price per unit equal to the initial public offering price per share of Class A common stock in this offering less the underwriting discount. Upon each purchase of LLC Interests from the Continuing Equity Owners, the corresponding shares of Class B common stock will automatically be transferred to Smith Douglas Homes Corp. for no consideration and canceled. We will only retain the net proceeds that are used to purchase newly issued LLC Interests from Smith Douglas Holdings LLC, which, in turn, Smith Douglas Holdings LLC intends to use as follows: (i) to repay approximately $71.0 million of borrowings outstanding under our Existing Credit Facility as part of the Refinancing, (ii) redeem all the outstanding Class C Units and Class D Units of Smith Douglas Holdings LLC at par aggregating $2.6 million, (iii) repay $1.2 million in notes payable to certain related parties (see "Certain relationships and related person transactions") and

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(iv) the remainder, if any, for general corporate purposes. Following this offering and the Refinancing, we will have $250.0 million of availability under our revolving facility. For more information on the Existing Credit Facility and the Amended Credit Facility, see “Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources—Existing Credit Facility” and “Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources—Amended Credit Facility.” We may also use a portion of the net proceeds to acquire or invest in businesses, products, services, or technologies; however, we do not have agreements or commitments for any material acquisitions or investments at this time. Smith Douglas Holdings LLC will bear or reimburse Smith Douglas Homes Corp. for all of the expenses of this offering. We will have broad discretion in the way that we use the net proceeds of this offering. See “Use of proceeds” and “Certain relationships and related person transactions.”

Dividend policy

We currently intend to retain all available funds and any future earnings to fund the development and growth of our business, and therefore, we do not anticipate declaring or paying any cash dividends on our Class A common stock. Except in certain limited circumstances, holders of our Class B common stock are not entitled to participate in any dividends declared by our board of directors. Because we are a holding company, our ability to pay cash dividends on our Class A common stock depends on our receipt of cash distributions from Smith Douglas Holdings LLC. Our ability to pay dividends may be restricted by the terms of any future credit agreement or any future debt or preferred equity securities of us. Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors, subject to the requirements of applicable law, and in compliance with contractual restrictions and covenants in the agreements governing our future indebtedness. Any such determination will also depend upon our business prospects, results of operations, financial condition, cash requirements and availability, industry trends, and other factors that our board of directors may deem relevant. See “Dividend policy.”

Conflicts of interest

Because Wells Fargo Bank, National Association, an affiliate of Wells Fargo Securities, LLC, is administrative agent for the Existing Credit Facility, which will be repaid in full with the proceeds from this offering, Wells Fargo Securities, LLC is deemed to have a “conflict of interest” under Financial Industry Regulatory Authority, Inc. (“FINRA”) Rule 5121. Accordingly, this offering is being made in compliance with the requirements of Rule 5121. Pursuant to that rule, the appointment of a “qualified independent underwriter” is not required in connection with this offering. In accordance with FINRA Rule 5121(c),

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no sales of the shares in this offering will be made to any discretionary account over which Wells Fargo Securities, LLC exercises discretion without the prior specific written approval of the account holder. See “Underwriting (conflicts of interest).”

Controlled company exception

After the consummation of the Transactions, the Founder Fund will have more than 50% of the combined voting power of our common stock. As a result, we will be a “controlled company” within the meaning of the corporate governance standards of the Exchange rules and intend to elect not to comply with certain corporate governance standards, including that we have a nominating and corporate governance committee that is composed entirely of independent directors. From time to time, we may rely on additional exemptions provided to controlled companies under the Exchange rules. For example, as a controlled company, from time to time we may not have a majority of independent directors on our board of directors, an entirely independent nominating and corporate governance committee, an entirely independent compensation committee, or perform annual performance evaluations of the nominating and corporate governance and compensation committees. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all these corporate governance requirements.

Tax Receivable Agreement

We will enter into a Tax Receivable Agreement with Smith Douglas Holdings LLC and the Continuing Equity Owners that will provide for the payment by Smith Douglas Homes Corp. to the Continuing Equity Owners of 85% of the amount of tax benefits, if any, that Smith Douglas Homes Corp. actually realizes (or in some circumstances is deemed to realize) as a result of (i) Basis Adjustments, (ii) Section 704(c) Allocations, and (iii) certain tax benefits (such as interest deductions) arising from payments made under the Tax Receivable Agreement. See “Certain relationships and related person transactions—Tax Receivable Agreement” for a discussion of the Tax Receivable Agreement.

Registration Rights Agreement

Pursuant to the Registration Rights Agreement, we will, subject to the terms and conditions thereof, agree to register the resale of the shares of our Class A common stock that are issuable to the Continuing Equity Owners in connection with the Transactions. See “Certain relationships and related person transactions—Registration Rights Agreement” for a discussion of the Registration Rights Agreement.

Risk factors

See “Risk factors” beginning on page 27 and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in shares of our Class A common stock.

Trading symbol

We have applied to list our Class A common stock on the Exchange under the symbol “SDHC.”

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Unless we indicate otherwise or the context otherwise requires, all information in this prospectus:

• gives effect to the amendment and restatement of the Smith Douglas LLC Agreement that converts all existing ownership interests in Smith Douglas Holdings LLC into 44,871,794 LLC Interests, as well as the filing of our amended and restated certificate of incorporation;

• gives effect to the other Transactions, including the Refinancing, the consummation of this offering and proposed use of proceeds;

• excludes 2,051,282 shares of Class A common stock reserved for issuance under the 2024 Incentive Award Plan (the “2024 Plan”), as described under the caption “Executive compensation—Equity compensation plans—2024 Incentive Award Plan”, including approximately 472,820 shares of Class A common stock issuable pursuant to the settlement of restricted stock units that we will grant to certain of our directors, executive officers and other employees, including certain of our named executive officers, in connection with this offering as described in “Executive compensation—Narrative to summary compensation table—Equity compensation—IPO equity awards”;

• assumes an initial public offering price of $19.50 per share of Class A common stock, which is the midpoint of the estimated price range set forth on the cover page of this prospectus; and

• assumes no exercise by the underwriters of their option to purchase 1,153,846 additional shares of Class A common stock from us.

Our 2024 Plan provides for annual automatic increases in the number of shares reserved thereunder.

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Summary historical and pro forma condensed consolidated

financial and other data

The following tables present the summary historical financial and other data for Smith Douglas Holdings LLC. Smith Douglas Holdings LLC is the predecessor of Smith Douglas Homes Corp. for financial reporting purposes. The summary statements of income and statements of cash flows data for the years ended December 31, 2022 and 2021, and the summary balance sheet data as of December 31, 2022 and 2021, are derived from the audited consolidated financial statements of Smith Douglas Holdings LLC included elsewhere in this prospectus. The summary statements of income and statements of cash flows data for the nine months ended September 30, 2023 and 2022, and the summary balance sheet data as of September 30, 2023 are derived from the unaudited condensed consolidated financial statements of Smith Douglas Holdings LLC included elsewhere in this prospectus. The unaudited condensed consolidated financial statements of Smith Douglas Holdings LLC have been prepared on the same basis as the audited consolidated financial statements and, in our opinion, include all adjustments, consisting of normal recurring adjustments, necessary to present fairly in all material respects our financial position and results of operations. The results for any interim period are not necessarily indicative of the results that may be expected for the full year. Historical results of operations for the periods presented below are not necessarily indicative of the results to be expected for any future period. The information set forth below should be read together with “Unaudited pro forma condensed consolidated financial information,” “Use of proceeds,” “Capitalization,” “Management’s discussion and analysis of financial condition and results of operations,” “Our organizational structure” and the audited financial statements and the accompanying notes included elsewhere in this prospectus.

The summary unaudited pro forma condensed consolidated financial information of Smith Douglas Homes Corp. presented below has been derived from our unaudited pro forma condensed consolidated financial information included elsewhere in this prospectus. The following summary unaudited pro forma condensed consolidated balance sheet as of September 30, 2023 and the unaudited pro forma condensed consolidated statements of income and statements of cash flows for the nine months ended September 30, 2023 and the year ended December 31, 2022 give effect to the Devon Street Homes Acquisition, the Transactions, the Refinancing, and the other events set forth in “Our organizational structure,” including the consummation of this offering, the use of the net proceeds therefrom and related transactions, as described in “Use of proceeds” and “Unaudited pro forma condensed consolidated financial information,” as if they all had occurred on January 1, 2022 with respect to the statements of income data, and September 30, 2023 with respect to the balance sheet data. The summary unaudited pro forma condensed consolidated financial information includes various estimates which are subject to material change and may not be indicative of what our operations or financial position would have been had the Devon Street Homes Acquisition and this offering and related transactions taken place on the dates indicated, or that may be expected to occur in the future. See “Unaudited pro forma condensed consolidated financial information” for a complete description of the adjustments and assumptions underlying the summary unaudited pro forma condensed consolidated financial information. The presentation of the summary unaudited pro forma condensed consolidated financial information is prepared in conformity with Article 11 of Regulation S-X.

The summary historical financial and other data of Smith Douglas Homes Corp. has not been presented because Smith Douglas Homes Corp. is a newly-incorporated entity and has had no business transactions or activities to date, besides our initial capitalization.

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	Smith Douglas Homes Corp. Pro Forma(1)		Historical Smith Douglas Holdings LLC
	Nine months ended September 30,	Year ended December 31,	Nine months ended September 30,		Year ended December 31,
	2023	2022	2023	2022	2022	2021
	(In thousands)		(Unaudited, in thousands)		(In thousands)
Summary statement of income data:
Home closing revenue	$594,591	$863,241	$547,304	$531,944	$755,353	$518,863
Cost of home closings	426,136	617,241	388,983	377,341	532,599	395,917
Home closing gross profit	168,455	246,000	158,321	154,603	222,754	122,946
Selling, general, and administrative costs	71,381	97,192	64,901	56,080	83,269	64,231
Equity in income from unconsolidated entities	(658)	(1,120)	(658)	(789)	(1,120)	(595)
Interest expense	808	1,016	795	528	734	1,733
Other (income) loss, net	(213)	(473)	(217)	(352)	(573)	188
Forgiveness of Paycheck Protection Program Loan	—	—	—	—	—	(5,141)
Income before income taxes	97,137	149,385	93,500	99,136	140,444	62,530
Provision for income taxes	3,643	5,602	—	—	—	—
Net income	93,494	143,783	$93,500	$99,136	$140,444	$62,530
Net income attributable to noncontrolling interests	79,470	122,216
Net income attributable to Smith Douglas Homes Corp.	$14,024	$21,567
Pro forma per share data:
Pro forma net income per share:
Basic and diluted	$1.77	$2.80
Pro forma weighted-average shares used to compute pro forma net income per share:
Basic and diluted	7,908,718	7,692,308

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	Smith Douglas Homes Corp. Pro Forma(1)	Historical Smith Douglas Holdings LLC
	As of September 30,	As of September 30,	As of December 31,
	2023	2023	2022	2021
	(In thousands)	(Unaudited, in thousands)	(In thousands)
Summary balance sheet data:
Cash and cash equivalents	$51,938	$10,440	$29,601	$25,340
Total assets	375,451	329,476	223,372	201,188
Notes payable	5,000	76,000	15,000	72,000
Total liabilities	78,585	141,692	58,861	105,672
Members’ equity		187,784	164,511	95,516
Equity attributable to Smith Douglas Homes Corp.	44,537
Noncontrolling interests	252,329
Total stockholders’/members’ equity	296,866	187,784	164,511	95,516
Total liabilities and stockholders’/members’ equity	$375,451	$329,476	$223,372	$201,188

	Smith Douglas Homes Corp. Pro Forma(1)		Historical Smith Douglas Holdings LLC
	Nine months ended September 30,	Year ended December 31,	Nine months ended September 30,		Year ended December 31,
	2023	2022	2023	2022	2022	2021
	(In thousands)		(Unaudited, in thousands)		(In thousands)
Summary statements of cash flows data:
Net cash provided by operating activities			$54,958	$58,105	$132,095	$30,870
Net cash (used in) provided by investing activities			(75,631)	798	361	847
Net cash (used in) provided by financing activities			1,512	(67,124)	(128,195)	(38,541)
Net (decrease) increase in cash and cash equivalents			(19,161)	(8,221)	4,261	(6,824)
Other financial data(2):
Home closing gross profit(3)	$168,455	$246,000	$158,321	$154,603	$222,754	$122,946
Adj. home closing gross profit(5)	$170,170	$249,040	$159,823	$156,444	$225,511	$124,981
Home closing gross margin(4)	28.3%	28.5%	28.9%	29.1%	29.5%	23.7%
Adj. home closing gross margin(4)	28.6%	28.9%	29.2%	29.4%	29.9%	24.1%
Adj. net income(5)	$72,853	$112,039	$70,125	$74,352	$105,333	$46,898
EBITDA(5)	$100,403	$154,325	$96,479	$102,155	$144,707	$67,284
Net income margin	15.7%	16.7%	17.1%	18.6%	18.6%	12.1%
EBITDA margin(4)(5)	16.9%	17.9%	17.6%	19.2%	19.2%	13.0%
Other operating data(2):
Home closings	1,789	2,524	1,643	1,575	2,200	1,848
ASP of homes closed	$332	$342	$333	$338	$343	$281
Net new home orders	1,996	2,132	1,844	1,504	1,928	1,920
Contract value of net new home orders	$663,690	$735,382	$614,683	$535,455	$667,530	$597,761
ASP of net new home orders	$333	$345	$333	$356	$346	$311
Cancellation rate(6)	10.7%	14.7%	9.5%	9.0%	10.9%	6.7%
Backlog homes (period end)(7)	1,042	841	1,042	972	771	1,043
Contract value of backlog homes (period end)	$350,439	$282,168	$350,439	$349,542	$258,718	$345,521
ASP of backlog homes (period end)	$336	$336	$336	$360	$336	$331
Active communities (period end)(8)	62	64	62	55	53	52
Controlled lots (period end):
Homes under construction	905	778	905	792	623	711
Owned lots	395	589	395	384	342	319
Optioned lots	10,279	8,665	10,279	9,390	7,848	9,840
Total controlled lots	11,579	10,032	11,579	10,566	8,813	10,870

(1)
Pro forma for the Transactions, including the Refinancing and the Devon Street Homes Acquisition. See “Unaudited pro forma condensed consolidated financial information.”

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(2)
For definitions and further information about how we calculate financial and operating data, including a reconciliation of adjusted home closing gross profit, adjusted net income, EBITDA, adjusted home closing gross margin, and EBITDA margin, please see “Management’s discussion and analysis of financial condition and results of operations—Reorganization transactions—Non-GAAP financial measures.”

(3)
Home closing gross profit is home closing revenue less cost of home closings.

(4)
Calculated as a percentage of home closing revenue.

(5)
Adjusted home closing gross profit, adjusted home closing gross margin, adjusted net income, EBITDA, and EBITDA margin are included in this prospectus because they are non-GAAP financial measures used by management and our board of directors to assess our financial performance. For definitions of adjusted homes closing gross profit, adjusted home closing gross margin, adjusted net income, EBITDA, and EBITDA margin and reconciliations to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “Management’s discussion and analysis of financial condition and results of operations—Reorganization transactions—Non-GAAP financial measures.” Our non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. Adjusted homes closing gross profit, adjusted home closing gross margin, adjusted net income, EBITDA, and EBITDA margin may be different than a similarly titled measure used by other companies.

(6)
The cancellation rate is the total number of cancellations during the period divided by the total gross new home orders during the period.

(7)
Backlog homes (period end) is the number of homes in backlog from the previous period plus the number of net new home orders generated during the current period minus the number of homes closed during the current period.

(8)
A community becomes active once the model is completed or the community has its first sale. A community becomes inactive when it has fewer than two units remaining to sell.

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Risk factors

An investment in our Class A common stock involves a high degree of risk. Before making an investment decision, you should carefully consider the specific risk factors set forth below, together with the other information included elsewhere in this prospectus. If any of the risks discussed in this prospectus occur, our business, prospects, liquidity, financial condition, and results of operations could be materially impaired, in which case the trading price of our Class A common stock could decline significantly, and you could lose all or part of your investment. Some statements in this prospectus, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section entitled “Cautionary note regarding forward-looking statements.”

Risks related to our business, industry, and the economy

Our industry is cyclical and is significantly affected by changes in general and local economic conditions.

Our business can be substantially affected by adverse changes in general economic or business conditions, and other events and conditions that are outside of our control, including:

• increases in short- and long-term interest rates;

• high inflation;

• supply-chain disruptions and the cost or availability of building materials;

• the availability of trade partners, vendors, or other third parties;

• housing affordability;

• the availability and cost of financing for homebuyers;

• federal and state income and real estate tax laws, including limitations on, or the elimination of, the deduction of mortgage interest or property tax payments;

• employment levels, job and personal income growth and household debt-to-income levels;

• consumer confidence generally and the confidence of potential homebuyers in particular;

• the ability of homeowners to sell their existing homes at acceptable prices;

• the U.S. and global financial systems and credit markets, including stock market and credit market volatility;

• inclement weather and natural and man-made disasters, including risks associated with global climate change, such as increased frequency or intensity of adverse weather events;

• environmental, health, and safety laws and regulations, and the environmental conditions of our properties;

• civil unrest, acts of terrorism, other acts of violence, threats to national security, global economic and political instability, and conflicts such as the conflict between Russia and Ukraine and the Israel-Hamas conflict (including any escalation or expansion), escalating global trade tensions, the adoption of trade restrictions, or a public health issue such as COVID-19 or another major epidemic or pandemic;

• mortgage financing programs and regulation of lending practices;

• housing demand from population growth, household formations and demographic changes (including immigration levels and trends or other costs of home ownership in urban and suburban migration);

• demand from foreign homebuyers for our homes;

• the supply of available new or existing homes and other housing alternatives;

• energy prices; and

• the supply of developable land in our markets and in the United States generally.

Adverse changes in these conditions may affect our business nationally or may be more prevalent or concentrated in particular regions or localities in which we operate or may decide to operate in the future, which effects may be magnified where we have significant operations. Additionally, governmental action and legislation related to economic stimulus, taxation, tariffs, spending levels and borrowing limits, interest rates, immigration, as well as

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political debate, conflicts, and compromises related to such actions, may negatively impact the financial markets and consumer confidence and spending, which could adversely impact the U.S. economy and the housing market. Any deterioration or significant uncertainty in economic or political conditions could have a material adverse effect on our business.

These adverse changes in economic and other conditions can cause mortgage rates to rise, demand and prices for our homes to diminish, or cause us to take longer to build our homes and make it more costly for us to do so. We may not be able to recover these increased costs by raising prices because of weak market conditions and because the price of each home we sell is usually set several months before the home is delivered, as many homebuyers sign their home purchase contracts before construction begins. The potential difficulties described above could impact our homebuyers’ ability to obtain suitable financing and cause some homebuyers to cancel their home purchase contracts altogether.

The housing market may not continue to grow at the same rate, or may decline, and any reduced growth or decline in our markets or for the homebuilding industry generally may materially and adversely affect our business and financial condition.

We cannot predict whether and to what extent the housing markets in the geographic areas in which we operate or may decide to operate in the future will continue to grow, particularly if interest rates for mortgage loans, land costs, and construction costs rise. Other factors that might impact growth in the homebuilding industry include uncertainty in domestic and international financial, credit, and consumer lending markets amid slow economic growth or recessionary conditions in various regions or industries around the world, including as a result of the COVID-19 pandemic, tight lending standards and practices for mortgage loans that limit consumers’ ability to qualify for mortgage financing to purchase a home, including increased minimum credit score requirements, credit risk/mortgage loan insurance premiums and/or other fees and required down payment amounts, higher home prices, more conservative appraisals, changing consumer preferences, higher loan-to-value ratios and extensive homebuyer income and asset documentation requirements, changes to mortgage regulations, population decline or slower rates of population growth in our markets, or Federal Reserve policy changes. Given these factors, we can provide no assurance that the present housing market will continue to be strong, whether overall or in our markets. Because we depend on a limited number of markets for substantially all of our home orders, if these markets, and in particular, Atlanta, Georgia, our largest market, experience downturns in the housing market, our business, prospects, and results of operations would be adversely impacted even if conditions in the broader economy or housing market did not suffer such a decline.

If there is limited economic growth, declines in employment and consumer income, changes in consumer behavior, including as a result of the COVID-19 pandemic, and/or tightening of mortgage lending standards, practices and regulation in the geographic areas in which we operate or may decide to operate in the future, or if interest rates for mortgage loans or home prices rise, there could likely be a corresponding adverse effect on our business, prospects, liquidity, financial condition, and results of operations, including, but not limited to, the number of homes we sell, our ASP of homes closed, and the amount of revenues or profits we generate, and such effect may be material.

The tightening of mortgage lending standards and mortgage financing requirements, untimely or incomplete mortgage loan originations, and rising mortgage interest rates could adversely affect the availability of mortgage loans for potential purchasers of our homes and thereby materially and adversely affect our business, prospects, liquidity, financial condition, and results of operations.

Almost all our homebuyers finance their home purchases through lenders that provide mortgage financing. Mortgage interest rates have generally trended downward for the last several decades and reached historic lows in 2021, which made the homes we sell more affordable during that period. Mortgage interest rates increased substantially during 2022 and 2023 in response to the Federal Reserve’s actions and future signaling to combat inflationary pressures, which negatively impacted consumer affordability. We cannot predict future mortgage interest rates, and if mortgage interest rates continue to increase, the ability of prospective homebuyers to finance home purchases may be adversely affected, and our operating results may be significantly impacted. Our homebuilding activities are dependent upon the availability of mortgage financing to homebuyers, which is expected to be impacted by continued regulatory changes and fluctuations in the risk appetites of lenders. The financial documentation, down payment amounts, and income to debt ratio requirements are subject to change and could become more restrictive.

