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Item 8. Financial Statements and Supplementary Data

2026-03-12 compared with 2025-03-12 · 411 added, 320 removed, 653 unchanged (53% of the section changed)

9 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Legacy Housing Corporation

To the Shareholders and Board of Directors of

Legacy Housing Corporation

Opinion on the Financial Statements

1 unchanged sentence

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), the Company's internal control over financial reporting as of December 31, 2024 and 2023, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 12, 2025 expressed an adverse opinion on the effectiveness of the Company's internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the "PCAOB"), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 12, 2026 expressed an adverse opinion on the effectiveness of the Company's internal control over financial reporting.

Basis for Opinion

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Loan Losses related to the New Note

As described in Note 2 to the financial statements, the allowance for loan losses represents management's estimate of the expected credit losses in the Company's loan portfolios.

Within the notes receivable from mobile home parks (“MHP”) portfolio balance, there is a $48.6 million loan (the “New Note” as disclosed).

As of December 31, 2024, there is no allowance for loan losses associated with the New Note.

The analysis for this estimate was made using quantitative methods that consider a variety of collateral based factors such as current replacement value of collateral, current value of collateral, and other precedent and comparable transactions.

The principal considerations for our determination that the allowance for loan losses on the New Note is a critical audit matter are the judgments and estimation used by management in estimating collateral value, which in turn led to a high degree of auditor judgment and subjectivity in performing procedures and in evaluating audit evidence obtained.

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Allowance for Loan Losses related to the Consumer Loans Receivable

As described in Note 2 to the financial statements, the allowance for loan losses – consumer loans receivable represents management's estimate of the expected credit losses in the Company's consumer loan portfolio.

As of December 31, 2025, the balance of this portfolio was $203.6 million and the associated allowance for loan losses was $2.4 million.

Management’s estimate for expected credit losses incorporates quantitative methods that consider a variety of factors such as aging of the loan portfolio, collateral fair value estimates and historical default rates.

The principal considerations for our determination that the allowance for loan losses – consumer loans receivable is a critical audit matter are the judgments and estimation used by management in developing default rates and estimating collateral fair value, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and in evaluating audit evidence obtained.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

The procedures performed in evaluating the reasonableness of management’s estimate for the allowance for loan losses related to the New Note, included, among others, (i) understanding management’s methodology to calculate the estimate, (ii) evaluating comparable transactions used to determine the value of the collateral associated with the loan, and (iii) calculating an independent estimate of the allowance for loan losses.

The procedures performed in evaluating the reasonableness of management's estimate for the allowance for loan losses related to consumer loans receivable, included (i) understanding management's methodology to calculate the estimate, (ii) testing management’s collateral fair value estimates, (iii) calculating an independent estimate of default rates, and (iv) calculating an independent estimate of the allowance for loan losses.

/s/ Frazier & Deeter, LLC

3 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Legacy Housing Corporation

To the Shareholders and Board of Directors of

Legacy Housing Corporation

Adverse Opinion on the Internal Control over Financial Reporting

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Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

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Current assets:

Cash and cash equivalents

Accounts receivable, net

Income tax refund receivable

Dealer financed receivables, net

Consumer loans receivable, current

Notes receivable from mobile home parks (“MHP”), current

Other notes receivable, current

Consumer loans receivable

Notes receivable from mobile home parks (“MHP”)

Other notes receivable

Prepaid expenses and other current assets

6 unchanged sentences

Property, plant and equipment, net

Deferred income taxes, net

Intangible Assets, net

Liabilities and Stockholders' Equity

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Common stock, $ .001 par value, 90,000,000 shares authorized;

24,865,906 and 24,843,494 issued and 24,158,311 and 24,398,429 outstanding at December 31, 2024 and 2023, respectively

24,866,342 and 24,865,906 issued

and 23,812,341 and 24,158,311 outstanding at December 31, 2025 and 2024, respectively

Treasury stock at cost 1,054,001 and 707,595 shares at December 31, 2025 and 2024, respectively

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Selling, general and administrative expenses

Dealer incentive

Total operating expenses

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Balances, December 31, 2023

Cumulative change in accounting principle, net of taxes

Balances, January 1, 2023 (as adjusted for change in accounting principle)

Share based compensation

Proceeds from exercise of stock options

Purchase of treasury stock

Balances, December 31, 2024

Share based compensation

Proceeds from exercise of stock options

Purchase of treasury stock

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Operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense

Amortization of deferred revenue

Amortization of other costs

Amortization of lines of credit cost

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Share based payment expense

Other non cash items

Changes in operating assets and liabilities:

Changes in operating assets and liabilities, net of the impact of the acquisition:

Accounts receivable

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Accounts payable and accrued liabilities

Right of use activity, net

Right of use asset, net

Customer deposits

1 unchanged sentence

Dealer incentive liability

Net cash provided by (used in) operating activities

Net cash provided by operating activities

Investing activities:

Purchases of property, plant and equipment

Proceeds from sale of leased property

Purchase of AmeriCasa

Proceeds from sale of property

Sale of investments - treasury notes

Issuance of notes receivable

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Payments on lines of credit

Net cash (used in) provided by financing activities

Net increase (decrease) in cash

Net cash used in financing activities

Net increase in cash

Cash at beginning of period

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The Company is headquartered in Bedford, Texas.

The Company (1) manufactures and provides for the transport of mobile homes, (2) provides wholesale financing to dealers and mobile home parks, (3) provides retail financing to consumers and (4) is involved in financing and developing new manufactured home communities.

The Company (1) manufactures and provides for the transport of manufactured homes, (2) provides wholesale financing to dealers and mobile home parks, (3) provides retail financing to consumers and (4) is involved in financing and developing new manufactured home communities.

The Company manufactures its mobile homes at plants located in Fort Worth, Texas, Commerce, Texas and Eatonton, Georgia.

The Company relies on a network of dealers to market and sell its mobile homes.

The Company relies on a network of dealers to market and sell its manufactured homes.

The Company also sells homes directly to consumers, through its own retail stores, and to dealers and mobile home parks.

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We also provide financing options for customers to facilitate home sales.

Accordingly, all significant operating and strategic decisions by the chief operating decision maker, the Chief Executive Officer, are based upon analyses of our company as one operating segment.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company maintains cash balances in bank accounts that may, at times, exceed federally insured limits.

The Company has not incurred any losses from such accounts and management considers the risk of loss to be minimal.

As of December 31, 2024, the Company had two bank accounts that exceeded the FDIC limit by $ 635 .

Accordingly, all significant operating and strategic decisions by the co-chief operating decision makers, the Executive Chairman and Chief Executive Officer, are based upon analyses of our company as one operating segment.

We generate revenues through the manufacture and sales of manufactured homes and “Tiny Houses” and the related interest income associated with financing these homes sales.

We define the segment primarily based on how internally reported financial and operating information is regularly reviewed by our co-chief operating decision makers (“co-CODMs”) to evaluate financial performance, make decisions and allocate resources.

Our co-CODMs are our Executive Chairman and Chief Executive Officer.

The co-CODMs assess performance for the segment based on net income and total assets that are also reported on the statements of income and balance sheet as net income and total assets, respectively.

The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

The co-CODMs assess our operating and financial performance on a company-wide or consolidated basis.

LEGACY HOUSING CORPORATION

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(Dollars in thousands, except per share amounts)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

The Company maintains cash balances in bank accounts that may, at times, exceed federally insured limits.

The Company has not incurred any losses from such accounts, and management considers the risk of loss to be minimal.

As of December 31, 2025, the Company had two bank accounts that exceeded the Federal Deposit Insurance Corporation and Securities Investor Protection Corporation limits by $ 7.7 million.

Revenue Recognition

Product sales primarily consist of sales of mobile homes to consumers and mobile home parks through various sales channels, which include Direct Sales, Commercial Sales, Inventory Finance Sales, and Retail Store Sales.

Product sales primarily consist of sales of manufactured homes to consumers and mobile home parks through various sales channels, which include Direct Sales, Commercial Sales, Inventory Finance Sales, and Retail Store Sales.

Direct Sales include homes sold directly to independent retailers or customers that are not financed by the Company and are not sold under an inventory finance arrangement.

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Accounts Receivable

“Accounts receivable, net” includes receivables from direct sales of mobile homes, sales of parts and supplies to customers, inventory finance fees and interest.

Net accounts receivable includes receivables from direct sales of manufactured homes, sales of parts and supplies to customers, inventory finance fees and interest.

Accounts receivable related to inventory finance fees and interest generally are due upon receipt, and all other accounts receivable generally are due within 30 days .

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The Company establishes an allowance for doubtful accounts for amounts that are deemed to be uncollectible.

At December 31, 2024, 2023 and 2022, the allowance for doubtful accounts totaled $ 578 , $ 651 and $ 279 , respectively.

