Legacy Housing Corp 10-K

ITEM 9A. CONTROLS AND PROCEDURES. Evaluation of Disclosure Controls and Procedures We are subject to the periodic reporting requirements of the Exchange Act which requires designing disclosure controls and procedures to provide reasonable assurance that information we disclose in reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosures. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Report. Based on the evaluation of our disclosure controls and procedures as of December 31, 2023, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of such date due to material weaknesses in internal control over financial reporting. In light of the conclusion that our disclosure controls and procedures are considered ineffective as of December 31, 2023, we have applied procedures and processes as necessary to ensure the reliability of our financial reporting in regard to this annual report. Accordingly, the Company believes, based on its knowledge, that: (i) this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading with respect to the period covered by this report; and (ii) the financial statements, and other financial information included in this annual report, fairly present in all material respects our financial condition, results of operations and cash flows as of and for the periods presented in this annual report. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance of the reliability of financial reporting and of the preparation of financial statements for external reporting purposes, in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and disposition of assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with the authorization of management and directors; and (3) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on financial statements. Our management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013). These criteria are in the areas of control environment, risk assessment, control activities, information and communication, and monitoring. Management’s assessment included documenting, evaluating and testing the design and operating effectiveness of its internal controls over financial reporting. Based on management’s processes and assessment, as described above, management has concluded that, as of December 31, 2023, our internal control over financial reporting was not effective. 64 Table of Contents Material Weaknesses in Internal Control Over Financial Reporting Under standards established by the PCAOB, a material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected and corrected on a timely basis. The material weaknesses in internal control over financial reporting as of December 31, 2023 are summarized as follows: ● We determined that we have not sufficiently or adequately designed or implemented control activities and have a lack of documentation, review and approval of certain control activities. Additionally, those activities are not sufficiently monitored and tested; ● We determined that we do not have sufficient qualified accounting personnel to support the preparation of financial statements that are in compliance with U.S. GAAP and SEC reporting requirements; and ● We determined that we have not sufficiently or adequately designed or implemented information technology general controls over in-scope business processes and financial reporting systems. ​ Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the fourth quarter of fiscal 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Inherent Limitations in Effectiveness of Controls Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures, or our internal controls, will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake or fraud. Additionally, controls can be circumvented by individuals or groups of persons or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements in our public reports due to error or fraud may occur and not be detected. ​ ITEM 9B. OTHER INFORMATION. During the three months ended December 31, 2023 , no director or officer of the Company adopted or terminated a “Rule 10 b 5 -1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. ​ ​ ​ 65 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. Executive Officers and Directors The following table identifies our executive officers and directors as of the date of this filing. ​ ​ ​ ​ ​ Name Age Position (s) Executive Officers and Employee Directors Curtis D. Hodgson 69 Executive Chairman of the Board Kenneth E. Shipley 64 Founder, Executive Vice President and Director R. Duncan Bates ​ 36 ​ President and Chief Executive Officer Jeffrey M. Fiedelman ​ 55 ​ Chief Financial Officer Non ‑ Employee Directors Jeffrey K. Stouder 52 Director Francisco J. Coll 39 Director Brian J. Ferguson ​ 44 ​ Director ​ The following information provides a brief description of the business experience of each executive officer and director. Executive Officers and Employee Directors Curtis D. Hodgson co-founded our company in 2005 and served as our Co-Chief Executive Officer from January 2018 to February 2019, then became our executive Chairman of the Board. He has been a member of our board of directors since January 2018. Prior to that, Mr. Hodgson served as a partner of the company’s predecessor, Legacy Housing, Ltd., and controlled its general partner. Over the past 38 years, Mr. Hodgson has owned and operated several manufactured home retail operations and manufactured housing communities in Texas. Mr. Hodgson has significant expertise in the manufactured housing industry. Mr. Hodgson earned a B.S. in Engineering from the University of Michigan and a J.D. from The University of Texas. Mr. Hodgson is the co-founder, executive Chairman and one of our largest stockholders and he was selected to serve on our board of directors due to his decades of experience and deep knowledge of our industry, his leadership and substantial operational and strategic planning expertise. His service as the executive Chairman creates a critical link between management and the board. Kenneth E. Shipley co-founded our company in 2005 with Curtis D. Hodgson. Mr. Shipley was our Co-Chief Executive Officer from January 2018 and, from February 2019 to June 2022, has served as our President and sole Chief Executive Officer. Effective in June 2022, Mr. Shipley became the Execitive Vice President of the Company. He has been a member of our board of directors since January 2018, when our company converted to a corporation and prior to that, Mr. Shipley, together with Mr. Hodgson, served as a general partner of the company’s predecessor, Legacy Housing, Ltd. Mr. Shipley has more than 30 years of experience in the manufactured home industry. Since 1981, he has also owned and operated Bell Mobile Homes and Shipley Bros. in Lubbock, Texas, a manufactured home retailer. Mr. Shipley is the co-founder, Executive Vice President and one of our largest stockholders and he was selected to serve on our board of directors due to his decades of experience and knowledge of our industry, his leadership and substantial sales and distribution experience with dealers and customers in the industry. His service as a director and the Executive Vice creates a critical link between management and the board. Duncan Bates joined our company in June 2022 and serves as President and Chief Executive Officer. In this capacity, he oversees the Company’s day-to-day operations and reports directly to the Board of Directors. Mr. Bates most recently served as Senior Vice President, Mergers & Acquisitions of Arcosa Inc., a publicly traded infrastructure products company since August 2018. Under his leadership, Arcosa executed 16 acquisitions and 2 divestitures in a three 66 Table of Contents and ½ year period to reposition its portfolio around growth-oriented, high-margin products. Previously, he served as a Vice President in the Industrials Investment Banking Group at Stephens Inc. from June 2015 to August 2018. From February 2012 to June 2015, he worked in the Energy Investment Banking Group at Seaport Global Securities, LLC. Mr. Bates began his career in New York at Willis Re Inc. in July 2010. Mr. Bates received his B.S. Management degree with a double major in Finance and Legal Studies from Tulane University. ​ Mr. Bates resigned from the Company’s Board upon his appointment as the President and Chief Executive Officer . ​ Jeffrey M. Fiedelman joined our company in September 2023 and serves as Chief Financial Officer. In this capacity, he oversees the Company’s finances, including all accounting systems and financial reporting. Before joining Legacy, Mr. Fiedelman managed his own consulting firm that provided CFO and transactional advisory services to middle market companies. Prior to that, Mr. Fiedelman was the CFO of Pioneer Wine & Spirits, a wholesaler of fine wines and artisanal spirits that was acquired in 2019. Previously, Mr. Fiedelman was the CFO of Oryon Technologies, a privately held licensor, developer, and manufacturer of a patented lighting technology, and CFO of Substrate Technologies Inc., a venture-backed developer and manufacturer of semiconductor components. Mr. Fiedelman also held senior management positions in corporate finance, operations, and marketing at Alcatel (now Nokia). Mr. Fiedelman began his career as a consultant with