Smith Douglas Homes Reports Material Agreements, Equity Sales, Rights Changes

TL;DR

**SDHC just dropped an 8-K detailing new agreements, equity sales, and rights changes – big capital structure shifts incoming!**

AI Summary

Smith Douglas Homes Corp. filed an 8-K on January 16, 2024, reporting an event that occurred on January 10, 2024. The filing indicates several material events, including entry into a material definitive agreement, unregistered sales of equity securities, and material modifications to security holder rights. This matters to investors because these actions can significantly impact the company's capital structure, ownership dilution, and the rights associated with holding its Class A common stock, potentially affecting its stock price (SDHC) on the New York Stock Exchange.

Why It Matters

These changes could dilute existing shareholders, alter the company's financial obligations, or modify the power of current stock owners, directly impacting the value and appeal of Smith Douglas Homes Corp. stock.

Risk Assessment

Risk Level: medium — The filing indicates multiple material changes, including unregistered sales of equity and modifications to security holder rights, which could introduce uncertainty or dilution for existing investors.

Analyst Insight

Investors should closely monitor subsequent filings for details on the 'Material Definitive Agreement' and the 'Unregistered Sales of Equity Securities' to assess potential dilution and financial implications before making investment decisions regarding SDHC.

Key Numbers

• January 16, 2024 — Filing Date (Date the 8-K was filed with the SEC)
• January 10, 2024 — Earliest Event Date (Date of the earliest material event reported in the 8-K)
• 001-41917 — Commission File Number (SEC file number for Smith Douglas Homes Corp.)

Key Players & Entities

• Smith Douglas Homes Corp. (company) — the registrant filing the 8-K
• New York Stock Exchange (company) — where Smith Douglas Homes Corp. Class A common stock (SDHC) is registered
• SDHC (company) — trading symbol for Smith Douglas Homes Corp. Class A common stock
• $0.0001 (dollar_amount) — par value per share of Class A common Stock

Forward-Looking Statements

• The unregistered sales of equity securities could lead to a short-term dip in SDHC stock price due to potential dilution. (SDHC) — medium confidence, target: Q1 2024
• The material definitive agreement will likely be detailed in a subsequent filing, providing more clarity on its financial impact. (Smith Douglas Homes Corp.) — high confidence, target: Q2 2024

FAQ

Key Financial Figures

• $0.0001 — which registered Class A common Stock, $0.0001 par value per share SDHC New York Sto
• $21.00 — ommon stock at a price to the public of $21.00 per share, which includes the exercise
• $185.8 m — y from the initial public offering were $185.8 million, before deducting underwriting di

Filing Documents

• ny20009679x17_8k.htm (8-K) — 32KB
• ny20009679x17_ex3-1.htm (EX-3.1) — 119KB
• ny20009679x17_ex3-2.htm (EX-3.2) — 185KB
• ny20009679x17_ex10-1.htm (EX-10.1) — 528KB
• ny20009679x17_ex10-2.htm (EX-10.2) — 269KB
• ny20009679x17_ex10-3.htm (EX-10.3) — 166KB
• ny20009679x17_ex10-4.htm (EX-10.4) — 1226KB
• ny20009679x17_ex10-5.htm (EX-10.5) — 140KB
• ny20009679x17_ex10-6.htm (EX-10.6) — 141KB
• ny20009679x17_ex10-7.htm (EX-10.7) — 142KB
• ny20009679x17_ex10-4img01.jpg (GRAPHIC) — 2KB
• 0001140361-24-002395.txt ( ) — 2954KB

01

Item 1.01 Entry into a Material Definitive Agreement. In connection with the initial public offering (the " Offering ") by Smith Douglas Homes Corp. (the " Company ") of its Class A common stock, par value $0.0001 (the " Common Stock "), described in the prospectus (the " Prospectus "), dated January 10, 2024, filed with the Securities and Exchange Commission pursuant to Rule 424(b) of the Securities Act of 1933, as amended (the " Securities Act "), which is deemed to be part of the Registration the Amended and Restated Limited Liability Company Agreement of Smith Douglas Holdings LLC, a Delaware limited liability company (the " LLC "), dated January 10, 2024, by and among the Company and its Members (as defined therein) (the " A&R LLCA "); the Tax Receivable Agreement, dated January 10, 2024, by and among the Company, the LLC and its Members (as defined therein); the Registration Rights Agreement, dated January 10, 2024, by and among the Company and the Original Equity Owners (as defined therein); and the Amended and Restated Revolving Credit Facility, dated January 16, 2024, by and among the LLC, certain of the Company's wholly owned subsidiaries and Wells Fargo Bank, National Association, as administrative agent for the lenders party thereto (the " A&R Credit Facility "). The A&R LLCA, Tax Receivable Agreement, Registration Rights Agreement and A&R Credit Facility are filed herewith as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, and are incorporated herein by reference. The terms of these agreements are substantially the same as the terms set forth in the forms of such agreements previously filed as exhibits to the Registration Statement and as described therein. For further information on the A&R Credit Facility, see "Management's discussion and analysis of financial condition and results of operations—Amended Credit

