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Fair value measurement | 12 Months Ended
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Dec. 31, 2024
Fair Value Disclosures [Abstract] |
Fair value measurement | Note 6 - Fair value measurement Certain assets and liabilities measured and reported at fair value under GAAP are classified in a three-level hierarchy that prioritizes the inputs used in the valuation process. Categorization within the valuation hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy is based on the observability and objectivity of the pricing inputs as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data. Level 3 – Prices or valuation techniques that require significant unobservable data inputs. These inputs would normally be the Company’s own data and judgments about assumptions that market participants would use in pricing the asset or liability. Due to the short-term nature of the Company’s Cash and cash equivalents, Accounts receivable, and Accounts payable, the carrying amounts of these instruments approximate their fair value. Lot deposits are recorded at the agreed-upon contract value, which approximates fair value. The interest rates on the Homebuilding debt and other affiliate debt, and the Term Loan vary and are the greater of either a reference rate plus an applicable margin, or the base rate plus the aforementioned applicable margin. Refer to Note 9 - Debt for additional detail on the determination of these instruments’ interest rate. As the reference rate of the Homebuilding debt and other affiliate debt and the Term Loan at any point in time are reflective of the current interest rate environment the Company operates in, the carrying amount of these instruments approximates their fair value. The Convertible Notes payable is presented on the Consolidated Balance Sheet at its amortized cost and not at fair value as of December 31, 2023. On December 11, 2024, the Company redeemed the Convertible Notes payable. See “Note 14 - Convertible Notes payable” for further details. All other financial instruments except for Derivative private placement warrants liability, Contingent earnout liability, Derivative stock option liability, Contingent consideration, and Convertible Notes payable are classified within Level 1 of the fair value hierarchy because the Company values these instruments based on recent trades of securities in active markets. The estimated fair value of the derivative private placement warrants liability, contingent earnout liability, derivative stock option liability, contingent consideration, and Convertible Notes payable is determined using Level 3 inputs. The models and significant assumptions used in preparing the valuations are disclosed in Note 14 - Convertible Notes payable, Note 15 - Stock-based compensation, Note 16 - Earnout shares, and Note 17 - Warrant liability respectively. The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2024 and 2023, and indicates the fair value hierarchy of the valuation.
| Fair Value Measurements as of December 31, 2024
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Contingent earnout liability | $ | — |  |  | $ | — |  |  | $ | 28,213,229 |  |  | $ | 28,213,229 |
Derivative private placement warrant liability | — |  |  | — |  |  | 2,907,330 |  |  | 2,907,330 |
Derivative public warrant liability | 7,762,500 |  |  | — |  |  | — |  |  | 7,762,500 |
Derivative stock option liability | — |  |  | — |  |  | 275,150 |  |  | 275,150 |
Total derivative liability | 7,762,500 |  |  | — |  |  | 31,395,709 |  |  | 39,158,209 |
Contingent consideration 1 | — |  |  | — |  |  | 1,225,000 |  |  | 1,225,000 |
Total fair value | $ | 7,762,500 |  |  | $ | — |  |  | $ | 32,620,709 |  |  | $ | 40,383,209 |
| Fair Value Measurements as of December 31, 2023
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Contingent earnout liability | $ | — |  |  | $ | — |  |  | $ | 115,566,762 |  |  | $ | 115,566,762 |
Derivative private placement warrant liability | — |  |  | — |  |  | 3,292,996 |  |  | 3,292,996 |
Derivative public warrant liability | 8,336,925 |  |  | — |  |  | — |  |  | 8,336,925 |
Derivative stock option liability | — |  |  | — |  |  | 414,260 |  |  | 414,260 |
Total derivative liability | 8,336,925 |  |  | — |  |  | 119,274,018 |  |  | 127,610,943 |
Contingent consideration 1 | — |  |  | — |  |  | 1,888,000 |  |  | 1,888,000 |
Total fair value | $ | 8,336,925 |  |  | $ | — |  |  | $ | 121,162,018 |  |  | $ | 129,498,943 |
__________________ 1 Contingent consideration is recorded within Other accrued expenses and liabilities on the Consolidated Balance Sheets. Transfers to/from Levels 1, 2 and 3 are recognized at the beginning of the reporting period. There were no transfers to/from levels during the years ended December 31, 2024 and 2023, respectively. The following table presents a roll forward of the Level 3 liabilities measured at fair value on a recurring basis:
| Contingent earnout liability |  | Derivative private placement warrant liability |  | Derivative stock option liability |  | Contingent consideration
Liability at January 1, 2024 | $ | 115,566,762 |  |  | $ | 3,292,996 |  |  | $ | 414,260 |  |  | $ | 1,888,000 |
Recognition | — |  |  | — |  |  | 211,370 |  |  | — |
Forfeitures | — |  |  | — |  |  | (8,368) |  |  | — |
Exercise of liability awards | — |  |  | — |  |  | (2,756) |  |  | — |
Change in fair value | (87,353,533) |  |  | (385,666) |  |  | (339,356) |  |  | (663,000) |
Liability at December 31, 2024 | $ | 28,213,229 |  |  | $ | 2,907,330 |  |  | $ | 275,150 |  |  | $ | 1,225,000 |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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