DiamondHead (OTCMKTS:DHHCU) Completes Underwritten Secondary Offering and Redemption Agreement

DiamondHead (OTCMKTS:DHHCU) recently announced the successful completion of an underwritten secondary offering and a redemption agreement. On December 5, 2024, United Homes Group, Inc. (the “Company”), which operates under the stock symbol UHG, entered into an underwriting agreement with BTIG, LLC, and the selling stockholders. The underwritten secondary offering involved the sale of 7,420,057 shares of the Company’s Class A common stock, with an additional 1,113,009 shares available for purchase by the underwriter if exercised.

The Company and the selling stockholders closed the offering on December 11, 2024, with proceeds going to the selling stockholders net of underwriting discounts and commissions. The Company did not sell any shares in the offering and did not receive any proceeds from the sale by the selling stockholders. The offering was conducted under a prospectus supplement dated December 5, 2024, as an amendment to the base prospectus filed with the Securities and Exchange Commission.

Additionally, the Company entered into a redemption agreement with the selling stockholders on the same date, agreeing to redeem outstanding convertible promissory notes for an aggregate of $70,000,000 along with accrued and unpaid interest. As part of the redemption, the Company provided the selling stockholders with 10,168,850 shares of Class A Common Stock. The remaining shares not sold in the offering, referred to as the “Remaining Shares,” were subject to a lock-up agreement preventing their sale for 120 days following the redemption agreement.

Furthermore, on December 11, 2024, the Company entered into a Credit Agreement with Great Southern Homes, Inc., Kennedy Lewis Agency Partners, LLC, and the lenders, securing a $70,000,000 subordinated loan. This loan facilitated the payment to the selling stockholders as part of the redemption agreement. The agreement outlines terms for a term loan maturing by December 11, 2030, with provisions for interest rates and financial covenants.

The underwriting agreement, redemption agreement, and credit agreement have been included in the Form 8-K filing by the Company for transparency to investors and stakeholders. These agreements outline crucial terms, conditions, and obligations pertinent to the transactions and are intended to provide insight into the Company’s financial activities. Investors are advised not to rely solely on the representations and warranties in the agreements as they are subject to change and may not reflect the actual state of the Company’s affairs.

This strategic move by DiamondHead illustrates a significant step in its financial operations and capital restructuring, with an emphasis on simplifying its capital structure and enhancing shareholder value. The Company’s transition from a fixed to a floating rate benchmark aims at improving profitability, providing opportunities for growth and financial stability in the long term.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read DiamondHead’s 8K filing here.

About DiamondHead

DiamondHead Holdings Corp. does not have significant operations. It intends to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or related business combination with one or more businesses. The company was incorporated in 2020 and is based in New York, New York.