Legacy Housing Corp

Previous wording

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

Current wording

The following discussion should be read in conjunction with the financial statements and accompanying notes and the information contained in other sections of this Form 10-Q. It contains forward looking statements that involve risks and uncertainties, and is based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Our actual results could differ materially from those anticipated by our management in these forward looking statements as a result of various factors, including those discussed in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2024, particularly under the heading “Risk Factors.” Dollar amounts are in thousands unless otherwise noted.

Previous wording

We build, sell and finance manufactured homes and “tiny houses” that are distributed through a network of independent retailers and company-owned stores and are sold directly to manufactured housing communities. We are one of the largest producers of manufactured homes in the United States. With current operations focused primarily in the southern United States, we offer our customers an array of quality homes ranging in size from approximately 395 to 2,667 square feet consisting of 1 to 5 bedrooms, with 1 to 31/2 bathrooms. Our homes range in price, at retail, from approximately $33 to $180. For the three months ended June 30, 2025 and 2024 we sold 697 and 578 home sections (which are entire homes or single floors that are combined to create complete homes), respectively. For the six months ended June 30, 2025 and 2024 we sold 1,124 and 1,223 home sections respectively.

Current wording

We build, sell and finance manufactured homes and “tiny houses” that are distributed through a network of independent retailers and company-owned stores and are sold directly to manufactured housing communities. We are one of the largest producers of manufactured homes in the United States. With current operations focused primarily in the southern United States, we offer our customers an array of quality homes ranging in size from approximately 395 to 2,667 square feet consisting of 1 to 5 bedrooms, with 1 to 31/2 bathrooms. Our homes range in price, at retail, from approximately $33 to $180. For the three months ended September 30, 2025 and 2024 we sold 420 and 475 home sections (which are entire homes or single floors that are combined to create complete homes), respectively. For the nine months ended September 30, 2025 and 2024 we sold 1,334 and 1,536 home sections respectively.

Previous wording

We believe our company is one of the most vertically integrated in the manufactured housing industry, allowing us to offer a complete solution to our customers. We manufacture custom-made homes using quality materials, distribute those homes through our expansive network of independent retailers and company-owned distribution locations and provide tailored financing solutions for our customers. Our homes are constructed in the United States at one of our three manufacturing facilities in accordance with the construction and safety standards of the U.S. Department of Housing and Urban Development (“HUD”). Our factories employ high-volume production techniques that allow us to produce up to, on average, approximately 70 home sections, or 60 fully-completed homes depending on product mix, in total per week. We use quality materials and operate our own component manufacturing facilities for many of the items used in the construction of our homes. Each home can be configured according to a variety of floor plans and equipped with features such as fireplaces, central air conditioning and state-of-the-art kitchens.

Current wording

We believe our company is one of the most vertically integrated in the manufactured housing industry, allowing us to offer a complete solution for our customers. We manufacture custom-made homes using quality materials, distribute those homes through our expansive network of independent retailers and company-owned distribution locations and provide tailored financing solutions for our customers. Our homes are constructed in the United States at our three manufacturing facilities in accordance with the construction and safety standards of the U.S. Department of Housing and Urban Development (“HUD”). Our factories employ high-volume production techniques that allow us to produce up to, on average, approximately 70 home sections, or 60 fully-completed homes depending on product mix, in total per week. We use quality materials and operate our own component manufacturing facilities for many of the items used in the construction of our homes. Each home can be configured according to a variety of floor plans and equipped with features such as fireplaces, central air conditioning and state-of-the-art kitchens.

Previous wording

For the six months ended June 30, 2025, approximately 58% of our manufactured homes were sold in Texas, followed by 10% in Georgia, 7% in Oklahoma, 4% in Tennessee and 3% in Alabama. For the six months ended June 30, 2024, approximately 49% of our manufactured homes were sold in Texas, followed by 12% in North Carolina, 9% in Georgia, 7% in Oklahoma and 4% in Michigan.

