BETTER HOME & FINANCE HOLDING CO, S-1/A filed on 12/20/2023
Securities Registration Statement
v3.23.4
Cover
 9 Months Ended
Sep. 30, 2023
Cover [Abstract]  
Document Type S-1/A
Entity Registrant Name Better Home & Finance Holding Company
Entity Filer Category Non-accelerated Filer
Entity Small Business true
Entity Emerging Growth Company true
Entity Ex Transition Period false
Entity Central Index Key 0001835856
Amendment Flag true
Amendment Description The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.
v3.23.4
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Assets    
Cash and Cash Equivalents, at Carrying Value $ 526,765 $ 317,959
Restricted Cash 27,806 28,106
Short-Term Investments 29,831 0
Mortgage loans held for sale, at fair value 160,025 248,826
Other Receivables 10,449 16,285
Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization 17,806 30,504
Operating Lease, Right-of-Use Asset 23,550 41,979
Intangible Assets, Net (Excluding Goodwill) 48,406 61,996
Goodwill 32,492 18,525
Derivative Asset 3,717 3,048
Prepaid Expense and Other Assets 56,208 66,572
Embedded Derivative, Fair Value of Embedded Derivative Asset 0 236,603
Loan Commitment, Asset 0 16,119
Total Assets 937,055 1,086,522
Liabilities [Abstract]    
Warehouse Agreement Borrowings 73,536 144,049
Post-Closing Convertible Notes (issued to a related party. See Note 10) 513,001 0
Bridge Loan 0 750,000
Long-Term Line of Credit 0 144,403
Contract with Customer, Liability, Current 9,908 0
Accounts Payable and Accrued Liabilities 103,435 88,983
Escrow Payable 3,153 8,001
Derivative Liability 1,678 1,828
Warrants and Rights Outstanding 0 3,096
Warrant and equity related liabilities, at fair value 1,527 0
Operating Lease, Liability 33,307 60,049
Other liabilities (includes $460 and $440 payable to related parties as of September 30, 2023 and December 31, 2022, respectively) 40,278 59,933
Total Liabilities 779,823 1,260,342
Commitments and Contingencies  
Convertible preferred stock 0 436,280
Equity, Attributable to Parent [Abstract]    
Common stock 74 10
Stockholders' Equity Note, Subscriptions Receivable (10,404) (53,900)
Additional paid-in capital 1,826,848 626,628
Retained earnings (1,656,856) (1,181,415)
Accumulated Other Comprehensive Income (Loss), Net of Tax (2,430) (1,423)
Equity, Attributable to Parent, Total 157,232 (610,100)
Liabilities and Equity, Total $ 937,055 $ 1,086,522
v3.23.4
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Jun. 30, 2022
Dec. 31, 2021
Jan. 01, 2021
Dec. 31, 2020
Assets                  
Mortgage loans held for sale, at fair value $ 160,025 $ 160,025   $ 248,826     $ 1,854,435    
Liabilities [Abstract]                  
Other liabilities $ 40,278     $ 59,933     $ 76,158 $ 44,690 $ 47,588
Convertible preferred stock, par value (in dollars per share)   $ 0.0001   $ 0.0001          
Convertible preferred stock, authorized (in shares)   0   602,405,839          
Convertible preferred stock, issued (in shares)       332,314,737          
Convertible preferred stock, outstanding (in shares)   0 332,314,737 332,314,737 332,314,737 332,314,737 108,721,433   107,634,678
Convertible preferred stock, liquidation preference       $ 420,742          
Equity, Attributable to Parent [Abstract]                  
Common stock, par value (in dollars per share)   $ 0.0001   $ 0.0001          
Common stock, authorized (in shares)   3,300,000,000   1,086,027,188          
Common stock, issued (in shares)   737,585,438   299,783,421          
Common stock, outstanding (in shares)   737,585,438   299,783,421          
v3.23.4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Interest Income (Expense), Net [Abstract]            