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The federal government has a significant role in supporting mortgage lending through its conservatorship of Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”), both of which purchase or insure mortgage loans and mortgage loan-backed securities, and its insurance of mortgage loans through or in connection with the FHA, the Veterans Administration (“VA”), and the U.S. Department of Agriculture (“USDA”). FHA and VA backing of mortgage loans has been particularly important to the mortgage finance industry and to our business. Increased lending volume and losses insured by the FHA have resulted in a reduction of the FHA insurance fund. If either the FHA or VA raised their down payment requirements or lowered maximum loan amounts, our business could be materially affected. In addition, changes in governmental regulation with respect to mortgage lenders could adversely affect demand for housing.

The availability and affordability of mortgage loans, including mortgage interest rates for such loans, could also be adversely affected by a scaling back or termination of the federal government’s mortgage loan-related programs or policies. Fannie Mae, Freddie Mac, FHA, USDA, and VA backed mortgage loans have been an important factor in marketing and selling many of our homes. Given that a majority of our homebuyers’ mortgages conform with terms established by Freddie Mac, Fannie Mae, FHA, USDA, and VA, any limitations or restrictions in the availability of, or higher consumer costs for, such government-backed financing could adversely affect our business, prospects, liquidity, financial condition, and results of operations. The elimination or curtailment of state bonds to assist homebuyers could materially and adversely affect our business, prospects, liquidity, financial condition, and results of operations.

In addition, certain current regulations impose, and future regulations may strengthen or impose, new standards and requirements relating to the origination, securitization, and servicing of residential consumer mortgage loans, which could further restrict the availability and affordability of mortgage loans and the demand for such loans by financial intermediaries and, as a result, adversely affect our home orders, financial condition, and results of operations. Further, if, due to credit or consumer lending market conditions, reduced liquidity, increased risk retention or minimum capital level obligations and/or regulatory restrictions related to certain regulations, laws or other factors or business decisions, these lenders refuse or are unable to provide mortgage loans to our homebuyers, or increase the costs to borrowers to obtain such loans, the number of homes we close and our business, prospects, liquidity, financial condition, and results of operations may be materially adversely affected.

Price-conscious entry-level and empty-nest homebuyers are the primary sources of demand for our new homes. Entry-level homebuyers are generally more affected by the availability of mortgage financing than other potential homebuyers and many of our potential empty-nest homebuyers must sell their existing homes to buy a home from us. A limited availability of suitable mortgage financing could prevent homebuyers from buying our homes and could prevent buyers of our homebuyers’ homes from obtaining mortgages they need to complete such purchases, either of which could result in potential homebuyers’ inability to buy a home from us, which could have a material adverse effect on our sales, profitability, cash flows, and ability to service our debt obligations.

Regional factors affecting the homebuilding industry in our current and future markets could materially and adversely affect us.

Our business strategy is focused on the acquisition of suitable land and the design, construction, and sale of primarily single-family homes in residential subdivisions, including planned communities, in Georgia, Alabama, North Carolina, Tennessee, and Texas. In addition, we have land banking contracts for the right to purchase land or lots at a future point in time in all our current markets. A prolonged economic downturn or future adverse conditions in one or more of these areas, or a particular industry that is fundamental to one or more of these areas, particularly within Atlanta, Georgia, our largest market, could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.

Furthermore, if homebuyer demand for new homes in these markets decreases, home prices could decline, which would have a material adverse effect on our business.

Interest rate changes, and the failure to hedge against them, may adversely affect us.

We have in the past and may in the future borrow money to finance acquisitions related to land, lots, home inventories, or other companies. The borrowings may bear interest at variable rates. Interest rate changes could affect our interest payments, and our future earnings, results of operations, and cash flows may be adversely affected, assuming other factors are held constant.

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We currently do not hedge against interest rate fluctuations. We may in the future obtain one or more forms of interest rate protection in the form of swap agreements, interest rate cap contracts or similar agreements to hedge against the possible negative effects of interest rate fluctuations. However, we cannot assure you that any hedging will adequately relieve the adverse effects of interest rate increases or that counterparties under these agreements will honor their obligations thereunder. In addition, we may be subject to risks of default by hedging counterparties. Adverse economic conditions could also cause the terms on which we borrow to be unfavorable. We could be required to liquidate one or more of our assets at times which may not permit us to receive an attractive return on our assets in order to meet our debt service obligations.

The homebuilding industry is highly competitive and, if our competitors are more successful or offer better value to our homebuyers, our business could decline.

We operate in a very competitive environment that is characterized by competition from a number of other homebuilders in each market in which we operate. Additionally, there are relatively low barriers to entry into our business. We compete with large national and regional homebuilding companies, some of which have greater financial and operational resources than us, and with smaller local homebuilders, some of which may have lower administrative costs than us. We may be at a competitive disadvantage relative to certain of our large national and regional homebuilding competitors whose operations are more geographically diversified than ours, as these competitors may be better able to withstand any future regional downturns in the housing market. Furthermore, our market share in certain of our markets may be lower as compared to some of our competitors. Many of our competitors also have longer operating histories and longstanding relationships with trade partners and suppliers in the markets in which we operate or to which we may expand. This may give our competitors an advantage in marketing their products, securing lots, materials, and labor at lower prices, and allowing their homes to be delivered to homebuyers more quickly and at more favorable prices. We compete for homebuyers, desirable lots and lot options, financing, raw materials, skilled management, and other labor resources, among other things. Our competitors may independently develop land and construct homes that are substantially similar to our products.

Increased competition could hurt our business, as it could prevent us from acquiring desirable lots and lot options on which to build homes or make such acquisitions more expensive, hinder our market share expansion, and cause us to increase our selling incentives and reduce our prices. An oversupply of homes available for sale or discounting of home prices by competitors could periodically adversely affect demand for our homes in certain markets and could adversely affect pricing for homes in the markets in which we operate or may operate in the future.

If we are unable to compete effectively in our markets, our business could decline disproportionately to our competitors, and our results of operations and financial condition could be adversely affected. We can provide no assurance that we will be able to continue to compete successfully in any of our markets. Our inability to continue to compete successfully in any of our markets could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.

Fluctuations in real estate values may require us to write-down the book value of our real estate assets.

The homebuilding and land development industries are subject to significant variability and fluctuations in real estate values. As a result, we may be required to write-down the book value of our real estate assets in accordance with GAAP, and some of those write-downs could be material. Any material write-downs of assets could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.

Natural and man-made disasters, severe weather, and adverse geologic conditions may increase costs, cause project delays, and reduce consumer demand for housing, all of which could materially and adversely affect us.

Our homebuilding operations are in many areas that are subject to natural and man-made disasters, severe weather, or adverse geologic conditions. These include, but are not limited to, hurricanes, tornadoes, droughts, floods, brushfires, wildfires, prolonged periods of precipitation, landslides, soil subsidence, earthquakes, and other natural and man-made disasters. The occurrence of any of these events could damage our land parcels and projects, cause delays in completion of our communities, reduce consumer demand for housing, cause delays in our supply chain, and cause shortages and price increases in labor or raw materials, any of which could affect our sales and profitability. In addition to directly damaging our land or projects, many of these natural events could damage roads and highways providing access to our assets or affect the desirability of our land or communities,

30

thereby adversely affecting our ability to market or sell homes in those areas and possibly increasing the costs of homebuilding. Furthermore, the occurrence of natural and man-made disasters, severe weather, and other adverse geologic conditions has increased in recent years due to climate change and may continue to increase in the future.

Climate change may have the effect of making the risks described above occur more frequently and more severely, which could amplify the adverse impact in our business, prospects, liquidity, financial condition, and results of operations.

There are some risks of loss for which we may be unable to purchase insurance coverage. For example, losses associated with hurricanes, landslides, prolonged periods of precipitation, earthquakes, and other weather-related and geologic events may not be insurable, and other losses, such as those arising from terrorism, may not be economically insurable. A sizeable uninsured loss could materially and adversely affect our business, prospects, liquidity, financial condition, and results of operations.

Because of the seasonal nature of our business, our quarterly operating results fluctuate.

We have historically experienced, and expect to continue to experience, variability in our results of operations from quarter to quarter due to the seasonal nature of the homebuilding industry. We generally close more homes in our second, third, and fourth quarters. As a result, our revenues may fluctuate on a quarterly basis, and we may have higher capital requirements in our second, third, and fourth quarters in order to maintain our inventory levels. Accordingly, there is a risk that we will invest significant amounts of capital in the acquisition and development of land and construction of homes that we do not sell at anticipated pricing levels or within anticipated time frames. If, due to market conditions, construction delays or other causes, we do not complete home orders at anticipated pricing levels or within anticipated time frames, our business, prospects, liquidity, financial condition, and results of operations would be adversely affected. We expect this seasonal pattern to continue over the long term, and we cannot make any assurances as to the degree to which our historical seasonal patterns will occur in the future.

Changes to population growth rates in certain of the markets in which we operate or plan to operate could affect the demand for homes in these regions.

Slower rates of population growth or population declines in our markets in Atlanta, Birmingham, Charlotte, Huntsville, Nashville, Raleigh, Houston, or other key markets in the United States we may decide to enter in the future, especially as compared to the high population growth rates in prior years, could affect the demand for housing, cause home prices in these markets to fall and adversely affect our plans for growth, business, financial condition, and operating results. Furthermore, while we have recently observed an increase in our business from people moving to more geographically diverse submarkets during the COVID-19 pandemic, we cannot assure you that this trend will continue or not reverse.

Volatility in the credit and capital markets may impact our cost of capital and our ability to access necessary financing and the difficulty in obtaining sufficient capital could prevent us from acquiring lots for our construction or increase costs and delays in the completion of our homebuilding expenditures.

On October 28, 2021, we entered our $175.0 million unsecured revolving Existing Credit Facility that includes a $25.0 million accordion feature. As amended on December 19, 2022, our outstanding borrowings under the Existing Credit Facility will mature on December 19, 2025. As of September 30, 2023, our outstanding borrowings under the Existing Credit Facility totaled $71.0 million and our availability as determined in accordance with the borrowing base totaled $85.0 million. For more information on the Existing Credit Facility see “Management's discussion and analysis of financial condition and results of operations—Liquidity and capital resources—Existing Credit Facility.” Concurrently with, and conditioned upon, the closing of this offering, we intend to enter into the Amended Credit Facility, and, as part of the Refinancing, we intend to use a portion of our net proceeds from this offering for the Debt Repayment, see “Use of proceeds.” The Amended Credit Facility is conditioned upon the closing of this offering and certain other customary conditions to effectiveness, however, this offering is not contingent upon the effectiveness of the Amended Credit Facility. For more information on the Amended Credit Facility see “Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources—Amended Credit Facility.” If we require working capital greater than that provided by our operations, our Existing Credit Facility and our Amended Credit Facility, we may be required to seek to increase the amount

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available under our Existing Credit Facility and our Amended Credit Facility or to seek alternative financing, which might not be available on terms that are favorable or acceptable or at all. If we are required to seek financing to fund our working capital requirements, volatility in credit or capital markets may restrict our flexibility to successfully obtain additional financing on terms acceptable to us, or at all. If we are at any time unsuccessful in obtaining sufficient capital to fund our planned homebuilding expenditures, we may experience a substantial delay in the completion of homes then under construction, or we may be unable to control or purchase finished building lots. Any delay could result in cost increases and could have a material adverse effect on our sales, profitability, stock performance, cash flows, and ability to service our debt obligations.

Inflation could adversely affect our business and financial results.

Currently, the United States is experiencing inflationary conditions. Inflation could adversely affect our business and financial results by increasing the costs of land, raw materials, and labor needed to operate our business. If our markets have an oversupply of homes relative to demand, we may be unable to offset any such increases in costs with corresponding higher sales prices for our homes. Inflation may also accompany higher interest rates, which could adversely impact a potential homebuyer’s ability to obtain financing on favorable terms, thereby further decreasing demand. If we are unable to raise the prices of our homes to offset the increasing costs of our operations, our margins could decrease. Furthermore, if we need to lower the price of our homes to meet demand, our profitability may decrease. Inflation may also raise our costs of capital and decrease our purchasing power, making it more difficult to maintain sufficient funds to operate our business. Our operations may be negatively impacted by inflation due to increasing construction costs, labor, and materials, as well as land acquisition financing costs. The Federal Reserve materially raised interest rates in the current year and signaled additional interest rate increases which increased our financing costs and has reduced demand for our homes.

Our geographic concentration could materially and adversely affect us if the homebuilding industry in our current markets should decline.

Our business strategy is focused on the design, construction, and sale of single-family homes in five states across the Southeastern and Southern United States. While our operations are geographically diverse and we may expand into additional markets, a prolonged economic downturn in one or more of the areas in which we operate, particularly within Atlanta, Georgia, our largest market, could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations, and a disproportionately greater impact on us than other homebuilders with larger scale and more diversified operations and geographic footprint.

Difficulties with appraisal valuations in relation to the proposed sales price of our homes could force us to reduce the price of our homes for sale.

Each of our home orders may require an appraisal of the home value before closing. These appraisals are professional judgments of the market value of the property and are based on a variety of market factors. If our internal valuations of the market and pricing do not line up with the appraisal valuations, and appraisals are not at or near the agreed upon sales price, we may be forced to reduce the sales price of the home to complete the sale. These appraisal issues could have a material adverse effect on our business and results of operations.

If the market value of our inventory or controlled lot position declines, our profits could decrease, and we may incur losses.

Inventory risk can be substantial for homebuilders. The market value of building lots and housing inventories can fluctuate significantly because of changing market conditions. In addition, inventory carrying costs can be significant and can result in losses in a poorly performing community or market. We must continuously seek and make acquisitions of lots for expansion into new markets, as well as for replacement and expansion within our current markets, which we generally accomplish by entering finished lot option contracts or land bank option contracts. In the event of adverse changes in economic, market, or community conditions, we may cease further building activities in certain communities, restructure existing land banking option contracts, or elect not to exercise our land banking options. Such actions would result in our forfeiture of some or all of any deposits, fees, or investments paid or made in respect of such arrangements, including any cost overruns. The forfeiture of land contract deposits or inventory impairments may result in a loss that could have a material adverse effect on our profitability, stock performance, ability to service our debt obligations, and future cash flows.

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A major health and safety incident relating to our business could be costly in terms of potential liabilities and reputational damage.

Building sites are inherently dangerous and operating in the homebuilding and land development industry poses certain inherent health and safety risks. Due to health and safety regulatory requirements and the number of projects we work on, health and safety performance is critical to the success of all areas of our business.

Any failure in health and safety performance may result in penalties or a suspension or cessation of our operations for non-compliance with relevant regulatory requirements or litigation, and a failure that results in a major or significant health and safety incident is likely to be costly in terms of potential liabilities incurred as a result. Such a failure could generate significant negative publicity and have a corresponding impact on our reputation and our relationships with relevant regulatory agencies, governmental authorities, and local communities, which in turn could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.

Risks related to the operation of our business

Our business model, which is dependent upon our ability to purchase and develop land at competitive prices and the ability of our homebuyers to be able to finance their home purchases through mortgage financing at accessible rates, can be substantially impacted by adverse changes in general economic conditions outside our control.

Our business can be substantially impacted by adverse changes in general economic conditions outside our control, including increases in short- and long-term interest rates, high inflation, and availability and cost of financing for homebuyers. These adverse changes in economic conditions can cause mortgage rates to rise, demand and prices for our homes to diminish, current and future land banking contracts to be negatively impacted, or lead to longer and more costly build times for our homes. We may not be able to recover these increased costs by raising prices, because of weak market conditions and because the price of each home we sell is usually set several months before the home is delivered, as many homebuyers sign their home purchase contracts before construction begins. The potential difficulties described above could increase our costs or impact our homebuyers’ ability to obtain suitable financing and cause some homebuyers to cancel or refuse to honor their home purchase contracts altogether, any of which could have a material adverse effect on our business.

Our inability to successfully identify, secure, and control an adequate inventory of lots at reasonable prices could adversely impact our operations.

The results of our homebuilding operations depend in part upon our continuing ability to successfully identify, control, and acquire an adequate number of homebuilding lots in desirable locations. There is no guarantee an adequate supply of homebuilding lots will continue to be available to us on terms like those available in the past, or that we will not be required to devote a greater amount of capital to controlling homebuilding lots than we have in the past. In addition, because we employ a land-light business model, we may have access to fewer and less attractive homebuilding lots than if we owned lots outright, like some of our competitors who do not operate under a land-light model.

An insufficient supply of homebuilding lots in one or more of our markets, an inability of our developers to deliver finished lots in a timely fashion, a loss or limitation of access to capital by our land bankers, delays in recording deeds or in conveying controlled lots as a result of government shut downs, stay-at-home orders, or other reasons, or our inability to purchase or finance homebuilding lots on reasonable terms could have a material adverse effect on our sales, profitability, stock performance, ability to service our debt obligations, and future cash flows. Any land shortages or any decrease in the supply of suitable land at reasonable prices could limit our ability to develop new communities or result in increased lot deposit requirements or land costs. We may not be able to pass any increased land costs to our homebuyers, which could adversely impact our revenues, earnings, and margins.

We consider a lot controlled when we hold an option to acquire the applicable lot for the relevant timeframe set forth in the option contract. After we sign a finished lot option contract, but prior to the deposit becoming non-refundable (except for certain circumstances such as seller default or force majeure events), we have an initial inspection and due diligence period (“Inspection Period”). The Inspection Period is typically 60-120 days, during which time we inspect the property to make sure it meets certain development requirements (e.g., zoning, environmental approvals, and other customary requirements). If we discover that the property does not

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sufficiently meet the development requirements after the Inspection Period has passed, we could lose some or all of any deposits, fees, or investments paid or made in respect of such arrangements, including any cost overruns, which could adversely impact our profitability, stock performance, ability to service our debt obligations, and future cash flows.

If the property meets our development requirements and successfully exits the Inspection Period, the deposit becomes non-refundable (except for certain circumstances such as seller default and force majeure events), and we proceed under the finished lot option contract with the lots available to us for purchase on a staggered takedown schedule, which is designed to mirror our expected home orders. Our options to purchase lots typically expire at the end of each purchase date as set forth in the staggered takedown schedule of the applicable option contract. As the fair market value of controlled lots fluctuates from the contracted purchase prices in our land banking option contracts, we attempt to renegotiate the terms of the option contracts to ensure lot prices and yields are aligned with current market conditions. If, ultimately, we do not exercise our option to purchase, the seller then would have the option to terminate the agreement, which would then result in the loss of the option to purchase all remaining unpurchased lots and forfeiture of the remaining deposit for the unpurchased lots. We do not typically receive a return of our deposit upon expiration or termination of the contract unless it is due to seller default or a force majeure event. The forfeiture of land contract deposits or inventory impairments may result in a loss that could have a material adverse effect on our profitability, stock performance, ability to service our debt obligations, and future cash flows.

Our business and results of operations are dependent on the availability, skill, and performance of trade partners.

We engage trade partners to perform the construction of our homes. Accordingly, the timing and quality of our construction depend on the availability and skill of our trade partners. While we anticipate being able to obtain reliable trade partners and believe that our relationships with trade partners are good, we do not have long-term, exclusive contractual commitments with any trade partners, and we can provide no assurance that skilled trade partners will continue to be available at reasonable rates and in our markets. In addition, as we expand into new markets, we must develop new relationships with trade partners in such markets, and there can be no assurance that we will be able to do so in a cost-effective and timely manner, or at all. Further, our ability to engage qualified trade partners could be affected by various national, regional, local, economic, and political factors, including changes in immigration laws and trends in labor migration. Additionally, our markets may exhibit a reduced level of skilled labor relative to increased homebuilding demand. Skilled labor shortages in the regions where we operate have made in the past, and may make in the future, the engagement of trade partners more difficult. The inability to contract with skilled trade partners at reasonable rates on a timely basis could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.

Despite our quality control efforts, we may discover from time to time that our trade partners have engaged in improper construction practices or have installed defective materials in our homes. When we discover these issues, we utilize our trade partners to repair the homes in accordance with our new home warranty program and as required by law. The adverse costs of satisfying our warranty program and other legal obligations in these instances may be significant, and we may be unable to recover the costs of warranty-related repairs from trade partners and insurers, which could have a material adverse impact on our business, prospects, liquidity, financial condition, and results of operations. We may also suffer reputational damage from the actions of trade partners, which are beyond our control.

A shortage or increase in the costs of building materials could delay or increase the cost of home construction, which could have an adverse material impact on our business.

The residential construction industry experiences building material shortages from time to time, including shortages in supplies of insulation, drywall, cement, steel, and lumber. These building material shortages can be more severe during periods of strong demand for housing, during periods following natural disasters that have a significant impact on existing residential and commercial structures, or as a result of broader economic disruptions, such as the COVID-19 pandemic. For example, there has recently been a lingering national shortage of electrical transformers due to both natural disasters and the COVID-19 pandemic. While this shortage has recently shown signs of easing, it is uncertain whether or how quickly this shortage will be alleviated and inventories return to normal levels. Further, prices of building materials could be affected by the factors discussed above and various other national, regional, local, economic, and political factors, including changes in tariffs. Our success in recently entered markets or those we may choose to enter in the future depends substantially on our ability to source local

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materials on terms that are favorable to us. In the event of shortages in building materials in such markets, local and suppliers may choose to allocate their resources to homebuilders with an established presence in the market and with whom they have longer-standing relationships. Building material shortages and price increases for building materials could cause delays in and increase our costs of home construction and our construction cycle time, which in turn could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.