Andersen Consulting (now Accenture). Mr. Fiedelman has a B.S. in Electrical Engineering from Stanford University and an M.B.A. from The Wharton School of the University of Pennsylvania. ​ Non-Employee Directors Jeffrey K. Stouder was elected to our board of directors at the 2020 annual meeting of stockholders. He has served as the Vice President, Global Controller at E2open, LLC, a leading provider of cloud-based supply chain software and solutions, since 2019. Previously, he served as the Chief Financial Officer at Global Resale, LLC, a global leader in aftermarket services and reverse logistics for IT hardware, from 2018 to 2019. From 2015 to 2018, Mr. Stouder served as the Corporate Controller at NBG Home, the largest provider of affordable home décor products, with manufacturing and distribution facilities across the United States and internationally. From 2000 to 2015, he served at Dell, Inc. in various accounting and finance positions including SEC Reporting Manager, Global Sales Controller, and Finance Director for Dell Services. Mr. Stouder began his career at Arthur Andersen LLP in the Dallas office, where he worked in the audit practice as staff, senior, and audit manager from 1994 to 2000. Mr. Stouder received his B.B.A. and M.S. Accounting degrees from Texas Tech University and is a certified public accountant. ​ Mr. Stouder brings over 25 years of experience in accounting, finance, audit, corporate governance, mergers, and investor relations. His expertise in these areas make him well qualified as a member of the Board. ​ Francisco J. Coll was appointed to our board of directors in June, 2022 and was elected to our Board of Directors at the 2022 annual meeting of stockholders . Mr. Coll has served as the President of Universal Air Conditioner, Inc., a wholesale distributor of aftermarket auto parts, since 2015. Previously, from 2011 to 2015, he was the U.S. Head of Sales for BTG Pactual, a Brazilian investment bank and asset manager that operates throughout Latin America. Mr. Coll began his career at UBS Investment Bank in the sales & trading and wealth management rotational program in 2007. Mr. Coll received his B.S. degree in East Asian Studies with a minor in Financial Economics from Vanderbilt University. ​ Mr. Coll’s substantial knowledge in capital markets transactions and risk management solutions make him well qualified as a member of the Board. Brian J. Ferguson was elected to our board of directors at the 2023 annual meeting of stockholders . He has practiced law as a Texas attorney since 2005 and was a certified as public accountant in 2006. He currently owns and manages a portfolio of oil and gas interests concentrated in West Texas and real estate holdings in the Rio Grande Valley. In addition, Mr. Ferguson has consulted on audit, compliance, and regulatory issues for publicly traded companies and registered investment advisors since 2005. He is a 2002 graduate of the University of Texas 67 Table of Contents Undergraduate School of Business and Graduate School of Business. He graduated from the University of Texas School of Law in 2005. He was commissioned as an officer in the United States Air Force, where he continues to serve in the Reserve component. Mr. Ferguson’s experience on audit, compliance, and regulatory issues make him well qualified as a member of the Board. ​ Board Composition Our business and affairs are managed under the direction of our board of directors. The number of directors is determined by our board of directors, subject to the terms of our certificate of incorporation and bylaws. Our board of directors currently consists of five members. The Board of Directors held its inaugural meeting on February 7, 2019. Director Independence Our common stock trades on The NASDAQ Global Select Market. Under Nasdaq rules, independent directors must comprise a majority of a listed company’s board of directors. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and governance committees must be independent. Under Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee: (i) accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries; or (ii) be an affiliated person of the listed company or any of its subsidiaries. Our board of directors undertook a review of its composition, the composition of its committees and the independence of each director. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our board of directors has determined that Jeffrey K. Stouder, Francisco J. Coll and Brian J. Ferguson, representing a majority of our directors, do not have any relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under Nasdaq rules. In making these determinations, our board of directors considered the relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director. Board Committees Commencing with the closing of our IPO on December 14, 2018, our board of directors established three standing committees: an audit committee, a compensation committee and a nominating and corporate governance committee. Under Nasdaq rules, the membership of each committee consists entirely of independent directors. The following is a brief description of our committees. Audit committee. In accordance with our audit committee charter, our audit committee oversees our corporate accounting and financial reporting processes and our internal controls over financial reporting; evaluates the independent public accounting firm’s qualifications, independence and performance; engages and provides for the compensation of the independent public accounting firm; approves the retention of the independent public accounting firm to perform any proposed permissible non-audit services; reviews our financial statements; reviews our critical accounting policies, estimates and internal controls over financial reporting; and discusses with management and the independent registered public accounting firm the results of the annual audit and the reviews of our quarterly financial statements. We believe 68 Table of Contents that our audit committee members meet the requirements for financial literacy under the current requirements of the Sarbanes-Oxley Act, Nasdaq and SEC rules and regulations. In addition, the board of directors has determined that Jeffrey K. Stouder is qualified as an audit committee financial expert within the meaning of SEC regulations. We have made this determination based on information received by our board of directors. The audit committee is composed of Messrs. Stouder (Chairman), Coll and Ferguson. Compensation committee. In accordance with our compensation committee charter, our compensation committee reviews and recommends policies relating to compensation and benefits of our officers and employees, including reviewing and approving corporate goals and objectives relevant to compensation of the Chief Executive Officer and other senior officers, evaluating the performance of these officers in light of those goals and objectives and setting compensation of these officers based on such evaluations. The compensation committee also administers the issuance of stock options and other awards under our equity-based incentive plans. We believe that the composition of our compensation committee meets the requirements for independence under, and the functioning of our compensation committee complies with, any applicable requirements of the Sarbanes-Oxley Act, Nasdaq and SEC rules and regulations. We intend to comply with future requirements to the extent they become applicable to us. The compensation committee is composed of Messrs. Ferguson (Chairman), Coll and Stouder. Nominating and governance committee. In accordance with our nominating and governance committee charter, our nominating and governance committee recommends to the board of directors nominees for election as directors, and meets as necessary to review director candidates and nominees for election as directors; recommends members for each committee of the board; oversees corporate governance standards and compliance with applicable listing and regulatory requirements; develops and recommends to the board governance principles applicable to the company; and oversees the evaluation of the board and its committees. We believe that the composition of our nominating and governance committee meets the requirements for independence under, and the functioning of our compensation committee complies with, any applicable requirements of the Sarbanes-Oxley Act, Nasdaq and SEC rules and regulations. We intend to comply with future requirements to the extent they become applicable to us. The nominating and governance committee is composed of Messrs. Coll (Chairman) and Ferguson. Board Composition In August 2021, the SEC approved a Nasdaq Stock Market proposal to adopt new listing rules relating to board diversity and disclosure. As approved by the SEC, the new Nasdaq listing rules require all Nasdaq listed companies to disclose consistent, transparent diversity statistics regarding their boards of directors. Because our Board consists of only five (5) directors, the Company is required to have at least one diverse director. The Board Diversity Matrix below presents the board’s diversity statistics in the format prescribed by the Nasdaq rules. ​ ​ ​ ​ ​ Board Diversity Matrix (as of December 31, 2023) ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Directors ​ 5 ​ ​ ​ ​ ​ Part I: Gender Identity ​ Male Directors ​ ​ 5 ​ Part II: Demographic Background ​ ​ Hispanic ​ ​ 1 ​ White ​ ​ 4 ​ ​ Code of Business Conduct and Ethics We adopted a code of business conduct and ethics that applies to all of our officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions, which is posted on our website. Our code of business conduct and ethics is a “code of ethics,” as defined in Item 406(b) of Regulation S-K. The information contained on, or accessible from, our website is not part of this Form 10-K by reference or otherwise. We will make any legally required disclosures regarding amendments to, or waivers of, provisions of our code of business conduct and ethics on our website. 