Current wording

For the nine months ended September 30, 2025, approximately 56% of our manufactured homes were sold in Texas, followed by 8% in Georgia, 7% in Oklahoma, 5% in Tennessee, 4% in Florida, and 3% in Louisiana. For the nine months ended September 30, 2024, approximately 48% of our manufactured homes were sold in Texas, followed by 9% in North Carolina, 9% in Georgia, 8% in Oklahoma, 3% in Michigan, and 3% in Florida.

Previous wording

Product sales primarily consist of direct sales, commercial sales, inventory finance sales and retail store sales. Product sales increased $6.7 million, or 21.3%, during the three months ended June 30, 2025 as compared to the same period in 2024. This increase was driven by an increase in unit volumes shipped, primarily in inventory finance sales, retail sales and mobile home park sales categories.

Current wording

Product sales primarily consist of direct sales, commercial sales, inventory finance sales and retail store sales. Product sales decreased $1.4 million, or 4.6%, during the three months ended September 30, 2025 as compared to the same period in 2024. This decrease was driven by a decrease in unit volumes shipped, primarily in inventory finance sales, retail sales and mobile home park sales categories.

Previous wording

For the three months ended June 30, 2025, our net revenue per product sold increased by 10.5% as compared to the same period in 2024. The increase is primarily due to an increase in units sold to consumers, which are sold at higher retail prices. We had increases in inventory finance sales, retail sales and commercial sales, partially offset by decreases in direct sales and other product sales Inventory finance sales increased $4.9 million, or 53.3% during the three months ended June 30, 2025 as compared to the same period in 2024. Retail sales increased $2.9 million, or 64.2% during the three months ended June 30, 2025 as compared to the same period in 2024. Commercial sales increased $0.6 million, or 5.3% during the three months ended June 30, 2025 as compared to the same period in 2024. Direct sales decreased $0.6 million, or 16.9% during the three months ended June 30, 2025 as compared to the same period in 2024. Other product

Current wording

For the three months ended September 30, 2025, our net revenue per product sold increased by 7.9% as compared to the same period in 2024. The increase is primarily due to an increase in units sold to consumers, which are sold at higher retail prices than our other channels. We had increases in retail and direct sales, which were more than offset by decreases in inventory finance sales, mobile home park sales, and other product sales. Inventory finance sales decreased $0.7 million, or 9% during the three months ended September 30, 2025 as compared to the same period in 2024. Retail sales increased $0.2 million, or 3.6% during the three months ended September 30, 2025 as compared to the same period in 2024. Mobile home park sales decreased $1.3 million, or 10.7% during the three months ended September 30, 2025 as compared to the same period in 2024. Direct sales increased $0.7 million, or 32.1% during the

Previous wording

Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, service fees and other miscellaneous income and decreased $0.1 million, or 10.8%, during the three months ended June 30, 2025 as compared to the same period in 2024. This decrease was primarily due to a $0.2 million decrease in forfeited deposits partially offset by a net $0.1 million increase in other miscellaneous revenue.

Current wording

Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, portfolio service revenue, park rental income, storage fees, and other miscellaneous income which decreased $3.0 million, or 78.8%, during the three months ended September 30, 2025 as compared to the same period in 2024. This decrease was primarily due to a $2.7 million decrease in land sales.

Previous wording

The cost of product sales increased $4.4 million, or 20.3%, during the three months ended June 30, 2025 as compared to the same period in 2024. The increase in costs is primarily related to the increase in units sold. The cost of other sales was $0.6 million during the three months ended June 30, 2025.

Current wording

The cost of product sales increased $1.6 million, or 7.5%, during the three months ended September 30, 2025 as compared to the same period in 2024. The increase in costs is primarily related to an increase in raw material and tariff costs from 39.4% to 47.7% of sales, which is particularly notable given the favorable shift in sales mix towards higher margin products. The cost of other sales was $0.6 million during the three months ended September 30, 2025.

Previous wording

Selling, general and administrative expenses increased $1.1 million, or 19.1%, during the three months ended June 30, 2025 as compared to the same period in 2024. We had a $1.1 million increase in warranty expense, $0.5 million increase in repossessed home expense, a $0.2 million increase in bad debt expense, a $0.1 million increase in loan loss provision offset by a $0.6 million decrease in legal expense, $0.1 million decrease in property tax and a net $0.1 million decrease in other miscellaneous expense.

