Company: UHG
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001830188-25-000036
Chunk: 86

Company: United Homes Group, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 86
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 12 - Earnout sharesAs 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. As of March 31, 2025, the fair value of the earnout shares was $0.61 per share issuable upon Triggering Event I, $0.44 per share issuable upon Triggering Event II and $0.33 per share issuable upon Triggering Event III. 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: March 31, 2025December 31, 2024Current stock price$2.80 $4.23 Stock price targets$12.50, $15.00, $17.50$12.50, $15.00, $17.50Expected life (in years)3.00 3.25 Earnout period (in years)3.00 3.25 Risk-free interest rate3.90 %4.30 %Expected volatility56 %52 %Expected dividend yield— %— %For the three months ended March 31, 2025 and 2024, the change in fair value of the earnout shares resulted in a gain of $18.0 million and $26.4 million, respectively, primarily resulting from changes in the company's stock price.As none of the earnout triggering events have occurred as of March 31, 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 months ended March 31, 2025 and 2024, resulted in a gain of $0.9 million and a loss of less than $0.1 million, respectively. These changes are included in Change in fair value of derivative liabilities on the Condensed Consolidated Statement of Operations. The Private Placement Warrants were valued using the following assumptions under the Monte Carlo method:

20

March 31,