Utility shortages or price increases could have an adverse impact on operations.

Certain of the markets in which we operate or plan to operate in the future may experience utility shortages as well as significant increases in utility costs. For example, certain areas of North Carolina have experienced temporary disruptions to sewer system capacity and development in response to municipal infrastructure delays. Additionally, municipalities may restrict or place moratoriums on the availability of utilities, such as electricity, natural gas, water, and sewer taps. We may incur additional costs and may not be able to complete construction on a timely basis if such utility shortages, restrictions, moratoriums, and rate increases continue. In addition, these utility issues may adversely affect the local economies in which we operate, which may reduce demand for housing in those markets. Our business, prospects, liquidity, financial condition, and results of operations may be materially and adversely impacted if further utility shortages, restrictions, moratoriums, or rate increases occur in our markets.

Increases in our home cancellation rate could have a negative impact on our home closing revenue and home closing gross margins.

We recognize homebuilding revenue at the time of the closing of a sale, at which time title to and possession of the property are transferred to the homebuyer. When we execute sales contracts with homebuyers, or when we require advance payment from homebuyers for custom changes, upgrades or options related to their homes, the cash deposits received are recorded as contract liabilities until the homes are closed or the contracts are canceled. We either retain or refund to the homebuyer deposits on canceled sales contracts, depending upon the applicable provisions of the contract or other circumstances. Cancellations negatively impact the number of closed homes, net new orders, homebuilding revenues, and results of operations, as well as contract liabilities. Cancellations can result from declines or slow appreciation in the market value of homes, increases in the supply of homes available to be purchased, increased competition, higher mortgage interest rates, and adverse changes in economic conditions. During 2022 and part of 2023, demand weakened in response to additional increases in mortgage rates. The market’s reaction to the deteriorating economic conditions negatively affected net new orders and has had a negative impact on our cancellation rate. Any continued increase in the level of our cancellations would have a negative impact on our business, prospects, liquidity, financial condition, and results of operations.

We are subject to warranty and liability claims arising in the ordinary course of business that can be significant.

As a homebuilder, we are subject to construction defect, product liability, and home and other warranty claims, including moisture intrusion and related claims, arising in the ordinary course of business. These claims are common to the homebuilding industry and can be costly. There is no assurance that any developments we undertake will be free from defects once completed, and any defects attributable to us may lead to significant contractual or other liabilities. Although we provide trade partners with detailed specifications and perform quality control procedures, trade partners may, in some cases, use improper construction processes or defective materials. Defective products used in the construction of our homes can result in the need to perform extensive repairs.

Under our warranty program, each of our homes comes with a limited warranty against certain building defects for up to one year after closing and a limited warranty against structural claims for up to ten years after closing. When we discover the above issues, we utilize our trade partners to repair the homes in accordance with our trade partner agreements, our warranty program and as required by law. We maintain and require our trade partners to maintain general liability insurance (including construction defect and bodily injury coverage) naming us as an additional insured and workers’ compensation insurance and generally seek to require our trade partners to provide a warranty to us and to defend and indemnify us for liabilities arising from their work. Therefore, any claims relating to workmanship and materials are generally the trade partners’ responsibility.

While these indemnities and insurance policies, subject to deductibles and other coverage limits, protect us against a portion of our risk of loss from claims related to our land development and homebuilding activities, we cannot

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provide assurance that these indemnities and insurance policies will be adequate to address all of our home and other warranty, product liability, and construction defect claims in the future, or that any potential inadequacies will not have an adverse effect on our business, financial condition, or results of operations. The cost of performing such repairs (not covered by trade partner warranty or indemnities) or litigation arising out of such issues may be significant if we are unable to recover certain costs from trade partners, suppliers and/or insurers. Warranty and construction defect matters can also result in negative publicity, including on social media platforms, which could damage our reputation and negatively affect our ability to sell homes.

Further, the coverage offered by, and the availability of, general liability insurance for completed operations and construction defects are currently limited and costly. While we record an estimate of warranty expense based on historical warranty costs, we cannot provide assurance that coverage will not become costlier and/or be further restricted, increasing our risks and financial exposure to claims.

If we are unable to develop our communities successfully or within expected timeframes, our results of operations could be adversely affected.

Although our preference is to acquire finished lots, we also have acquired in the past and expect to acquire in the future, property that requires further development before we can begin building homes. When a community requires additional development, we devote substantial time and capital to obtain development approvals, acquire land, and construct significant portions of project infrastructure and amenities before the community generates any revenue. In addition, our land bank option contracts often include interest provisions under which delays in land development and/or longer land takedown periods cause us to incur additional cost. It can take several years from the time we acquire control of an undeveloped property to the time we get our first home order on the site. Delays in the development of communities, including delays associated with trade partners performing the development activities or entitlements, expose us to the risk of changes in market conditions for homes. A decline in our ability to successfully develop and market one of our new undeveloped communities and to generate positive cash flow from these operations in a timely manner could have a material adverse effect on our business and results of operations and on our ability to service our debt and to meet our working capital requirements. In addition, higher than expected absorption rates in existing communities may result in lower-than-expected inventory levels until the development for replacement communities is completed.

We may be unable to obtain suitable bonding for the development of our communities.

We are often required to provide bonds, letters of credit, or guarantees to governmental authorities and others to ensure completion of our communities. As a result of market conditions, some municipalities and governmental authorities have been reluctant to accept surety bonds and instead require credit enhancements, such as cash deposits or letters of credit, in order to maintain existing bonds or issue new bonds. If we are unable to obtain required bonds in the future for our communities, or if we are required to provide credit enhancements with respect to our current or future bonds or in place of bonds, our business, prospects, liquidity, financial condition, and results of operations could be materially and adversely affected.

We may suffer significant financial harm and loss of reputation if we do not comply, cannot comply, or are alleged to have not complied with applicable laws, rules and regulations concerning our classification and compensation practices for independent contractors.

Each of our divisions retain various independent contractors, either directly or indirectly through third-party entities formed by these independent contractors for their business purposes, including, without limitation, some of our sales agents. With respect to these independent contractors, we are subject to the Internal Revenue Service (the “IRS”) regulations, and applicable state law guidelines regarding independent contractor classification. These regulations and guidelines are subject to judicial and agency interpretation, and it might be determined that the independent contractor classification is inapplicable to any sales agents, vendors, or any other individual or entity characterized as an independent contractor. Further, if legal standards for the classification of independent contractors change or appear to be changing, we may need to modify our compensation and benefits structure for such independent contractors, including by paying additional compensation or benefits or reimbursing expenses.

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

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business with us. Although management believes there are no proposals currently pending that would significantly change the independent contractor classification, potential changes, if any, with respect to such classification could have a significant impact on our operating model. Further, the costs associated with any such potential changes could have a significant effect on our results of operations and financial condition if we were unable to pass through to our homebuyers an increase in price corresponding to such increased costs. Additionally, we could incur substantial costs, penalties, and damages, including back pay, unpaid benefits, taxes, expense reimbursement and attorneys’ fees, in defending future challenges to our employment classification or compensation practices.

Poor relations with the residents of our communities could negatively impact sales, which could cause our revenues or results of operations to decline.

Residents of communities we develop rely on us to resolve issues or disputes that may arise in connection with the operation or development of their communities. Efforts made by us to resolve these issues or disputes could be deemed unsatisfactory by the affected residents, and subsequent actions by these residents could adversely affect our sales or our reputation. In addition, we could be required to make material expenditures related to the settlement of such issues or disputes or to modify our community development plans, which could adversely affect our results of operations.

Our business depends on our ability to build and maintain a strong reputation and to receive favorable homebuyer reviews. If we receive negative reviews, complaints, negative publicity or otherwise fail to live up to expectations, it could materially adversely affect our business, results of operations, and growth prospects.

Homebuyer complaints or negative publicity about our materials, homes, delivery times, sales and customer support, or marketing strategies, even if not accurate, especially on our website, blogs, and social media websites could diminish homebuyers’ views of our homes and result in harm to our brand. We may be subject to delays and construction or product quality issues due to circumstances beyond our control which may impact our perceived performance and homebuyer satisfaction with our services and our homes. This may result in negative reviews and publicity, which could materially adversely affect our business, results of operations, and growth prospects.

We may engage in joint venture or other unconsolidated entity investments which could be adversely affected by our lack of sole decision-making authority, our reliance on the financial condition of our joint venture partners, and disputes between us and our joint venture partners.

We have in the past or may in the future co-invest with third parties through partnerships, joint ventures, or other unconsolidated entities, to acquire non-controlling interests in, and/or sharing responsibility for, managing the affairs of, a land acquisition, development, title insurance, and/or mortgage lending activities. In this event, we would not be able to exercise sole decision-making authority regarding the acquisition, development, title insurance, and/or mortgage lending activities, and our investment may be illiquid due to our lack of control.

We have in the past or may in the future have investments in and commitments to certain unconsolidated entities with related and unrelated strategic partners generally involved in real estate development, homebuilding, title insurance, and/or mortgage lending activities.

Investments in partnerships, joint ventures, or other unconsolidated entities may, under certain circumstances, involve incremental risks from involving a third party, including the possibility that our joint venture partners might become bankrupt, fail to fund their share of required capital contributions, make poor business decisions, or block or delay necessary decisions. Our joint venture partners may have economic or other business interests or goals that are inconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor our joint venture partners would have full control over the land acquisition or development. If the other partners in our partnerships or joint ventures do not cooperate or fulfill their contractual obligations due to their financial condition, strategic business interests, or otherwise, we may be required to spend additional resources or suffer losses, each of which could be significant. Moreover, our ability to recoup such expenditures and losses by exercising remedies against such partners may be limited due to the contractual terms of the agreements, potential legal defenses they may have, their respective financial condition, and other circumstances. Furthermore, because we lack a controlling interest in our unconsolidated entities we cannot exercise sole decision-making authority, which could create the potential risk of impasses on decisions and prevent the unconsolidated entity from taking, or not taking, actions that we believe may be in our best interests.

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In addition, as our relationships with our partners are contractual in nature and may be terminated or dissolved under the terms of the applicable agreements, including buy-sell provisions, we may not continue to own or operate the interests or assets underlying such relationship or may need to purchase additional interests or assets in the venture to continue ownership. Disputes between us and our joint venture partners may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and effort on our business. In addition, we may be liable for the actions of our joint venture partners in certain circumstances.

We could be adversely affected by efforts to impose joint employer liability on us for labor, safety, or worker’s compensation law violations committed by our trade partners.

Our homes are constructed by employees of trade partners and other third parties. We do not have the ability to control what these parties pay their employees or the rules they impose on their employees. However, various governmental agencies have taken actions to hold parties like us responsible for violations of wage and hour laws and other labor laws, safety laws, or worker’s compensation laws by trade partners. Governmental rulings that hold us responsible for labor practices by our trade partners could create substantial exposures for us under our trade partner relationships, which could have a material adverse impact on our business, prospects, liquidity, financial condition, and results of operations.

The fabrication and installation of building products may pose certain health and safety risks to the employees of our trade partners. The operations of our trade partners and trade partners are subject to regulation under the Occupational Safety and Health Act (as enforced by the U.S. Occupational Safety and Health Administration (“OSHA”), and equivalent state laws. Changes to OSHA requirements, or stricter interpretation or enforcement of existing laws or regulations, could result in increased costs to our trade partners, which could be passed on to us. If we fail to comply with applicable OSHA regulations, are determined to be responsible for compliance with certain OSHA regulations, or are found jointly liable for any violations of OSHA regulations, even if no work-related serious injury or death occurs, we may be subject to civil or criminal enforcement and be required to pay substantial penalties, incur significant capital expenditures, or suspend or limit operations. Any accidents, citations, violations, injuries, or failure to comply with industry best practices or applicable regulations may subject us to adverse publicity, damage our reputation and competitive position, and adversely affect our business.

Because real estate investments are relatively illiquid, our ability to promptly sell one or more properties for reasonable prices in response to changing economic, financial, and investment conditions may be limited, and we may be forced to hold non-income producing properties for extended periods of time.

Real estate investments are relatively difficult to sell quickly. As a result, our ability to promptly sell one or more properties in response to changing economic, financial, and investment conditions is limited, and we may be forced to hold non-income producing assets for an extended period. We cannot predict whether we will be able to sell any property for the price or on the terms that we set or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property.

There are various potential conflicts of interest in our relationship with founder and Executive Chairman Tom Bradbury, which could result in decisions that are not in the best interest of our stockholders.

Conflicts of interest may exist or could arise in the future with the Founder Fund, a trust for which Mr. Bradbury is the co-trustee. The trust is our majority stockholder. We have leased, and we expect to continue to lease, office space from JBB Cherokee Holdings LLC, an entity affiliated with the Founder Fund. We also had related person receivables with an entity affiliated with the Founder Fund as of September 30, 2023 and December 31, 2022 and 2021, related to various general and administrative expenses, including aviation expenses, and in part, related to insurance that was paid on behalf of the related person who reimbursed us at cost. Historically, Mr. Bradbury has also supported our growth by hosting numerous events at personal properties that are intended to foster business development and vendor relations. For fiscal years 2022, 2021, and 2020, we paid an annual use fee to certain entities affiliated with the Founder Fund for use of facilities and related services. Additionally, we have two uncollateralized notes payable to an entity affiliated with the Founder Fund for the purchase of airplanes totaling $1.2 million as of September 30, 2023 and $1.3 million, $1.5 million, and $1.6 million as of December 31, 2022, 2021, and 2020, respectively, which we have included in accrued expenses and other liabilities in our consolidated balance sheets. We also charter aircraft services from an entity affiliated with the Founder Fund. We have

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historically licensed SMART Builder, our ERP system, on a nonexclusive basis from an entity affiliated with the Founder Fund, which we expect to continue licensing following the completion of this offering on a nonexclusive, perpetual, and royalty-free basis. Furthermore, some of the third-party vendors we work with source sod directly from an entity affiliated with the Founder Fund.

Conflicts of interest may exist or could arise in the future with Founder Fund-affiliated entities. These transactions may not be on terms that are as attractive as those we might be able to achieve if we sought other partners. Conflicts with Founder Fund-affiliated entities may include, without limitation: conflicts arising from the enforcement of agreements between us and Founder Fund-affiliated entities and conflicts in future transactions that we may pursue with Founder Fund-affiliated entities.

For additional discussion of our executive officers’ and directors’ business affiliations and the potential conflicts of interest of which our stockholders should be aware, see “Certain relationships and related person transactions.”

The estimates, forecasts, and projections relating to our markets prepared by JBREC are based upon numerous assumptions and have not been independently verified by us.

This prospectus contains estimates, forecasts, and projections relating to our markets that were prepared for us for use in connection with this offering by JBREC, an independent research provider and consulting firm focused on the housing industry. See “Market opportunity” in this prospectus for additional information. The estimates, forecasts, and projections relate to, among other things, employment, demographics, household income, home sales prices, and affordability. These estimates, forecasts, and projections are based on data (including third-party data), significant assumptions, proprietary methodologies, and the experience and judgment of JBREC, and we have not independently verified this information.

The estimates, forecasts, and projections are forward-looking statements and involve risks and uncertainties that may cause actual results to be materially different from the projections. JBREC has made these estimates, forecasts, and projections based on studying the historical and current performance of the residential housing market and applying JBREC’s qualitative knowledge about the residential housing market. The future is difficult to predict, particularly given that the economy and housing markets can be cyclical and are subject to changing consumer and market psychology and governmental policies related to mortgage regulations and interest rates. There will usually be differences between projected and actual outcomes because events and circumstances frequently do not occur as expected, and such differences may be material.

For the foregoing reasons, JBREC cannot provide any assurance that the estimates, forecasts, and projections contained in this prospectus are accurate, actual outcomes may vary significantly from those contained or implied by the estimates, forecasts, and projections and you should not place undue reliance on these estimates, forecasts, and projections. We have not independently verified these estimates, forecasts, and projections. Except as required by law, we are not obligated to, and do not intend to, update the statements in this prospectus to conform to actual outcomes or changes in our or JBREC’s expectations.

Our future success depends upon our ability to successfully adapt our business strategy to evolving home buying patterns and trends.

Future home buying patterns and trends could reduce the demand for our homes and, as a result, could have a material adverse effect on our business and results of operations. Part of our business strategy is to offer homes that appeal to a broad range of price-conscious entry-level and empty-nest homebuyers based on each local market in which we operate. However, given the significant increases in average home sales prices across our markets and the anticipated increased demand for more affordable homes due to generational shifts, changing demographics, and other factors, we have increased our focus on offering more affordable housing options in our markets. We believe that, due to anticipated generational shifts, changing demographics, and other factors, the demand for more affordable homes will increase.

We cannot make any assurances that our growth or expansion strategies will be successful, and we may incur a variety of costs to engage in such strategies, including through targeted acquisitions, and the anticipated benefits may never be realized.

We have expanded our business through selected investments in new geographic markets and by capturing market-share within our existing markets. Investments in land, developed lots, and home inventories can expose us to risks of economic loss and inventory impairments if housing conditions weaken or we are unsuccessful in

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implementing our growth strategies. Our long-term success and growth strategies depend in part upon continued availability of suitable land at acceptable prices. The availability of land, lots, and home inventories for purchase at favorable prices depends on several factors outside of our control. We may compete for available land with entities that possess significantly greater financial, marketing, and other resources. In addition, some state and local governments in markets where we operate have approved, and others may approve, slow-growth or no-growth initiatives and other ballot measures that could negatively impact the availability of land and building opportunities within those areas. Approval of these initiatives could adversely affect our ability to build and sell homes in the affected markets and/or could require the satisfaction of additional administrative and regulatory requirements, which could result in slowing the progress or increasing the costs of our homebuilding operations in these markets. Finally, our ability to begin new projects could be negatively impacted if we elect not to purchase land under our land banking option contracts.

We intend to grow our operations in existing markets and to strategically expand into new markets or pursue opportunistic purchases of other homebuilders on attractive terms, as such opportunities arise. We may be unable to achieve the anticipated benefits of any such growth or expansion, including through targeted acquisitions or through efficiencies that we may be unable to achieve, the anticipated benefits may take longer to realize than expected, or we may incur greater costs than expected in attempting to achieve the anticipated benefits. In such cases, we will likely need to employ additional personnel or trade partners that are knowledgeable about such markets. There can be no assurance that we will be able to recruit, develop, or retain the necessary personnel or trade partners to successfully implement a disciplined management process and culture with local management, that our expansion operations will be successful, or that we will be able to successfully integrate any acquired homebuilder. This could disrupt our ongoing operations, including our Rteam production model, and divert management resources that would otherwise focus on developing our existing business.

We can give no assurance that we will be able to successfully identify, acquire, or implement these new strategies in the future. Accordingly, any such expansion, including through acquisitions, could expose us to significant risks beyond those associated with operating our existing business and may adversely affect our business, prospects, liquidity, financial condition, and results of operations.

We may experience difficulties in integrating the operations of Devon Street Homes or any potential future acquisitions into our business or we may experience challenges in realizing expected benefits of each such acquisition.

On July 31, 2023, we acquired substantially all of the assets of Devon Street Homes. See “Management’s discussion and analysis of financial condition and results of operations—Devon Street Homes Acquisition.” The success of the Devon Street Homes Acquisition will depend in part on our ability to realize the anticipated business opportunities from combining the operations of Devon Street Homes with our business in an efficient and effective manner. The integration process could take longer than anticipated and could result in the loss of key employees, the disruption of each company’s ongoing businesses, tax costs or inefficiencies or inconsistencies in standards, controls, IT systems, procedures and policies, any of which could adversely affect our ability to maintain relationships with customers, employees or other third parties, or our ability to achieve the anticipated benefits of the Devon Street Homes Acquisition, and could harm our financial performance. If we are unable to successfully or timely integrate the operations of Devon Street Homes with our business, we may incur unanticipated liabilities and be unable to realize the revenue growth, synergies and other anticipated benefits resulting from the Devon Street Homes Acquisition, and our business, results of operations and financial condition could be materially and adversely affected.

From time-to-time, we may evaluate other possible future acquisitions, some of which may be material. Any potential future acquisitions may pose significant risks to our existing operations if they cannot be successfully integrated. These acquisitions would place additional demands on our managerial, operational, financial, and other resources and create operational complexity requiring additional personnel and other resources.

Furthermore, the integration of Devon Street Homes or any future acquisition may divert management’s time and resources from our core business and disrupt our operations. We may incur significant costs in the integration of Devon Street Homes or any future acquisition and may not achieve cost synergies and other benefits sufficient to offset the costs of the Devon Street Homes Acquisition or any future acquired business. Moreover, even if we were successful in integrating newly acquired businesses or assets, expected synergies or cost savings may not materialize, resulting in lower-than-expected benefits to us from such transactions. We may spend time and money on projects that do not increase our revenue. Additionally, when making acquisitions, it may not be possible for us

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to conduct a detailed investigation of the nature of the business or assets being acquired due to, for instance, time constraints in making the decision, and other factors. We may become responsible for additional liabilities or obligations not foreseen at the time of an acquisition. To the extent we pay the purchase price of an acquisition in cash, such an acquisition would reduce our cash reserves, and, to the extent the purchase price of an acquisition is paid with our stock, such an acquisition could be dilutive to our stockholders. To the extent we pay the purchase price of an acquisition with proceeds from incurring debt, such an acquisition would increase our level of indebtedness and interest expense and could negatively affect our liquidity and restrict our operations. To the extent that the purchase price of an acquisition is paid in the form of an earn-out on future financial results, the success of such an acquisition will not be fully realized by us for a period of time as it is shared with the sellers. In addition, changes to the fair value of estimated earn-out payments could significantly impact our results of operations.