Current wording

Selling, general and administrative expenses increased $1.3 million, or 20.6%, during the three months ended September 30, 2025 as compared to the same period in 2024. We had a $0.9 million increase in legal expense, $0.5 million increase in loan portfolio loss expense, $0.5 million increase in professional and consulting fee expense, and a $0.1 million increase in property tax expense offset by a $0.6 million decrease in payroll health benefit expense due to a significant medical claim accrual during the comparable period of 2024.

Previous wording

Income tax decreased $1.4 million during the six months ended June 30, 2025 as compared to the same period in 2024. The effective tax rate for the six months ended June 30, 2025 was 18.1% and differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction and a federal tax credit purchased by the Company in this second quarter, both partially offset by state income taxes. The effective tax rate for the six months ended June 30, 2024 was 18.2% and differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction, partially offset by state income taxes.

Current wording

Income tax decreased $1.9 million during the three months ended September 30, 2025 as compared to the same period in 2024 due to a decrease in before tax income as well as the purchase of tax credits at a discount during the three months ended September 30, 2025. The effective tax rate for the three months ended September 30, 2025 was 15.7% and differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction and federal tax credits purchased at a discount by the Company in both the second and third quarters of 2025. The effective tax rate for the three months ended September 30, 2024 was 18.2%

Previous wording

Comparison of Six Months ended June 30, 2025 and 2024 (in thousands)

Current wording

Comparison of Nine Months ended September 30, 2025 and 2024 (in thousands)

Previous wording

Product sales primarily consist of direct sales, commercial sales, inventory finance sales and retail store sales. Product sales increased $0.2 million, or 0.3%, during the six months ended June 30, 2025 as compared to the same period in 2024. This increase was driven by a $7.5 million increase in inventory finance sales and a $1.4 million increase in retail sales, offset by a decrease of $6.2 million in mobile home park sales, a $0.9 million decrease in direct sales, and a $1.6 million decrease in other product sales.

Current wording

Product sales primarily consist of direct sales, commercial sales, inventory finance sales and retail store sales. Product sales decreased $1.2 million, or 1.3%, during the nine months ended September 30, 2025 as compared to the same period in 2024. This decrease was driven by a $6.8 million increase in inventory finance sales and a $1.6 million increase in retail sales, offset by a decrease of $7.5 million in mobile home park sales, a $0.2 million decrease in direct sales, and a $1.9 million decrease in other product sales.

Previous wording

Net revenue attributable to our factory-built housing consisted of the following during the six months ended June 30, 2025 and 2024:

Current wording

Net revenue attributable to our factory-built housing consisted of the following during the nine months ended September 30, 2025 and 2024:

Previous wording

For the six months ended June 30, 2025, our net revenue per product sold increased by 16.4% as compared to the same period in 2024. The increase is primarily due to a decrease in units sold to mobile home parks, which are sold at wholesale prices, and an increase in units sold to consumers, which are sold at higher retail prices. We had increases in inventory finance sales and retail sales, partially offset by decreases in commercial sales, direct sales, and other product sales. Inventory finance sales increased $7.5 million, or 42.8% during the six months ended June 30, 2025 as compared to the same period in 2024. Retail sales increased $1.4 million, or 15.1% during the six months ended June 30, 2025 as compared to the same period in 2024. Commercial sales decreased $6.2 million, or 25.0% during the six months ended June 30, 2025 as compared to the same period in 2024. Direct sales decreased $0.9 million, or 16.9% during the six months ended June 30, 2025 as compared to the same period in 2024. Other product sales decreased $1.7 million, or 29.6% during the six months ended June 30, 2025 as compared to the same period in 2024.