At December 31, 2024, 2023 and 2022, accounts receivable, net was $ 3,985 , $ 4,656 and $ 4,873 , respectively.

At December 31, 2025, 2024 and 2023, the allowance for doubtful accounts totaled $ 1.5 million, $ 578 and $ 651 , respectively.

At December 31, 2025, 2024 and 2023, accounts receivable, net was $ 5.5 million, $ 4.0 million and $ 4.7 million, respectively.

Consumer Loans Receivable

Consumer loans receivable result from financing transactions entered into with retail consumers of mobile homes sold through independent retailers and company-owned retail locations.

Consumer loans receivable result from financing transactions entered into with retail consumers of manufactured homes sold through independent retailers and company-owned retail locations.

Consumer loans receivable generally consist of the sales price and any additional financing fees, less the buyer’s down payment.

2 unchanged sentences

Consumer loans receivable have maturities that range from 3 to 30 years .

The Company reviews loan applications in an underwriting process which considers credit history, among other things, to evaluate credit risk of the consumer and determines interest rates on approved loans based on consumer credit score, payment ability and down payment amount.

The Company uses payment history to monitor the credit quality of the consumer loans on an ongoing basis.

The Company may also receive escrow payments for property taxes and insurance included in its consumer loan collections.

The liabilities associated with these escrow collections totaled $ 11,623 and $ 10,104 as of December 31, 2024 and 2023, respectively, and are included in escrow liability in the accompanying balance sheets.

LEGACY HOUSING CORPORATION

2 unchanged sentences

(Dollars in thousands, except per share amounts)

The Company uses payment history to monitor the credit quality of the consumer loans on an ongoing basis.

The Company may also receive escrow payments for property taxes and insurance included in its consumer loan collections.

The liabilities associated with these escrow collections totaled $ 13.1 million and $ 11.6 million as of December 31, 2025 and 2024, respectively, and are included in escrow liability in the accompanying balance sheets.

Allowance for Loan Losses—Consumer Loans Receivable

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At each reporting period, the fair value of the collateral is adjusted to the lower of the amount recorded at repossession or the estimated sales price less estimated costs to sell, based on current information.

Repossessed homes from the consumer loan portfolio totaled $ 3,931 and $ 2,215 as of December 31, 2024 and 2023, respectively, and are included in other assets in the accompanying balance sheets.

Notes Receivable from Mobile Home Parks

The notes receivable from mobile home parks (“MHP Notes”) relate to mobile homes sold to mobile home parks and financed through notes receivable.

The MHP Notes have varying maturity dates and require monthly principal and interest payments.

The interest rate on the MHP Notes can be fixed or variable, and the interest rates range from 4.9 % to 11.5 %.

The average interest rate per loan was approximately 7.8 % as of December 31, 2024 and 8.0 % as of December 31, 2023, with maturities that range from 1 to 10 years .

The collateral underlying the MHP Notes are

Repossessed homes from the consumer loan portfolio totaled $ 8.4 million and $ 3.9 million as of December 31, 2025 and 2024, respectively, and are included in other assets in the accompanying balance sheets.

LEGACY HOUSING CORPORATION

2 unchanged sentences

(Dollars in thousands, except per share amounts)

individual mobile homes which can be repossessed and resold.

Notes Receivable from Mobile Home Parks

The notes receivable from mobile home parks (“MHP Notes”) relate to manufactured homes sold to mobile home parks and financed through notes receivable.

The MHP Notes have varying maturity dates and require monthly principal and interest payments.

The interest rate on the MHP Notes can be fixed or variable, and the interest rates range from 4.9 % to 11.5 %.

The average interest rate per loan was approximately 8.1 % as of December 31, 2025 and 7.8 % as of December 31, 2024, with maturities that range from 1 to 10 years .

The collateral underlying the MHP Notes are individual manufactured homes which can be repossessed and resold.

The MHP Notes are generally personally guaranteed by borrowers.

3 unchanged sentences

The Company establishes an allowance composed of specific and general reserve amounts.

As of December 31, 2024 and December 31, 2023, the MHP Notes balance is presented net of unamortized finance fees of $ 1,057 and $ 1,565 , respectively.

As of December 31, 2025 and 2024, the MHP Notes balance is presented net of unamortized finance fees of $ 1.1 million and $ 1.1 million, respectively.

The finance fees are amortized over the life of the MHP Notes.

2 unchanged sentences

For the years ended December 31, 2025 and 2024, there were no charge offs recorded for MHP Notes.

Allowance for loan loss for the MHP Notes was $ 654 and $ 735 as of December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, there was a minimal impaired balance of MHP Notes.

Allowance for loan loss for the MHP Notes was $ 1.4 million and $ 654 as of December 31, 2025 and 2024, respectively.

As of December 31, 2025 and 2024, the impaired balance of MHP notes was $ 248 and $ 0 , respectively.

Collateral for repossessed loans is acquired through foreclosure or similar proceedings and is recorded at the estimated fair value of the home, less the costs to sell.

Other Notes Receivable

Other notes receivable relate to notes issued to mobile home park owners and dealers and are not directly tied to the sale of mobile homes.

Other notes receivable relate to notes issued to mobile home park owners and dealers and are not directly tied to the sale of manufactured homes.

These other notes have varying maturity dates and generally require monthly principal and interest payments.

They are collateralized by mortgages on real estate, mobile homes that we have financed for which the borrower uses as offices, as well as vehicles.

They are collateralized by mortgages on real estate, manufactured homes that we have financed for which the borrower uses as offices, as well as vehicles.

These notes typically are personally guaranteed by the borrowers.

2 unchanged sentences

As of December 31, 2025, there were past due balances of $ 189 on other notes.

As of December 31, 2023, there were past due balances of $ 22 on other notes, excluding any amounts attributable to the Notes, as defined in Note 5, Notes Receivable from Mobile Home Parks.

For the years ended December 31, 2024 and 2023, there were no charge offs recorded for other notes.

As of December 31, 2024, there were past due balances of $ 1.4 million on other notes, excluding any amounts attributable to the Notes, as defined in Note 5, Notes Receivable from Mobile Home Parks.

For the years ended December 31, 2025 and 2024, the charge offs of other notes was $ 276 and $ 0 , respectively.

Allowance for loan loss for the other notes was $ 229 and $ 364 as of December 31, 2025 and 2024, respectively.

As of December 31, 2024 and 2023, the impaired balance of other notes was $ 141 and $ 84 , respectively.

As of December 31, 2025 and 2024, the impaired balance of other notes was

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

$ 63 and $ 141 , respectively.

Collateral for repossessed loans is acquired through foreclosure or similar proceedings and is recorded at the estimated fair value of the home, less the costs to sell.

Dealer Finance Receivable

Dealer finance receivable are receivables for loans that we make to independent retailers, or dealers, for the purchase of mobile homes so that dealers can then market them for sale to consumers.

Dealer finance receivable are receivables for loans that we make to independent retailers, or dealers, for the purchase of manufactured homes so that dealers can then market them for sale to consumers.

The loans are part of our inventory finance program.

1 unchanged sentence

The terms of the financing typically include a three year term, a monthly interest payment, an annual curtailment payment and require the retailer to pay the principal amount of the loan to the Company upon the earlier of the sale of the home by the retailer to its customer or the end of the term.

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except per share amounts)

The Company establishes an allowance for past due interest payments and inventory sold out of trust (SOT).

As of December 31, 2025 and 2024, the allowance for loan losses is $ 1.7 million and $ 194 , respectively.

Inventories consist of raw materials, work-in-process, and finished goods and are stated at the lower of cost or net realizable value.

4 unchanged sentences

Leased Property

The Company offers mobile home park operators the opportunity to lease mobile homes for rent in lieu of purchasing the homes for cash or under a longer-term financing agreement.

In this arrangement, the title for the mobile homes remains with the Company, and the lease is accounted for as an operating lease.

The Company offers mobile home park operators the opportunity to lease manufactured homes for rent in lieu of purchasing the homes for cash or under a longer-term financing agreement.

In this arrangement, the title for the manufactured homes remains with the Company, and the lease is accounted for as an operating lease.

Our typical lease agreement is for 96 months or 120 months .

1 unchanged sentence

It provides the lessee with a termination option for a fee, an option to extend the lease and a purchase option at fair market value.

The leased mobile homes are included in other assets on the Company’s balance sheet, capitalized at manufactured cost and depreciated over a 15 year useful life.

The leased manufactured homes are included in other assets on the Company’s balance sheet, capitalized at manufactured cost and depreciated over a 15 year useful life.

Homes returned to the Company upon expiration of the lease or in the event of default are sold by the Company through its standard sales and distribution channels.

During the year ended December 31, 2024, the Company sold 128 leased mobile homes for $ 5,609 to two mobile home park customers which is included in Product sales on the accompanying statements of income.

