Company: UHG
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001830188-25-000079
Chunk: 61

Company: United Homes Group, Inc.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 1
Chunk 61
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5, the fair value of the earnout shares was $1.63 per share issuable upon Triggering Event I, $1.31 per share issuable upon Triggering Event II and $1.05 per share issuable upon Triggering Event III. As of December 31, 2024, the fair value of the earnout shares was $1.59 per share issuable upon Triggering Event I, $1.25 per share issuable upon Triggering Event II and $0.99 per share issuable upon Triggering Event III. 

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The estimated fair value of the earnout shares was determined using a Monte Carlo simulation using a distribution of potential outcomes on a daily basis over the earnout period. The assumptions used in the valuation of these instruments, using the most reliable information available, include: September 30, 2025December 31, 2024Current stock price$4.13 $4.23 Stock price targets$12.50, $15.00, $17.50$12.50, $15.00, $17.50Expected life (in years)2.50 3.25 Earnout period (in years)2.50 3.25 Risk-free interest rate3.60 %4.30 %Expected volatility65 %52 %Expected dividend yield— %— %For the three and nine months ended September 30, 2025, the change in fair value of the earnout shares resulted in a loss of $15.0 million and $1.1 million, respectively, primarily resulting from changes in the company's stock price. For the three and nine months ended September 30, 2024, the change in fair value of the earnout shares resulted in a loss of $3.1 million and a gain of $50.9 million, respectively, primarily resulting from changes in the company's stock price.As none of the earnout triggering events have occurred as of September 30, 2025, no shares have been distributed.

Note 13 - Warrant liabilityThe private placement warrant liability is recognized in accordance with ASC 815 as a derivative liability and marked to market at each reporting period end. The change in fair value of the private placement warrant liability for the three and nine months ended September 30, 2025, resulted in a loss of $3.1 million and $2.8 million, respectively. For the three and nine