Current wording

For the nine months ended September 30, 2025, our net revenue per product sold increased by 13.7% as compared to the same period in 2024. The increase is primarily due to a decrease in units sold to mobile home parks, which are sold at wholesale prices, and an increase in units sold to consumers, which are sold at higher retail prices. We had increases in inventory finance sales and retail sales, partially offset by decreases in mobile home park sales, direct sales, and other product sales. Inventory finance sales increased $6.8 million, or 27.0% during the nine months ended September 30, 2025 as compared to the same period in 2024. Retail sales increased $1.6 million, or 10.7% during the nine months ended September 30, 2025 as compared to the same period in 2024. Mobile home park sales decreased $7.5 million, or 20.2% during the nine months ended September 30, 2025 as compared to the same period in 2024. Direct sales decreased $0.2 million, or 2.9% during the nine months ended September 30, 2025 as compared to the same period in 2024. Other product sales decreased $1.9 million, or 24.4% during the nine months ended September 30, 2025 as compared to the same period in 2024.

Previous wording

Consumer, MHP and dealer loans interest income increased $1.0 million, or 10.6% during the three months ended June 30, 2025 as compared to the same period in 2024. Between June 30, 2025 and June 30, 2024 our consumer loan portfolio increased by $24.6 million, our MHP loan portfolio increased by $20.3 million, and our dealer finance notes decreased by $0.5 million.

Current wording

Consumer, MHP and dealer loans interest income increased $1.6 million, or 5.3%, during the nine months ended September 30, 2025 as compared to the same period in 2024. Our consumer loan portfolio interest income increased by $2.0 million, our MHP loan portfolio interest income decreased by $0.2 million, and our dealer finance interest income decreased by $0.1 million.

Previous wording

Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, service fees and other miscellaneous income and decreased $1.2 million, or 41.8%, during the six months ended June 30, 2025 as compared to the same period in 2024. This decrease was primarily due to a $1.3 million decrease in forfeited deposits and a $0.2 million decrease in service sales partially offset by a $0.3 million increase in portfolio fees and service revenue.

Current wording

Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, portfolio service fees, storage fees, and other miscellaneous income and decreased $4.1 million, or 63.1%, during the nine months ended September 30, 2025 as compared to the same period in 2024. This decrease was primarily due to a $2.6 million decrease in land sale revenue and a $1.1 million decrease in deposit forfeitures.

Previous wording

The cost of product sales increased $1.1 million, or 2.6%, during the six months ended June 30, 2025 as compared to the same period in 2024. The increase in costs is primarily related to moderate increases in material and labor costs. The cost of other sales was $1.1 million during the six months ended June 30, 2025.

Current wording

The cost of product sales increased $2.7 million, or 4.3%, during the nine months ended September 30, 2025 as compared to the same period in 2024. The increase in costs is primarily related to an increase in raw materials and tariffs from 39.1% to 41.3% of sales, partially offset by a decrease in labor and factory overhead costs.

Previous wording

Selling, general and administrative expenses increased $1.5 million, or 12.8%, during the six months ended June 30, 2025 as compared to the same period in 2024. We had a $0.7 million increase in warranty expense, a $0.6 million increase in loan loss provision and a $0.6 million increase repossessed home expense, a $0.2 million increase in bad debt expense offset by a $0.3 million decrease in payroll and related expense, a $0.2 million decrease in professional fees and a net $0.1 million decrease in other miscellaneous expense.

Current wording

Selling, general and administrative expenses increased $2.7 million, or 15.5%, during the nine months ended September 30, 2025 as compared to the same period in 2024. We had a $1.7 million increase in loan portfolio loss expense, a $0.8 million increase in legal expense, a $0.7 million increase in service warranty expense, a $0.4 million increase in professional and consulting expense, and a $0.2 million increase in retail operations’ payroll expense offset by a $0.7 million decrease in health benefits expense, a $0.4 million decrease in corporate and general payroll expense, a $0.15 million decrease in depreciation and amortization expense, and a $0.15 million decrease in postage and shipping expense. Professional and consulting expense increased primarily for due diligence related to pursuing corporate opportunities.

Previous wording

Other income (expense) decreased $2.8 million, or 74.5%, during the three months ended June 30, 2025 as compared to the same period in 2024. We had a (i) decrease of $0.5 million in Non-operating interest income reflecting a lower balance of other notes receivable, (ii) a $2.5 million decrease in miscellaneous income primarily due to land sales and a reversal of accrued liabilities during the three months ended June 30, 2024 that did not occur during the three months ended June 30, 2025, and (iii) a decrease of $0.2 million in interest expense.