Future minimum lease income under all operating leases for each of the next five years at December 31, 2025, is as follows:

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

Property, Plant, and Equipment

8 unchanged sentences

Expenditures for major renewals or betterments which extend the useful lives of existing property, plant and equipment are capitalized and depreciated.

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except per share amounts)

Impairment of Long-Lived Assets

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No impairment for long-lived assets was recorded for the years ended December 31, 2025 and 2024.

Goodwill represents the cost of business acquisitions in excess of the fair value of identifiable net tangible and intangible assets acquired.

The Company reviews goodwill for potential impairment annually, or when an event or other circumstances change that would more likely than not reduce the fair value of the asset below its carrying value.

Intangible Assets, Net

Our intangible assets consist of trade name, internally developed software, customer contracts, and non-complete agreements, are considered finite-lived, and are amortized over their useful lives.

Finite-lived intangibles are generally amortized over 1 to 15 years on a straight-line depreciation basis and are reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

Amortization expenses recognized on intangible assets was $ 162 during the year ended December 31, 2025.

Finite-lived intangible have a weighted average remaining life of 10.3 years.

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

Business Combinations

Business combinations are accounted for using the acquisition method.

Under this approach, the Company recognizes the assets acquired and liabilities assumed at their fair values as of the acquisition date.

Any excess of the acquisition price over the fair values of the identifiable assets and liabilities is recorded as goodwill, provided that the criteria of a business combination are met.

For significant acquisitions, the Company engages third-party appraisal firms to determine the fair values of certain assets and liabilities, using techniques such as discounted cash flow analysis and other relevant valuation methods.

Acquisition-related costs are expensed as incurred.

The Company may adjust the fair values of acquired assets and assumed liabilities during the measurement period, which lasts until all relevant information regarding the facts and circumstances that existed as of the acquisition date is available, not to exceed one year from the acquisition date.

Adjustments made during this period will be recognized in the period they are determined, including any impacts on earnings that would have been recorded in previous periods if the accounting had been finalized at the acquisition date.

Estimating the fair values of assets and liabilities in business combinations requires significant judgment.

These estimates rely on both observable and unobservable inputs, making them susceptible to variability and sensitive to changes in market conditions.

As a result, future changes in these inputs may affect our financial statements.

Dealer Incentive Liability

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A dealer incentive liability is recorded in the Company’s balance sheet based on the total outstanding balance of individual dealer loan portfolios at period end, less the remaining portion of the Company’s contribution in respective portfolios.

As of December 31, 2024 and 2023, the dealer incentive liability was $ 4,370 and $ 5,260 , respectively.

Dealer incentive income for the year ended December 31, 2024 was $ 930 , dealer incentive expense for the year ended December 31, 2023 was $ 586 , and these amounts are included in the Company’s statements of income.

As of December 31, 2025 and 2024, the dealer incentive liability was $ 2.8 million and $ 4.4 million, respectively.

Dealer incentive expense for the year ended December 31, 2025, was $ 332 , dealer incentive income for the year ended December 31, 2024, was $ 930 , and these amounts are included in the Company’s statements of income.

Product Warranties

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The accrued warranty liability is reduced as costs are incurred and the warranty liability balance is included as part of accrued liabilities in the Company’s balance sheet.

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

The following table summarizes activity within the warranty liability for the years ended December 31, 2025 and 2024:

Year Ended December 31,

Warranty liability, beginning of period

2 unchanged sentences

Warranty liability, end of period

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except per share amounts)

Fair Value Measurements and Fair Value of Financial Instruments

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This is considered a Level II valuation technique.

The Company also assessed the fair value of the consumer loans receivable, the fixed rate MHP Notes and the portion of other note receivables with fixed rates based on the discounted value of the remaining principal and interest cash flows.

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

and interest cash flows.

This is considered a Level III valuation technique.

9 unchanged sentences

Fixed rate other notes, book value

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except per share amounts)

Reserve for Repurchase Commitments

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Share-based compensation expense is recognized based on an award’s estimated grant date fair value in order to recognize compensation cost for those shares expected to vest.

The Company has elected to record forfeitures as they occur.

Compensation cost is recognized on a straight-line basis over the vesting period of the awards and adjusted as forfeitures occur.

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Treasury zero-coupon securities that correspond to the expected life of the award.

The volatility is estimated based on the historical volatility of the Company’s common stock.

The expected life of awards granted represents the period of time that the awards are expected to be outstanding based on the “simplified” method, which is allowed for companies that cannot reasonably estimate the expected life of options based on its historical award exercise experience.

The volatility is

LEGACY HOUSING CORPORATION

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(Dollars in thousands, except per share amounts)

estimated based on the historical volatility of the Company’s common stock.

The expected life of awards granted represents the period during which the awards are expected to remain outstanding, based on the “simplified” method, which is allowed for companies that cannot reasonably estimate the expected life of options based on their historical award exercise experience.

The Company does not expect to pay dividends on its common stock.

Pursuant to the Legacy Housing Corporation 2018 Incentive Compensation Plan (the “Plan”), the Company may issue up to 10.0 million equity awards to employees, directors, consultants, and nonemployee service providers in the form of stock options, stock, restricted stock, and stock appreciation rights.

1 unchanged sentence

At December 31, 2025, the Company had 8.3 million shares available for grant under the Plan.

As of December 31, 2024, approximately 1,013,000 options were outstanding, 189,000 options were exercisable, and 824,000 options remained nonvested.

Unrecognized compensation expense related to these options at December 31, 2024 was $ 4,220 and is expected to be recognized over 7.2 years.

Compensation expense for stock option awards for the years ended December 31, 2024 and 2023 was $ 630 and $ 535 , respectively.

The Company does not expect to pay dividends on its common stock.

During the year ended 2025, the Company granted stock option awards to an individual who joined Legacy as part of the AmeriCasa acquisition to purchase up to 300,000 shares at an exercise price of $ 36 and up to 600,000 shares at an exercise price of $ 48 .

Each stock option award will vest equally each year from January 1, 2026, through January 1, 2031.

Additionally, the Company also granted other immaterial stock option awards to certain other employees.

As of December 31, 2025, all 2025 options issued remain unvested.

The fair value of each option granted was estimated on the date of grant using the Black-Scholes-Merton option-pricing model with the following assumptions:

Expected life (in years) 4 - 8 years

Expected stock price volatility 40 - 44 %

Risk-free interest rate 3.70 % - 3.91 %

Dividend rate 0 %

The weighted-average grant-date fair value of options granted in 2025 was $ 5.86 per share.

During the year ended December 31, 2025, certain former employees of the Company forfeited all of their remaining options.

As the Company has elected to record forfeitures as they occur, the Company recognized a related reversal of its previously recognized compensation expense for unvested stock option awards of $ 231 as a reduction to stock compensation expense for the period.

As of December 31, 2025 and 2024, approximately 1,239,000 and 1,013,000 options were outstanding, respectively.

Of the 1,239,000 and 1,013,000 options outstanding as of December 31, 2025 and 2024, 289,000 and 189,000 were exercisable and 950,000 and 824,000 were nonvested, respectively.

Of the 289,000 exercisable as of December 31, 2025, all were forfeited in January 2026.

Unrecognized compensation expense related to these options at December 31, 2025 and 2024 was $ 5.4 million and $ 4.2 million and is expected to be recognized over 6.0 years and 7.2 years, respectively.

Compensation expense for stock option awards for the years ended December 31, 2025 and 2024 was $ 458 and $ 777 , respectively, net of forfeitures.

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

Earnings Per Share

2 unchanged sentences

Diluted EPS is based on the weighted-average number of common shares outstanding plus the number of additional shares that would have been outstanding had the dilutive common shares been issued.

The Company is subject to U.S.

federal and state income taxes as a corporation.

Income tax expense for the Company is recognized for the tax effects of the transactions reported in the financial statements and consist of taxes currently due, plus deferred taxes.

The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled.

Deferred tax assets and liabilities are reflected at income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled.

As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized.

Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years.

Although realization is not assured, management believes it is more likely than not that the deferred tax assets will be realized.

In addition, management does not believe there are any unrecorded deferred tax liabilities that are material to the financial statements.

The determination of the provision for income taxes requires judgment, use of estimates, and the interpretation and application of complex tax laws.

Judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions.

The benefits of uncertain tax positions are recorded in the Company’s financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities.

When facts and circumstances change, the Company reassesses these probabilities and records any changes through the provision for income taxes.

The Company recognizes interest and penalties relating to uncertain tax provisions as a component of tax expense.

For the periods presented, management has determined there are no material uncertain tax positions for the tax years that remain subject to examination by major tax jurisdictions as of December 31, 2024, which includes the tax years 2021, 2022 and 2023.