69 Table of Contents Compensation Committee Interlocks and Insider Participation None of the members of our compensation committee is an executive officer or employee of our company. None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors or compensation committee. Limitations on Director and Officer Liability and Indemnification Our certificate of incorporation limits the liability of our directors to the maximum extent permitted by Texas law. Texas law provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except liability for: ● any breach of their duty of loyalty to the corporation or its stockholders; ● acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; ● unlawful payments of dividends or unlawful stock repurchases or redemptions; or ● any transaction from which the director derived an improper personal benefit. Our certificate of incorporation and our bylaws provide that we are required to indemnify our directors and officers, in each case to the fullest extent permitted by Texas law. Any repeal of, or modification to, our certificate of incorporation and our bylaws may not adversely affect any right or protection of a director or officer for or with respect to any acts or omissions of such director or officer occurring prior to such amendment or repeal. Our bylaws also provide that we will advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in connection with their services to us, regardless of whether our bylaws permit such indemnification. We have entered into separate indemnification agreements with our directors and executive officers, in addition to the indemnification provided for in our bylaws. These agreements, among other things, provide that we will indemnify our directors and executive officers for certain expenses (including attorneys’ fees), judgments, fines, penalties and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of such person’s services as one of our directors or executive officers, or any other company or enterprise to which the person provides services at our request. We believe that these provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers. The limitation of liability and indemnification provisions that are contained in our certificate of incorporation and our bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. There is no pending litigation or proceeding involving one of our directors or executive officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification. 70 Table of Contents ITEM 11. EXECUTIVE COMPENSATION. Compensation Discussion and Analysis The compensation committee, which includes our independent directors, oversees an executive compensation program that is intended to align the interests of our executive officers with those of our shareholders, link compensation paid with performance achieved, and attract, retain and motivate our key executives. Our named executive officers (“NEOs”) are shown in the Summary Compensation Table below and include (i) all persons serving as our principal executive officers during the years ended December 31, 2023 and 2022 and (ii) our three other most highly compensated executive officers who received compensation during the years ended December 31, 2023 and 2022 of at least $100,000 and who were executive officers on December 31, 2023 and 2022. Our annual compensation of our executive officers consists of a base salary and a discretionary bonus determined by the compensation committee. The purpose of the base salary is to provide a fixed amount of cash compensation that is not variable and is generally competitive with market practices. The purpose of the bonus is to provide a variable cash incentive based on performance. In addition, our chief executive officer and chief financial officer each received stock option grants upon hire (as disclosed in the Company’s Form 8-K filings). The annual compensation of our two co-founders, Mr. Hodgson and Mr. Shipley, is nominal as their significant equity positions in the Company drives their total compensation. The Company does not have a formal compensation plan. Employment Agreements The Company maintains employment agreements with Messrs. Hodgson, Shipley, Bates and Fiedelman. Curtis Hodgson’s Employment Agreeement. On January 5, 2022, we entered into an amended and restated employment agreement with Curtis D. Hodgson to serve as our Executive Chairman for a term beginning January 1, 2022 and ending June 16, 2024. Under the employment agreements, Mr. Hodgson’s annual base salary is $200,000, and he is eligible to receive an annual incentive bonus as determined by the board of directors. The employment agreement provides for customary provisions for the termination of the Mr. Hodgson’s employment. Mr. Hodgson is entitled to receive his base salary for the remaining portion of the employment period if he is terminated without cause. Additionally, in the event Mr. Hodgson’s employment with us is terminated within one year after a change of control (as defined in the employment agreement) for certain reasons, we have agreed to pay Mr. Hodgson an amount equal to two years’ compensation at his then current rate of pay. The employment agreements also contains customary confidentiality, intellectual property, non-solcitation and non-competition covenants. Kenneth E. Shipley’s Employment Agreement. On November 27, 2018, we entered into an employment agreement with Kenneth E. Shipley to serve as our Co-Chief Executive Officer. From February 2019 to June 2022, Mr. Shipley served as our President and sole Chief Executive Officer, and in June 2022, Mr. Shipley became our Executive Vice President. The term of the employment agreement commenced January 1, 2018, ended December 31, 2021 and automatically is extended for one year periods beginning with the initial termination date. Under the employment agreement, Mr. Shipley’s annual base salary is $50,000, and he is entitled to receive such health, death, disability, and other insurance benefits, and to participate in such retirement and other plans, as are made available to other executive officers of the Company. The employment agreement provides for customary provisions for the termination of Mr. Shipley’s employment. Mr. Shipley is entitled to receive his base salary for the remaining portion of the employment period if he is terminated without cause. Additionally, in the event Mr. Shipley’s employment with us is terminated within one year after a change of control (as defined in the employment agreement) for certain reasons, we have agreed to pay Mr. Shipley an amount equal to two years’ compensation at his then current rate of pay. The employment agreements also contains customary confidentiality, intellectual property, non-solcitation and non-competition covenants. Duncan Bates’ Employment Agreement . On June 7, 2022, we entered into an employment agreement with Duncan Bates to serve as our President and Chief Executive Officer for an initial term beginning June 7, 2022 and ending June 7, 2027. The employment agreement provides for Mr. Bates to receive a base salary of $300,000 per year 71 Table of Contents and a restricted stock award of 14,700 shares of Company common stock as a signing bonus, which shall vest one-half each of the first and second anniversary of the effective date. Mr. Bates is eligible for an annual incentive bonus that will be determined by the Board. The employment agreement grants Mr. Bates (i) qualified stock options valued at $1,000,000 that vest at a rate of 10% per year, (ii) an option to purchase 300,000 shares of Company common stock at an exercise price of $36 per share, which shall vest one-tenth on each anniversary of the effective date and have a term of ten years and (iii) an option to purchase 600,000 shares of Company common stock at an exercise price of $48 per share, which shall vest one-tenth on each anniversary of the effective date and have a term of ten years; each of these grants shall be subject to the terms of the Company’s 2018 Incentive Compensation Plan. Mr. Bates is also entitled to receive such health, death, disability, and other insurance benefits, and to participate in such retirement and other plans, as are made available to other executive officers of the Company. The employment agreement provides for customary provisions for the termination of the Mr. Bates’ employment. Mr. Bates is entitled to receive an amount equal to one years’ base salary and bonus if he is terminated without cause. Additionally, in the event Mr. Bates’ employment with us is terminated within two years after a change of control (as defined in the employment agreement) for certain reasons, we have agreed to pay Mr. Bates an amount equal to one years’ compensation at his then current rate of pay. The employment agreements also contains customary confidentiality, intellectual property, non-solcitation and non-competition covenants. Jeffrey M. Fiedelman’s Employment Agreement. On September 10, 2023, we entered into an employment agreement with Jeffrey M. Fiedelman to serve as our Chief Financial Officer for an initial term beginning September 10, 2023 and ending September 10, 2028. The employment agreement provides for Mr. Fiedelman to receive a base salary of $275,000 per year. Mr. Fiedelman is eligible for an annual incentive bonus that will be determined by the Board. The employment agreement grants Mr. Fiedelman qualified stock options valued at $500,000 that vest at a rate of 20% per year and shall be subject to the terms of the Company’s 2018 Incentive Compensation Plan. Mr. Fiedelman also is entitled to receive such health, death, disability, and other insurance benefits, and to participate in such retirement and other plans, as are made available to other executive officers of the Company. The employment agreement provides for customary provisions for the termination of the Mr. Fiedelman’s employment. Mr. Fiedelman is entitled to receive an amount equal to one years’ base salary and bonus if he is terminated within two years after a change of control (as defined in the employment agreement) for certain reasons. The employment agreements also contains customary confidentiality, intellectual property, non-solcitation and non-competition covenants. ​ Our NEOs participate in the same employee benefit plans that are made available to the Company’s employees generally. We do not provide a defined benefit pension plan for our NEOs or other employees. Our currently employed NEOs are eligible to participate in our 401(k) plan on the same terms as are generally provided to our full-time employees. The Company provides matching contributions in respect of a portion of the participant’s elective deferrals under the 401(k) plan. We do not provide any nonqualified deferred compensation plans for our NEOs. The Company adopted an executive compensation clawback policy in December, 2023, that provides for the recoupment from certain executives of incentive compensation in the event of an accounting restatement or the occurrence of other clawback events described in the policy. The policy is designed to deter and prevent detrimental conduct and to protect our investors from financial misconduct. ​ ​ 72 Table of Contents Summary Compensation Table The table below shows the compensation paid to or earned by our NEOs for the years ending December 31, 2023 and December 31, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock Option All Other ​ Name and Position ​ Years ​ Salary ($) ​ Bonus ($) Awards ($) Awards ($) Compensation ($) ​ Total ($) Curtis D. Hodgson 2023 200,000 — — — — 200,000 Executive Chairman 2022 200,000 — 3,741,000 — — 3,941,000 Kenneth E. Shipley 2023 50,000 — — — — 50,000 Executive Vice President (former President and Chief Executive Officer) 2022 50,000 — — — — 50,000 R. Duncan Bates ​ 2023 ​ 300,000 ​ 100,000 — — — ​ 400,000 President and Chief Executive Officer (1) ​ 2022 ​ 167,308 ​ 50,000 ​ 235,347 ​ 4,579,757 ​ — ​ 5,032,412 Jeffrey V. Burt 2023 256,500 — — — — 256,500 Chief Accounting Officer (4) 2022 266,923 — — — — 266,923 Ronald C. Arrington 2023 153,462 — — — — 153,462 Chief Financial Officer (2) 2022 125,385 10,000 — 535,157 — 670,542 Jeffrey M. Fiedelman ​ 2023 ​ 76,154 ​ — — 349,740 — ​ 425,894 Chief Financial Officer (3) ​ 2022 ​ — ​ — ​ — ​ — ​ — ​ — (1) Mr. Bates joined the Company as President and Chief Executive Officer in June 2022 . (2) Mr. Arrington joined the Company as Chief Financial Officer in May 2022 and left the Company in September 2023 . (3) Mr. Fiedelman joined the Company as Chief Financial Officer in September 2023. (4) Mr. Burt left the Company in December 2023. Grants of Plan Based Awards The following table lists grants of plan-based awards to each of our NEOs for the year ending December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ All Other ​ All Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock Awards: ​ Option Awards: ​ Exercise or ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Number of ​ Base Price ​ ​ ​ ​ Estimated Future Payouts Under ​ Estimated Future Payouts Under ​ Securities ​ Securities ​ of Option ​ ​ ​ ​ Non-Equity Incentive Plan Awards ​ Equity Incentive Plan Awards ​ Underlying ​ Underlying ​ Award Name Grant Date Threshold ($) Target ($) Maximum ($) Threshold ($) Target ($) Maximum ($) Award (#) Award (#) ($ per share) Jeffrey M. Fiedelman 12/1/23 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 21,496 ​ 23.26 ​ (1) Mr. Fiedelman received the award upon joining the Company as Chief Financial Officer in September 2023. ​ ​ 73 Table of Contents Outstanding Equity Awards The following table lists outstanding equity awards held by our NEOs as of December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated Future Payouts Under ​ Estimated Future Payouts Under ​ ​ ​ ​ Non-Equity Incentive Plan Awards ​ Equity Incentive Plan Awards ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity incentive ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity incentive ​ plan awards: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ plan awards: ​ market or payout ​ ​ ​ ​ Number of ​ Number of ​ ​ ​ ​ ​ ​ ​ ​ ​ number of ​ value of ​ ​ ​ ​ Securities ​ Securities ​ ​ ​ ​ ​ Number of ​ Market Value of ​ unearned ​ unearned ​ ​ ​ ​ Underlying ​ Underlying ​ ​ ​ ​ ​ Shares or Units ​ Shares or Units ​ shares, units ​ shares, units ​ ​ ​ ​ Unexercised ​ Unexercised ​ Options ​ Option ​ of Stock That ​ of Stock That ​ or other rights ​ or other rights ​ ​ ​ ​ Options ​ Options ​ Exercise ​ Expiration ​ Have Not ​ Have Not ​ that have not ​ that have not Name Grant Date # Exercisable # Unexercisable Price ($) Date Vested (#) Vested (#) (1) vested (#) vested ($) Duncan Bates (2) 6/7/22 ​ 6,246 ​ 56,214 ​ 16.01 ​ 6/7/32 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6/7/22 ​ 30,000 ​ 270,000 ​ 36.00 ​ 6/7/32 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6/7/22 ​ 60,000 ​ 540,000 ​ 48.00 ​ 6/7/32 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6/7/22 ​ ​ ​ ​ ​ ​ ​ ​ ​ 7,350 ​ 185,367 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Jeffrey M. Fiedelman (3) ​ 12/1/23 ​ — ​ 21,496 ​ 23.26 ​ 12/1/28 ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Market value amounts represent the product of the closing price of our common stock on December 29, 2023 of $25.22 per share, multiplied by the number of unvested shares. (2) Mr. Bates received the awards upon joining the Company as Chief Executive Officer in June 2022. (3) Mr. Fiedelman received the award upon joining the Company as Chief Financial Officer in September 2023. ​ Options Exercised and Stock Vested ​ The following table includes certain information with respect to the options exercised and stock vested by the NEOs during the year ended December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Option Awards ​ ​ ​ Stock Awards ​ ​ ​ ​ Number of Shares ​ Value ​ Number of Shares ​ Value ​ ​ Acquired on ​ Realized on ​ Acquired on ​ Realized on Name Exercise (#) Exercise ($) Vesting (#) Vesting ($) Duncan Bates ​ ​ ​ ​ 7,350 ​ 156,923 Jeffrey V. Burt ​ ​ ​ ​ ​ 8,571 ​ 188,648 Ronald C. Arrington ​ 6,246 ​ 33,354 ​ ​ ​ ​ ​ Pension Benefits and Nonqualified Deferred Compensation ​ We do not provide any pension benefits, nonqualified defined contribution or other deferred compensation plans for our NEOs. Potential Payments Upon Termination or Change of Control We are party to employment agreements with NEOs Hodgson, Shipley, Bates and Fiedelman. This section describes the payments and benefits that may be payable upon certain terminations of employment or a change of control and the events that trigger them. Certain equity awards held by these NEOs are subject to accelerated vesting on a 74 Table of Contents change in control. This section describes the payments and benefits that may be payable upon certain terminations of employment or a change of control and the events that trigger them. Our payment obligations under each employment agreement are contingent upon the NEO executing and delivering a reasonable general release of claims in favor of the Company. Mr. Shipley does not have this this requirement. The employment agreements for these NEOs require the NEO to satisfy the following obligations: 1) During his employment and for 12 months following his termination of employment the NEO must comply with the provisions of a covenant not to compete, except for Mr. Fiedelman who must comply for 6 months if he terminates employment voluntarily or for 12 months if he is terminated by the Company for cause, death or disability, or without cause. 2) During his employment and for 24 months following his termination of employment, the NEO must comply with a customary non-solicitation covenant. 