Current wording

Other income (expense) decreased $6.9 million, or 72.3%, during the nine months ended September 30, 2025 as compared to the same period in 2024. We had (i) a decrease of $1.0 million in non-operating interest income primarily due to a lower balance of other development notes receivable, (ii) a $6.5 million decrease in other income/expense primarily due to land sales, reversal of accrued liabilities, and fair value gain adjustments related to settlements during the nine months ended September 30, 2024 that did not occur during the nine months ended September 30, 2025, and (iii) a decrease of $0.7 million in interest expense related to the reduction in the company’s line of credit utilization.

Previous wording

Income tax decreased $0.5 million during the three months ended June 30, 2025 as compared to the same period in 2024. The effective tax rate for the three months ended June 30, 2025 was 17.3% and differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction and a federal tax credit purchased by the Company in this second quarter, both partially offset by state income taxes. The effective tax rate for the three months ended June 30, 2024 was 18.2% and differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction, partially offset by state income taxes.

Current wording

Income tax decreased $3.4 million during the nine months ended September 30, 2025 as compared to the same period in 2024. This is primarily due to a $16.9 million decrease in before tax income between comparable nine month periods for 2025 and 2024 as well as the purchase of tax credits at a discount during 2025. The effective tax rate for the nine months ended September 30, 2025 was 17.5% and differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction and federal tax credits purchased at a discount by the Company during the second and third quarters, both partially offset by state income taxes. The effective tax rate for the nine months ended September 30, 2024 was 18.2%.

Previous wording

We maintain cash balances in bank accounts that may, at times, exceed federally insured limits. We have not incurred any losses from such accounts, and management considers the risk of loss to be minimal. As of June 30, 2025, we had approximately $2.6 million in cash, compared to $1.1 million as of December 31, 2024. We consider all cash and highly liquid investments with an original maturity of three months or less to be cash equivalents.

Current wording

We maintain cash balances in bank accounts that may, at times, exceed federally insured limits. We have not incurred any losses from such accounts, and management considers the risk of loss to be minimal. As of September 30, 2025, we had approximately $13.6 million in cash, compared to $1.1 million as of December 31, 2024. We consider all cash and highly liquid investments with an original maturity of three months or less to be cash equivalents.

Previous wording

Net cash provided by operating activities was $11.0 million during the six months ended June 30, 2025, compared to net cash of $14.3 million provided by operating activities during the six months ended June 30, 2024. This change was predominantly the result of decreased net income, increased consumer loan originations net of collections and change in inventories, partially offset by decreased MHP loan originations net of collections, and change in other assets – leased mobile homes.

Current wording

Net cash provided by operating activities was $18.1 million during the nine months ended September 30, 2025, compared to net cash of $28.1 million provided by operating activities during the nine months ended September 30, 2024. This change was predominantly the result of decreased net income, increased consumer loan originations net of collections due to a higher percentage of sales being financed by the company, increased other assets, decreased accounts payable and accrued liabilities, increased inventories, and increased accounts receivable partially offset by decreased MHP loan originations net of collections, decreased dealer inventory loan originations, and increased customer escrow liability.

Previous wording

Net cash used in investing activities of $3.1 million during the six months ended June 30, 2025 was primarily attributable to $3.6 million used in improvements and development of property, plant and equipment and $1.3 million used to issue notes to third parties for the development of manufactured housing parks, offset by $1.6 million of collections of loans we made to third parties for development of manufactured housing parks and $0.2 million in proceeds from the sale of property. Net cash provided by investing activities of $2.1 million during the six months ended June 30, 2024 was primarily attributable to $4.8 million of collections of loans we made to third parties for development of manufactured housing parks and $1.6 million in proceeds from the sale of property, offset by $2.6 million used in improvements and development of property, plant and equipment and $1.7 million used to issue notes to third parties for the development of manufactured housing parks.