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

The Company measures deferred tax assets and liabilities using the enacted tax rates for the years and jurisdictions in which the temporary differences are expected to be recovered.

A change to the tax rates used to measure the Company’s deferred taxes is recognized in income during the period in which the new rate(s) were enacted.

The Company recognizes deferred tax assets to the extent the Company’s assets are more likely than not to be realized.

In making such a determination, the Company considers all available positive and negative evidence, including the future reversals of existing taxable temporary differences, projected future taxable income exclusive of reversing temporary differences and carryforwards, tax-planning strategies, taxable income in prior carryback years if permitted under tax law, and the results from prior years.

If the Company determines it is more likely than not, that all or a portion of a deferred tax asset will not be realized a valuation allowance is recorded with a charge to income tax expense.

Alternatively, if the Company determines that all or a portion of a deferred tax asset previously not meeting the more likely than not threshold will be realized, the Company reduces its valuation allowance and recognizes a benefit in income tax expense.

The Company recognizes and measures uncertain tax benefits in accordance with ASC 740 based on a two-step process in which (1) the Company determines whether it is more likely than not that the tax position will be sustained based on the technical merits of the position, and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than fifty percent likely to be realized upon ultimate settlement with the related tax authority.

The Company's policy is to recognize interest and penalties related to uncertain tax positions, if any, in income tax expense.

From time to time, the Company purchases tax credits.

The purchased credit is either recorded as an adjustment to income taxes refundable (payable) or as a deferred tax asset, or if the purchased credit is expected to be carried forward to be utilized on future income tax returns, the difference between the purchase price, including direct costs to acquire the credit, and the purchased tax credit is recognized as a deferred credit.

The deferred credit is recognized in income tax expense in the proportion to the reversal of the associated deferred tax asset.

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable, consumer loans, MHP Notes, inventory finance loans and other notes receivable.

Management believes that

Management believes that its credit policies are adequate to minimize potential credit risk related to accounts receivable and other notes receivable.

The consumer loans and inventory finance loans are secured by the manufactured homes that were financed through the loans.

The MHP Notes are secured by manufactured homes, other assets, and are personally guaranteed.

The MHP Notes personal guarantor may cover multiple parks and each park is treated as a customer.

As of December 31, 2025, the Company had concentrations of MHP Notes with three independent third-parties and their respective affiliates that equaled 24.7 %, 9.6 % and 7.4 % of the principal balance outstanding, all of which was secured by the manufactured homes.

As of December 31, 2024, the Company had concentrations of MHP Notes with three independent third-parties

LEGACY HOUSING CORPORATION

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(Dollars in thousands, except per share amounts)

its credit policies are adequate to minimize potential credit risk related to accounts receivable and other notes receivable.

The consumer loans and inventory finance loans are secured by the mobile homes that were financed through the loans.

The MHP Notes are secured by mobile homes, other assets, and are personally guaranteed.

The MHP Notes personal guarantor may cover multiple parks and each park is treated as a customer.

As of December 31, 2024, the Company had concentrations of MHP Notes with three independent third-parties and their respective affiliates that equaled 11.4 %, 23.5 % and 14.6 % of the principal balance outstanding, all of which was secured by the mobile homes.

As of December 31, 2023, the Company had concentrations of MHP Notes with three independent third-parties and their respective affiliates that equaled 14.0 %, 17.9 % and 24.5 % of the principal balance outstanding, all of which was secured by the mobile homes.

and their respective affiliates that equaled 11.4 %, 23.5 % and 14.6 % of the principal balance outstanding, all of which was secured by the manufactured homes.

As of December 31, 2025, the Company had concentrations of other notes receivable with three independent third-parties and their respective affiliates that equaled 54.9 %, 10.6 % and 9.2 %, respectively, of the principal balance outstanding.

As of December 31, 2023, the Company had concentration of other notes receivable with one independent third-party and its affiliates that equaled 64.4 % of the principal balance outstanding.The other notes are secured by land and other assets and are personally guaranteed.

Reclassifications

For purposes of comparability, certain reclassifications have been made to amounts previously reported to conform with the current period presentation.

As of December 31, 2024, the Company had concentrations of other notes receivable with three independent third-parties and their respective affiliates that equaled 33.7 %, 22.7 % and 10.5 %, respectively, of the principal balance outstanding.

The other notes are secured by land and other assets and are personally guaranteed.

Recent Accounting Pronouncements

The Company elected to use longer phase-in periods for the adoption of new or revised financial accounting standards under the JOBS Act while it was an emerging growth company.

In June 2016, the FASB issued ASU 2016-13 Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments , which amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities.

For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses.

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected.

For available for sale debt securities, credit losses should be measured in a manner similar to previous GAAP, however Topic 326 requires that credit losses be presented as an allowance rather than as a write-down and affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income.

The amendments affected loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash.

The Company used the longer phase-in period for adoption, and accordingly this ASU became effective for the Company’s fiscal year beginning January 1, 2023.

The adoption of ASU 2016-13 resulted in an increase in portfolio allowances of $ 900 at transition.

The $ 900 was comprised of a $ 225 increase for MHP notes, a $ 187 increase for dealer financed contracts and a $ 488 increase for other notes receivable.

The cumulative effect of the adoption was a net decrease of $ 698 to beginning retained earnings at January 1, 2023.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 .

The amendments in this update extend the transition relief period for reference rate reform from December 31, 2022 to December 31, 2024.

The amendments in ASU 2022-06 apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

ASU 2022-06 was effective upon issuance.

The new standard has had no material impact on the Company's financial statements.

In November 2023 the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

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ASU 2023-07 enhances current and interim annual reportable segment disclosures and requires additional disclosures about significant segment expenses.

Public entities with a single

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as existing segment disclosures and reconciliation requirements in ASC 280 – Segment Reporting on an interim and annual basis.

In 2024, we adopted ASU 2023-07 it did not have a significant impact.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures" ("ASU 2023-09"), which enhances the transparency and decision usefulness of income tax disclosures.

Adjustments to the annual disclosure of income taxes include:

(1) A tabular rate reconciliation comprised of eight specific categories, (2) Incomes taxes paid, disaggregated between significant national, state, and foreign jurisdictions, (3) Eliminates requirements to disclose the nature and estimate of reasonably possible changes to unrecognized tax benefits in the next 12 months or that an estimated range cannot be made, and (4) Adds a requirement to disclose income (or loss) from continuing operations before income tax expense (or benefit) by national, state, and foreign, and income tax expense (or benefit) from continuing operations disaggregated between national, state and foreign.

The ASU is effective for public business entities for fiscal years beginning on or after December 15, 2024, and for all other entities for fiscal years beginning on or after December 31, 2025, with early adoption permitted.

The amendments in ASU 2023-09 were adopted by the Company on a retrospective basis.

There was no material impact to the Company's financial statements as a result of adopting ASU 2023-09.

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting-Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses.

The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about certain types of costs and expenses in the notes to the financial statements.

The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The standard updates are to be applied prospectively with the option for retrospective application.

We are currently evaluating the impact of disclosure requirements related to the new standard on our financial statements.

From time to time, new accounting pronouncements are issued by the FASB and other regulatory bodies that are adopted by the Company as of the specified effective dates.

Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

LEGACY HOUSING CORPORATION

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(Dollars in thousands, except per share amounts)

reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as existing segment disclosures and reconciliation requirements in ASC 280 – Segment Reporting on an interim and annual basis.

In 2024, we adopted ASU 2023-07 on a retrospective basis for annual periods starting with this Annual Report on Form 10-K.

For additional information, refer to “Note 18 Segment Information.”

From time to time, new accounting pronouncements are issued by the FASB and other regulatory bodies that are adopted by the Company as of the specified effective dates.

Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s Financial Statements upon adoption.

AMERICASA ACQUISITION

On October 30, 2025, as amended and effective November 1, 2025, the Company entered into an Asset and Membership Interest Purchase Agreement (the “Agreement” or the “AmeriCasa Acquisition”) with AmeriCasa Solutions LLC and certain affiliated entities (collectively, the “Seller Entities”).

Pursuant to the terms of the Agreement, the Company agreed to acquire specified, substantially all of the assets and certain membership interests related to the Seller Entities’ business (the “Business”).

The Business consists of the sale and distribution of manufactured housing, related real property leasing and sales, financing and insurance services, and the operation of the “FutureHomeX” cloud-based SaaS platform for manufactured home retailers and communities.

Under the Agreement, the Company acquired intellectual property, real property, inventory, accounts receivable arising after closing, assigned contracts, permits, consumer loans, and goodwill, and 28.75 % of the membership interests in an AmeriCasa affiliate entity, free and clear of all encumbrances other than permitted encumbrances.

Certain assets, including cash, specified accounts receivable, excluded contracts, benefit plans and other items set forth in the Agreement, are excluded from the transaction.

