Company: UHG
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001830188-25-000012
Chunk: 91

Company: United Homes Group, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 7
Chunk 91
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 Company paid to the Convertible Note Investors (a) an aggregate of $70.0 million, plus accrued and unpaid interest through the Redemption Date, and (b) an aggregate of 10,168,850 shares of Class A Common Stock with a fair value of $4.41 per share. The majority of the loss on extinguishment is attributable to the make-whole payment of $37.1 million.

Change in Fair Value of Derivative Liabilities: Change in fair value of derivative liabilities for the year ended December 31, 2024 was a gain of $88.7 million as compared to a gain of $115.9 million for the year ended December 31, 2023. Under ASC 815, derivative liabilities are marked to market each reporting period with changes recognized on the Condensed Consolidated Statement of Operations. The overall increase is primarily attributable to changes in the fair value of the Earnout Shares, which fluctuates each period due to changes in the Company's stock price.

Income Tax (Benefit) Expense: Income tax (benefit) expense for the year ended December 31, 2024 was a benefit of $9.7 million as compared to an expense of $3.0 million for the year ended December 31, 2023. The Company's estimated annual effective tax rate as of December 31, 2024 is (26.1)% as compared to 2.4% as of December 31, 2023. The primary driver of the change in estimated annual effective tax rate is the change in fair value of derivative liabilities. 

Net Income: Net income for the year ended December 31, 2024 was $46.9 million, a decrease of $78.2 million, or 62.5%, from $125.1 million for the year ended December 31, 2023. The decrease in net income is primarily attributable to the loss on extinguishment of Convertible Notes, change in fair value of derivative liabilities, an increase in selling, 

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general, and administrative expense, and a decrease in gross profit percentage, partially offset by an increase in income tax benefit.

Net New Orders: Net new orders for a period is gross sales of homes less any customer cancellations received during the same period. Net new orders for the year ended December 31, 2024 were 1,399 units, an increase of 103 units, or 7.9%, from 1,296 units for the