All of the above risks could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.

We rely on SMART Builder, an enterprise resource planning system that we nonexclusively license from an entity affiliated with the Founder Fund for managing our construction process and work-flow scheduling. If SMART Builder fails to adequately perform these functions or experiences an interruption in its operation, our business and results of operations could be adversely affected.

The efficient operation of our business depends on SMART Builder, an enterprise resource planning system that we nonexclusively license from an entity affiliated with the Founder Fund. We rely on SMART Builder to effectively manage sales, purchasing, scheduling, production, accounting, servicing, and other functions. SMART Builder is vulnerable to damage or interruption from computer viruses or hackers, natural or man-made disasters, vandalism, terrorist attacks, power loss, or other computer systems, internet, telecommunications, or data network failures. Any such interruptions to SMART Builder could disrupt our business and could result in decreased revenues and increased overhead costs, causing our business and results of operations to suffer. For further discussion on the risks related to our software and information systems, see “Risks related to other legal, regulatory, and tax matters” below.

Risks related to other legal, regulatory, and tax matters

Any limitation on, or reduction or elimination of, tax benefits associated with homeownership would have an adverse effect upon the demand for homes, which could be material to our business.

While tax laws generally permit significant expenses associated with homeownership, primarily mortgage interest expense and real estate taxes, to be deducted for the purpose of calculating an individual’s federal and, in many cases, state taxable income, the ability to deduct mortgage interest expense and real estate taxes for federal income tax purposes is limited. The federal government or a state government may change its income tax laws by eliminating, limiting, or substantially reducing these income tax benefits without offsetting provisions, which may increase the after-tax cost of owning a new home for many of our potential homebuyers. For example, the Tax Cuts and Jobs Act, which became effective January 1, 2018, contained substantial changes to the Code, including (i) limitations on the ability of our homebuyers to deduct property taxes, (ii) limitations on the ability of our homebuyers to deduct mortgage interest, and (iii) limitations on the ability of our homebuyers to deduct state and local income taxes. Any further future changes may have an adverse effect on the homebuilding industry in general. For example, the further loss or reduction of homeowner tax deductions could decrease the demand for new homes. Any such future changes could also have a material adverse impact on our business, prospects, liquidity, financial condition, and results of operations.

New and existing laws and regulations or other governmental actions may increase our expenses, limit the number of homes that we can build, or delay completion of our communities.

We are subject to numerous local, state, federal, and other statutes, ordinances, rules, and regulations concerning zoning, development, building design, construction, accessibility, anti-discrimination, and other matters, which, among other things, impose restrictive zoning and density requirements, the result of which is to limit the number of homes that can be built within the boundaries of a particular area. We may encounter issues with entitlement, not identify all entitlement requirements during the pre-development review of a project site, or encounter zoning changes that impact our operations. Projects for which we have not received land use and development

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entitlements or approvals may be subjected to periodic delays, changes in use, less intensive development, or elimination of development in certain specific areas due to government regulations. We may also be subject to periodic delays or may be precluded entirely from developing in certain communities due to building moratoriums or zoning changes. Such moratoriums generally relate to insufficient water supplies, sewage facilities, delays in utility hook-ups, or inadequate road capacity within specific market areas or subdivisions. Local governments also have broad discretion regarding the imposition of development fees for projects in their jurisdiction. Projects for which we have received land use and development entitlements or approvals may still require a variety of other governmental approvals and permits during the development process and can also be impacted adversely by unforeseen health, safety, and welfare issues, which can further delay these projects or prevent their development. As a result of any of these statutes, ordinances, rules, or regulations, the timing of our home orders could be delayed, the number of our home orders could decline, and/or our costs could increase, which could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.

Changes in U.S. trade policies and retaliatory responses from other countries may significantly increase the costs or scarcity of supplies of building materials and products used in our homes.

The state of relationships between other countries and the United States with respect to trade policies, taxes, government relations, and tariffs may impact our business. The federal government has imposed new or increased tariffs or duties on an array of imported materials and goods that are used in connection with the construction and delivery of our homes, including steel, aluminum, lumber, solar panels, and appliances, raising our costs for these items (or products made with them). Foreign governments, including China, Canada, and the European Union, have responded by imposing or increasing tariffs, duties, or trade restrictions on U.S. goods, and may consider other measures. These trading conflicts and related escalating governmental actions that result in additional tariffs, duties, or trade restrictions could cause disruptions or shortages in our supply chains, increase our construction costs or home-building costs generally, or negatively impact the U.S., regional, or local economies and individually or in the aggregate, materially and adversely affect our business and our operating results.

We and our trade partners are subject to environmental, health, and safety laws and regulations, which may increase our costs, result in liabilities, limit the areas in which we can build homes, and delay completion of our communities.

We and our trade partners are subject to a variety of local, state, federal, and other environmental, health, and safety laws, statutes, ordinances, rules, and regulations, including those governing storm water and surface water management, discharge and releases of pollutants and hazardous materials into the environment, including air, groundwater, subsurface and soil, remediation activities, handling of hazardous materials, protection of wetlands, endangered plant and animal species and sensitive habitats, climate change, and human health and safety. The environmental requirements that apply to any given site vary according to multiple factors, including the site’s location, its present and former uses, its environmental conditions, the presence or absence of wetlands, endangered plant or animal species, sensitive habitats, or the existence of environmental conditions at nearby or adjoining properties. There is no guarantee that we will be able to identify all these considerations during any pre-acquisition or pre-development review of project sites or that such factors will not develop during our development and homebuilding activities. Environmental requirements and conditions, particularly those that have not been previously identified and incorporated into development plans, may result in project delays, may cause us to incur substantial compliance, remediation and other costs and can prohibit or severely restrict development and homebuilding activity in certain areas, including environmentally sensitive regions or contaminated areas. In addition, in those cases where endangered or threatened plant or animal species, wetlands, or other protected environmental resources are involved and agency rulemaking and litigation are ongoing, the outcome of such rulemaking and litigation can be unpredictable and, at any time, can result in unplanned or unforeseeable restrictions on, or the prohibition of development in, identified environmentally sensitive areas. In some instances, regulators from different governmental agencies do not concur on development, remedial standards, or property use restrictions for a project, and the resulting delays or additional costs can be material for a given project.

Certain environmental laws and regulations also impose strict joint and several liability on former and current owners and operators of real property and in connection with third-party sites where parties have sent waste. As a result, we may be held liable for environmental conditions we did not create on properties we currently or formerly owned or operated, including properties we have developed or properties to which we sent waste. In

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addition, due to our wide range of historic and current ownership, operation, development, homebuilding, and construction activities, we could be liable for future claims for damages because of the past or present use of hazardous materials, including in building materials or fixtures whether or not currently known or suspected to be hazardous or contain hazardous materials. We could be subject to liability claims related to certain naturally occurring conditions, such as methane or radon, or conditions that may develop during or after construction, such as mold. A mitigation plan may be implemented if a cleanup does not remove all contaminants of concern or adequately address a condition. Some homebuyers may not want to purchase a home that is, or that may have been, subjected to remediation or a mitigation plan. In addition, we do not maintain separate insurance policies for claims related to hazardous materials, and insurance coverage for such claims under our general commercial liability insurance may be limited or nonexistent.

Pursuant to such environmental, health, and safety laws, statutes, ordinances, rules, and regulations, we may be required to obtain permits and other approvals from applicable authorities to commence and conduct our development and homebuilding activities. These permits and other approvals may contain restrictions that are costly or difficult to comply with, or may be opposed or challenged by local governments, environmental advocacy groups, neighboring property owners, or other interested parties, which may result in delays, additional costs, and non-approval of our activities.

From time to time, the U.S. Environmental Protection Agency (the “EPA”) or OSHA, and similar federal, state, or local agencies review land developers’ and homebuilders’ compliance with environmental, health, and safety laws, statutes, ordinance, rules, and regulations, including those relating to the storage, handling or discharge of hazardous substances or the control of storm water discharges during construction. Failure to comply with such laws, statutes, ordinances, rules, and regulations may result in civil and criminal fines and penalties, injunctions, suspension of our activities, remedial obligations, third-party claims, enforcement actions or other sanctions, or additional requirements for future compliance as a result of past failures. Similarly, spills or other releases of hazardous substances into the environment could expose us to additional costs or liabilities, including for site investigation, remediation of contamination, or third-party claims for personal injury property damage or natural resource damages. Any such actions taken with respect to us may increase our costs and result in project delays. We expect that increasingly stringent requirements will be imposed on land developers and homebuilders in the future. We cannot assure you that environmental, health, and safety laws will not change or become more stringent in the future in a manner that would not have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.

We have provided environmental indemnities to certain land bankers and various third-party land developers in connection with our option contracts with them. These indemnities obligate us to reimburse the indemnified parties for damages related to environmental matters, and, generally, there is no expiration or damage limitations on these indemnities.

Concerns about greenhouse gas emissions and the potential risks associated with climate change have led to increased regulation and other actions that can have an adverse impact on our activities, operations, and profitability and on the availability and price of certain raw materials.

There is a growing concern about the emission of greenhouse gases and other human activities that have caused, and will continue to cause, significant changes in weather patterns and temperatures and increase the frequency and severity of natural disasters. Government mandates, standards, legislation, and regulations enacted in response to these current and projected climate change impacts and concerns could result in restrictions on land development in certain areas or increased energy, transportation, and raw material costs. On February 19, 2021, the United States rejoined the Paris Agreement, which requires countries to set greenhouse gas emission reduction goals and review and “represent a progression” in their intended nationally determined contributions every five years. New legislation has been enacted, or may be enacted in the future, or considered for enactment at the federal, state, and local levels relating to climate change, greenhouse gas emissions, and energy production and use, including in response to the United States’ reentry into the Paris Agreement and the Biden Administration’s focus on climate change. This legislation could relate to, for example, matters such as greenhouse gas emissions control and building and other codes that impose energy efficiency standards or require use of energy-saving construction materials. New building or other code requirements that impose stricter energy efficiency standards or requirements for building materials could significantly increase our cost to construct homes. As climate change concerns continue to grow, legislation, regulations, mandates, standards, and other requirements of this nature are expected to continue to be enacted and impose additional costs on us. Additionally, certain areas in the United

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States either have enacted or are considering a ban on the use of natural gas appliances and/or natural gas hookups in new construction. Such bans, if enacted in areas in which we operate or may decide to operate in the future, could affect our cost to construct homes. Similarly, climate change-related initiatives or requirements impacting the energy industry affect a wide variety of companies throughout the United States, and because our operations are heavily dependent on significant amounts of raw materials with energy-intensive manufacturing and supply processes, such as lumber, steel and concrete, these initiatives or requirements could increase the costs of such materials and have an adverse impact on our operations and profitability. Furthermore, according to the Intergovernmental Panel on Climate Change, physical risks from climate change could include, but are not limited to, increased runoff and earlier spring peak discharge in many glacier and snow-fed rivers, warming of lakes and rivers, increases in sea level, and changes and variability in precipitation and in the intensity and frequency of extreme weather events. These physical impacts may have the potential to significantly affect our business and operations and there is no guarantee that any losses incurred would be covered by applicable insurance policies.

Failure to keep up with evolving trends, regulations, and expectations relating to environmental, social and governance (“ESG”) issues could adversely impact our reputation, access to and cost of capital, and financial results.

Certain institutional investors, investment funds, creditors, influential financial markets participants, and other stakeholders have become increasingly focused on companies’ ESG issues in evaluating their investments and business relationships. Certain organizations also provide assessments of companies’ ESG practices. Although there are no universally accepted standards for such assessments, they are used by some investors to inform their investment and voting decisions. Unfavorable press about, or assessments of, our ESG practices, including the environmental impact of our operations, regardless of whether we comply with applicable legal requirements, may lead to negative investor sentiment toward us.

A failure to comply with ESG expectations and standards, which are evolving, or if we are perceived to not have responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, could cause reputational harm to our business and could have a material adverse effect on our financial results and access to and cost of capital. In addition, the adoption of new ESG-related regulations applicable to our business, or pressure from key stakeholders to comply with voluntary ESG-related initiatives or frameworks, could require us to make substantial investments which could impact the results of our operations and cash flows.

The success of our business depends on our ability to obtain, maintain, protect, and enforce our intellectual property rights.

Our success depends, in part, on our ability protect our intellectual property, proprietary information, and technology. We rely, or may in the future rely, on a combination of trademarks, copyrights, unfair competition and trade secret laws, and other intellectual property rights, as well as confidentiality procedures and contractual restrictions, to establish and protect our proprietary rights, all of which provide only limited protection.

We also rely on non-registered proprietary information, technology, and intellectual property rights, including with respect to our home designs, such as unregistered copyrights, confidential information, trade secrets, know-how and technical information. The steps we take to protect our intellectual property may be inadequate and we will not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property. We attempt to protect our intellectual property, technology, and confidential information in part through confidentiality, nondisclosure and invention assignment agreements with our employees, consultants, contractors, and other third parties who develop intellectual property on our behalf or with whom we share information. However, we cannot guarantee that we have entered into such agreements with each party who has developed intellectual property on our behalf or each party that has or may have had access to our confidential information, know-how, and trade secrets. These agreements may not be self-executing or may be insufficient or breached, or may not effectively prevent unauthorized access to or unauthorized use, disclosure misappropriation or reverse engineering of, our intellectual property, technology, or confidential information. Additionally, these agreements may not provide an adequate remedy for breaches or unauthorized uses or disclosures of our intellectual property, technology, or confidential information. Individuals not subject to invention assignment agreements may make adverse ownership claims in respect of our current and future intellectual property, and to the extent that our employees, independent contractors, or other third parties with whom we do business use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

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Even if we successfully maintain the confidentiality of our trade secrets, intellectual property and other proprietary information, competitors may independently develop products or technologies that are substantially equivalent or superior to our own. Enforcing a claim that a party disclosed proprietary information in an unauthorized manner or infringed, misappropriated, or otherwise violated any intellectual property rights is difficult, expensive, and time-consuming, and the outcome is unpredictable. In addition, some courts are less willing or unwilling to protect certain intellectual property rights, and agreement terms that address non-competition are difficult to enforce in many jurisdictions and might not be enforceable in certain cases. If we are unable to maintain the proprietary nature of our technologies or intellectual property, our competitive position, business, financial condition, and results of operations could be harmed.

If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest.

Our failure to obtain or maintain adequate protection of our trademark or trade name rights for any reason could have a material adverse effect on our business, results of operations and financial condition. Our current and future trademark applications in the United States may not be allowed or may subsequently be opposed. Once filed and registered, our trademarks or trade names may be challenged, infringed, circumvented, or declared generic, or determined to be infringing on other marks. As a means to enforce our trademark rights and prevent infringement, we may be required to file trademark claims against third parties or initiate trademark opposition proceedings. This can be expensive and time-consuming, particularly for a company of our size. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential partners or homebuyers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights, or other intellectual property may be ineffective and could result in substantial costs and diversion of resources. Any of the foregoing could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.

If third parties claim that we infringe upon their intellectual property rights, our operating profits could be adversely affected.

We face the risk of claims that we have infringed, misappropriated, or otherwise violated third parties’ intellectual property rights. Any claims of trademark or other intellectual property infringement, misappropriation, or violation, even those without merit, could (i) be expensive and time consuming to defend; (ii) require us to rebrand or cease using or offering certain of our products, packaging or services, or otherwise modify our operations; (iii) divert management’s attention and resources; or (iv) require us to enter into royalty or licensing agreements in order to obtain the right to use a third party’s intellectual property. Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim against us of third-party intellectual property infringement, misappropriation, or violation could result in our being required to pay significant damages, enter into costly license or royalty agreements, or cease the infringing activity, any of which could have a negative impact on our operating profits and harm our future prospects.

We rely on licenses to use the intellectual property rights of third parties which are incorporated into our products, services, and offerings.

We rely, and expect to continue to rely on, certain services and intellectual property that we license from third parties for use in our operations, particularly SMART Builder, which we license from an entity affiliated with the Founder Fund. We cannot be certain that our suppliers and licensors are not infringing upon the intellectual property rights of others or that our suppliers and licensors have sufficient rights to the third-party technology used in our business in all jurisdictions in which we may operate. Disputes with licensors over uses or terms could result in the payment of additional royalties or penalties by us, cancellation or non-renewal of the underlying license or litigation. In the event that we cannot renew and/or expand existing licenses, we may be required to discontinue or limit our use of the operations, products, or offerings that include or incorporate the licensed intellectual property. Any such discontinuation or limitation could have a material and adverse impact on our business, financial condition, and results of operation.

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Perceived or actual information system failures, cybersecurity incidents or attacks, or other security incidents suffered by us or our critical third-party vendors could adversely affect us.

We rely on accounting, financial, operational, management, and other information systems to conduct our operations. Our information systems, and the information systems of any third-party vendors or suppliers we may use, are subject to damage or interruption from power outages, computer and telecommunication failures, computer viruses, cybersecurity incidents or attacks (including malware, phishing attacks, ransomware attacks, social engineering and attempts to gain unauthorized access to data or other electronic security breaches or similar events, or cybersecurity attacks carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on systems or websites and rendering them unavailable or ineffective), other security breaches, natural or man-made disasters, usage errors, negligence or intentional misuse by our employees or third parties, and other related risks. The risk of such damage or interruption has grown with the increased frequency and sophistication of cybersecurity attacks on companies in recent years. We have and may continue to have cybersecurity incidents, attacks, or disruptions and although we have implemented, and our third-party vendors and suppliers may implement, various controls, systems and processes intended to secure these information systems, there can be no assurance that our efforts to maintain the security and integrity of our information systems will be effective or that future attempted cybersecurity incidents, attacks, or disruptions would not be successful or damaging.

Any perceived or actual cybersecurity incident or attack or other disruption or failure in these information systems, or other systems or infrastructure upon which they rely, could result in unauthorized access to and misappropriation of confidential, sensitive, proprietary, or personal information in our possession or control, or extended interruptions of our operations. Furthermore, any perceived or actual failure or breach of any information systems, or related theft, misuse, or loss of data, could result in a violation of applicable data privacy, cybersecurity, and other laws and regulations. In short, a perceived or actual cybersecurity incident, attack, or other disruption could adversely affect our ability to conduct our business, cause significant legal and financial exposure, damage to our reputation, or a loss of confidence in our security measures. Any such incident could harm our business and could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations. Given the variety and potential severity of cybersecurity threats, we may not have adequate insurance coverage to compensate against all losses, and we cannot ensure that applicable insurance will continue to be available to us on commercially reasonable terms, or at all, or that our insurer will not deny coverage as to any particular claim.

Our business is subject to complex and evolving laws and regulations regarding data privacy and cybersecurity.

As part of our normal business activities, we collect, use, store, and otherwise process certain personal information, including personal information specific to homebuyers, employees, vendors, and suppliers. We may transfer some of this personal information to third parties who assist us with certain aspects of our business for limited purposes under appropriate contractual arrangements.

The regulatory environment surrounding data privacy and cybersecurity is constantly evolving and can be subject to significant change. Laws and regulations governing data privacy, cybersecurity, and the unauthorized disclosure of personal information pose increasingly complex compliance challenges, including the potential for inconsistent interpretation, and the implementation and maintenance of compliance measures may potentially elevate our costs.

Additionally, laws, regulations, and standards covering marketing, advertising, and other activities conducted by telephone, email, mobile devices, and the internet may be or become applicable to our business, such as the Telephone Consumer Protection Act and the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003.

While we have taken commercially reasonable steps to comply with applicable data privacy and cybersecurity laws and regulations, these laws and regulations are in some cases relatively new and the interpretation and application of these laws and regulations are uncertain. Thus, there can be no assurance that our efforts will be deemed effective by regulatory bodies. Any failure, or perceived failure, by us to comply with applicable data privacy and cybersecurity laws and regulations could result in proceedings or actions against us by governmental entities or others, subject us to significant fines, penalties, judgments, and negative publicity, require us to change our business practices, increase the costs and complexity of compliance, and adversely affect our business. As noted above, we are also subject to the possibility of information system failures, cybersecurity incidents or

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attacks, or other security breaches, which themselves may result in a violation of these laws and regulations. Additionally, if we acquire a company that has violated or is not in compliance with applicable data privacy and cybersecurity laws and regulations, we may incur significant liabilities and penalties as a result.

Risks related to our organizational structure

Our principal asset after the completion of this offering will be our interest in Smith Douglas Holdings LLC, and, as a result, we will depend on distributions from Smith Douglas Holdings LLC to pay our taxes and expenses, including payments under the Tax Receivable Agreement. Smith Douglas Holdings LLC’s ability to make such distributions may be subject to various limitations and restrictions.

Upon the consummation of this offering and the Transactions, we will be a holding company and will have no material assets other than our ownership of LLC Interests. As such, we will have no independent means of generating revenue or cash flow, and our ability to pay our taxes and operating expenses or declare and pay dividends in the future, if any, will be dependent upon the financial results and cash flows of Smith Douglas Holdings LLC and distributions we receive from Smith Douglas Holdings LLC. There can be no assurance that Smith Douglas Holdings LLC will generate sufficient cash flow to distribute funds to us or that applicable state law and contractual restrictions, including negative covenants in any applicable debt instruments, will permit such distributions. Smith Douglas Holdings LLC is currently subject to debt instruments or other agreements that restrict its ability to make distributions to us, which may in turn affect Smith Douglas Holdings LLC’s ability to pay distributions to us and thereby adversely affect our cash flows.

