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Fair value measurement
 12 Months Ended
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 1Level 2Level 3Total
Contingent earnout liability$— $— $28,213,229 $28,213,229 
Derivative private placement warrant liability— — 2,907,330 2,907,330 
Derivative public warrant liability7,762,500 — — 7,762,500 
Derivative stock option liability— — 275,150 275,150 
Total derivative liability7,762,500 — 31,395,709 39,158,209 
Contingent consideration1
— — 1,225,000 1,225,000 
Total fair value$7,762,500 $— $32,620,709 $40,383,209 
Fair Value Measurements as of December 31, 2023
Level 1Level 2Level 3Total
Contingent earnout liability$— $— $115,566,762 $115,566,762 
Derivative private placement warrant liability— — 3,292,996 3,292,996 
Derivative public warrant liability8,336,925 — — 8,336,925 
Derivative stock option liability— — 414,260 414,260 
Total derivative liability8,336,925 — 119,274,018 127,610,943 
Contingent consideration1
— — 1,888,000 1,888,000 
Total fair value$8,336,925 $— $121,162,018 $129,498,943 
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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 liabilityDerivative private placement warrant liabilityDerivative stock option liabilityContingent 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