The Company assumed only specified liabilities, including a line of credit used to finance inventory, and liabilities under assigned contracts arising after the closing, as well as other liabilities set forth in the Agreement.

All other liabilities, including those related to taxes for pre-closing periods, benefit plans, excluded assets and pre-closing actions, remained with the Seller Entities.

The transaction was structured as an asset purchase for tax purposes.

The total net purchase consideration is $ 19.9 million, composed of $ 20.4 million in cash, less the extinguishment of the Company's pre-existing dealer liability payable to AmeriCasa of $ 539 , and the assumption of certain liabilities totaling approximately $ 1.3 million.

Additionally, the Company has not yet released approximately $ 400 in cash and $ 1.0 million held in escrow.

The escrow is to be retained for one year to secure performance guarantees per the Agreement.

The AmeriCasa Acquisition was accounted for using the acquisition method of accounting for business combinations.

The table below outlines our allocation of the total purchase consideration to the identifiable assets acquired and liabilities assumed, based on their fair values at the acquisition date.

At acquisition date

Property and equipment

Consumer loans

Intangible assets – trademarks (estimated useful life of 15 years )

Intangible assets – noncompete (estimated useful life of 6 years )

Intangible assets – developed technology (estimated useful life of 5 years )

Intangible assets – customer relationships (estimated useful life of 1 year )

Line of credit

Fair value of net assets acquired

The fair value of the acquired property and equipment and equipment held for lease was determined using both cost and sales comparison approaches.

The cost approach was primarily employed, which involved estimating the replacement cost of the assets and adjusting this amount for their age, condition, utility and remaining economic life.

The sales comparison approach utilized comparable transactions adjusting for market conditions, location, size and improvements.

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

The fair value of inventories reflects the manufactured homes on hand at closing date and approximates its carrying and realizable value as the inventories acquired turns quickly and is sold at pricing that reflects market conditions.

The fair value of consumer loans approximates the carrying values as management estimates that such consumer loans’ rates of interest represent market interest rates and are currently paying as agreed.

Management also recognized identifiable intangible assets that are both separable and legally enforceable.

The valuation methods used to determine the estimated fair value of identifiable intangible assets included the multi-period excess earnings method for customer relationships, developed technology and non-compete agreements and the relief from royalty method for trademarks.

Several significant assumptions were involved in the application of these valuation methods, including revenue growth rate, royalty rates, contributory asset charges, probability of renewal, discount rates and estimated useful lives of the intangible assets.

These identifiable intangible assets have finite lives and are subject to amortization over their estimated useful lives.

The fair value of the line of credit liability assumed approximates its carrying value at acquisition date, as the terms for the line of credit are consistent with current market terms for inventory financing lines of credit.

At acquisition date

Fair value of purchase consideration transferred allocated to business combination

Fair value of net assets acquired

The value assigned to goodwill in connection with the business combination is $ 2.5 million.

This goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired, reflecting the assembled workforce and expected growth opportunities available to us resulting from the AmeriCasa Acquisition.

Goodwill is not subject to amortization but is tested for impairment annually, or more frequently if indicators of impairment arise.

The goodwill from this business combination is fully deductible for income tax purposes.

Due to the timing of the AmeriCasa Acquisition’s completion, the purchase price and related allocation are preliminary and may be revised.

Adjustments could arise from changes to the purchase price, additional information obtained regarding the acquired assets and assumed liabilities and revisions to preliminary estimates of fair values including, but not limited to, certain intangible assets acquired and liabilities assumed, contractual relationships, intangible assets, deferred income taxes and residual goodwill.

These adjustments to the purchase price allocation could be significant.

The final allocation will be completed within the measurement period, which may extend up to one year from the acquisition date.

In connection with the AmeriCasa Acquisition, we incurred acquisition-related costs of $ 167 for the year ended December 31, 2025.

These costs primarily consisted of legal and consulting fees and are included in “Selling, general, and administrative expenses” in our statement of income.

For the year ended December 31, 2025, our statement of income included total revenue of $ 1.0 million and pre-tax loss of $ 28 from the AmeriCasa Acquisition.

Direct Sales include homes sold directly to independent retailers or customers that are not financed by the Company and are not sold under an inventory finance arrangement.

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Commercial Sales include homes sold to mobile home parks under commercial loan programs or paid for upfront.

Inventory Finance Sales include sales of homes to independent retailers, or dealers, who then resell the homes to consumers.

Inventory Finance Sales include sales of homes to independent retailers, or dealers, who then resell the homes to

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

Retail Store Sales are homes sold through Company-owned retail locations.

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The Company has elected to use the practical expedient to expense the incremental costs of obtaining a contract if the amortization period of the asset that the Company would have otherwise recognized is one year or less.

Contract costs, which include commissions incurred related to the sale of homes, are expensed at the point-in-time when the related revenue is recognized.

Warranty costs and contract costs are included in selling, general and administrative

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except per share amounts)

expenses in the statements of income.

Warranty and contract costs were $ 1,800 and $ 2,691 for the years ended December 31, 2024 and 2023.

For the years ended December 31, 2024 and 2023, total cost of product sales included $ 6,357 and $ 10,188 of costs relating to subcontracted production for commercial sales, transportation and delivery costs, and certain other costs incurred for retail store and commercial sales.

Warranty costs are included in selling, general, and administrative expenses, in the statements of income.

Warranty costs were $ 1.5 million and $ 1.8 million for the years ended December 31, 2025 and 2024.

For the years ended December 31, 2025 and 2024, total cost of product sales included $ 7.8 million and $ 6.4 million of costs relating to subcontracted production for commercial sales, transportation and delivery costs, and certain other costs incurred for retail store and commercial sales.

Other revenue consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, service fees and other miscellaneous income.

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Revenue for service fees and miscellaneous income is recognized at a point in time when the performance obligation is satisfied.

Land sales revenue is comprised of sales of land (real property) that was acquired as a result of maintaining or furthering our primary business of producing, selling and financing mobile homes.

Land sale revenue for 2024 was $ 8,904 for the sale of two properties.

Land sales revenue is comprised of sales of land (real property) that was acquired as a result of maintaining or furthering our primary business of producing, selling, and financing manufactured homes.

Land sale revenue for 2025 was $ 114 , while for 2024 it was $ 8.9 million for the sale of two properties.

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

Sales Concentration.

The following table presents mobile home park (“MHP”) sales to independent third parties and their affiliates that are greater than 5.0% of our total product sales for the years ended December 31, 2024 and 2023:

The following table presents mobile home park (“MHP”) sales to independent third parties and their affiliates that are greater than 5.0% of our total product sales for the following:

Year ended December 31,

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Disaggregation of Revenue.

The following table summarizes customer contract revenues disaggregated by source of the revenue for the years ended December 31, 2024 and 2023:

The following table summarizes customer contract revenues disaggregated by source of the revenue for the following:

Product sales:

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CONSUMER LOANS RECEIVABLE

Consumer loans receivable, net of allowance for loan losses and deferred financing fees, consisted of the following at December 31, 2024, 2023 and 2022:

Consumer loans receivable, net of allowance for loan losses and deferred financing fees, consisted of the following:

As of December 31,

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Consumer loans receivable, net

The following table presents a detail of the activity in the allowance for loan losses for the years ended December 31, 2024 and 2023:

The following table presents a detail of the activity in the allowance for loan losses for:

Year Ended December 31,

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Provision for loan losses

Recoveries/(Charge-offs)

Allowance for loan losses, end of period

Consumer loans receivable tables include 126 purchased loans from the recent AmeriCasa acquisition at a net value of $ 9.0 million as of December 31, 2025.

A detailed aging of consumer loans receivable that are past due as of the following:

LEGACY HOUSING CORPORATION

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(Dollars in thousands, except per share amounts)

The following table presents impaired and general reserve for allowance for loan losses at December 31, 2024 and 2023:

As of December 31,

Total consumer loans

Allowance for loan losses

Impaired loans individually evaluated for impairment

Specific reserve against impaired loans

Other loans collectively evaluated for allowance

General allowance for loan losses

A detailed aging of consumer loans receivable that are past due as of December 31, 2024 and 2023 were as follows:

As of December 31,

Total consumer loans receivable

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NOTES RECEIVABLE FROM MOBILE HOME PARKS (“MHP Notes”)

The notes receivable from mobile home parks (“MHP Notes”) relate to mobile homes sold to mobile home parks and financed through notes receivable.

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except per share amounts)

Settlement Agreement

Legacy and numerous entities owned or operated by one individual (the “Makers”) previously entered into several Promissory Notes (the “Notes”) valued at approximately $ 55 million.

In January 2024, the Makers defaulted on, and Legacy accelerated, a portion of the Notes valued at approximately $ 37 million.