Smith Douglas Holdings LLC will continue to be treated as a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, any taxable income of Smith Douglas Holdings LLC will be allocated to holders of LLC Interests, including us. Accordingly, we will incur income taxes on our allocable share of any net taxable income of Smith Douglas Holdings LLC. Under the terms of the Smith Douglas LLC Agreement, Smith Douglas Holdings LLC will be obligated, subject to various limitations and restrictions, including with respect to our debt agreements, to make tax distributions to holders of LLC Interests, including us. In addition to tax expenses, we will also incur expenses related to our operations, including payments under the Tax Receivable Agreement, which we expect will be significant. See “Certain relationships and related person transactions—Tax Receivable Agreement.” We intend, as its managing member, to cause Smith Douglas Holdings LLC to make cash distributions to the holders of LLC Interests in an amount sufficient to (i) fund all or part of their tax obligations in respect of taxable income allocated to them and (ii) cover our operating expenses, including payments under the Tax Receivable Agreement. However, Smith Douglas Holdings LLC’s ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would either violate any contract or agreement to which Smith Douglas Holdings LLC is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering Smith Douglas Holdings LLC insolvent. If we do not have sufficient funds to pay tax or other liabilities, or to fund our operations (including, if applicable, because of an acceleration of our obligations under the Tax Receivable Agreement), we may have to borrow funds, which could materially and adversely affect our liquidity and financial condition, and subject us to various restrictions imposed by any lenders of such funds. To the extent we are unable to make timely payments under the Tax Receivable Agreement for any reason, such payments generally will be deferred and will accrue interest until paid; provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivable Agreement resulting in the acceleration of payments due under the Tax Receivable Agreement. See “Certain relationships and related person transactions—Tax Receivable Agreement” and “Certain relationships and related person transactions—Smith Douglas LLC Agreement—Agreement in effect upon consummation of the Transactions—Distributions.” In addition, if Smith Douglas Holdings LLC does not have sufficient funds to make distributions, our ability to declare and pay cash dividends will also be restricted or impaired, although we do not anticipate declaring or paying any cash dividends on our Class A common stock in the foreseeable future. See “—Risks related to this offering and ownership of our Class A common stock” and “Dividend policy.”

Under the Smith Douglas LLC Agreement, we intend to cause Smith Douglas Holdings LLC, from time to time, to make distributions in cash to the holders of LLC Interests (including us) in amounts sufficient to cover the taxes imposed on their allocable share of taxable income of Smith Douglas Holdings LLC. As a result of (i) potential differences in the amount of net taxable income allocable to us and to the other holders of LLC Interests, (ii) the lower tax rate applicable to corporations as opposed to individuals, and (iii) certain tax benefits covered by, and

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payments under, the Tax Receivable Agreement, these tax distributions may be in amounts that exceed our tax liabilities. Our board of directors will determine the appropriate uses for any excess cash so accumulated, which may include, among other uses, the payment of obligations under the Tax Receivable Agreement and the payment of other expenses. We will have no obligation to distribute such cash (or other available cash) to our stockholders. No adjustments to the exchange ratio for LLC Interests and corresponding shares of Class A common stock will be made as a result of any cash dividend or distribution by us or any retention of cash by us. As a result, the holders of LLC Interests (other than us) may benefit from any value attributable to such cash balances if they acquire shares of Class A common stock in exchangefor their LLC Interests, notwithstanding that such holders may have participated previously as holders of LLC Interests in distributions that resulted in such excess cash balances to us. See “Description of capital stock.” To the extent we do not distribute such excess cash as dividends on our Class A common stock we may take other actions with respect to such excess cash, for example, holding such excess cash, or lending or contributing it (or a portion thereof) to Smith Douglas Holdings LLC, which may result in shares of our Class A common stock increasing in value relative to the value of LLC Interests. Following a contribution of such excess cash to Smith Douglas Holdings LLC we may make an adjustment to the outstanding number of LLC Interests held by holders of LLC Interests (other than us).

The Tax Receivable Agreement with the Continuing Equity Owners requires us to make cash payments to them in respect of certain tax benefits to which we may become entitled, and we expect that such payments will be substantial.

In connection with this offering, we will enter into a Tax Receivable Agreement with Smith Douglas Holdings LLC and each of the Continuing Equity Owners. Under the Tax Receivable Agreement, we will be required to make cash payments to the Continuing Equity Owners equal to 85% of the tax benefits, if any, that we actually realize, or in certain circumstances are deemed to realize, as a result of (i) Basis Adjustments; (ii) Section 704(c) Allocations; and (iii) certain tax benefits (such as interest deductions) arising from payments under the Tax Receivable Agreement. We will be required to make such payments to the Continuing Equity Owners even if all of the Continuing Equity Owners were to exchange or redeem their remaining LLC Interests.

The payment obligation is an obligation of Smith Douglas Homes Corp. and not of Smith Douglas Holdings LLC. We expect that the amount of the cash payments we will be required to make under the Tax Receivable Agreement will be substantial. Any payments made by us to the Continuing Equity Owners under the Tax Receivable Agreement will not be available for reinvestment in our business and will generally reduce the amount of overall cash flow that might have otherwise been available to us. To the extent that we are unable to make timely payments under the Tax Receivable Agreement for any reason, the unpaid amounts will be deferred and will accrue interest until paid by us; provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivable Agreement resulting in the acceleration of payments due under the Tax Receivable Agreement. See “Certain relationships and related person transactions—Tax Receivable Agreement” and “Certain relationships and related person transactions—Smith Douglas LLC Agreement—Agreement in effect upon consummation of the Transactions—Distributions.” Payments under the Tax Receivable Agreement are not conditioned upon continued ownership of Smith Douglas Holdings LLC by the exchanging Continuing Equity Owners. Furthermore, if we experience a change of control (as defined under the Tax Receivable Agreement), which includes certain mergers, asset sales, and other forms of business combinations, we would be obligated to make an immediate payment, and such payment may be significantly in advance of, and may materially exceed, the actual realization, if any, of the future tax benefits to which the payment relates. This payment obligation could (i) make us a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax benefits that are the subject of the Tax Receivable Agreement and (ii) result in holders of our Class A common stock receiving substantially less consideration in connection with a change of control transaction than they would receive in the absence of such obligation. Accordingly, the Continuing Equity Holders’ interests may conflict with those of the holders of our Class A common stock.

Assuming no material changes in the relevant tax laws and that we earn sufficient taxable income to realize all tax benefits that are subject to the Tax Receivable Agreement, we expect that the tax savings associated with the purchase of LLC Interests in connection with this offering, together with future redemptions or exchanges of all remaining LLC Interests owned by the Continuing Equity Owners pursuant to the Smith Douglas LLC Agreement as described above, would aggregate to approximately $215.8 million over 26 years from the date of this offering based on the assumed initial public offering price of $19.50 per share of our Class A common stock, which is the midpoint of the range set forth on the cover page of this prospectus, and assuming all redemptions or exchanges would occur immediately after the initial public offering, which is assumed to occur on September 30, 2023 for

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purposes of the pro forma information presented herein and elsewhere in this prospectus. Under such scenario, assuming future payments are made on the date each relevant tax return is due, without extensions, we would be required to pay approximately 85% of such amount, or approximately $183.5 million, over the 26-year period from the date of this offering. The actual Basis Adjustments and Section 704(c) Allocations and the actual utilization of any resulting tax benefits, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors including: the timing of redemptions by the Continuing Equity Owners; the price of shares of our Class A common stock at the time of the exchange; the extent to which such exchanges are taxable; the amount of gain recognized by such Continuing Equity Owners; the amount and timing of the taxable income allocated to us or otherwise generated by us in the future; the portion of our payments under the Tax Receivable Agreement constituting imputed interest; and the federal and state tax rates then applicable.

Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the Continuing Equity Owners that will not benefit holders of our Class A common stock to the same extent that it will benefit the Continuing Equity Owners.

Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the Continuing Equity Owners that will not benefit the holders of our Class A common stock to the same extent that it will benefit the Continuing Equity Owners. We will enter into the Tax Receivable Agreement with Smith Douglas Holdings LLC and the Continuing Equity Owners in connection with this offering and the Transactions, which will provide for the payment by us to the Continuing Equity Owners of 85% of the amount of tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of (i) Basis Adjustments; (ii) Section 704(c) Allocations; and (iii) certain tax benefits (such as interest deductions) arising from payments under the Tax Receivable Agreement. See “Certain relationships and related person transactions—Tax Receivable Agreement.” Although we will retain 15% of the amount of such tax benefits, this and other aspects of our organizational structure may adversely impact the future trading market for our Class A common stock.

In certain cases, payments under the Tax Receivable Agreement to the Continuing Equity Owners may be accelerated or significantly exceed any actual benefits we realize in respect of the tax attributes subject to the Tax Receivable Agreement.

The Tax Receivable Agreement will generally apply to each of our taxable years, beginning with the first taxable year ending after the consummation of the Transactions. There is no maximum term for the Tax Receivable Agreement. However, the Tax Receivable Agreement will provide that if (i) we materially breach any of our material obligations under the Tax Receivable Agreement, (ii) certain mergers, asset sales, other forms of business combinations or other changes of control occur after the consummation of this offering, or (iii) we elect an early termination of the Tax Receivable Agreement, then our obligations, or our successor’s obligations, under the Tax Receivable Agreement to make payments will be determined based on certain assumptions, including an assumption that we will have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax Receivable Agreement.

As a result of the foregoing, we would be required to make an immediate cash payment equal to the present value of the anticipated future tax benefits that are the subject of the Tax Receivable Agreement, based on certain assumptions, which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits. Such cash payment to the Continuing Equity Owners could be greater than the specified percentage of any actual benefits we ultimately realize in respect of the tax benefits that are subject to the Tax Receivable Agreement. In these situations, our obligations under the Tax Receivable Agreement could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring, or preventing certain mergers, asset sales, other forms of business combinations or other changes of control. For example, should we elect to terminate the Tax Receivable Agreement immediately following this offering, assuming no material changes in the relevant tax laws or tax rates and that we earn sufficient taxable income to realize all tax potential benefits that are subject to the Tax Receivable Agreement, we estimate that the aggregate of termination payments would be approximately $88.4 million based on the assumed initial public offering price of $19.50 per share of our Class A common stock, which is the midpoint of the range set forth on the cover page of this prospectus, and assuming the discount rate were to be 10.31%. There can be noassurance that we will be able to fund or finance our obligations under the Tax Receivable Agreement. We may need to incur debt to finance payments under the Tax Receivable Agreement to the extent our cash resources are insufficient to meet our obligations under the Tax Receivable Agreement as a result of timing discrepancies or otherwise.

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We will not be reimbursed for any payments made to the Continuing Equity Owners under the Tax Receivable Agreement in the event that any tax benefits are disallowed.

Payments under the Tax Receivable Agreement will be based on the tax reporting positions that we determine, and the IRS, or another tax authority, may challenge all or part of the Basis Adjustments, Section 704(c) Allocations, or other tax benefits we claim, as well as other related tax positions we take, and a court could sustain such challenge. If the outcome of any such challenge would reasonably be expected to materially and adversely affect the rights and obligations of Continuing Equity Owners under the Tax Receivable Agreement, then we will not be permitted to settle such challenge without the consent (not to be unreasonably withheld or delayed) of Continuing Equity Owners. The interests of Continuing Equity Owners in any such challenge may differ from or conflict with our interests and your interests, and Continuing Equity Owners may exercise their consent rights relating to any such challenge in a manner adverse to our interests and your interests. We will not be reimbursed for any cash payments previously made to the Continuing Equity Owners under the Tax Receivable Agreement in the event that any tax benefits initially claimed by us and for which payment has been made to a Continuing Equity Owner are subsequently challenged by a taxing authority and are ultimately disallowed. Instead, any excess cash payments made by us to a Continuing Equity Owner will be netted against future cash payments, if any, that we might otherwise be required to make to such Continuing Equity Owner, under the terms of the Tax Receivable Agreement. However, we might not determine that we have effectively made an excess cash payment to a Continuing Equity Owner for a number of years following the initial time of such payment. Moreover, the excess cash payments we made previously under the Tax Receivable Agreement could be greater than the amount of future cash payments against which we would otherwise be permitted to net such excess. The applicable U.S. federal income tax rules for determining applicable tax benefits we may claim are complex and factual in nature, and there can be no assurance that the IRS or a court will agree with our tax reporting positions. As a result, payments could be made under the Tax Receivable Agreement significantly in excess of any actual cash tax savings that we realize in respect of the tax attributes with respect to a Continuing Equity Owner that are the subject of the Tax Receivable Agreement.

Changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results of operations and financial condition.

We are subject to taxation by U.S. federal, state, and local tax authorities. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

• allocation of expenses to and among different jurisdictions;

• changes to our assessment about our ability to realize, or in the valuation of, our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business;

• expected timing and amount of the release of any tax valuation allowances;

• tax effects of stock-based compensation;

• costs related to intercompany restructurings;

• changes in tax laws, regulations, or interpretations thereof;

• the outcome of current and future tax audits, examinations, or administrative appeals;

• lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates; and

• limitations or adverse findings regarding our ability to do business in some jurisdictions.

Any changes in U.S. taxation may increase our effective tax rate and harm our business, financial condition, and results of operations. In particular, new income or other tax laws or regulations could be enacted at any time, which could adversely affect our business operations and financial performance. Further, existing tax laws and regulations could be interpreted, modified, or applied adversely to us.

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If we were deemed to be an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), including as a result of our ownership of Smith Douglas Holdings LLC, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.

Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” for purposes of the 1940 Act if (i) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities, or (ii) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding, or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we are an “investment company,” as such term is defined in either of those sections of the 1940 Act.

We and Smith Douglas Holdings LLC intend to conduct our operations so that we will not be deemed an investment company. As the sole managing member of Smith Douglas Holdings LLC, we will control and operate Smith Douglas Holdings LLC. On that basis, we believe that our interest in Smith Douglas Holdings LLC is not an “investment security” as that term is used in the 1940 Act. However, if we were to cease participation in the management of Smith Douglas Holdings LLC, or if Smith Douglas Holdings LLC itself becomes an investment company, our interest in Smith Douglas Holdings LLC could be deemed an “investment security” for purposes of the 1940 Act.

We and Smith Douglas Holdings LLC intend to conduct our operations so that we will not be deemed an investment company. If it were established that we were an unregistered investment company, there would be a risk that we would be subject to monetary penalties and injunctive relief in an action brought by the U.S. Securities and Exchange Commission (the “SEC”), that we would be unable to enforce contracts with third parties and that third parties could seek to obtain rescission of transactions undertaken during the period it was established that we were an unregistered investment company. If we were required to register as an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.

We depend on key management personnel and other experienced employees.

Our success depends to a significant degree upon the contributions of certain key management personnel, including, but not limited to, our founder and Executive Chairman Tom Bradbury; our President, Chief Executive Officer, and Vice Chairman Greg Bennett; and our Executive Vice President and Chief Financial Officer Russell Devendorf. Although we have entered into employment agreements with Mr. Bennett and Mr. Devendorf, there is no guarantee that Mr. Bennett and Mr. Devendorf will remain employed by us. Our ability to retain our key management personnel, or to attract suitable replacements should any existing members of our management team leave, is dependent on the competitive nature of the employment market. The loss of services from key management personnel or a limitation in their availability could materially and adversely impact our business, prospects, liquidity, financial condition, and results of operations. Further, such a loss could be negatively perceived in the capital markets. We have not obtained key person life insurance that would provide us with proceeds in the event of the death or disability of any of our key management personnel.

Experienced employees in the homebuilding, land acquisition, development, and construction industries are fundamental to our ability to generate, obtain, and manage opportunities. In particular, local knowledge and relationships are critical to our ability to source attractive land acquisition opportunities. Experienced employees working in the homebuilding, development, and construction industries are highly sought after. Failure to attract and retain such personnel or to ensure that their experience and knowledge is not lost when they leave the business through retirement, redundancy or otherwise may adversely affect the standards of our service and may have an adverse impact on our business, prospects, liquidity, financial condition, and results of operations.

Our current financing arrangements contain, and our future financing arrangements likely will contain, restrictive covenants.

Our current financing arrangements (including the Existing Credit Facility and Amended Credit Facility) contain, and the financing arrangements we enter in the future likely will contain, covenants (financial and otherwise) affecting our ability to incur additional debt, make certain investments, reduce liquidity below certain levels, make distributions to our stockholders, and otherwise affect our operating policies. The restrictions contained in our

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financing arrangements could also limit our ability to plan for or react to market conditions, meet capital needs, make acquisitions, or otherwise restrict our activities or business plans. For example, the Amended Credit Facility’s financial covenants include (i) a minimum tangible net worth requirement, (ii) a maximum leverage ratio, (iii) a minimum ratio of EBITDA to interest incurred, and (iv) a minimum liquidity requirement.

If we fail to meet or satisfy any of these covenants in our debt agreements, we would be in default under these agreements, and our lenders could elect to declare outstanding amounts due and payable, terminate their commitments, require the posting of additional collateral, or enforce their respective interests against existing collateral. A default also could significantly limit our financing alternatives, which could cause us to curtail our investment activities and/or dispose of assets when we otherwise would not choose to do so. If we default on several of our debt agreements or any single significant debt agreement, it could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.

We expect to use leverage in executing our business strategy, which may adversely affect the return on our assets.

We may incur a substantial amount of debt in the future. Our existing indebtedness is recourse to us, and we anticipate that future indebtedness will likewise be recourse. As of September 30, 2023, we had $71.0 million of borrowings outstanding under the Existing Credit Facility bearing interest at the rate of 8.25% and $5.0 million outstanding under a three-year promissory note payable bearing interest at the rate of 8.0%. Our board of directors will consider several factors when evaluating our level of indebtedness and when making decisions regarding the incurrence of new indebtedness, including the purchase price of assets to be acquired with debt financing, the estimated market value of our assets, and the ability of particular assets, and us as a whole, to generate cash flow to cover the expected debt service. Our governing corporate documents do not contain a limitation on the amount of debt we may incur, and our board of directors may change our target debt levels at any time without the approval of our stockholders.

Incurring a substantial amount of debt could have important consequences for our business, including:

• making it more difficult for us to satisfy our obligations with respect to our debt or to our trade or other creditors;

• increasing our vulnerability to adverse economic or industry conditions;

• limiting our ability to obtain additional financing to fund capital expenditures and acquisitions, particularly when the availability of financing in the capital markets is limited;

• requiring a substantial portion of our cash flows from operations and the proceeds from this offering for the payment of interest on our debt and reducing our ability to use our cash flows and the proceeds from this offering to fund working capital, capital expenditures, acquisitions, and general corporate requirements;

• limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and

• placing us at a competitive disadvantage to less leveraged competitors.

We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us through capital markets financings or under our credit facilities or otherwise in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness, on or before its maturity. We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all. In addition, we may incur additional indebtedness to finance our operations or to repay existing indebtedness. If we cannot service our indebtedness, we may have to take actions such as selling assets, seeking additional debt or equity, financing, or reducing or delaying capital expenditures, strategic acquisitions, investments, and alliances. We cannot assure you that any such actions, if necessary, could be effected on commercially reasonable terms or at all, or on terms that would be advantageous to our stockholders or on terms that would not require us to breach the terms and conditions of our existing or future debt agreements.

Our PPP Loan eligibility and forgiveness, while approved, remains subject to audit for compliance with applicable Small Business Administration (“SBA”) requirements.

As a result of the COVID-19 pandemic, we sought and obtained support through various business assistance programs. We applied for and, on May 1, 2020, received a Paycheck Protection Program Loan in the amount of

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$5.1 million (the “PPP Loan”), under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), as administered by the SBA. The application for receipt of the PPP Loan required us to certify, in good faith, that the attendant economic uncertainty made the loan necessary to support our ongoing operations. On August 16, 2021, we received notice the full principal amount and all accrued interest thereon of the PPP Loan was formally forgiven by the SBA. Under the terms of the PPP Loan, we must retain all related records for a period of six years from the date the loan was forgiven. During this period, our PPP Loan eligibility and loan forgiveness application are subject to review and audit by the SBA. We are aware of the requirements of the PPP Loan and believe we are within the eligibility threshold and have used the loan proceeds in accordance with the PPP Loan forgiveness requirements. We have retained all necessary documentation supporting our eligibility. If, despite our actions and good faith belief that we satisfied all eligibility requirements for the PPP Loan, we are made subject to an audit and are found to have been ineligible to receive the PPP Loan or forgiveness thereof, or are found in violation of any of the laws or regulations that apply to us in connection with the PPP Loan, we may be subject to penalties, including significant civil, criminal, and administrative penalties, and could be required to repay the PPP Loan. An audit by the SBA could consume significant financial and management resources. Any of these events could harm our business, results of operations, and financial condition.

Risks related to this offering and ownership of our Class A common stock

The Continuing Equity Owners will continue to have significant influence over us after this offering, including control over decisions that require the approval of stockholders.

Upon consummation of this offering, the Continuing Equity Owners will control, in the aggregate, approximately 98.3% of the voting power represented by all our outstanding shares of capital stock, assuming no exercise of the underwriters’ option to purchase additional shares of Class A common stock. As a result, the Continuing Equity Owners will continue to exercise significant influence over all matters on which holders of Class B common stock are entitled to vote, including the election and removal of directors (subject to the rights of the holders of preferred stock, if any), amendments to our amended and restated certificate of incorporation or amended and restated bylaws, and any approval of significant corporate transactions (including a sale of all or substantially all of our assets), and will continue to have significant control over our business, affairs, and policies, including the appointment of our management, through their influence over the board composition. The directors, whom the Continuing Equity Owners will have the ability to elect through their voting power, will have the authority to incur additional debt, issue or repurchase stock, declare dividends, and make other decisions that could be detrimental to stockholders.