Interest Income, Operating $ 3,667 $ 4,977 $ 12,527 $ 22,918 $ 26,714 $ 89,627
Interest Expense (2,758) (2,838) (9,544) (14,775) (17,059) (69,929)
Interest Income (Expense), Net, Total 909 2,139 2,983 8,143 9,655 19,698
Revenues, Net of Interest Expense, Total 16,449 28,653 67,569 376,448 382,976 1,241,670
Operating Expenses [Abstract]            
General and administrative expenses 59,189 46,499 113,392 161,293 194,565 231,220
Marketing and advertising expenses 5,128 9,948 17,122 59,801 69,021 248,895
Research and Development Expense 20,732 29,414 66,639 100,354 124,912 144,490
Restructuring, Settlement and Impairment Provisions 679 45,781 11,798 212,490 247,693 17,048
Costs and Expenses, Total 108,055 205,951 291,945 1,109,612 1,253,806 1,481,346
Operating Income (Loss), Total (91,606) (177,298) (224,376) (733,164) (870,830) (239,676)
Other Income and Expenses [Abstract]            
Other Nonoperating Income (Expense) 977 746 5,187 861 3,741 0
Change in fair value of warrants 861 0 861 0 28,901 (32,790)
Change in fair value of convertible preferred stock warrants 0 4,202 266 24,613    
Embedded Derivative, Gain (Loss) on Embedded Derivative, Net (237,667) 29,089 (236,603) 306,866 236,603 0
Nonoperating Income (Expense), Total (247,768) (49,366) (248,526) 108,750 (16,872) (63,835)
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total (339,374) (226,664) (472,902) (624,414) (887,702) (303,511)
Income Tax Expense (Benefit) 659 (52) 2,539 1,450 1,100 (2,383)
Net income (loss) (340,033) (226,612) (475,441) (625,864) (888,802) (301,128)
Other Comprehensive Income (Loss), Net of Tax [Abstract]            
Foreign currency translation adjustment, net of tax (698) (155) (1,007) (764) (1,318) 35
Comprehensive Income (Loss), Net of Tax, Attributable to Parent, Total $ (340,731) $ (226,767) $ (476,448) $ (626,628) $ (890,120) $ (301,093)
Earnings Per Share [Abstract]            
Basic (in dollars per share) $ (0.68) $ (0.77) $ (1.30) $ (2.16) $ (9.33) $ (3.46)
Diluted (in dollars per share) $ (0.68) $ (0.77) $ (1.30) $ (2.16) $ (9.33) $ (3.46)
Weighted average common shares outstanding - Basic (in shares) 496,577,751 292,660,334 364,817,445 289,934,149 95,303,684 86,984,646
Diluted weighted average shares outstanding 496,577,751 292,660,334 364,817,445 289,934,149 95,303,684 86,984,646
Non-Funding Debt            
Other Income and Expenses [Abstract]            
Interest expense on debt $ (11,939) $ (3,304) $ (18,237) $ (10,077) $ (13,450) $ (11,834)
Pre-Closing Bridge Notes            
Other Income and Expenses [Abstract]            
Interest expense on debt 0 (80,099) 0 (213,513) (272,667) (19,211)
Mortgage Platform            
Revenues [Abstract]            
Revenues 14,207 11,087 54,927 106,586 105,658 1,088,223
Operating Expenses [Abstract]            
Expenses 19,166 55,545 70,809 292,915 327,815 700,113
Cash Offer Program            
Revenues [Abstract]            
Revenues 0 9,739 304 226,096 228,721 39,361
Operating Expenses [Abstract]            
Expenses 0 9,813 398 227,509 230,144 39,505
Other Platform            
Revenues [Abstract]            
Revenues 1,333 5,688 9,355 35,623 38,942 94,388
Operating Expenses [Abstract]            
Expenses $ 3,161 $ 8,951 $ 11,787 $ 55,250 $ 59,656 $ 100,075
v3.23.4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - USD ($)
Total
Cumulative Effect, Period of Adoption, Adjusted Balance
As Previously Reported
Recapitalization of shares due to Business Combination (Note 3)
Common Stock
Common Stock
Cumulative Effect, Period of Adoption, Adjusted Balance
Common Stock
As Previously Reported