The Notes were secured by mobile homes and mobile-home parks located in Texas, Mississippi, and Louisiana, and personally guaranteed by individuals (the “Personal Guarantors”).

During 2024, Legacy filed several lawsuits against the Makers and the Personal Guarantors and aggressively pursued the collateral.

On July 27, 2024, Legacy, the Makers, and the Personal Guarantors entered into a Settlement Agreement and Release (the “Agreement”).

The parties to the Agreement are Legacy, Legacy’s Executive Chairman, Curtis D.

Hodgson (collectively, the “Plaintiffs”), William Rodwell, Cynthia Rodwell, Tony Hartsgrove, Robert T.

Hutson II, Yakov Plotnikov, Eric D.

Wooten (collectively, the “Individual Defendants”), Cleveland MHC, LLC (“Cleveland”), Country Aire Homes of LA, LLC, Forest Hollow, LLC (“Forest Hollow”), Gulf Stream Homes of LA, LLC, Gulf Stream Homes of MS, LLC, Stellar GS Homes, LLC, SINOP GS Homes, LLC, Gulf Stream Manor Phase 2 Homes, LLC, Iowa Homes, LLC, Southern Pointe Homes, LLC, Southern Pointe Investments, LLC, Southern Pointe Investments II, LLC, Stellar GS Homes LLC, and Country Aire MHP LLC (collectively, the “Entity Defendants”).

As consideration for the mutual releases contained in the Agreement:

● Forest Hollow conveyed clear title, and the undisputed right to possess, all real and personal property located on or at the Forest Hollow Mobile Home Community, 6650 Broad Oak Street, Beaumont, TX 77713 (the “Forest Hollow Mobile Home Community”) to Legacy;

● Cleveland conveyed clear title, and the undisputed right to possess, all real and personal property located on or at the Cleveland Mobile Home Community, 110 Old Hwy 49 S.

Richland, MS 39218 (the “Cleveland Mobile Home Community”) to Legacy;

● Cleveland and Forest Hollow assigned all intangible assets, including all leases, contracts, and goodwill applicable or related to the real and personal property located on or at the Forest Hollow Mobile Home Community and the Cleveland Mobile Home Community to Legacy;

● The Individual and Entity Defendants irrevocably waived any and all claims related to existing deposits;

● Legacy refinanced the Entity and Individual Defendants’ remaining debt, pursuant to a new two-year , $ 48.6 million Promissory Note (the “New Note”).

The New Note bears interest at a fixed rate of 7.9 % , requires monthly payments of interest only for twenty-four months , and matures in July, 2026.

The New Note is secured by a first priority interest in more than 1,000 mobile homes and two mobile-home parks located in Louisiana, and personal guarantees signed by the Individual Defendants.

The New Note is secured by the same Louisiana collateral as the old Notes, while providing additional legal efficiencies.

The Individual Defendants have personally guaranteed the New Note to the same extent they personally guaranteed the Entity Defendants’ prior debt.

The Company presents the entire New Note on the accompanying balance sheets under the heading Notes receivable from mobile home parks (“MHP”), and interest income associated with the New Note is presented on the accompanying statement of income under the heading Consumer, MHP and dealer loans interest.

Prior to the three months ending September 30, 2024, the Company classified the old Notes as MHP notes and other notes.

The Company sold the Forest Hollow Mobile Home Community in December, 2024.

The Company recorded the fair value of the real property from Cleveland on the accompanying balance sheets under the heading Property, plant and equipment, net and the fair value of the personal property from Cleveland on the accompanying balance sheets under the heading Other assets.

The Company recorded a gain of $ 5.4 million in 2024 on the settlement agreement and transactions related to the Cleveland Mobile Home Community and the Forest Hollow Mobile Home Community.

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except per share amounts)

The Company evaluated the recoverability of the New Note as of December 31, 2024 and determined a provision for expected loan losses is not necessary based on the analysis of the fair value of underlying collateral.

Notes receivable from mobile home parks, net of allowance for loan losses and deferred financing fees, consisted of the following at December 31, 2024, 2023 and 2022:

The notes receivable from mobile home parks (“MHP Notes”) relate to manufactured homes sold to mobile home parks and financed through notes receivable.

Notes receivable from mobile home parks, net of allowance for loan losses and deferred financing fees, consisted of the following:

As of December 31,

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Allowance for loan losses

The following table presents a detail of the activity in the allowance for loan losses for the years ended December 31, 2024 and 2023:

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

The following table presents a detail of the activity in the allowance for loan losses for the following years:

Allowance for loan losses, beginning of period

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Allowance for loan losses, end of period

The following table presents impaired and general reserve for allowance for loan losses at December 31, 2024 and 2023:

A detailed aging of MHP loans receivable that are past due as of the following:

As of December 31,

Total MHP loans

Allowance for loan losses

Impaired loans individually evaluated for impairment

Specific reserve against impaired loans

Other loans collectively evaluated for allowance

General allowance for loan losses

Total MHP loans receivable

Past due MHP loans:

31 - 60 days past due

61 - 90 days past due

91 - 120 days past due

Greater than 120 days past due

Total past due

We evaluate the credit quality of our MHP portfolio based on the aging status of the loan and by payment activity.

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> 90 days past due

Settlement Agreement

In 2024, the Company and various borrowers and guarantors (the “Makers”) entered into a Settlement Agreement and Release (the “Agreement”) to resolve disputes related to previously existing promissory notes with an aggregate principal balance of approximately $ 55.0 million, of which approximately $ 37.0 million had been accelerated following default.

As consideration under the Agreement, the Makers conveyed to the Company clear title to the Forest Hollow Mobile Home Community in Beaumont, Texas and the Cleveland Mobile Home Community in Richland, Mississippi, together with related personal property and intangible assets, and the parties executed a new $ 48.6 million promissory note (the “New Note”) bearing a fixed interest rate of 7.9 %, requiring monthly interest-only payments for twenty-four months and maturing in July 2026.

The New Note is secured by a first-priority interest in more than 1,000 mobile homes and two mobile-home parks located in Louisiana and is personally guaranteed by the individual borrowers.

The Company recognized a gain of $ 5.4 million in 2024 related to the Agreement and the subsequent disposition of the Forest Hollow and Cleveland properties.

LEGACY HOUSING CORPORATION

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(Dollars in thousands, except per share amounts)

As of December 31, 2025, the Company evaluated the recoverability of the New Note and based on an analysis of the fair value of the underlying collateral, the current payment status of the borrowers, and other relevant credit quality indicators, determined that a provision for expected loan losses on the New Note was not necessary.

Other Notes Receivable

Other notes receivable relate to notes issued to mobile home park owners and dealers and are not directly tied to the sale of mobile homes.

Note 5, Notes Receivable from Mobile Home Parks, in these Notes to Financial Statements for the year ended December 31, 2024 provides details regarding a settlement agreement related to prior debt.

Prior to the three months ending September 30, 2024, the Company recorded the old Notes described in Note 5 in MHP notes and other notes.

The New Note is recorded in MHP notes only.

Other notes receivable, net of allowance for loan losses and deferred financing fees, consisted of the following at December 31, 2024, 2023 and 2022:

Other notes receivable relate to notes issued to mobile home park owners and dealers and are not directly tied to the sale of manufactured homes.

Other notes receivable, net of allowance for loan losses and deferred financing fees, consisted of the following:

As of December 31,

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Allowance for loan losses

The following table presents a detail of the activity in the allowance for loan losses for the years ended December 31, 2024 and 2023:

The following table presents a detail of the activity in the allowance for loan losses for the years:

Allowance for loan losses, beginning of period

2 unchanged sentences

Allowance for loan losses, end of period

The following table presents impaired and general reserve for allowance for loan losses at December 31, 2024 and 2023:

As of December 31,

Total Other notes receivable

Allowance for loan losses

Impaired loans individually evaluated for impairment

Specific reserve against impaired loans

Other notes receivable collectively evaluated for allowance

General allowance for loan losses

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except per share amounts)

We evaluate the credit quality of our Other notes receivable portfolio based on the aging status of the loan and by payment activity.

Loan delinquency reporting is generally based upon borrower payment activity, relative to the contractual terms of the loan.

The following table disaggregates the outstanding principal balance of Other notes receivable by credit quality indicator based on delinquency status and fiscal year of origination and is presented as of December 31, 2024:

Year of Origination

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> 90 days past due

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

DEALER FINANCED RECEIVABLES

Dealer finance receivable are receivables for loans that we make to independent retailers, or dealers, for the purchase of mobile homes so that dealers can then market them for sale to consumers.

The loans are part of our inventory finance program.