We expect that certain members of our board will continue to be affiliated with the Continuing Equity Owners. The Continuing Equity Owners can take actions that have the effect of delaying or preventing a change of control of us or discouraging others from making tender offers for our shares, which could prevent stockholders from receiving a premium for their shares. These actions may be taken even if other stockholders oppose them. The concentration of voting power with the Continuing Equity Owners may have an adverse effect on the price of our Class A common stock. The Continuing Equity Owners may have interests that are different from yours and may vote in a way with which you disagree and that may be adverse to your interests.

Our stock price may change significantly following the offering, and you may not be able to resell shares of our Class A common stock at or above the price you paid or at all, and you could lose all or part of your investment as a result.

The initial public offering price for the shares was determined by negotiations between us and the underwriters. You may not be able to resell your shares at or above the initial public offering price due to a number of factors included herein, including the following:

• results of operations that vary from the expectations of securities analysts and investors;

• results of operations that vary from those of our competitors;

• changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors;

• technology changes, changes in consumer behavior in our industry;

• security breaches related to our systems or those of our affiliates or strategic partners;

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• changes in economic conditions for companies in our industry;

• changes in market valuations of, or earnings and other announcements by, companies in our industry;

• declines in the market prices of stocks generally, particularly those of residential construction;

• strategic actions by us or our competitors;

• announcements by us, our competitors or our strategic partners of significant contracts, new products, acquisitions, joint marketing relationships, joint ventures or other unconsolidated entities, other strategic relationships, or capital commitments;

• changes in general economic or market conditions or trends in our industry or the economy as a whole and, in particular, in the residential construction environment;

• changes in business or regulatory conditions;

• future sales of our Class A common stock or other securities;

• investor perceptions of the investment opportunity associated with our Class A common stock relative to other investment alternatives;

• the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;

• announcements relating to litigation or governmental investigations;

• guidance, if any, that we provide to the public, any changes in this guidance, or our failure to meet this guidance;

• the development and sustainability of an active trading market for our stock;

• changes in accounting principles; and

• other events or factors, including those resulting from system failures and disruptions, natural or man-made disasters, extreme weather events, war, acts of terrorism, an outbreak of highly infectious or contagious diseases, such as COVID-19, or responses to these events.

Furthermore, the stock market may experience extreme volatility that, in some cases, may be unrelated or disproportionate to the operating performance of particular companies. These broad market and industry fluctuations may adversely affect the market price of our Class A common stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our Class A common stock is low.

In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of management from our business regardless of the outcome of such litigation.

We cannot predict the effect our dual class structure may have on the market price of our Class A common stock.

We cannot predict whether our dual class structure will result in a lower or more volatile market price of our Class A common stock, adverse publicity, or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indices. In July 2017, FTSE Russell announced that it plans to require new constituents of its indices to have greater than 5% of the company’s voting rights in the hands of public stockholders, and S&P Dow Jones announced that it will no longer admit companies with multiple-class share structures to certain of its indices. Affected indices include the Russell 2000 and the S&P 500, S&P MidCap 400, and S&P SmallCap 600, which together make up the S&P Composite 1500. Also in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices and in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria. Under such announced policies, the dual class structure of our stock would make us ineligible for inclusion in certain indices and, as a result, mutual funds, exchange-traded funds, and other investment vehicles that attempt to track those indices would not invest in our Class A common stock. These policies are relatively new, and it is unclear what effect, if any, they will have on the valuations of publicly traded companies excluded from such

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indices, but it is possible they may depress valuations, compared to similar companies that are included. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock could be adversely affected.

Non-U.S. Holders may be subject to U.S. federal income tax on gain realized on the sale or disposition of shares of our Class A common stock.

Because of our anticipated holdings in U.S. real property interests following the completion of the Transactions, we believe we will be and will remain a “United States real property holding corporation” for U.S. federal income tax purposes. As a result, a Non-U.S. Holder (as defined in “Material U.S. federal income tax considerations to Non-U.S. Holders of Class A common stock”) generally will be subject to U.S. federal income tax on any gain realized on a sale or disposition of shares of our Class A common stock unless our Class A common stock is regularly traded on an established securities market and such Non-U.S. Holder did not actually or constructively hold more than 5% of our Class A common stock at any time during the shorter of (i) the five-year period preceding the date of the sale or disposition and (ii) the Non-U.S. Holder’s holding period in such stock. In addition, if the above exception does not apply, a purchaser of the stock from such Non-U.S. holder generally will be required to withhold and remit to the IRS 15% of the purchase price. A Non-U.S. Holder will also be required to file a U.S. federal income tax return for any taxable year in which it realizes a gain from the disposition of our Class A common stock that is subject to U.S. federal income tax. We anticipate that our Class A common stock will be regularly traded on an established securities market following this offering. However, no assurance can be given in this regard, and no assurance can be given that our Class A common stock will remain regularly traded in the future. Non-U.S. Holders should consult their tax advisors concerning the consequences of disposing of shares of our Class A common stock.

Upon the listing of our Class A common stock, we will be a “controlled company” within the meaning of the rules of the Exchange and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You may not have the same protections afforded to stockholders of companies that are subject to such corporate governance requirements.

After the consummation of this offering, Founder Fund, a trust controlled by our founder and Executive Chairman Tom Bradbury, will have more than 50% of the voting power for the election of directors, and, as a result, we will be considered a “controlled company” for the purposes of the corporate governance rules of the Exchange. The corporate governance requirements and specifically the independence standards are intended to ensure that directors who are considered independent are free of any conflicting interest that could influence their actions as directors. Following this offering, we intend to utilize certain exemptions from corporate governance requirements that are afforded to a “controlled company” under the Exchange rules. For example, we will not have a nominating and corporate governance committee that is composed entirely of independent directors. From time to time, we may rely on additional exemptions provided to controlled companies under the Exchange rules.

Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all the corporate governance requirements of the Exchange. Our status as a controlled company could make our Class A common stock less attractive to some investors or otherwise harm our stock price.

Certain provisions of Delaware law and antitakeover provisions in our organizational documents could delay or prevent a change of control.

Certain provisions of Delaware law and our amended and restated certificate of incorporation and amended and restated bylaws may have an antitakeover effect and may delay, defer, or prevent a merger, acquisition, tender offer, takeover attempt, or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders. These provisions provide for, among other things:

• the ability of our board of directors to issue one or more series of preferred stock without stockholder approval;

• at any time prior to the Sunset Date, our stockholders may take action by consent without a meeting, and from and after the occurrence of the Sunset Date, our stockholders may not take action by consent without a meeting, but may only take action at a meeting of stockholders;

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• vacancies on our board of directors will be able to be filled only by our board of directors and not by stockholders;

• advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders;

• at any time prior to the Sunset Date, the Secretary (or other officer or our board of directors) at the request of any Continuing Equity Owner owning at least 5% of the voting power of all of the then outstanding shares of capital stock entitled to vote thereon may call a special meeting of stockholders, and from and after the occurrence of the Sunset Date, our stockholders will be unable to call a special meeting of stockholders;

• no cumulative voting in the election of directors;

• prior to the Sunset Date, directors may be removed at any time with or without cause upon the affirmative vote of the holders of a majority of the voting power of our outstanding shares of capital stock entitled to vote thereon, and from and after the occurrence of the Sunset Date, directors may be removed with or without cause and only upon the affirmative vote of holders of at least 66 2/3% of the voting power of our outstanding shares of capital stock entitled to vote thereon; and

• that certain provisions of amended and restated certificate of incorporation may be amended only by the affirmative vote of holder of at least 66 2/3% of the voting power of our then-outstanding capital stock entitled to vote thereon.

These antitakeover provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares.

In addition, we have opted out of Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”), but our amended and restated certificate of incorporation will provide that engaging in any of a broad range of business combinations with any “interested” stockholder (generally defined as any stockholder with 15% or more of our outstanding voting stock and any entity or person affiliated with or controlling or controlled by such stockholder) for a period of three years following the time on which the stockholder became an “interested” stockholder is prohibited, subject to certain exceptions (except with respect to the Continuing Equity Owners and any of their respective affiliates and any of their respective direct or indirect transferees of our common stock). See “Description of capital stock.”

We will become subject to financial reporting and other requirements as a public company for which our accounting and other management systems and resources may not be adequately prepared.

As a public company with listed equity securities, we will need to comply with new laws, regulations, and requirements, including the requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), certain corporate governance provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and related regulations and requirements of the SEC, with which we were not required to comply as a private company. The Exchange Act requires that we file annual, quarterly, and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting. Section 404 of the Sarbanes-Oxley Act requires our management and independent auditors to report annually on the effectiveness of our internal control over financial reporting. However, we are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), so for as long as we continue to be an emerging growth company, we intend 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, not being required to comply with the auditor attestation requirements of Section 404. Once we are no longer an emerging growth company or, if prior to such date, we opt to no longer take advantage of the applicable exemptions, we will be required to include an opinion from our independent auditors on the effectiveness of our internal control over financial reporting. These reporting and other obligations will place significant demands on our management, administrative, operational, and accounting resources and will cause us to incur significant expenses. We may need to upgrade our systems or create new systems, implement additional financial and management controls, reporting systems and procedures, create or outsource an internal audit function, and hire additional accounting and finance staff. If we are unable to accomplish these objectives in a timely and effective fashion, our ability to comply with the financial reporting requirements and other rules that apply to reporting companies could be impaired. Any failure to maintain

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effective internal control over financial reporting could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations. We also expect that being a public company and these rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers. As a result of disclosure of information in this prospectus and in filings required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and operating results.

The JOBS Act will allow us to postpone the date by which we must comply with certain laws and regulations intended to protect investors and to reduce the amount of information we provide in our reports filed with the SEC. We cannot be certain if this reduced disclosure will make our Class A common stock less attractive to investors.

The JOBS Act is intended to reduce the regulatory burden on “emerging growth companies.” As defined in the JOBS Act, a public company whose initial public offering of common equity securities occurs after December 8, 2011, and whose annual net sales are less than $1.235 billion will, in general, qualify as an “emerging growth company” until the earliest of:

• the last day of its fiscal year following the fifth anniversary of the date of its initial public offering of common equity securities;

• the last day of its fiscal year in which it has annual gross revenue of $1.235 billion or more;

• the date on which it has, during the previous three-year period, issued more than $1 billion in nonconvertible debt; and

• the date on which it is deemed to be a “large accelerated filer,” which will occur at such time as we (i) have an aggregate worldwide market value of common equity securities held by non-affiliates of $700 million or more as of the last business day of its most recently completed second fiscal quarter, (ii) have been required to file annual and quarterly reports under the Exchange, for a period of at least 12 months, and (iii) have filed at least one annual report pursuant to the Exchange Act.

Under this definition, we will be an “emerging growth company” upon completion of this offering and could remain an “emerging growth company” until as late as the fifth anniversary of the completion of this offering. For so long as we are an “emerging growth company,” we will, among other things:

• not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act;

• not be required to hold a nonbinding advisory stockholder vote on executive compensation pursuant to Section 14A(a) of the Exchange Act;

• not be required to seek stockholder approval of any golden parachute payments not previously approved pursuant to Section 14A(b) of the Exchange Act;

• be exempt from the requirement of the Public Company Accounting Oversight Board (the “PCAOB”) regarding the communication of critical audit matters in the auditor’s report on the financial statements; and

• be subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This permits an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have chosen to “opt out” of this transition period and, as a result, we will comply with new or revised accounting standards as required when they are adopted. This decision to opt out of the extended transition period is irrevocable.

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We cannot predict if investors will find our Class A common stock less attractive as a result of our decision to take advantage of some or all of the reduced disclosure requirements above. If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and our stock price may be more volatile.

The historical and pro forma financial information in this prospectus may make it difficult to accurately predict our costs of operations in the future.

The historical financial information in this prospectus does not reflect the added costs we expect to incur as a public company or the resulting changes that will occur in our capital structure and operations. In preparing our pro forma financial information we have given effect to, among other items, the Transactions, the Refinancing, and the Devon Street Homes Acquisition. The estimates we used in our pro forma financial information may not be similar to our actual experience as a public company. For more information on our historical financial information and pro forma financial information, see “Unaudited pro forma condensed consolidated financial information,” “Selected historical and pro forma condensed consolidated financial and other data,” “Management’s discussion and analysis of financial condition and results of operations,” “Our organizational structure,” and our consolidated financial statements included elsewhere in this prospectus.

Because we have no current plans to pay regular cash dividends on our Class A common stock following this offering, you may not receive any return on investment unless you sell your Class A common stock for a price greater than that which you paid for it.

While Smith Douglas Holdings LLC has historically had high returns on equity, we do not anticipate paying any regular cash dividends on our Class A common stock immediately following this offering. Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors and will depend on, among other things, general and economic conditions, our results of operations and financial condition, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions, and such other factors that our board of directors may deem relevant. In addition, our ability to pay dividends is, and may be, limited by covenants of any future outstanding indebtedness we or our subsidiaries incur. Therefore, any return on investment in our Class A common stock is solely dependent upon the appreciation of the price of our Class A common stock on the open market, which may not occur. See “Dividend policy” for more detail.

No market currently exists for our Class A common stock, and an active, liquid trading market for our Class A common stock may not develop, which may cause our Class A common stock to trade at a discount from the initial offering price and make it difficult for you to sell the Class A common stock you purchase.

Prior to this offering, there has not been a public market for our Class A common stock. We cannot predict the extent to which investor interest in us will lead to the development of a trading market or how active and liquid that market may become. If an active and liquid trading market does not develop or continue, you may have difficulty selling any of our Class A common stock that you purchase, at a price above the price you purchase it or at all. The initial public offering price for the shares was determined by negotiations between us and the underwriters and may not be indicative of prices that will prevail in the open market following this offering. The failure of an active and liquid trading market to develop and continue would likely have a material adverse effect on the value of our Class A common stock. The market price of our Class A common stock may decline below the initial offering price, and you may not be able to sell your shares of our Class A common stock at or above the price you paid in this offering, or at all. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware is the sole and exclusive forum for certain stockholder litigation matters and the federal district courts of the United States are the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

Our amended and restated bylaws provide that, unless we otherwise consent in writing, (i) (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, other employees or stockholders to us or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL, our amended and restated certificate of

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incorporation or our amended and restated bylaws (as either may be amended or restated) or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (d) any action asserting a claim governed by the internal affairs doctrine shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware (or, in the event that the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware); and (ii) the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act; provided, however, that the foregoing choice of forum provision shall not apply to claims seeking to enforce any liability or duty created by the Exchange Act, or any other claim for which the United States federal courts have exclusive jurisdiction.

The choice of forum provision is limited to the extent permitted by law, and it will not apply to claims brought to enforce any liability or duty arising under the Exchange Act, or for any other federal securities laws which provide for exclusive federal jurisdiction. Additionally, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, or the rules and regulations promulgated thereunder. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated bylaws will provide that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring such a claim arising under the Securities Act against us, our directors, officers, or other employees in a venue other than in the federal district courts of the United States. In such instance, we would expect to vigorously assert the validity and enforceability of the choice of forum provisions of our amended and restated bylaws.

The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition, and results of operations. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated bylaws.

If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, or if there is any fluctuation in our credit rating, our stock price and trading volume could decline.

The trading market for our Class A common stock will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. Securities and industry analysts do not currently, and may never, publish research on our company. If no securities or industry analysts commence coverage of us, the trading price of our shares would likely be negatively impacted. Furthermore, if one or more of the analysts who do cover us downgrade our stock or our industry, or the stock of any of our competitors, or publish inaccurate or unfavorable research about our business, the price of our stock could decline. If one or more of these analysts stops covering us or fails to publish reports on us regularly, we could lose visibility in the market, which, in turn, could cause our stock price or trading volume to decline.

Additionally, any fluctuation in the credit rating of us or our subsidiaries may impact our ability to access debt markets in the future or increase our cost of future debt, which could have a material adverse effect on our operations and financial condition, which in return, may adversely affect the trading price of shares of our Class A common stock.

If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes appearing elsewhere in this prospectus. We base our estimates on historical experience and on various other

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assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s discussion and analysis of financial condition and results of operations—Critical accounting policies and estimates.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses. Significant estimates and judgments involve: revenue recognition, including revenue-related reserves; legal contingencies; valuation of our Class A common stock and equity awards; income taxes; and sales and indirect tax reserves. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of our Class A common stock.

Future sales, or the perception of future sales, by us or our existing stockholders in the public market following this offering could cause the market price for our Class A common stock to decline.

After this offering, the sale of shares of our Class A common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our Class A common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

Upon consummation of the Transactions, we will have outstanding a total of 7,692,308 shares of Class A common stock. Of the outstanding shares, the 7,692,308 shares sold in this offering (or 8,846,154 shares if the underwriters exercise in full their option to purchase additional shares of Class A common stock) will be freely tradable without restriction or further registration under the Securities Act, other than any shares held by our affiliates. Any shares of Class A common stock held by our affiliates will be eligible for resale pursuant to Rule 144 under the Securities Act, subject to the volume, manner of sale, holding period and other limitations of Rule 144.

Our directors and executive officers, and substantially all of our stockholders, will enter into lock-up agreements with the underwriters prior to the commencement of this offering pursuant to which each of these persons or entities, subject to certain exceptions, restrict the sale of the shares of our Class A common stock and certain other securities held by them for a period of 180 days after the date of this prospectus. J.P. Morgan Securities LLC and BofA Securities, Inc. may, in their sole discretion and at any time, release all or any portion of the shares or securities subject to any such lock-up agreements. See “Underwriting (conflicts of interest).”

In addition, we have reserved shares of Class A common stock for issuance under the 2024 Plan. Any Class A common stock that we issue under the 2024 Plan or other equity incentive plans that we may adopt in the future would dilute the percentage ownership held by the investors who purchase Class A common stock in this offering.

As restrictions on resale end or if these stockholders exercise their registration rights, the market price of our shares of Class A common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of Class A common stock or other securities.

In the future, we may also issue securities in connection with investments, acquisitions, or capital raising activities. In particular, the number of shares of our Class A common stock issued in connection with an investment or acquisition, or to raise additional equity capital, could constitute a material portion of our then-outstanding shares of our Class A common stock. Any such issuance of additional securities in the future may result in additional dilution to you or may adversely impact the price of our Class A common stock.

If you purchase shares of Class A common stock in this offering, you will suffer immediate and substantial dilution of your investment.

The initial public offering price of our Class A common stock is substantially higher than the net tangible book value per share of our Class A common stock. Therefore, if you purchase shares of our Class A common stock in this offering, you will pay a price per share that substantially exceeds our net tangible book value per share after this offering. You will experience immediate dilution of $14.03 per share, representing the difference between our net tangible book value per share after giving effect to this offering and the initial public offering price. In addition, investors who purchase Class A common stock from us in this offering will have contributed 96.3% of the aggregate price paid by all purchasers of our outstanding equity but will own only approximately 15.0% of our outstanding equity after this offering. See “Dilution” for more detail, including the calculation of the net tangible book value per share of our Class A common stock.

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We have broad discretion to use the proceeds from this offering, and our investment of those proceeds may not yield a favorable return.

Our management has broad discretion to spend the proceeds from this offering in ways with which you may not agree. See “Use of proceeds” and “Certain relationships and related person transactions.” The failure of our management to apply these funds effectively could result in unfavorable returns. This could harm our business and could cause the price of our Class A common stock to decline.

General risk factors

We are subject to litigation, arbitration, or other claims which could materially and adversely affect us.

We are subject to litigation, and we may in the future be subject to enforcement actions, such as claims relating to our operations, securities offerings, and otherwise in the ordinary course of business. Some of these claims may result in significant defense costs and potentially significant judgments against us, some of which are not, or cannot be, insured against. Although we have established warranty, claim, and litigation reserves that we believe are adequate, we cannot be certain of the ultimate outcomes of any claims that may arise in the future, and legal proceedings may result in the award of substantial damages against us beyond our reserves. Resolution of these types of matters against us may result in our having to pay significant fines, judgments, or settlements, which, if uninsured or in excess of insured levels, could adversely impact our earnings and cash flows, thereby materially and adversely affecting us. Furthermore, plaintiffs may, in certain of these legal proceedings, seek class action status with potential class sizes that vary from case to case. Class action lawsuits can be costly to defend, and if we were to lose any certified class action suit, it could result in substantial liability for us. Certain litigation or the resolution thereof may affect the availability or cost of some of our insurance coverage, which could materially and adversely impact us, expose us to increased risks that would be uninsured, and materially and adversely impact our ability to attract directors and officers.

We may suffer uninsured losses or material losses in excess of insurance limits.

We could suffer physical damage to property and liabilities resulting in losses that may not be fully recoverable by insurance. Insurance against certain types of risks, such as terrorism, earthquakes, floods, or personal injury claims, may be unavailable, available in amounts that are less than the full market value or replacement cost of investment or underlying assets or subject to a large deductible or self-insurance retention amount. In addition, there can be no assurance that certain types of risks that are currently insurable will continue to be insurable on an economically feasible basis. Should an uninsured loss or a loss in excess of insured limits occur or be subject to deductibles or self-insurance retention, we could sustain financial loss or lose capital invested in the affected property, as well as anticipated future income from that property. Furthermore, we could be liable to repair damage or meet liabilities caused by risks that are uninsured or subject to deductibles. We may also be liable for any debt or other financial obligations related to affected property.

Acts of war or terrorism may seriously harm our business.