Current wording

Net cash provided by investing activities of $0.8 million during the nine months ended September 30, 2025 was primarily attributable to $6.0 million of development notes receivable collections net of originations offset by $5.7 million used in development of property and purchases of machinery and equipment. Net cash used in investing activities of $1.5 million during the nine months ended September 30, 2024 was primarily attributable to $7.3 million used in development of property and purchases of machinery and equipment offset by $4.1 million of development notes receivable collections net of originations, and proceeds of $1.6 million from the sale of company property.

Previous wording

Net cash used in financing activities of $6.3 million during the six months ended June 30, 2025 was attributable $6.5 million of stock repurchases offset by net uses of $0.2 million on our lines of credit. Net cash used in financing activities of $17.1 million during the six months ended June 30, 2024 was attributable to net payments of $11.8 million on our lines of credit, $5.4 million of stock repurchases and $0.1 million received from the exercise of stock options.

Current wording

Net cash used in financing activities of $6.5 million during the nine months ended September 30, 2025 was attributable $6.5 million of stock repurchases. Net cash used in financing activities of $26.8 million during the nine months ended September 30, 2024 was attributable to net payments of $21.6 million on our lines of credit, and $5.4 million of stock repurchases and $0.2 million received from the exercise of stock options.

Previous wording

For the three months ended June 30, 2025 and 2024, interest expense under the Revolver was $3 and $235, respectively. For the six months ended June 30, 2025 and 2024, interest expense under the Revolver was $3 and $511, respectively. The outstanding balance of the Revolver as of June 30, 2025 and December 31, 2024 was $142 and $0, respectively. The interest rate in effect as of June 30, 2025 and December 31, 2024 for the Revolver was 6.76% and 7.61%, respectively. The amount of available credit under the Revolver was $49,858 and $50,000 as of June 30, 2025 and December 31, 2024, respectively. The Revolver requires the Company to comply with certain financial and non-financial covenants. As of June 30, 2025, 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.

Current wording

For the three months ended September 30, 2025 and 2024, interest expense under the Revolver was $2 and $175, respectively. For the nine months ended September 30, 2025 and 2024, interest expense under the Revolver was $3 and $686, respectively. The outstanding balance of the Revolver as of September 30, 2025 and December 31, 2024 was $0 and $0, respectively. The interest rate in effect as of September 30, 2025 and December 31, 2024 for the Revolver was 7.25% and 7.61%, respectively. The amount of available credit under the Revolver was $50,000 and $50,000 as of September 30, 2025 and December 31, 2024, respectively. The Revolver requires the Company to comply with certain financial and non-financial covenants. As of September 30, 2025, 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.

Previous wording

We did not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, net sales, results of operations, liquidity or capital expenditures. However, we do have repurchase agreements with financial institutions providing inventory financing for independent retailers of our products. Under these agreements, we have agreed to repurchase homes at declining prices over the term of the agreement. Our obligation under these repurchase agreements ceases upon the purchase of the home by the retail customer. The maximum amount of our contingent obligations under such repurchase agreements was approximately $512 and $805 as of June 30, 2025 and December 31, 2024, respectively, without reduction for the resale value of the homes. We may be required to honor contingent repurchase obligations in the future and may incur additional expense as a consequence of these repurchase agreements. We consider our obligations on current contracts to be immaterial and accordingly we have not recorded any reserve for repurchase commitment as of June 30, 2025.

Current wording

We did not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, net sales, results of operations, liquidity or capital expenditures. However, we do have repurchase agreements with financial institutions providing inventory financing for independent retailers of our products. Under these agreements, we have agreed to repurchase homes at declining prices over the term of the agreement. Our obligation under these repurchase agreements ceases upon the purchase of the home by the retail customer. The maximum amount of our contingent obligations under such repurchase agreements was approximately $713 and $805 as of September 30, 2025 and December 31, 2024, respectively, without reduction for the resale value of the homes. We may be required to honor contingent repurchase obligations in the future and may incur additional expense as a consequence of these repurchase agreements. We consider our obligations on current contracts to be immaterial and accordingly we have not recorded any reserve for repurchase commitment as of September 30, 2025.