02

Item 3.02 Unregistered Sales of Equity Securities. Simultaneously with the consummation of the Offering, the Company issued (i) 40,384,615 shares of Class B common stock of the Company, par value $0.0001 per share, to The Bradbury Family Trust II A U/A/D December 29, 2015 (the " Founder Fund ") and (ii) 4,487,179 shares of Class B common stock of the Company, par value $0.0001 per share, to GSB Holdings LLC (" GSB Holdings "), on a one-to-one basis equal to the number of common membership interests of the LLC each of the Founder Fund and GSB Holdings owns, in exchange for nominal consideration (the " Exchange "). No underwriters were involved in the issuance and sale of the shares of Class B common stock pursuant to the Exchange. The shares of Class B common stock were issued in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act on the basis that the transaction did not involve a public offering.

03

Item 3.03 Material Modification to Rights of Security Holders. The information set forth under Item 5.03 below is incorporated by reference in this Item 3.03.

02

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. On January 16, 2024, the Company entered into employment agreements with each of Gregory S. Bennett, its President, Chief Executive Officer and Vice Chairman; Russell Devendorf, its Executive Vice President and Chief Financial Officer; and Brett A. Steele, its Vice President, General Counsel and Secretary. A full copy of each of the foregoing arrangements is attached hereto as Exhibits 10.5-10.7 and incorporated herein by reference.

03

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. On January 10, 2024, the Company's Amended and Restated Certificate of Incorporation (the " Charter "), in the form previously filed as Exhibit 3.2 to the Registration Statement, and the Company's Amended and Restated Bylaws (the " Bylaws "), in the form previously filed as Exhibit 3.4 to the Registration Statement, became effective. The Charter, among other things, provides that the Company's authorized capital stock consists of 250,000,000 shares of Class A common stock, 100,000,000 shares of Class B common stock and 10,000,000 shares of preferred stock. A description of the Company's capital stock, after giving effect to the adoption of the Charter and Bylaws, has previously been reported by the Company in the Registration Statement. The Charter and Bylaws are filed herewith as Exhibits 3.1 and 3.2, respectively, and are incorporated herein by reference.

01

Item 8.01 Other Events. On January 16, 2024, the Company completed the Offering of 8,846,154 shares of its Class A common stock at a price to the public of $21.00 per share, which includes the exercise by the underwriters of their option to purchase an additional 1,153,846 shares of the Company's Class A common stock. The gross proceeds to the Company from the initial public offering were $185.8 million, before deducting underwriting discounts and commissions.

Financial Statements and Exhibits

Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description 3.1 Amended and Restated Certificate of Incorporation of Smith Douglas Homes Corp. 3.2 Amended and Restated Bylaws of Smith Douglas Homes Corp. 10.1 Amended and Restated Limited Liability Company Agreement of Smith Douglas Holdings LLC, dated as of January 10, 2024 10.2 Tax Receivable Agreement, dated as of January 10, 2024, by and among Smith Douglas Homes Corp., Smith Douglas Holdings LLC and its Members 10.3 Registration Rights Agreement, dated January 10, 2024, by and among Smith Douglas Homes Corp., Smith Douglas Holdings LLC and its Original Equity Owners 10.4 Amended and Restated Credit Agreement, dated January 16, 2024, by and among Smith Douglas Building Services LLC, SDH Atlanta LLC, SDH Alabama LLC, SDH Nashville LLC, SDH Raleigh LLC, SDH Charlotte LLC; and SDH Houston LLC, the Lenders and their Assignees; Wells Fargo Bank, National Association, as Administrative Agent and Sole Bookrunner; Wells Fargo Bank, National Association, and BofA Securities, Inc., as Joint Lead Arrangers; and Bank of America, N.A. as Syndication Agent. 10.5 Employment Agreement, dated January 16, 2024 by and among Smith Douglas Homes Corp., Smith Douglas Holdings LLC, SDH Management Services LLC and Gregory S. Bennett. 10.6 Employment Agreement, dated January 16, 2024 by and among Smith Douglas Homes Corp., Smith Douglas Holdings LLC, SDH Management Services LLC and Russell Devendorf. 10.7 Employment Agreement, dated January 16, 2024 by and among Smith Douglas Homes Corp., Smith Douglas Holdings LLC, SDH Management Services LLC and Brett A. Steele.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SMITH DOUGLAS HOMES CORP. Date: January 16, 2024 By: /s/ Russell Devendorf Russell Devendorf Executive Vice President and Chief Financial Officer

View Full Filing

View this 8-K filing on SEC EDGAR