Acts of war, any outbreak or escalation of hostilities between the United States and any foreign power, or acts of terrorism may cause disruption to the U.S. economy, or the local economies of the markets in which we operate, cause shortages of building materials, increase costs associated with obtaining building materials, result in building code changes that could increase costs of construction, result in uninsured losses, affect job growth and consumer confidence, or cause economic changes that we cannot anticipate, all of which could reduce demand for our homes and adversely impact our business, prospects, liquidity, financial condition, and results of operations.

Negative publicity could adversely affect our reputation as well as our business, financial results, and stock price.

Unfavorable media related to our industry, company, brands, marketing, personnel, operations, business performance, or prospects may affect our stock price and the performance of our business, regardless of its accuracy or inaccuracy. The speed at which negative publicity can be disseminated has increased dramatically with the capabilities of electronic communication, including social media outlets, websites, blogs, newsletters, and other digital platforms. Our success in maintaining, extending, and expanding our brand image depends on our ability to adapt to this rapidly changing media environment. Adverse publicity or negative commentary from any media outlets could damage our reputation and reduce the demand for our homes, which would adversely affect our business.

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Changes in accounting rules, assumptions, and/or judgments could materially and adversely affect us.

Accounting rules and interpretations for certain aspects of our financial reporting are highly complex and involve significant assumptions and judgment. These complexities could lead to a delay in the preparation and dissemination of our financial statements. Furthermore, changes in accounting rules and interpretations or in our accounting assumptions and/or judgments, such as those related to asset impairments, could significantly impact our financial statements. In some cases, we could be required to apply a new or revised standard retroactively, resulting in restating prior period financial statements. Any of these circumstances could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.

Access to financing sources may not be available on favorable terms, or at all, especially in light of current market conditions, which could adversely affect our ability to maximize our returns.

Our access to additional third-party sources of financing will depend, in part, on:

• general market conditions, including inflation and rising interest rates;

• the market’s perception of our growth potential;

• with respect to acquisition and/or development financing, the market’s perception of the value of the land parcels to be acquired and/or developed;

• our current debt levels;

• our current and expected future earnings;

• our cash flow; and

• the market price per share of our Class A common stock.

The global credit and equity markets and the overall economy can be extremely volatile, which could have a number of adverse effects on our operations and capital requirements. For the past decade, the domestic financial markets have experienced a high degree of volatility, uncertainty and, during certain periods, tightening of liquidity in both the high yield debt and equity capital markets, resulting in certain periods when new capital has been both more difficult and more expensive to access. If we are unable to access the credit markets, we could be required to defer or eliminate important business strategies and growth opportunities in the future. In addition, if there is prolonged volatility and weakness in the capital and credit markets, potential lenders may be unwilling or unable to provide us with financing that is attractive to us or may increase collateral requirements or may charge us prohibitively high fees in order to obtain financing. Consequently, our ability to access the credit market in order to attract financing on reasonable terms may be adversely affected. Investment returns on our assets and our ability to make acquisitions could be adversely affected by our inability to secure additional financing on reasonable terms, if at all.

Depending on market conditions at the relevant time, we may have to rely more heavily on additional equity financings or on less efficient forms of debt financing that require a larger portion of our cash flow from operations, thereby reducing funds available for our operations, future business opportunities and other purposes. We may not have access to such equity or debt capital on favorable terms at the desired times, or at all.

The failure of any bank in which we deposit our funds could reduce the amount of cash we have available to pay distributions and make additional investments.

The Federal Deposit Insurance Corporation only insures amounts up to $250,000 per depositor. We maintain the majority of our cash and cash equivalents in accounts with major U.S. financial institutions, and our deposits at certain of these institutions may exceed insured limits from time to time. Market conditions can impact the viability of these institutions, as we have seen recently with the abrupt failure of more than one regional bank. Although we did not experience any loss related to these failures, if any of the banking institutions in which we deposit funds ultimately fails, there can be no assurance that we will be able to access uninsured funds in a timely manner or at all. The loss of our deposits could reduce the amount of cash we have available to distribute or invest and could result in a decline in the value of our stockholders’ investment.

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We may change our operational policies, investment guidelines and our business and growth strategies without stockholder consent, which may subject us to different and more significant risks in the future.

Our board of directors will determine our operational policies, investment guidelines, and business and growth strategies. Our 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, our stockholders. This could result in us conducting operational matters, making investments, or pursuing different business or growth strategies than those contemplated in this prospectus. Under any of these circumstances, we may expose ourselves to different and more significant risks in the future, which could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.

Future offerings of debt securities, which would rank senior to our Class A common stock upon our bankruptcy or liquidation, and future offerings of equity securities that may be senior to our Class A common stock for the purposes of dividend and liquidation distributions, may adversely affect the market price of our Class A common stock.

In the future, we may attempt to increase our capital resources by making offerings of debt securities or additional offerings of equity securities. Upon bankruptcy or liquidation, holders of our debt securities and shares of preferred stock and lenders with respect to other borrowings will receive a distribution of our available assets prior to the holders of our Class A common stock. Additional equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our Class A common stock, or both. Our preferred stock will have a preference on liquidating distributions and dividend payments, which could limit our ability to make a dividend distribution to the holders of our Class A common stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control. As a result, we cannot predict or estimate the amount, timing or nature of our future offerings, and purchasers of our Class A common stock in this offering bear the risk of our future offerings reducing the market price of our Class A common stock and diluting their ownership interest in our company.

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Cautionary note regarding forward-looking statements

This prospectus contains forward-looking statements. All statements other than statements of historical facts contained in this prospectus may be forward-looking statements. Statements regarding our future results of operations and financial position, business strategy, and plans and objectives of management for future operations, including, among others, statements regarding the Transactions, including the consummation of this offering, expected growth, future capital expenditures, and debt service obligations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms, such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these terms or other similar expressions. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

Forward-looking statements contained in this prospectus include, but are not limited to, statements about:

• our ability to successfully identify, secure, and control an adequate inventory of lots at reasonable prices;

• our market opportunity and the potential growth of that market;

• our ability to expand into new regions;

• our strategy, expected outcomes, and growth prospects;

• trends in our operations, industry, and markets;

• our future profitability, indebtedness, liquidity, access to capital, and financial condition;

• the effects of seasonal trends on our results of operations;

• the increased expenses associated with being a public company;

• our ability to remain in compliance with extensive laws and regulations that apply to our business and operations;

• the effect our dual class structure may have on the market price of our Class A common stock;

• the completion of the concurrent Refinancing and

• the future trading prices of our Class A common stock.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled “Risk factors.” Moreover, we operate in a very competitive and rapidly changing environment.

New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

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You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this prospectus or to conform these statements to actual results or revised expectations, except as required by law.

You should read this prospectus and the documents that we reference in this prospectus and have filed with the SEC as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, performance, and events and circumstances may be materially different from what we expect.

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Our organizational structure

Smith Douglas Homes Corp., a Delaware corporation, was formed on June 20, 2023 and is the issuer of the Class A common stock offered by this prospectus. Prior to this offering and the Transactions (as defined below), all of our business operations have been conducted through Smith Douglas Holdings LLC and the Continuing Equity Owners are the only owners of Smith Douglas Holdings LLC. We will consummate the Transactions, excluding this offering, prior to the consummation of this offering.

Existing organization

Smith Douglas Holdings LLC is treated as a partnership for U.S. federal income tax purposes and, as such, is generally not subject to any U.S. federal entity-level income taxes. Taxable income or loss of Smith Douglas Holdings LLC is included in the U.S. federal income tax returns of Smith Douglas Holdings LLC’s members. Immediately prior to the consummation of this offering, the Continuing Equity Owners were the only members of Smith Douglas Holdings LLC.

Transactions

Prior to the Transactions, we expect there will initially be one holder of common stock of Smith Douglas Homes Corp. We will consummate the following organizational transactions in connection with this offering:

• we will amend and restate the existing limited liability company agreement of Smith Douglas Holdings LLC, which will become effective prior to the consummation of this offering, to, among other things, (i) recapitalize all existing ownership interests in Smith Douglas Holdings LLC into 44,871,794 LLC Interests (before giving effect to the use of proceeds described below), (ii) appoint Smith Douglas Homes Corp. as the sole managing member of Smith Douglas Holdings LLC upon its acquisition of LLC Interests in connection with this offering, and (iii) provide certain redemption rights to the Continuing Equity Owners;

• we will amend and restate Smith Douglas Homes Corp.’s certificate of incorporation to, among other things, provide (i) for Class A common stock, with each share of our Class A common stock entitling its holder to one vote per share on all matters presented to our stockholders generally; (ii) for Class B common stock, with each share of our Class B common stock entitling its holder to ten votes per share on all matters presented to our stockholders generally prior to the Sunset Date and from and after the occurrence of the Sunset Date each share of our Class B common stock will entitle its holder to one vote per share on all matters presented to our stockholders generally; (iii) that shares of our Class B common stock may only be held by the Continuing Equity Owners and their respective permitted transferees as described in “Description of capital stock—Common stock—Class B common stock;” and (iv) for preferred stock, which can be issued by our board in one or more series without stockholder approval;

• we will issue 43,589,743 shares of our Class B common stock (after giving effect to the use of net proceeds as described below and assuming no exercise of the underwriters’ option to purchase additional shares of Class A common stock) to the Continuing Equity Owners at the time of such issuance of Class B common stock, which is equal to the number of LLC Interests held by such Continuing Equity Owners, for nominal consideration;

• we will issue 7,692,308 shares of our Class A common stock to the purchasers in this offering (or 8,846,154 shares if the underwriters exercise in full their option to purchase additional shares of Class A common stock) in exchange for net proceeds of approximately $139.5 million (or approximately $160.4 million if the underwriters exercise in full their option to purchase additional shares of Class A common stock) based upon an assumed initial public offering price of $19.50 per share (which is the midpoint of the estimated price range set forth on the cover page of this prospectus), less the underwriting discount;

• we will use the net proceeds from this offering (i) to purchase 6,410,257 newly issued LLC Interests for approximately $116.3 million directly from Smith Douglas Holdings LLC at the initial public offering price less the underwriting discount; and (ii) to purchase 1,282,051 LLC Interests from the Continuing Equity Owners on a pro rata basis for $23.2 million in aggregate (or 2,435,897 LLC Interests for $44.2 million in aggregate if the underwriters exercise in full their option to purchase additional shares of Class A common stock) at a price per unit equal to the initial public offering price per share of Class A common stock in this offering less the underwriting discount;

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• Smith Douglas Holdings LLC intends to use the net proceeds from the sale of LLC Interests to Smith Douglas Homes Corp. (i) to repay approximately $71.0 million of borrowings outstanding under the Existing Credit Facility as part of the Refinancing, (ii) to redeem all outstanding Class C Units and Class D Units of Smith Douglas Holdings LLC at par in aggregate for $2.6 million, (ii) to repay $1.2 million in notes payable to certain related parties, and (iv) if any remain, for general corporate purposes as described under “Use of proceeds” and “Certain relationships and related person transactions”; and

• Smith Douglas Homes Corp. will enter into (i) the Registration Rights Agreement with certain of the Continuing Equity Owners and (ii) the Tax Receivable Agreement with Smith Douglas Holdings LLC and the Continuing Equity Owners. For a description of the terms of the Registration Rights Agreement and the Tax Receivable Agreement, see “Certain relationships and related person transactions.”

Organizational structure following the Transactions

• Smith Douglas Homes Corp. will be a holding company and its principal asset will consist of LLC Interests it acquires directly from Smith Douglas Holdings LLC and from each Continuing Equity Owner;

• Smith Douglas Homes Corp. will be the sole managing member of Smith Douglas Holdings LLC and will control the business and affairs of Smith Douglas Holdings LLC;

• Smith Douglas Homes Corp. will own, directly or indirectly, 7,692,308 LLC Interests of Smith Douglas Holdings LLC, representing approximately 15.0% of the economic interest in Smith Douglas Holdings LLC (or 8,846,154 LLC Interests, representing approximately 17.3% of the economic interest in Smith Douglas Holdings LLC if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

• the Continuing Equity Owners will own (i) 43,589,743 LLC Interests of Smith Douglas Holdings LLC, representing approximately 85.0% of the economic interest in Smith Douglas Holdings LLC (or 42,435,897 LLC Interests, representing approximately 82.7% of the economic interest in Smith Douglas Holdings LLC if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and (ii) 43,589,743 shares of Class B common stock of Smith Douglas Homes Corp., representing approximately 98.3% of the combined voting power of all of Smith Douglas Homes Corp.’s common stock (or 42,435,897 shares of Class B common stock of Smith Douglas Homes Corp., representing approximately 98.0% if the underwriters exercise in full their option to purchase additional shares of Class A common stock); and

• the purchasers in this offering will own (i) 7,692,308 shares of Class A common stock of Smith Douglas Homes Corp. (or 8,846,154 shares of Class A common stock of Smith Douglas Homes Corp. if the underwriters exercise in full their option to purchase additional shares of Class A common stock), representing approximately 1.7% of the combined voting power of all of Smith Douglas Homes Corp.’s common stock and approximately 100% of the economic interest in Smith Douglas Homes Corp. (or approximately 2.0% of the combined voting power and approximately 100% of the economic interest if the underwriters exercise in full their option to purchase additional shares of Class A common stock), and (ii) through Smith Douglas Homes Corp.’s ownership of LLC Interests, indirectly will hold approximately 15.0% of the economic interest in Smith Douglas Holdings LLC (or approximately 17.3% of the economic interest in Smith Douglas Holdings LLC if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

Our corporate structure following this offering, as described below, is commonly referred to as an umbrella partnership-C corporation (“Up-C”) structure, which is often used by partnerships and limited liability companies when they undertake an initial public offering of their business. The Up-C structure will allow the Continuing Equity Owners to retain their equity ownership in Smith Douglas Holdings LLC and to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or “flow-through” entity, for U.S. federal income tax purposes following the offering. Investors in this offering will, by contrast, hold their equity ownership in Smith Douglas Homes Corp., a Delaware corporation that is a domestic corporation for U.S. federal income tax purposes, in the form of shares of Class A common stock. One of the tax benefits to the Continuing Equity Owners associated with this structure is that future taxable income of Smith Douglas Holdings LLC that is allocated to the Continuing Equity Owners will be taxed on a flow-through basis and therefore will not be subject to corporate taxes at the entity level. Additionally, because the Continuing Equity Owners may have their LLC Interests redeemed by Smith Douglas Holdings LLC (or at our option, directly exchanged by Smith Douglas Homes Corp.) for newly issued shares of our Class A common stock on a one-for-one basis (subject to customary adjustments, including for stock splits, stock dividends, and reclassifications) or, at our option, for cash, the Up-C

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structure also provides the Continuing Equity Owners with potential liquidity that holders of non-publicly traded limited liability companies are not typically afforded. In connection with any such redemption or exchange of LLC Interests, a corresponding number of shares of Class B common stock held by the relevant Continuing Equity Owner will automatically be transferred to Smith Douglas Homes Corp. for no consideration and be canceled. The Continuing Equity Owners and Smith Douglas Homes Corp. also each expect to benefit from the Up-C structure as a result of certain cash tax savings arising from redemptions or exchanges of the Continuing Equity Owner’s LLC Interests for Class A common stock or cash, and certain other tax benefits covered by the Tax Receivable Agreement discussed in “Certain relationships and related person transactions—Tax Receivable Agreement.” See “Risk factors—Risks related to our organizational structure.” In general, the Continuing Equity Owners expect to receive payments under the Tax Receivable Agreement of 85% of the amount of certain tax benefits, as described below, and Smith Douglas Homes Corp. expects to benefit in the form of cash tax savings in amounts equal to 15% of certain tax benefits, as described below. Any payments made by us to the Continuing Equity Owners under the Tax Receivable Agreement will reduce cash otherwise arising from such tax savings. We expect such payments will be substantial.

As described below under “Certain relationships and related person transactions—Tax Receivable Agreement,” prior to the completion of this offering, we will enter into a tax receivable agreement with Smith Douglas Holdings LLC and the Continuing Equity Owners that will provide for the payment by Smith Douglas Homes Corp. to the Continuing Equity Owners of 85% of the amount of tax benefits, if any, that Smith Douglas Homes Corp. actually realizes (or in some circumstances is deemed to realize) as a result of (i) Basis Adjustments, (ii) Section 704(c) Allocations, and (iii) certain tax benefits (such as interest deductions) arising from payments made under the Tax Receivable Agreement.

The diagram below depicts our organizational structure after giving effect to the Transactions, including this offering, assuming no exercise by the underwriters of their option to purchase additional shares of Class A common stock.

 

(1)
Includes Founder Fund and GSB Holdings.

As the sole managing member of Smith Douglas Holdings LLC, we will operate and control all of the business and affairs of Smith Douglas Holdings LLC and, through Smith Douglas Holdings LLC, conduct our business. Following the Transactions, including this offering, Smith Douglas Homes Corp. will control the management of Smith Douglas Holdings LLC as its sole managing member. As a result, Smith Douglas Homes Corp. will consolidate Smith Douglas Holdings LLC and record a significant non-controlling interest in a consolidated entity in Smith Douglas Homes Corp.’s consolidated financial statements for the economic interest in Smith Douglas Holdings LLC held by the Continuing Equity Owners.

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Incorporation of Smith Douglas Homes Corp.

Smith Douglas Homes Corp., the issuer of the Class A common stock offered by this prospectus, was incorporated as a Delaware corporation on June 20, 2023. Smith Douglas Homes Corp. has not engaged in any material business or other activities except in connection with its formation and the Transactions. The amended and restated certificate of incorporation of Smith Douglas Homes Corp. that will become effective immediately prior to the consummation of this offering will, among other things, authorize two classes of common stock, Class A common stock and Class B common stock, and a class of preferred stock, each having the terms described in “Description of capital stock.”

Reclassification and amendment and restatement of the Smith Douglas LLC Agreement

Prior to the consummation of this offering, the existing limited liability company agreement of Smith Douglas Holdings LLC will be amended and restated to, among other things, recapitalize its capital structure by creating a single new class of units, or the common units or the LLC interests, and provide for a right of redemption of common units in exchange for, at our election (determined solely by our independent directors (within the meaning of the Exchange rules), who are disinterested), shares of our Class A common stock or cash provided that, at our election (determined solely by our independent directors (within the meaning of the Exchange rules) who are disinterested), we may effect a direct exchange by Smith Douglas Homes Corp. of such Class A common stock or such cash, as applicable, for such LLC Interests. In connection with any such redemption or exchange of LLC Interests, a corresponding number of shares of Class B common stock held by the relevant Continuing Equity Owner will automatically be transferred to Smith Douglas Homes Corp. and be canceled. See “Certain relationships and related person transactions—Smith Douglas LLC Agreement.”

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Use of proceeds

We estimate, based upon an assumed initial public offering price of $19.50 per share (which is the midpoint of the estimated price range set forth on the cover page of this prospectus), that we will receive net proceeds from this offering of approximately $139.5 million (or $160.4 million if the underwriters exercise in full their option to purchase additional shares of Class A common stock), after deducting the underwriting discount.

We intend to use the net proceeds from this offering to: (i) purchase 6,410,257 newly issued LLC Interests for approximately $116.3 million directly from Smith Douglas Holdings LLC at a price per unit equal to the initial public offering price per share of Class A common stock in this offering less the underwriting discount; and (ii) purchase 1,282,051 LLC Interests from the Continuing Equity Owners on a pro rata basis for $23.2 million in aggregate (or 2,435,897 LLC Interests from the Continuing Equity Owners for $44.2 million in aggregate if the underwriters exercise in full their option to purchase additional shares of Class A common stock) at a price per unit equal to the initial public offering price per share of Class A common stock in this offering less the underwriting discount). Upon each purchase of LLC Interests, the corresponding shares of Class B common stock will automatically be transferred to Smith Douglas Homes Corp. for no consideration and be canceled.

We will only retain the net proceeds that are used to purchase newly issued LLC Interests from Smith Douglas Holdings LLC, which, in turn, Smith Douglas Holdings LLC intends to use as follows: (i) to repay approximately $71.0 million of borrowings outstanding under our Existing Credit Facility as part of the Refinancing (see “Underwriting (conflicts of interest)”), (ii) redeem all outstanding Class C Units and Class D Units of Smith Douglas Holdings LLC at par aggregating $2.6 million, (iii) repay $1.2 million in notes payable to related parties and (iv) the remainder, if any, for general corporate purposes as described herein and under “Certain relationships and related person transactions.” As of September 30, 2023, outstanding borrowings under the Existing Credit Facility aggregated $71.0 million with no outstanding letters of credit. Borrowings under the Existing Credit Facility bear interest at the Prime Rate plus the applicable margin, as defined therein, based on our leverage ratio and payable monthly (an effective rate of 8.25% as of September 30, 2023). The maturity, among other provisions, under the Existing Credit Facility will be amended and restated by the Amended Credit Facility. Following this offering and the Refinancing, we will have $250.0 million of availability under our revolving facility. For more information on the Existing Credit Facility and the Amended Credit Facility, see “Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources—Existing Credit Facility” and “Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources—Amended Credit Facility.” We may also use a portion of the net proceeds to acquire or invest in businesses, products, services, or technologies; however, we do not have agreements or commitments for any material acquisitions or investments at this time.

This expected use of the net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. We cannot predict with certainty all of the particular uses for the net proceeds to be received upon the closing of this offering or the amounts that we will actually spend on the uses set forth above. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering.

Based on our planned use of the net proceeds of this offering and our existing cash and cash equivalents, we estimate that such funds will be sufficient to enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of this prospectus. We have based this estimate on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than we currently expect. We may satisfy our future cash needs through the sale of equity securities, debt financings, working capital lines of credit, corporate collaborations, or license agreements, grant funding, interest income earned on invested cash balances or a combination of one or more of these sources. We could use our available capital resources sooner than we currently expect, in which case we would need to obtain additional funding, which may not be available to use on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy.

