v3.26.1
Business Combinations
 3 Months Ended
Mar. 31, 2026
Business Combination [Abstract]  
Business Combinations Note 5. Business Combinations
UDF IV Merger
On March 13, 2025 the Company acquired UDF IV, a real estate investment trust providing capital solutions to
residential real estate developers and regional homebuilders. Refer to Note 1 for more information about the UDF IV
Merger. The purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair
values. The methodologies used, and key assumptions made, to estimate the fair value of the assets acquired and
liabilities assumed are primarily based on future cash flows and discount rates.
The table below summarizes the fair value of assets acquired and liabilities assumed from the UDF IV Merger.
(in thousands)
Preliminary Purchase
Price Allocation
Measurement Period
Adjustments
Updated Purchase Price
Allocation
Assets
Cash and cash equivalents
$16,020
$—
$16,020
Loans, net
158,469
10,836
169,305
Investment in unconsolidated joint ventures
5,290
—
5,290
Other Assets:
Accrued interest
1,231
—
1,231
Receivable from third party
738
—
738
Other
1,946
—
1,946
Total assets acquired
$183,694
$10,836
$194,530
Liabilities
Accounts payable and other accrued liabilities
1,214
(605)
609
Contract liability 
—
4,529
4,529
Total liabilities assumed
$1,214
$3,924
$5,138
Net assets acquired
$182,480
$6,912
$189,392
In a business combination, the initial allocation of the purchase price is considered preliminary and therefore, is subject
to change until the end of the measurement period. The final determination must occur within one year of the merger
date. Because the measurement period for the UDF IV Merger remained open until March 13, 2026, certain fair value
estimates changed once all information necessary to make a final fair value assessment was received. The amounts
presented in the table above pertained to the preliminary purchase price allocation reported at the time of the UDF IV
Merger based on information that was available to management at the time the consolidated financial statements were
prepared. The preliminary purchase price allocation changed as the Company completed its analysis of the fair value of
the assets acquired and liabilities assumed, which impacts the consolidated financial statements. Subsequent to the
determination of the preliminary purchase price allocation, the Company recorded a measurement period adjustment
based on the updated valuations obtained by increasing net assets acquired, decreasing the consideration transferred and
increasing the bargain purchase gain related to this transaction by $7.1 million.
The table below illustrates the aggregate consideration transferred, net assets acquired, and the related bargain purchase
gain, which was primarily driven by a discount in UDF IV’s market valuation due to factors such as the illiquid nature of
UDF IV’s shares, and a change in our stock price between the date of the agreement and the closing date of the UDF IV
Merger.
(in thousands)
Preliminary Purchase
Price Allocation
Measurement Period
Adjustments
Updated Purchase Price
Allocation
Fair value of net assets acquired
$182,480
$6,912
$189,392
Consideration transferred based on the value of common stock issued
64,600
—
64,600
Contingent consideration
15,409
(167)
15,242
Total consideration transferred
$80,009
$(167)
$79,842
Bargain purchase gain
$102,471
$7,079
$109,550
The table above includes contingent consideration in the form of CVRs valued at approximately $15.4 million or $1.21
per CVR. Subsequent to the determination of the preliminary purchase price allocation, based on updated valuations
obtained, the Company recorded a measurement period adjustment of $0.2 million to decrease the value of the CVR. As
of March 31, 2026, the updated purchase price of the CVRs was valued at approximately $15.2 million or $1.19 per
CVR. See note 7 for more information about the valuation of the CVRs.