3) During his employment and at all times subsequent to the last day of his employment, the NEO must comply with a customary confidentiality covenant. There are four categories of events related to a termination of employment that can trigger payments or other benefits to our NEOs: (i) death and disability; (ii) involuntary termination; (iii) voluntary termination; and (iv) change of control (followed by an involuntary termination). The following chart describes each category. Death or Disability . Upon the termination of any NEO’s employment as a result of death or disability, the Company does not have any continuing obligation after termination to the NEO or the NEO’s estate. Involuntary Termination . The Company may terminate an NEO for cause or without cause. Termination for cause occurs when we decide to terminate a NEO based on our good faith determination that one of certain events have occurred. In this case, the Company does not have any continuing obligation after termination to the NEO. Termination without cause occurs when we decide to terminate the NEO’s employment for any reason other than for cause or disability. For Mr. Hodgson, Mr. Shipley and Mr. Bates, the Company is obligated to provide benefits for 12 months following termination. For Mr. Hodgson and Mr. Shipley, the Company is obligated to pay their base salary for the remainder of their employment period as states in their employment agreements in as if they were still employed by the Company. For Mr. Bates, the Company is obligated to pay his base salary for 12 months following termination plus a prorated bonus amount, both paid as if he was still on the employed by the Company. For Mr. Fiedelman, the Company does not have any continuing obligation. Voluntary Termination . The NEO may terminate his employment voluntarily, in which case the Company does not have any continuing obligation to the NEO. Change of Control . For Mr. Hodgson and Mr. Shipley, if their employment is terminated within 12 months after a change in control (as defined in their employment agreements), the Company is obligated to pay their base salary for 24 months following termination. For Mr. Bates and Mr. Fiedelman, if their employment is terminated within 24 months after a change in control (as defined in their employment agreements), the Company is obligated to pay their base salary for 12 months following termination in a lump sum payment. Mr. Bates and Mr. Fiedelman hold equity awards that are subject to accelerated vesting upon a change of control. 75 Table of Contents The following table and footnotes present potential payments to each NEO as if the NEO’s employment had been terminated on December 31, 2023 involuntarily, without cause , and/or if a change in control had occurred on such date. ​ ​ ​ ​ ​ ​ ​ ​ ​ Involuntary ​ ​ ​ ​ Termination ​ ​ Change of ​ Without ​ ​ Control ​ Cause Name ($) ($) Duncan Bates ​ ​ ​ ​ Salary continuation ​ 300,000 ​ 300,000 Annual bonus ​ — ​ — Equity awards (1) ​ 703,098 ​ — Curtis D. Hodgson ​ ​ ​ ​ Salary continuation (3) ​ 400,000 ​ 100,000 Annual bonus ​ — ​ — Equity awards ​ — ​ — Kenneth E. Shipley ​ ​ ​ ​ Salary continuation (4) ​ 100,000 ​ 45,835 Annual bonus ​ — ​ — Equity awards ​ — ​ — Jeffrey M. Fiedelman ​ ​ ​ ​ Salary continuation ​ 275,000 ​ — Annual bonus ​ — ​ — Equity awards (2) ​ 42,132 ​ — ​ (1) Mr. Bates’ equity awards include unvested restricted stock and stock options that would vest upon a change of control. Restricted stock value is based on the Company’s closing stock price at December 31, 2023. Stock option value is based on the difference between the Company’s closing stock price at December 31, 2023 and the exercise price. (2) Mr. Fiedelman’s equity awards include unvested stock options that would vest upon a change of control. Stock option value is based on the difference between the Company’s closing stock price at December 31, 2023 and the exercise price. (3) Mr. Hodgson’s employment period terminates in June, 2024. (4) Mr. Shipley’s has a one year employment period that automatically renews, The current employment period terminates in November, 2024. ​ ​ CEO Pay Ratio Disclosure In accordance with Section 953(b) of the Dodd-Frank Act, and Item 402(u) of Regulation S-K,we are providing the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee. In determining the median compensated employee, SEC rules allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions reflecting their unique employee populations. Therefore, our reported pay ratio may not be comparable to that reported by other companies due to differences in 76 Table of Contents industry, business models and scale, as well as the different estimates, assumptions, and methodologies applied by other companies in calculating their respective pay ratios. Excluding our CEO, we identified our median employee by preparing a list of all 572 individuals employed by the Company as of December 31, 2023, and examined the total compensation paid to each such individual as reflected in the Company’s payroll records. We included all employees (other than our CEO), whether employed on a full-time, part-time, seasonal or temporary basis. We annualized the compensation for any permanent employees who were not employed by us for all of 2023. The 2023 annual total compensation of our CEO was $400,000. The 2023 annual total compensation of our median employee was $32,240, and the ratio of these amounts is 12:1. Pay versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain measures of financial performance of the Company. The following table provides information regarding Compensation Actually Paid (“CAP”) to our Principle Executive Officer (“PEO”) and non-PEO NEOs during the last two fiscal years, as well as total shareholder return and net income. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Value of Initial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ Fixed $100 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Summary ​ Average ​ Investment ​ ​ ​ ​ Summary ​ Compensation ​ Summary ​ Compensation ​ Compensation ​ Compensation ​ Based On: ​ ​ ​ ​ Compensation ​ Actually ​ Compensation ​ Actually ​ Table Total for ​ Actually Paid to ​ Cumulative ​ ​ ​ ​ Total for ​ Paid to ​ Total for ​ Paid to ​ Non-PEO ​ Non-PEO ​ Total ​ ​ ​ ​ PEO ​ PEO ​ PEO ​ PEO ​ NEOs ​ NEOs ​ Shareholder ​ Net Income Year ($) (1) (3) ($) (1) (3) ($) (1) (3) ($) (1) (3) ($) (2) (4) ($) (2) (4) Return ($) (in thousands) ($) 2023 ​ 400,000 ​ 587,176 ​ — ​ — ​ 219,171 ​ 26,046 ​ 95.28 ​ 54,460 2022 ​ 5,032,412 ​ 8,751,772 ​ 50,000 ​ 50,000 ​ 1,626,155 ​ 1,711,072 ​ 71.63 ​ 67,773 ​ 1) During 2023, our PEO was Duncan Bates 2) During 2023, our Non-PEO NEOs were Curtis D. Hodgson, Kenneth E. Shipley, Jeffrey V. Burt, Ronald C. Arrington and Jeffrey M. Fiedelman 3) During 2022, our PEOs were Kenneth E. Shipley and Duncan Bates 4) During 2022, our Non-PEO NEOs were Curtis D. Hodgson, Jeffrey V. Burt, and Ronald C. Arrington ​ Adjustments to the Summary Compensation Table Total to arrive at CAP for our PEO are shown below. No adjustments were necessary for defined benefit and pension plans or dividends. The assumptions used for determining the fair values shown in this table are consistent with those used to determine the fair values disclosed as of the grant date of such awards. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plue: Fair ​ ​ ​ ​ ​ Plus: Increase / ​ ​ ​ ​ ​ ​ ​ ​ Less: Grant ​ Value of ​ Plus: Increase / ​ Plus: Increase / ​ (Decrease) in ​ Less: Fair Value ​ ​ ​ ​ Summary ​ Date Fair Value ​ Unvested Equity ​ (Decrease) in ​ (Decrease) in ​ Fair Value of ​ of Equity Awards ​ ​ ​ ​ Compensation ​ of Equity Awards ​ at Fiscal Year End ​ Fair Value of ​ Fair Value of ​ Equity Vested ​ at Prior Year-End ​ Compensation ​ ​ Total for ​ Granted in ​ (Current Year ​ Equity Vested ​ Unvested Equity ​ During Fiscal Year ​ Forfeited in ​ Actually Paid ​ ​ PEO ​ Fiscal Year ​ Awards) ​ During Fiscal Year ​ at Fiscal Year End ​ (Prior Year Awards) ​ Current Fiscal Year ​ to PEO Year ($) ($) ($) ($) ($) ($) ($) ($) 2023 (1) ​ 400,000 ​ — ​ — ​ — ​ 404,432 ​ (217,256) ​ — ​ 587,176 2022 (1) ​ 5,032,412 ​ (4,815,104) ​ 8,534,464 ​ — ​ — ​ — ​ — ​ 8,751,772 2022 (2) ​ 50,000 ​ — ​ — ​ — ​ — ​ — ​ — ​ 50,000 ​ 1) Data shown for PEO Duncan Bates 2) Data shown for PEO Kenneth Shipley ​ 77 Table of Contents Adjustments to the Summary Compensation Table Total to arrive at CAP for non-PEO NEOs (shown as an average) are presented below. No adjustments were necessary for defined benefit and pension plans or dividends. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plue: Fair ​ ​ ​ ​ ​ Plus: Increase / ​ ​ ​ ​ ​ ​ ​ ​ Less: Grant ​ Value of ​ Plus: Increase / ​ Plus: Increase / ​ (Decrease) in ​ Less: Fair Value ​ ​ ​ ​ Summary ​ Date Fair Value ​ Unvested Equity ​ (Decrease) in ​ (Decrease) in ​ Fair Value of ​ of Equity Awards ​ ​ ​ ​ Compensation ​ of Equity Awards ​ at Fiscal Year End ​ Fair Value of ​ Fair Value of ​ Equity Vested ​ at Prior Year-End ​ Compensation ​ ​ Total for ​ Granted in ​ (Current Year ​ Equity Vested ​ Unvested Equity ​ During Fiscal Year ​ Forfeited in ​ Actually Paid to ​ ​ Non-PEO NEOs ​ Fiscal Year ​ Awards) ​ During Fiscal Year ​ at Fiscal Year End ​ (Prior Year Awards) ​ Current Fiscal Year ​ Non-PEO NEOs Year ($) ($) ($) ($) ($) ($) ($) ($) 2023 ​ 219,171 ​ (69,948) ​ 77,214 ​ — ​ — ​ 4,704 ​ (205,095) ​ 26,046 2022 ​ 1,626,155 ​ (1,425,386) ​ 259,417 ​ 1,247,000 ​ 2,914 ​ 972 ​ — ​ 1,711,072 ​ 1) During 2023, our Non-PEO NEOs were Curtis D. Hodgson, Kenneth E. Shipley, Jeffrey V. Burt, Ronald C. Arrington and Jeffrey M. Fiedelman 2) During 2022, our Non-PEO NEOs were Curtis D. Hodgson, Jeffrey V. Burt, and Ronald C. Arrington ​ ​ The graph below illustrates the relationship between CAP and cumulative total shareholder return. The cumulative total shareholder return assumes $100 was invested for the period starting December 31, 2021 through the end of the listed fiscal year. The graph shows CAP for both PEOs, Duncan Bates and Kenneth Shipley. ​ ​ ​ The graph below illustrates the relationship between CAP and net income. The graph shows CAP for both PEOs, Duncan Bates and Kenneth Shipley. ​ ​ ​ ​ ​ ​ 78 Table of Contents ​ We structure our executive compensation program to award compensation based on individual and Company performance, to be competitive in the market and to retain our executives. ​ ​ 2018 Incentive Compensation Plan Our board of directors and the holders of a majority of our outstanding shares of common stock adopted our 2018 Incentive Compensation Plan (the “Plan”) prior to the closing of our IPO. The purpose of our Plan is to assist us in attracting, motivating, retaining and rewarding high-quality executives and other employees, officers, directors, consultants and other persons who provide services to us. We have set aside an aggregate of 2,500,000 shares of common stock (including stock options) as additional compensation that we expect to award to our officers, directors and key personnel under the terms of our Plan, and this amount will not exceed 10% of the then outstanding shares of our common stock. Administration. Our Plan is to be administered by our Compensation Committee, provided, however, that except as otherwise expressly provided in the Plan, the board of directors may exercise any power or authority granted to the committee under our Plan. Subject to the terms of our Plan, the committee is authorized to select eligible persons to receive awards, determine the type, number and other terms and conditions of, and all other matters relating to, awards, prescribe award agreements (which need not be identical for each participant), and the rules and regulations for the administration of the Plan, construe and interpret the Plan and award agreements, and correct defects, supply omissions or reconcile inconsistencies in them, and make all other decisions and determinations as the committee may deem necessary or advisable for the administration of our Plan. 79 Table of Contents Eligibility. The persons eligible to receive awards under our Plan are the officers, directors, employees, consultants and other persons who provide services to us. An employee on leave of absence may be considered as still in the employ of our company for purposes of eligibility for participation in our Plan. Types of Awards. Our Plan provides for the issuance of stock options, stock appreciation rights, or SARs, restricted stock, deferred stock, dividend equivalents, bonus stock and awards in lieu of cash compensation, other stock-based awards and performance awards. Performance awards may be based on the achievement of specified business or personal criteria or goals, as determined by the committee. Shares Available for Awards. The total number of shares of common stock that may be subject to the granting of awards under our Plan at any time during the term of the Plan will be equal to 2,500,000 shares. This limit will be increased by the number of shares with respect to which awards previously granted under our Plan that are forfeited, expire or otherwise terminate without issuance of shares, or that are settled for cash or otherwise do not result in the issuance of shares, and the number of shares that are tendered (either actually or by attestation) or withheld upon exercise of an award to pay the exercise price or any tax withholding requirements. Stock Options and Stock Appreciation Rights. The committee is authorized to grant stock options, including both incentive stock options, or ISOs, which can result in potentially favorable tax treatment to the participant, and non-qualified stock options, and stock appreciation rights entitling the participant to receive the amount by which the fair market value of a share of common stock on the date of exercise exceeds the grant price of the stock appreciation right. The exercise price per share subject to an option and the grant price of a stock appreciation right are determined by the committee, but in the case of an ISO must not be less than the fair market value of a share of common stock on the date of grant. For purposes of our Plan, the term “fair market value” means the fair market value of common stock, awards or other property as determined by the committee or under procedures established by the committee. The maximum term of each option or stock appreciation right, the times at which each option or stock appreciation right will be exercisable, and provisions requiring forfeiture of unexercised options or stock appreciation rights at or following termination of employment generally are fixed by the committee, except that no option or stock appreciation right may have a term exceeding ten years. Restricted and Deferred Stock. The committee is authorized to grant restricted stock and deferred stock. Restricted stock is a grant of shares of common stock which may not be sold or disposed of, and which may be forfeited in the event of certain terminations of employment, prior to the end of a restricted period specified by the committee. A participant granted restricted stock generally has all of the rights of a stockholder of our company, unless otherwise determined by the committee. An award of deferred stock confers upon a participant the right to receive shares of common stock at the end of a specified deferral period, subject to possible forfeiture of the award in the event of certain terminations of employment prior to the end of a specified restricted period. Prior to settlement, an award of deferred stock carries no voting or dividend rights or other rights associated with share ownership, although dividend equivalents may be granted, as discussed below. Other Terms of Awards. Awards may be settled in the form of cash, shares of common stock, other awards or other property, in the discretion of the committee. The committee may require or permit participants to defer the settlement of all or part of an award in accordance with such terms and conditions as the committee may establish, including payment or crediting of interest or dividend equivalents on deferred amounts, and the crediting of earnings, gains and losses based on deemed investment of deferred amounts in specified investment vehicles. The committee is authorized to place cash, shares of common stock or other property in trusts or make other arrangements to provide for payment of our obligations under our Plan. Awards under our Plan are generally granted without a requirement that the participant pay consideration in the form of cash or property for the grant (as distinguished from the exercise), except to the extent required by law. The committee may, however, grant awards in exchange for other awards under our Plan, awards under other company plans or other rights to payment from us, and may grant awards in addition to and in tandem with such other awards, rights or other awards. 80 Table of Contents Acceleration of Vesting; Change in Control. The committee may, in its discretion, accelerate the exercisability, the lapsing of restrictions or the expiration of deferral or vesting periods of any award, and such accelerated exercisability, lapse, expiration and if so provided in the award agreement or otherwise determined by the committee, vesting will occur automatically in the case of a “change in control” of our company, as defined in our Plan (including the cash settlement of stock appreciation rights which may be exercisable in the event of a change in control). In addition, the committee may provide in an award agreement that the performance goals relating to any performance award will be deemed to have been met upon the occurrence of any “change in control.” Amendment and Termination. The board of directors may amend, alter, suspend, discontinue or terminate our Plan or the committee’s authority to grant awards without further stockholder approval, except stockholder approval must be obtained for any amendment or alteration if such approval is required by law or regulation or under the rules of any stock exchange or quotation system on which shares of common stock are then listed or quoted. Thus, stockholder approval may not necessarily be required for every amendment to our Plan which might increase the cost of our Plan or alter the eligibility of persons to receive awards. Stockholder approval will not be deemed to be required under laws or regulations, such as those relating to ISOs, that condition favorable treatment of participants on such approval, although the board of directors may, in its discretion, seek stockholder approval in any circumstance in which it deems