Pending our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term and intermediate-term, investment-grade, interest-bearing instruments, and U.S. government securities.

Assuming no exercise of the underwriters’ option to purchase additional shares of Class A common stock, each $1.00 increase (decrease) in the assumed initial public offering price of $19.50 per share (which is the midpoint of

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the estimated price range set forth on the cover page of this prospectus) would increase (decrease) the net proceeds to us from this offering by approximately $7.2 million and, in turn, the net proceeds received by Smith Douglas Holdings LLC from the sale of LLC Interests to Smith Douglas Homes Corp. by approximately $6.0 million, assuming the number of shares offered, as set forth on the cover page of this prospectus, remains the same, and after deducting the underwriting discount.

Each 1,000,000 share increase (decrease) in the number of shares offered by us in this offering would increase (decrease) the net proceeds to us by approximately $18.1 million and, in turn, increase (decrease) the net proceeds by approximately $15.1 million used to purchase newly issued LLC Interests from Smith Douglas Holdings LLC, and by approximately $3.0 million used to purchase LLC interests from the Continuing Equity Owners, assuming that the price per share for the offering remains at $19.50 (which is the midpoint of the estimated price range set forth on the cover page of this prospectus), and after deducting the underwriting discount.

Smith Douglas Holdings LLC will bear or reimburse Smith Douglas Homes Corp. for all of the expenses incurred in connection with the Transactions, including this offering, which we estimate to be approximately $5.5 million.

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Capitalization

The following table sets forth the cash and capitalization as of September 30, 2023, as follows:

• of Smith Douglas Holdings LLC on a historical basis; and

• of Smith Douglas Homes Corp. and its subsidiaries, pro forma for the Transactions, including the sale of the shares of Class A common stock in this offering at an assumed initial public offering price of $19.50 per share (which is the midpoint of the estimated price range set forth on the cover page of this prospectus), after deducting the underwriting discount, and the application of the net proceeds therefrom as described under “Use of proceeds,” including the Refinancing.

For more information, please see “Our organizational structure,” “Use of proceeds,” and “Unaudited pro forma condensed consolidated financial information” included elsewhere in this prospectus. You should read this information in conjunction with our financial statements and the related notes included elsewhere in this prospectus and the “Management’s discussion and analysis of financial condition and results of operations” section and other financial information contained in this prospectus.

As of September 30, 2023 (in thousands, except per share and share amounts)	Smith Douglas Holdings LLC Historical	Smith Douglas Homes Corp. Pro Forma(1)
Cash and cash equivalents	$10,440	$51,938
Debt(2)	$76,000	$5,000
Total members’ equity	187,784	—
Stockholders’ equity	—
Class A common stock, par value $0.0001 per share; no shares authorized, issued and outstanding, actual; 250,000,000 shares authorized, 7,692,308 shares issued and outstanding, Smith Douglas Homes Corp. pro forma	—	1
Class B common stock, par value $0.0001 per share; no shares authorized, issued and outstanding, actual; 100,000,000 shares authorized, 43,589,743 shares issued and outstanding, Smith Douglas Homes Corp. pro forma	—	7
Preferred stock $0.0001 par value per share, no shares authorized, issued and outstanding, actual; 10,000,000 authorized, no shares issued and outstanding, pro forma	—	—
Additional paid-in-capital	—	44,529
Equity attributable to Smith Douglas Homes Corp.	—	44,537
Non-controlling interest attributable to Smith Douglas LLC	—	252,329
Total stockholders’ and members’ equity	187,784	296,866
Total capitalization	$263,784	$301,866

(1)
A $1.00 increase (decrease) in the assumed initial public offering price of $19.50 per share, which is the midpoint of the price range listed on the cover page of this prospectus, would increase (decrease) the pro forma amount of each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity, and total capitalization by approximately $7.2 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions.

(2)
As of September 30, 2023, we had $71.0 million of borrowings outstanding under the Existing Credit Facility and $5.0 million outstanding under the three-year promissory note payable to the seller of the Devon Street Homes Acquisition. The Existing Credit Facility is a $175.0 million unsecured revolving credit facility, which includes a $25.0 million accordion feature, subject to additional commitments, and provides that up to $10.0 million may be used for letters of credit. Concurrently with, and conditioned upon, the closing of this offering, we intend to enter into the Amended Credit Facility and, as part of the Refinancing, pay down $71.0 million outstanding under our Existing Credit Facility. For a further description of our Existing Credit Facility, see “Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources—Existing Credit Facility” and “Use of proceeds.”

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Dividend policy

We currently intend to retain all available funds and any future earnings to fund the development and growth of our business, and therefore we do not anticipate declaring or paying any cash dividends on our Class A common stock in the foreseeable future. Except in certain limited circumstances, holders of our Class B common stock are not entitled to participate in any dividends declared by our board of directors. Furthermore, because we are a holding company, our ability to pay cash dividends on our Class A common stock depends on our receipt of cash distributions from Smith Douglas Holdings LLC. Our Existing Credit Facility and our Amended Credit Facility contain certain covenants that restrict, subject to certain exceptions, our ability to pay dividends. See “Management’s discussion and analysis of financial condition and results of operation—Liquidity and capital resources—Existing Credit Facility” and “Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources—Amended Credit Facility.” Our ability to pay dividends may be restricted by the terms of any future credit agreement or any future debt or preferred equity securities of us. See “Description of capital stock” and “Management’s discussion and analysis of financial condition and results of operation—Liquidity and capital resources.” Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors and subject to the requirements of applicable law, compliance with contractual restrictions and covenants in the agreements governing our future indebtedness. Any such determination will also depend upon our business prospects, results of operations, financial condition, cash requirements and availability and other factors that our board of directors may deem relevant.

Accordingly, you may need to sell your shares of our Class A common stock to realize a return on your investment, and you may not be able to sell your shares at or above the price you paid for them. See “Risk factors—Risks related to this offering and ownership of our Class A common stock—Because we have no current plans to pay regular cash dividends on our Class A common stock following this offering, you may not receive any return on investment unless you sell your Class A common stock for a price greater than that which you paid for it.”

Immediately following this offering, we will be a holding company, and our principal asset will be the LLC Interests we purchase from Smith Douglas Holdings LLC and from each Continuing Equity Owner. If we decide to pay a dividend in the future, we would need to cause Smith Douglas Holdings LLC to make distributions to us in an amount sufficient to cover such dividend. If Smith Douglas Holdings LLC makes such distributions to us, the other holders of LLC Interests will be entitled to receive pro rata distributions. See “Risk factors—Risks related to our organizational structure—Our principal asset after the completion of this offering will be our interest in Smith Douglas Holdings LLC, and, as a result, we will depend on distributions from Smith Douglas Holdings LLC to pay our taxes and expenses, including payments under the Tax Receivable Agreement. Smith Douglas Holdings LLC’s ability to make such distributions may be subject to various limitations and restrictions.”

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Dilution

The Continuing Equity Owners will own LLC Interests after the Transactions. Because the Continuing Equity Owners do not own any Class A common stock or have any right to receive distributions or dividends from Smith Douglas Homes Corp., we have presented dilution in pro forma net tangible book value per share both before and after this offering assuming that all of the holders of LLC Interests (other than Smith Douglas Homes Corp.) had their LLC Interests redeemed or exchanged for newly-issued shares of Class A common stock on a one-for-one basis (rather than for cash) and the transfer to us and cancellation for no consideration of all of their shares of Class B common stock (which are not entitled to receive distributions or dividends, whether cash or stock from Smith Douglas Homes Corp). In order to more meaningfully present the dilutive impact on the investors in this offering. We refer to the assumed redemption or exchange of all LLC Interests for shares of Class A common stock as described in the previous sentence as the “Assumed Redemption.”

Dilution is the amount by which the offering price paid by the purchasers of the Class A common stock in this offering exceeds the pro forma net tangible book value per share of Class A common stock after the offering. Smith Douglas Holdings Corp.’s pro forma net tangible book value as of September 30, 2023 prior to this offering and after giving effect to the recapitalization transaction and the Assumed Redemption was $171.3 million. Pro forma net tangible book value per share prior to this offering is determined by subtracting our total liabilities from the total book value of our tangible assets and dividing the difference by the number of shares of Class A common stock deemed to be outstanding after giving effect to the Assumed Redemption.

If you invest in our Class A common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price per share and the pro forma net tangible book value per share of our Class A common stock after this offering.

Pro forma net tangible book value per share after this offering is determined by subtracting our total liabilities from the total book value of our tangible assets and dividing the difference by the number of shares of Class A common stock deemed to be outstanding, after giving effect to the Transactions, including this offering and the application of the proceeds from this offering as described in “Use of proceeds”, and the Assumed Redemption. Our pro forma net tangible book value as of September 30, 2023, after giving effect to this offering would have been approximately $280.4 million, or $5.47 per share of Class A common stock. This amount represents an immediate increase in pro forma net tangible book value of $1.65 per share to our existing stockholders and an immediate dilution in pro forma net tangible book value of $14.03 per share to new investors purchasing shares of Class A common stock in this offering. We determine dilution by subtracting the pro forma net tangible book value per share after this offering from the amount of cash that a new investor paid for a share of Class A common stock. The following table illustrates this dilution:

Assumed initial public offering price per share		$19.50
Pro forma net tangible book value as of September 30, 2023 before this offering	$3.82
Increase per share attributable to new investors in this offering	$1.65
Pro forma net tangible book value per share after this offering		5.47
Dilution per share to new Class A common stock investors in this offering		$14.03

A $1.00 increase (decrease) in the assumed initial public offering price of $19.50 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma net tangible book value per share after this offering by $0.14 and dilution per share to new Class A common stock investors in this offering by $0.86 assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discount.

If the underwriters exercise in full their option to purchase additional shares of Class A common stock, the pro forma net tangible book value after the offering per share, the pro forma net tangible book value per share to existing stockholders and the dilution in pro forma net tangible book value to new investors would be unchanged, in each case assuming an initial public offering price of $19.50 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus.

The following table summarizes, as of September 30, 2023, after giving effect to the Transactions (including this offering and proposed use of proceeds) and the Assumed Redemption, the number of shares of Class A common stock purchased from us, the total consideration paid, or to be paid, to us and the average price per share paid, or

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to be paid, by Continuing Equity Owners and by the new investors. The calculation below is based on an assumed initial public offering price of $19.50 per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, before deducting the underwriting discount.

(in thousands)	Shares Purchased		Total Consideration		Average Price Per Share
	Number	Percent	Amount	Percent
Continuing Equity Owners	43,590	85.0%	$5,773	3.7%	$0.13
New public investors	7,692	15.0%	150,000	96.3%	$19.50
Total	51,282	100%	$155,773	100%	$3.04

Each $1.00 increase (decrease) in the assumed initial public offering price of $19.50 per share would increase (decrease) the total consideration paid by new investors and the total consideration paid by all stockholders by $7.2 million, assuming the number of shares offered by us remains the same and after deducting the underwriting discount.

Except as otherwise indicated, the discussion and the tables above assume no exercise of the underwriters’ option to purchase additional shares of Class A common stock. The number of shares of our Class A common stock outstanding after this offering as shown in the tables above is based on the number of shares outstanding as of September 30, 2023, after giving effect to the Transactions and the Assumed Redemption, and excludes 2,051,282 shares of Class A common stock reserved for issuance under the 2024 Plan, including approximately 472,820 shares of Class A common stock issuable pursuant to the settlement of restricted stock units which we will grant to certain of our directors, executive officers and other employees in connection with this offering as described under the caption “Executive compensation—Narrative to summary compensation table—Equity compensation—IPO equity awards”.

To the extent any of these restricted stock units settle, there will be further dilution to new investors. To the extent all of such outstanding restricted stock units had vested in full and settled as of September 30, 2023, the pro forma net tangible book value per share after this offering would be $5.42 and total dilution per share to new investors would be $14.08.

If the underwriters exercise in full their option to purchase additional shares of Class A common stock:

• the percentage of shares of Class A common stock held by the Continuing Equity Owners will decrease to approximately 82.7% of the total number of shares of our Class A common stock outstanding after this offering; and

• the number of shares of Class A common stock held by new investors in this offering will increase to 8,846,154, or approximately 17.3% of the total number of shares of our Class A common stock outstanding after this offering.

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Unaudited pro forma condensed consolidated financial information

The following unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X, as amended, to reflect the impact of this offering, after giving effect to the Transactions described in “Our organizational structure” and the Devon Street Homes Acquisition.

Following the completion of the Transactions, Smith Douglas Homes Corp. will be a holding company whose principal asset will consist of 15.0% of the outstanding LLC Interests (or 17.3% of LLC Interests if the underwriters exercise in full their option to purchase additional shares of Class A common stock) that it acquires directly from Smith Douglas Holdings LLC or from each of the Continuing Equity Owners. Smith Douglas Homes Corp. will act as the sole managing member of Smith Douglas Holdings LLC, will operate and control the business and affairs of Smith Douglas Holdings LLC and, through Smith Douglas Holdings LLC, will conduct its business.

The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2023 presents our unaudited pro forma balance sheet after giving effect to the Transactions, including this offering, as if they had occurred on September 30, 2023. The following unaudited pro forma condensed consolidated statements of income for the nine months ended September 30, 2023 and the year ended December 31, 2022 give effect to the Transactions, including this offering and the Devon Street Homes Acquisition, as if they had occurred on January 1, 2022.

We have derived the unaudited pro forma condensed consolidated balance sheet as of September 30, 2023 and the unaudited pro forma condensed consolidated statement of income for the nine months then ended from the unaudited condensed consolidated financial statements of Smith Douglas Holdings LLC and its subsidiaries and from the unaudited consolidated financial statements of Devon Street Homes as of July 31, 2023 and for the seven months then ended. We have derived the unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2022 from the audited financial statements of Smith Douglas Holdings LLC and its subsidiaries and from the audited financial statements of Devon Street Homes for the year ended December 31, 2022, each included elsewhere in this prospectus, to reflect the accounting for the transactions described below in accordance with U.S. GAAP. The unaudited pro forma condensed consolidated financial information reflects adjustments that are described in the accompanying notes and are based on available information and certain assumptions we believe are reasonable but are subject to change. Smith Douglas Homes Corp. was formed on June 20, 2023 and on June 20, 2023 was capitalized at one cent, and will have no results of operations until the completion of this offering; therefore, its financial position as of September 30, 2023 and its historical results of operations for the period then ended are not shown in separate columns in the unaudited pro forma condensed consolidated balance sheet or statements of income.

As a public company, we will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. We expect to incur additional annual expenses related to these steps and, among other things, additional directors’ and officers’ liability insurance, director fees, costs for reporting requirements of the SEC, transfer agent fees, costs for hiring additional accounting, legal, and administrative personnel, increased auditing and legal expenses, and other related costs. Due to the scope and complexity of these activities, the amount of these costs would be based on subjective estimates and assumptions that could not be factually supported. We have not included any pro forma adjustments related to these costs.

The unaudited pro forma condensed consolidated financial information is provided for informational purposes only and is not necessarily indicative of the operating results that would have occurred if the Transactions and the Devon Street Homes Acquisition, had been completed as of the dates set forth above, nor is it indicative of our future results.

The unaudited pro forma condensed consolidated financial information should be read together with “Our organizational structure,” “Capitalization,” “Use of proceeds,” “Summary historical and pro forma condensed consolidated financial and other data,” “Management’s discussion and analysis of financial condition and results of operations,” and our historical financial statements and related notes of Smith Douglas Holdings LLC and its subsidiaries, Smith Douglas Homes Corp., and Devon Street Homes, each included elsewhere in this prospectus.

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Summary of the Transactions

Devon Street Homes Acquisition

• The acquisition of Devon Street Homes on July 31, 2023 (the “Acquisition Date”), for a purchase price of approximately $82.9 million funded by $2.9 million of cash on hand, $72.0 million of draws on our Existing Credit Facility, $5.0 million from the issuance of a three-year promissory note payable to the seller, and approximately $3.0 million of contingent consideration to the seller. We do not intend to use the proceeds from this offering for the payment of any outstanding amounts under the APA that may be paid pursuant to the contingent consideration.

Reorganization Transactions

The pro forma adjustments related to the reorganization transactions are described in the notes to the unaudited pro forma condensed consolidated financial information and primarily include:

• the amendment and restatement of the existing limited liability company agreement of Smith Douglas Holdings LLC, which will become effective prior to the consummation of this offering, to, among other things, (i) appoint Smith Douglas Homes Corp. as the sole managing member of Smith Douglas Holdings LLC upon its acquisition of LLC Interests in connection with this offering and (ii) provide certain redemption rights to the Continuing Equity Owners;

• the amendment and restatement of Smith Douglas Homes Corp’s certificate of incorporation to, among other things, provide (i) for Class A common stock, with each share of our Class A common stock entitling its holder to one vote per share on all matters presented to our stockholders generally and (ii) for Class B common stock, with each share of our Class B common stock entitling its holder to ten votes per share on all matters presented to our stockholders generally prior to the Sunset Date and from and after the occurrence of the Sunset Date each share of our Class B common stock will entitle its holder to one vote per share on all matters presented to our stockholders generally, and that shares of our Class B common stock may only be held by the Continuing Equity Owners and their respective permitted transferees as described in “Description of capital stock—Common stock—Class B common stock;”

• the issuance of 43,589,743 shares of our Class B common stock to the Continuing Equity Owners, which is equal to the number of LLC Interests held by such Continuing Equity Owners, for nominal consideration; and

• the entrance into the Tax Receivable Agreement with Smith Douglas Holdings LLC and the Continuing Equity Owners that will provide for the payment by Smith Douglas Homes Corp. to the Continuing Equity Owners of 85% of the amount of tax benefits, if any, that Smith Douglas Homes Corp. actually realizes (or in some circumstances is deemed to realize) related to certain Basis Adjustments, Section 704(c) Allocations, and payments made under the Tax Receivable Agreement. See “Certain relationships and related person transactions—Tax Receivable Agreement” for a description of the Tax Receivable Agreement.

Our agreements will include a provision for the Continuing Equity Owners, subject to certain exceptions from time to time at each of their option, to require Smith Douglas Holdings LLC to redeem all or a portion of their LLC Interests (and corresponding Class B common stock) in exchange for, at our election, newly-issued shares of our Class A common stock on a one-for-one basis or a cash payment equal to a volume weighted average market price of one share of our Class A common stock for each LLC Interest so redeemed, in each case, in accordance with the terms of the Smith Douglas LLC Agreement.

Offering and Other Transactions

The pro forma adjustments related to the offering transactions are described in the notes to the unaudited pro forma condensed consolidated financial information and primarily include:

• issuance of 7,692,308 shares of our Class A common stock to the purchasers in this offering (or 8,846,154 shares if the underwriters exercise in full their option to purchase additional shares of Class A common stock) in exchange for net proceeds of approximately $139.5 million (or approximately $160.4 million if the underwriters exercise in full their option to purchase additional shares of Class A common stock) based upon an assumed initial public offering price of $19.50 per share (which is the midpoint of the estimated price range set forth on the cover page of this prospectus), less the underwriting discount;

• use of the net proceeds from this offering (i) to purchase 6,410,257 newly issued LLC Interests for approximately $116.3 million directly from Smith Douglas Holdings LLC at a price per unit equal to the initial public offering

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price per share of Class A common stock in this offering less the underwriting discount; and (ii) to purchase 1,282,051 LLC Interests from the Continuing Equity Owners on a pro rata basis for $23.2 million in aggregate (or 2,435,897 LLC Interests from the Continuing Equity Owners for $44.2 million in aggregate if the underwriters exercise in full their option to purchase additional shares of Class A common stock) at a price per unit equal to the initial public offering price per share of Class A common stock in this offering less the underwriting discount;

• the use by Smith Douglas Holdings LLC of the proceeds from the sale of its LLC Interests to us to repay existing indebtedness under our Existing Credit Facility, to redeem all outstanding Class C Units and Class D Units of Smith Douglas Holdings LLC at par aggregating $2.6 million, repay $1.2 million in notes payable to certain related parties and the remainder, if any, for general corporate purposes, as described under “Use of Proceeds” and “Certain relationships and related person transactions;”

• the purchase of LLC Interests from the Continuing Equity Owners will reduce their ownership interest from 44,871,794 LLC Interests to 43,589,743;

• recognition of the obligation under the Tax Receivable Agreement triggered by the purchase of LLC Interests from each of the Continuing Equity Owners discussed above, and related set-up of deferred tax assets on the Tax Receivable Agreement and on the basis difference associated with the purchase of LLC Interests from each of the Continuing Equity Owners; and

• the grant of restricted stock unit awards pursuant to the 2024 Plan to certain of our directors and employees upon completion of this offering with an aggregate grant date fair value of approximately $9.2 million, which awards will cover 472,820 shares of our Class A common stock based on the initial public offering price of 19.50 per share, of which 165,128 shares of our Class A common stock (subject to awards with an aggregate grant date fair value of $3.2 million) will vest in full upon the one-year anniversary of the closing date of this offering, and 307,692 shares of our Class A common stock (subject to an award with a grant date fair value of $6.0 million) will vest in six equal installments on each of the first six anniversaries of the closing date of this offering, in each case subject to the applicable grantee's continued employment or service (as applicable) through the applicable vesting date, and further subject to accelerated vesting upon certain qualifying terminations of employment or service (as applicable) that occur following a change in control (as further described under the caption “Executive compensation—Narrative to summary compensation