Company: UHG
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001830188-25-000079
Chunk: 116

Company: United Homes Group, Inc.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 8
Chunk 116
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, 2024, the change in fair value resulted in a loss of $1.2 million and $0.1 million, respectively. These changes are included in Change in fair value of derivative liabilities on the Condensed Consolidated Statements of Operations. The Private Placement Warrants were valued using the following assumptions under the Monte Carlo method:September 30, 2025December 31, 2024Current stock price$4.13 $4.23 Exercise price$11.50 $11.50 Expected life (in years)2.50 3.25 Risk-free interest rate3.60 %4.30 %Expected volatility65 %52 %Expected dividend yield— — 

The public 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 public warrant liability for the three and nine months ended September 30, 2025 resulted in a loss of $9.0 million and $8.2 million, respectively. For the three and nine months ended September 30, 2024 the change in fair value of the public warrant liability resulted in a loss of $3.4 million and $0.3 million, respectively. These changes are included in Change in fair value of derivative liabilities on the Condensed Consolidated Statements of Operations. 

Note 14 - Income taxes

The Company recognized an income tax expense of $0.6 million and income tax benefit of $1.0 million, respectively, for the three and nine months ended September 30, 2025, as compared to an income tax benefit of less than $0.1 million and $1.1 million, respectively, for the three and nine months ended September 30, 2024. At the end of each interim period, the Company estimates the effective tax rate expected to be applicable for the full fiscal year and this rate is applied to the results for the year-to-date period, and then adjusted for any discrete period items. Excluding discrete items related to fair value adjustments on derivative liabilities, the Company's estimated effective tax rate as of September 30, 2025 is 11.7% as compared to 17.0% as of September 30, 2024. This differs from the federal statutory rate of 21.0% primarily due to state income tax expense and nondeductible stock compensation expense for executives. 

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Note 15 - E