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Dealer financed notes receivable, net of allowance for loan losses and deferred financing fees, consisted of the following at December 31, 2024, 2023 and 2022:

Dealer financed notes receivable, net of allowance for loan losses, consisted of the following:

As of December 31,

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Allowance for loan losses

The following table presents a detail of the activity in the allowance for loan losses for the years ended December 31, 2024 and 2023:

The following table presents a detail of the activity in the allowance for loan losses for:

Allowance for loan losses, beginning of period

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As such, there is relatively little historical data to measure credit quality of the loans in this portfolio.

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except per share amounts)

As of December 31, 2024, the Company had 12 operating leases, eight of which were for the Company’s Heritage Housing and Tiny Homes retail locations, two were subleased by the Company and two were for corporate and administrative offices in Bedford, TX and Norcross, GA.

Included in the allowance for loan losses as of December 31, 2025 is a provision of $ 900 related to one independent dealer.

This amount represents approximately 51 % of the total allowance for loan losses related to dealer financed receivables as of December 31, 2025.

As of December 31, 2025, the Company had 12 operating leases, eight of which were for the Company’s Heritage Housing and Tiny House retail locations, two were subleased by the Company and two were for corporate and administrative offices in Bedford, TX, and Norcross, GA.

These leases typically have initial terms ranging from 5 to 10 years and include one or more options to renew.

Under ASC 842, the Company elected the modified retrospective approach, applying the new standard to all leases at the date of initial application.

We determine if an arrangement is or contains a lease at inception.

1 unchanged sentence

The lease liabilities are shown as Operating lease obligation and Operating lease obligation, less current portion on our balance sheets.

ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease.

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease.

ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

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As of December 31, 2025, the remaining weighted-average lease term was 3.64 years and the weighted-average discount rate was 4.34 %.

We consider lease payments that cannot be predicted with reasonable certainty upon lease commencement to be variable lease payments, which are recorded as incurred each period and are excluded from our calculation of lease liabilities.

There were no variable lease costs for the year ended December 31, 2024.

Short-term leases, those with a term of 12 months or less, are not recorded on our balance sheet.

Our short-term lease costs were not material for the year ended December 31, 2024.

Lease expense for operating leases consists of fixed lease payments recognized on a straight-line basis over the lease term plus variable lease payments as incurred.

Amortization of the ROU asset for operating leases reflects

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except per share amounts)

amortization of the lease liability, any differences between straight-line expense and related lease payments during the accounting period, and any impairments.

Amortization of the ROU asset for operating leases reflects amortization of the lease liability, any differences between straight-line expense and related lease payments during the accounting period, and any impairments.

As of December 31, 2025, present value of future lease payments under our operating lease liabilities were as follows:

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Total non-current lease liability

Inventories consisted of the following at December 31, 2024 and 2023:

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

Inventories consisted of the following:

As of December 31,

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Finished goods, net

Finished goods includes an allowance of $ 688 and $ 439 as of December 31, 2024 and December 31, 2023, respectively.

Finished goods includes an allowance of $ 559 and $ 688 as of December 31, 2025 and 2024, respectively.

PROPERTY, PLANT, AND EQUIPMENT

Property, plant and equipment consisted of the following at December 31, 2024 and 2023:

Property, plant, and equipment consisted of the following:

As of December 31,

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Total property, plant and equipment

Depreciation expense was $ 1.6 million and $ 1.8 million for the years ended December 31, 2025 and 2024, respectively, and includes depreciation expense for leased mobile homes.

Depreciation expense also includes $ 658 and $ 663 as a component of cost of product sales for the years ended December 31, 2025 and 2024, respectively.

Land includes foreclosed property of $ 2.5 million and $ 1.1 million for years ended December 31, 2025 and 2024, respectively, which was collateral for MHP and Other notes.

Other assets consisted of the following:

As of December 31,

Repossessed homes

Investment Corpus Americasa

Used Inventory - Dealer Repossession

LEGACY HOUSING CORPORATION

2 unchanged sentences

(Dollars in thousands, except per share amounts)

Depreciation expense was $ 1,819 and $ 1,663 for the year ended December 31, 2024 and 2023, respectively, and includes depreciation expense for leased mobile homes.

Depreciation expense also includes $ 663 and $ 512 as a component of cost of product sales for the year ended December 31, 2024 and 2023, respectively.

Other assets consisted of the following at December 31, 2024 and 2023:

As of December 31,

Repossessed homes

Repossessed homes balance as of December 31, 2024 includes $ 3,931 for homes repossessed from the consumer loan portfolio and $ 1,198 for homes repossessed from the MHP loan portfolio.

Repossessed homes balance as of December 31, 2023 includes $ 2,215 for homes repossessed from the consumer loan portfolio.

Repossessed homes balance as of December 31, 2025, includes $ 8.4 million for homes repossessed from the consumer loan portfolio and $ 1.8 million for homes repossessed from the MHP loan portfolio.

Repossessed homes balance as of December 31, 2024 includes $ 3.9 million for homes repossessed from the consumer loan portfolio and $ 1.2 million for homes repossessed from the MHP loan portfolio.

ACCRUED LIABILITIES

Accrued liabilities consist of the following at December 31, 2024 and 2023:

Accrued liabilities consist of the following:

As of December 31,

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LINES OF CREDIT

On July 28, 2023, the Company entered into a new Credit Agreement (the “Revolver”), by and among the Company as borrower, the financial institutions from time to time party thereto, as lenders, and Prosperity Bank as administrative agent.

Subsequently, the Company repaid in full the balance due on its prior line of credit with Capital One, N.A.

and all commitments under this prior line of credit were terminated.

The Revolver provides for a four-year senior secured revolving credit facility with an initial commitment of $ 50,000 and an additional $ 25,000 commitment under an accordion feature.

The Company has a Credit Agreement (the “Revolver”), by and among the Company as borrower, the financial institutions from time to time party thereto, as lenders, and Prosperity Bank as administrative agent.

The Revolver provides for a four-year senior secured revolving credit facility with an initial commitment of $ 50.0 million and an additional $ 25.0 million commitment under an accordion feature.

The Revolver is secured by the Company’s consumer loans receivables and all escrow accounts associated with the consumer loans receivables.

At the Company's option, borrowings will bear interest at a per annum rate equal to, (i) Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin of 2.5 % or 2.75 % based upon the Company's average quarterly borrowings under the Revolver or (ii) a base rate plus an applicable margin of 2.5 % or 2.75 % based upon the Company's average quarterly borrowings under the Revolver.

The Company paid certain arrangement fees and other fees in connection with the Revolver of approximately $ 271 , which were capitalized

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2024 and 2023

(Dollars in thousands, except per share amounts)

as unamortized debt issuance costs and included within lines of credit balance in the accompanying balance sheets and are amortized to interest expense over the life of the Revolver.

The Company paid certain arrangement fees and other fees in connection with the Revolver of approximately $ 271 , which were capitalized as unamortized debt issuance costs and included within prepaids and other current assets in the accompanying balance sheets and are amortized to interest expense over the life of the Revolver.

The Revolver matures July 28, 2027.

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The interest rate in effect as of December 31, 2025 and 2024 for the Revolver was 6.69 % and 7.61 %, respectively.

The amount of available credit under the Revolver was $ 50,000 and $ 26,320 as of December 31, 2024 and 2023, respectively.

The amount of available credit under the Revolver was $ 50.0 million as of December 31, 2025 and 2024, respectively.

The Revolver requires the Company to comply with certain financial and non-financial covenants.

As of December 31, 2024, the Company was in compliance with all financial covenants, including that it maintain a maximum leverage ratio of no more than 1.00 to 1.00 and a minimum fixed charge coverage ratio of no less than 1.75 to 1.00.

The provision for income tax expense for the years ended December 31, 2024 and 2023 was $ 14,396 and $ 14,276 , respectively.

The effective tax rates for the years ended December 31, 2024 and 2023 were 18.9 % and 20.8 %, respectively.

These rates differ from the federal statutory rate of 21 % primarily due to a federal tax credit for the sale of energy efficient homes under the Internal Revenue Code §45L, partially offset by state income taxes.

The §45L tax credit was initially established under the Federal Energy Policy Act of 2005 and was extended through December 31, 2032 by the Inflation Reduction Act of 2022.

Significant components of the provision for income taxes are as follows:

Total current income tax provision

Total deferred income tax provision

Provision for income taxes

A reconciliation of the Company’s effective tax rate from operations to the U.S.

federal income tax rate is as follows:

Federal statutory rate

State income taxes, net of federal tax benefit

Energy efficiency credit

Effective tax rate

As of December 31, 2025, the Company was in compliance with all financial covenants, including that it maintains a maximum leverage ratio of no more than 1.00 to 1.00 and a minimum fixed charge coverage ratio of no less than 1.75 to 1.00.

As part of the AmeriCasa Acquisition, we assumed a line of credit with 21 st Mortgage in the amount of $ 1.3 million at the time of acquisition.