such approval advisable. Our Plan will terminate at the earliest of (a) such time as no shares of common stock remain available for issuance under our Plan, (b) termination of our Plan by the board of directors, or (c) the tenth anniversary of theeffecttive date of the Plan. Awards outstanding upon expiration of our Plan will remain in effect until they have been exercised or terminated, or have expired. It is intended that any amounts payable under the Plan will either be exempt from Section 409A of the Code or will comply with Section 409A (including Treasury regulations and other published guidance related thereto) so as not to subject an employee to payment of any other additional tax, penalty or interest imposed under Section 409A of the Code. Director Compensation Directors who are also officers or employees of the Company do not receive any special or additional remuneration for service on the board. We currently compensate each non-employee director through annual restricted stock grants and by paying annual fees for their participation on the board and on respective board committees. Our directors receive compensation of $10,000 per quarter, as well as an annual award of $10,000 in restricted stock grants that vest as of the next annual meeting or in one year. We also compensate our directors for serving as a committee member and a committee chair. Our board of directors reviews director compensation annually or when circumstances exist requiring reexamination and adjusts it according to then current market conditions and good business practices. The following table provides information regarding compensation paid to each non-employee director during the year ended December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ Fees Earned ​ ​ ​ ​ or Paid in ​ Stock ​ ​ Name Cash ($) Awards ($) (1) Total ($) Francisco J. Coll ​ 45,500 ​ 10,000 ​ 55,500 Jeffrey K. Stouder ​ 57,000 ​ 10,000 ​ 67,000 Brian J. Ferguson (2) ​ 10,000 ​ 10,000 ​ 20,000 Joseph P. Lane (2) 39,750 — 39,750 ​ (1) Amounts in this column reflect the fair value of restricted stock based on the closing price of the Company’s stock on the grant date (2) Mr. Lane’s term ended December 1, 2023 and he was replaced by Mr. Ferguson ​ ​ ​ 81 Table of Contents ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. The following table and accompanying footnotes set forth certain information with respect to the beneficial ownership of our common stock as of March 10, 2024, referred to in the table below as the “Beneficial Ownership Date,” by: ● each person who is known to be the beneficial owner of 5% or more of the outstanding shares of our common stock; ● each of our current directors and director nominees and each of our named executive officers individually; and ● all our current directors, director nominees and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to stock options or warrants held by that person that are currently exercisable or exercisable within 60 days of the Beneficial Ownership Date and shares of restricted stock subject to vesting until the occurrence of certain events are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. Percentage of beneficial ownership is based on 24,401,429 shares of common stock outstanding as of the Beneficial Ownership Date. To our knowledge, except as set forth in the footnotes to this table and subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to the shares set forth opposite such person’s name. Except as otherwise indicated, the address of each of the persons in this table is c/o Legacy Housing Corporation, 1600 Airport Freeway, #100, Bedford, Texas 76022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares of Common ​ ​ ​ Stock Beneficially ​ ​ ​ Owned ​ Name and Address of Beneficial Owner Number of Shares Percentage Directors and Executive Officers Curtis D. Hodgson (1) 4,536,429 18.6 % Kenneth E. Shipley (2) 2,992,610 12.3 % Duncan Bates (3) ​ 13,425 ​ * ​ Jeffrey M. Fiedelman ​ — ​ * ​ Francisco J. Coll 1,199 * Jeffrey K. Stouder ​ 1,653 ​ * ​ Brian J. Ferguson ​ — ​ * ​ 5% Stockholders William Shipley (2) 2,865,953 11.7 % Douglas Shipley (2) 2,885,978 11.8 % All directors, director nominees and executive officers as a group (7 persons) 7,545,316 30.9 % * Less than 1% of outstanding shares of common stock (1) Mr. Hodgson’s beneficial ownership includes 1,000,000 shares of common stock owned by Hodgson Ventures, a Texas limited partnership, of which Mr. Hodgson is the general partner, 2,669,056 shares of common stock owned by the Hodgson 2015 Grandchild’s Trust, of which Mr. Hodgson shares voting and investment power with respect to such shares and 100,000 shares owned by Cusach, Inc., an entity controlled by Mr. Hodgson. 82 Table of Contents (2) Kenneth E. Shipley’s beneficial ownership includes 100,000 shares of common stock owned by Shipley Bros., Ltd., an entity controlled by Kenneth E. Shipley. Each of Kenneth E. Shipley’s brothers, William Shipley and Douglas Shipley, owns 2,865,953 and 2,885,978 shares of our common stock, respectively, as to which shares Kenneth E. Shipley disclaims any beneficial interest. (3) Mr. Bates’ beneficial ownership consists of 1,075 shares of common stock granted to him for service as a board member during 2021 and 2022, 5,000 shares of common stock purchased on the open market, and 7,350 shares of common stock granted to him during the two-year period commencing on June 7, 2022 under our 2018 Incentive Compenation Plan, which are currently vested . Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires that our directors and executive officers, and persons who own more than ten percent (10%) of our common stock, file with the SEC initial statements of beneficial ownership of common stock and statements of changes in beneficial ownership of common stock. To the best of our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us during or with respect to the year ended December 31, 2023 and through the date of this filing, the following persons failed to file, on a timely basis, the identified reports required by Section 16(a) of the Exchange Act during fiscal year ended December 31, 2023 and through the date of this filing: ​ ​ ​ ​ ​ ​ ​ Name and Principal Position Number Of Late Reports Transactions Not Reported In A Timely Manner Number Of Reports Not Filed Jeffrey V. Burt, Chief Accounting Officer ​ 2 ​ 2 ​ — ​ ​ ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. Transactions and Relationships with Directors, Officers and 5% Stockholders Bell Mobile Homes, a retailer owned by one of the Company’s significant shareholders, purchases manufactured homes from the Company. Accounts receivable balances due from Bell Mobile Homes were $403 and $0 as of December 31, 2023 and 2022, respectively. Accounts payable balances due to Bell Mobile Homes were $18 and $132 as of December 31, 2023 and 2022, respectively. Home sales to Bell Mobile Homes were $4,543 and $4,499 for the years ended December 31, 2023 and 2022, respectively. Shipley Bros., Ltd. And Crazy Red’s Mobile Homes (together, “Shipley Bros.”), retailers owned by one of the Company’s significant shareholders, purchase manufactured homes from the Company. Accounts receivable balances due from Shipley Bros. were $143 and $0 as of December 31, 2023 and 2022, respectively. Accounts payable balances due to Shipley Bros. were $67 and $0 as of December 31, 2023 and 2022, respectively. Home sales to Shipley Bros. were $1,199 and $3,181 as of December 31, 2023 and 2022, respectively. At December 31, 2023 and December 31, 2022, the Company had an accounts receivable balance of $0 and $68, respectively, from a principal shareholder. Indemnification Agreements We have entered into an indemnification agreement with each of our directors and executive officers. The indemnification agreements and our certificate of incorporation and bylaws require us to indemnify our directors and executive officers to the fullest extent permitted by Texas law. 83 Table of Contents Corporate Conversion Effective January 1, 2018, we converted to a Delaware corporation and changed our name to Legacy Housing Corporation. Prior to January 1, 2018, we were a Texas limited partnership controlled by our Executive Chairman and President and Chief Executive Officer. Upon the corporate conversion, all of our outstanding partnership interests were exchanged on a proportional basis for shares of common stock of Legacy Housing Corporation. The conversion qualified as a tax free transaction under Section 351 of the Internal Revenue Code. Effective December 31, 2019, the Company converted from a Delaware corporation to a Texas corporation. Policies and Procedures for Transactions with Related Persons Our board of directors adopted a written related person transaction policy setting forth the policies and procedures for the review and approval or ratification of related person transactions. Related persons include any executive officer, director or a holder of more than 5% of our common stock, including any of their immediate family members and any entity owned or controlled by such persons. Related person transactions refer to any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which (i) we were or are to be a participant, (ii) the amount involved exceeds $120,000, and (iii) a related person had or will have a direct or indirect material interest. Related person transactions include, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness, and employment by us of a related person, in each case subject to certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act. The policy provides that in any related person transaction, our audit committee and board of directors will consider all of the available material facts and circumstances of the transaction, including the direct and indirect interests of the related persons, in the event the related person is a director (or immediate family member of a director or an entity with which a director is affiliated), the impact that the transaction will have on a director’s independence, the risks, costs and benefits of the transaction to us, and whether any alternative transactions or sources for comparable services or products are available. After considering all such facts and circumstances, our audit committee and board of directors will determine whether approval or ratification of the related person transaction is in our best interests. For example, if our audit committee determines that the proposed terms of a related person transaction are reasonable and at least as favorable as could have been obtained from unrelated third parties, it will recommend to our board of directors that such transaction be approved or ratified. In addition, if a related person transaction will compromise the independence of one of our directors, our audit committee may recommend that our board of directors reject the transaction if it could affect our ability to comply with securities laws and regulations or Nasdaq listing requirements. Each transaction described above was entered into prior to the adoption of our audit committee charter and the foregoing policy. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. Frazier & Deeter, LLC served as our independent registered public accountants for the year ended December 31, 2023. Daszkal Bolton, LLP served as our independent registered public accountants for the year ended December 31, 2022 and for the three months ended March 31, 2023. CohnReznick LLP served as our independent registered public accountants for the three months ended June 30, 2023 and September 30, 2023. Audit Fees ​ For our fiscal year ended December 31, 2023, we were billed approximately $505,000 for professional services rendered by Frazier & Deeter, LLC. For our fiscal year ended December 31, 2022, we were billed approximately $254,000 for professional services rendered by Daszkal Bolton, LLP. For services rendered in 2023 rendered by Daszkal Bolton, LLP, we were billed $30,000. For services rendered in 2023 rendered by CohnReznick LLP, we were billed $80,610. Audit fees consist of the aggregate fees billed for (i) the audit of our annual financial statements included herein and (ii) services that are normally provided in connection with statutory and regulatory filings or engagements such as comfort letters, consents and other services. 84 Table of Contents Audit Related Fees There were no fees for audit related services rendered by our independent auditors for the years ended December 31, 2023 and 2022. Tax Fees There were no fees for professional services rendered by our independent auditors for tax compliance, tax advice, and tax planning for the years ended December 31, 2023 and 2022. All Other Fees There were no fees that fell into the classification of “Other Fees” for our fiscal years ended December 31, 2023 and 2022. ​ Pre-Approval Policies All of the above services and fees were reviewed and approved by the audit committee prior to the commencement of such services. No services were performed before or without approval. ​ 85 Table of Contents PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES. Exhibit Number ​ Description ​ ​ ​ 3.1 ​ Amended and Restated Certificate of Incorporation of Legacy Housing Corporation. 3.2 ​ Amended and Restated Bylaws of Legacy Housing Corporation. 4.1 ​ Specimen Common Stock Certificate. 4.2 * Description of Securities of the Registrant 10.1 † 2018 Incentive Compensation Plan . 10.2 ​ Promissory Note, dated December 14, 2011, from Legacy Housing, Ltd. to Capital One, N.A. 10.3 ​ Amended and Restated Promissory Note, dated December 12, 2013, from Legacy Housing, Ltd. to Capital One, N.A . 10.4 ​ Second Amended and Restated Promissory Note, dated March 31, 2014, from Legacy Housing, Ltd. to Capital One, N.A. 10.5 ​ Third Amended and Restated Promissory Note, dated May 12, 2017, from Legacy Housing, Ltd. to Capital One, N.A. 10.6 ​ Fourth Amendment to Loan and Security Agreement, dated July 2015, between Legacy Housing, Ltd. and Capital One, N.A. 10.7 ​ Amended and Restated Promissory Note, dated April 4, 2016, from Legacy Housing, Ltd. to Veritex Community Bank . 10.8 ​ Promissory Note, dated April 7, 2011, from Legacy Housing, Ltd. to Woodhaven Bank Fossil Creek, a Branch of Woodhaven National Bank. 10.9 ​ Promissory Note, dated May 24, 2016, from Legacy Housing, Ltd. to Eagle One, LLC. 10.10 ​ Promissory Note, dated February 16, 2016, from Legacy Housing, Ltd. to DT Casualty Insurance Company Ltd. 10.11 ​ Lease Agreement, dated as of December 1, 2016, between Putnam Development Authority and Legacy Housing, Ltd., together with related Option Agreement. 10.12 ​ Bond Purchase Loan Agreement, dated as of December 1, 2016, between Putnam Development Authority and Legacy Housing, Ltd. 10.13 ​ Form of Indemnification Agreement. 10.14 ​ Form of Non-Disclosure, Non-Competition and Non-Solicitation Agreement between Legacy Housing Corporation and its employees. 10.15 † Employment Agreement, dated as of November 27, 2018, between Legacy Housing Corporation and Curtis D. Hodgson. 10.16 † Employment Agreement, dated as of November 27, 2018, between Legacy Housing Corporation and Kenneth E. Shipley . 10.17 ​ Loan and Security Agreement, dated December 14, 2011, between Legacy Housing, Ltd. and Capital One, N.A. 10.18 ​ First Amendment to Loan and Security Agreement, dated December 12, 2013, between Legacy Housing, Ltd. and Capital One, N.A . 10.19 ​ Second Amendment to Loan and Security Agreement, dated March 31, 2014, between Legacy Housing, Ltd. and Capital One, N.A. 10.20 ​ Third Amendment to Loan and Security Agreement, dated May 20, 2014, between Legacy Housing, Ltd. and Capital One, N.A . 10.21 ​ Amendment to Loan and Security Agreement, dated May 12, 2017, between Legacy Housing, Ltd. and Capital One, N.A. 10.22 ​ Loan Agreement, dated April 4, 2016, by and between Legacy Housing, Ltd. and Veritex Bank. 10.23 † Amended and Restated Employment Agreement, dated as of January 5, 2022, between Legacy Housing Corporation and Curtis D. Hodgson. 10.24 ​ Credit Agreement, dated as of July 28, 2023, by and among Legacy Housing Corporation, Prosperity Bank as administrative agent, and the lenders party thereto 86 Table of Contents Exhibit Number ​ Description ​ ​ ​ 10.25 † Employment Agreement, effective June 7, 2022 by and between Legacy Housing Corporation and Duncan Bates 10.26 † Employment Agreement, dated September 10, 2023 between Legacy Housing Corporation and Jeff Fiedelman 14.1 ​ Code of Ethics and Business Conduct. 14.2 ​ Code of Ethics for the CEO and Senior Financial Officers. 23.1 * Consent of Frazier & Deeter, LLC, Independent Registered Public Accounting Firm 23.2 * Consent of Daszkal Bolton, LLP, Independent Registered Public Accounting Firm 31.1 * Rule 13a-14(a)/15d-14(a) Certification. 31.2 * Rule 13a-14(a)/15d-14(a) Certification. 32.1 * Section 1350 Certifications . 32.2 * Section 1350 Certifications. 97.1 * Executive Compensation Clawback Policy 101.INS ​ Inline XBRL Instance Document 101.SCH ​ Inline XBRL Taxonomy Extension Schema Document 101.CAL ​ Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF ​ Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB ​ Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE ​ Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 ​ Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) ​ ​ † Compensatory plan or agreement. * Filed herewith. ​ ​ ​ (a)2. ​ Financial Statement Schedules ​ ​ ​ ​ ​ There are no Financial Statement Schedules included with this filing for the reason that they are not applicable or are not required or the information is included in the financial statements or notes thereto. ​ ​ ​ ​ 87 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ ​ ​ LEGACY HOUSING CORPORATION ​ ​ ​ ​ ​ ​ ​ By: /s/ R. Duncan Bates ​ ​ Name: R. Duncan Bates ​ ​ Title: President and Chief Executive Officer ​ ​ Date: March 15, 2024 ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Signature ​ ​ ​ Title ​ ​ ​ ​ ​ Date ​ ​ ​ ​ ​ ​ /s/ Curtis D. Hodgson Curtis D. Hodgson Executive Chairman of the Board March 15, 2024 ​ ​ ​ /s/ Kenneth E. Shipley Kenneth E. Shipley Executive Vice President and Director ( principal executive officer ) March 15, 2024 ​ ​ ​ /s/ Jeffrey M. Fiedelman Chief Financial Officer ( principal March 15, 2024 Jeffrey M. Fiedelman financial officer ) ​ ​ ​ ​ /s/ Jeffrey K. Stouder Jeffrey K. Stouder Director March 15, 2024 ​ ​ ​ /s/ Brian J. Ferguson Brian J. Ferguson Director March 15, 2024 ​ ​ ​ /s/ Francisco J. Coll Francisco J. Coll Director March 15, 2024 ​ ​ ​ ​ 88