As of December 31, 2025, the balance of the line of credit was $ 1.2 million which we subsequently paid off in January 2026.

LEGACY HOUSING CORPORATION

2 unchanged sentences

(Dollars in thousands, except per share amounts)

The tax effects of cumulative temporary differences that give rise to deferred tax assets and liabilities are as follows:

Deferred tax assets:

December 31, 2025

December 31, 2024

Pre-Tax Income

The Company's income tax expense is as follows:

December 31, 2025

December 31, 2024

Current income tax expense

Deferred income tax expense

Total income tax expense

The following is a reconciliation from the Company’s statutory rate to the effective tax rate reported in the financial statements:

December 31, 2025

December 31, 2024

Income Tax at Federal Statutory Rate

State and local income tax, net of federal benefit of state

Energy efficient home credit

Nontaxable or Nondeductible items

Unrecognized tax benefits

Deferred true-ups

For the year ended December 31, 2025, the Company's state and local income tax expense, net of federal income tax effect, was primarily attributable to income taxes incurred in Georgia and Texas.

These states collectively comprised more than 50% of the total state and local income tax expense for the period.

For the period ended December 31, 2025, the primary driver of the variance from the statutory rate was the federal Energy Efficient Home Credit, and deferred true-ups, which were partially offset by uncertain tax benefits.

For the period ended December 31, 2024, the primary driver of the variance from the statutory rate was the federal Energy Efficient Home Credit.

The tax effect of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases that give rise to deferred tax assets and liabilities is as follows:

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

December 31, 2025

December 31, 2024

Accruals and reserves

Operating lease liabilities

Goodwill and identifiable intangibles assets

Allowance for doubtful accounts

Reserve accounts

Payroll taxes

Uniform capitalization

Gross deferred tax assets

Valuation allowance

Total deferred tax assets

Deferred tax liabilities

Property and equipment, net

Operating lease, right-of-use assets

Installment sale revenue

1 unchanged sentence

Total deferred tax liabilities

Net deferred tax liabilities

Net deferred tax assets (liabilities)

For the period ended December 31, 2025, the Company does not have any federal or state carryforward tax attributes.

Additionally, after weighing up all available and positive and negative evidence for the period ended December 31, 2025, the Company determined no full valuation allowance was necessary, consistent with prior year.

On July 4th, 2025, the President signed into law significant federal tax legislation, H.R.1 (the “One, Big, Beautiful Bill Act” (OBBBA)).

The legislation includes numerous changes to U.S.

corporate income tax law, including but not limited to:

permanent 100% bonus depreciation for qualified property, immediate expensing of domestic research and experimental expenditures, modifications to the limitation on business interest expense, increased Section 179 expensing limits, changes to the international tax regime, and expanded limitations on the deductibility of executive compensation under IRC Section 162(m).

Most provisions are effective for tax years beginning after December 31, 2024, with certain transition rules and exceptions.

The OBBBA did not materially impact the Company’s effective tax rate for the period ended December 31, 2025.

The Company is subject to income tax in multiple jurisdictions, including federal and several states.

The Company has federal and state income tax returns that are open to examination from 2022 forward.

As a result, the Company continuously monitors its current and prior filing positions in order to determine if any unrecognized tax positions need to be recorded.

The analysis involves considerable judgment and is based on the best information available.

A reconciliation of the beginning to ending gross amount of unrecognized tax benefits is as follows:

December 31, 2025

December 31, 2024

Balance as of January 1st

Additions for tax positions of prior years

Reductions for tax positions of prior years

Balance as of December 31st

A majority of the unrecognized tax benefit for the period ended December 31, 2025 relates to the recognition of revenue for income tax purposes.

The Company has accrued interest expenses related to the unrecognized tax benefits for the periods ended December 31, 2025 and 2024, of $ 638 and $ 0 , respectively.

In addition, the Company has accrued penalties related to the unrecognized tax benefits for the periods ended December 31, 2025 and 2024 of $ 353 and $ 0 ,

LEGACY HOUSING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Dollars in thousands, except per share amounts)

respectively.

As of December 31, 2025, the unrecognized tax benefits would, if recognized, decrease our effective taxes by $ 1.7 million.

The following summarizes the Company’s tax payments and refunds by jurisdiction.

Income Tax Paid, Net of Refunds

Other Jurisdictions

In addition to the income tax payments (net of refunds) presented above, the company purchased $ 5.0 million of 2024 transferable credits during the year ended December 31, 2025.

COMMITMENTS AND CONTINGENCIES

3 unchanged sentences

The Company will adjust its self-insured medical benefits reserve based on actual experience, estimated costs and changes to assumptions.

As of December 31, 2024 and 2023, the Company accrued a $ 861 and $ 242 liability, respectively, for incurred but not reported claims, respectively.

As of December 31, 2025 and 2024, the liability for incurred but not reported claims is $ 802 and $ 861 , respectively.

These accrued amounts are included in accrued liabilities on the accompanying balance sheets.

11 unchanged sentences

See Note 9 – Leases, for a schedule of the Company’s future minimum lease commitments.

Legal Matters

The Company is party to certain legal proceedings that arise in the ordinary course and are incidental to its business.

Certain of the claims pending against the Company in these proceedings allege, among other things, breach of contract and warranty, product liability and personal injury.

The Company has determined that it is probable that it has

LEGACY HOUSING CORPORATION

2 unchanged sentences

(Dollars in thousands, except per share amounts)

Legal Matters

The Company is party to certain legal proceedings that arise in the ordinary course and are incidental to its business.

Certain of the claims pending against the Company in these proceedings allege, among other things, breach of contract and warranty, product liability and personal injury.

The Company has determined that it is probable that it has some liability related to the claims.

some liability related to the claims.

The Company has included legal reserves of $ 970 and $ 328 as of December 31, 2025 and 2024, respectively, in accrued liabilities on the accompanying balance sheets.

15 unchanged sentences

On August 6, 2024, our Board of Directors authorized the repurchase of an additional $ 10.0 million of the Company’s common stock under the share repurchase program.

We repurchased 262,530 shares of common stock for $ 5,398 in the open market during the year ended December 31, 2024.

As of December 31, 2024, we had a remaining authorization of approximately $ 14,602 .

Between January 1, 2025 and March 10, 2025 we repurchased 29,385 shares of common stock for $ 674 in the open market.

We repurchased 262,530 shares of common stock for $ 5.4 million in the open market during the year ended December 31, 2024.

Between January 1, 2025 and December 31, 2025, we repurchased 346,406 shares of common stock for $ 7.6 million in the open market.

All repurchase programs have expired as of October 31, 2025.

RELATED PARTY TRANSACTIONS

Bell Mobile Homes (“Bell”), a retailer owned by one of the Company’s significant stockholders, purchases manufactured homes from the Company.

Accounts receivable balances due from Bell were $ 613 and $ 115 as of December 31, 2025 and 2024, respectively.

Accounts payable balances due to Bell were $ 103 and $ 58 as of December

LEGACY HOUSING CORPORATION

2 unchanged sentences

(Dollars in thousands, except per share amounts)

RELATED PARTY TRANSACTIONS

Bell Mobile Homes (“Bell”), a retailer owned by one of the Company’s significant stockholders, purchases manufactured homes from the Company.

Accounts receivable balances due from Bell were $ 115 and $ 403 as of December 31, 2024 and 2023, respectively.

Accounts payable balances due to Bell were $ 58 and $ 18 as of December 31, 2024 and 2023, respectively.

Home sales to Bell were $ 5,748 and $ 4,543 for the years ended December 31, 2024 and 2023, respectively.

31, 2025 and 2024, respectively.

Home sales to Bell were $ 4.8 million and $ 5.7 million for the years ended December 31, 2025 and 2024, respectively.

Shipley Bros., Ltd.

2 unchanged sentences

Accounts payable balances due to Shipley were $ 36 and $ 22 as of December 31, 2025 and 2024.

Home sales to Shipley were $ 2,545 and $ 1,199 for the years ended December 31, 2024 and 2023, respectively.

SEGMENT INFORMATION

We have determined that we have one operating and reportable segment.

We define the segment primarily based on how internally reported financial and operating information is regularly reviewed by our chief operating decision maker (“CODM”) to evaluate financial performance, make decisions and allocate resources.

Our CODM is the Chief Executive Officer.

The CODM assesses the Company’s operating and financial performance based on net income, total revenue and return on investment.

The Company determined that it does not have significant segment expenses.

Home sales to Shipley were $ 2.1 million and $ 2.5 million for the years ended December 31, 2025 and 2024, respectively.

At December 31, 2025, we have outstanding receivables of $ 1.5 million from, and outstanding payables of $ 800 to, an entity affiliated with one of our employees.

These amounts related to the business operations of AmeriCasa Solutions between the date of acquisition and year-end.

SUBSEQUENT EVENTS

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data