Common Stock
Recapitalization of shares due to Business Combination (Note 3)
Notes Receivables from Stockholders
Notes Receivables from Stockholders
Cumulative Effect, Period of Adoption, Adjusted Balance
Notes Receivables from Stockholders
As Previously Reported
Additional Paid-in Capital
Additional Paid-in Capital
Cumulative Effect, Period of Adoption, Adjusted Balance
Additional Paid-in Capital
As Previously Reported
Additional Paid-in Capital
Recapitalization of shares due to Business Combination (Note 3)
Accumulated Deficit
Accumulated Deficit
Cumulative Effect, Period of Adoption, Adjusted Balance
Accumulated Deficit
As Previously Reported
AOCI Attributable to Parent [Member]
AOCI Attributable to Parent [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance
AOCI Attributable to Parent [Member]
As Previously Reported
Beginning balance (in shares) at Dec. 31, 2020 107,634,678                                        
Beginning balance at Dec. 31, 2020 $ 409,688,000                                        
Ending balance (in shares) at Dec. 31, 2021 108,721,433 332,314,737 108,721,433 223,593,304                                  
Ending balance at Dec. 31, 2021 $ 436,280,000 $ 436,280,000 $ 436,280,000                                    
Beginning balance (in shares) at Dec. 31, 2020         81,239,084                                
Beginning balance at Dec. 31, 2020 49,326,000       $ 8,000       $ (365,000)     $ 42,301,000       $ 7,522,000     $ (140,000)    
Increase (Decrease) in Stockholders' Equity                                          
Issuance of common stock (in shares)         19,433,510                                
Stock Issued During Period, Value, New Issues 57,062,000       $ 2,000             57,060,000                  
Repurchase or cancellation of common stock (in shares)         (1,605,435)                                
Stock Repurchased and Retired During Period, Value (5,648,000)                     (5,648,000)                  
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition 64,187,000                     64,187,000                  
Stockholders' Equity Note, Subscriptions Receivable, Vesting Of Common Stock (38,268,000)               (38,268,000)                        
Net loss (301,128,000)   (303,752,000)                         (301,128,000)          
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax 35,000                                   35,000    
Ending balance (in shares) at Dec. 31, 2021         99,067,159 302,805,767 99,067,159 203,738,608                          
Ending balance at Dec. 31, 2021 $ 240,160,000 $ 240,160,000 $ 240,160,000   $ 10,000 $ 10,000 $ 10,000   (38,633,000) $ (38,633,000) $ (38,633,000) 571,501,000 $ 571,501,000 $ 571,501,000   (292,613,000) $ (292,613,000) $ (292,613,000) (105,000) $ (105,000) $ (105,000)
Beginning balance (in shares) at Dec. 31, 2021 108,721,433 332,314,737 108,721,433 223,593,304                                  
Beginning balance at Dec. 31, 2021 $ 436,280,000 $ 436,280,000 $ 436,280,000                                    
Ending balance (in shares) at Jun. 30, 2022 332,314,737   108,721,433 223,593,304                                  
Ending balance at Jun. 30, 2022 $ 436,280,000   $ 436,280,000                                    
Beginning balance (in shares) at Dec. 31, 2021         99,067,159 302,805,767 99,067,159 203,738,608                          
Beginning balance at Dec. 31, 2021 240,160,000 $ 240,160,000 240,160,000   $ 10,000 $ 10,000 $ 10,000   (38,633,000) (38,633,000) (38,633,000) 571,501,000 571,501,000 571,501,000   (292,613,000) (292,613,000) (292,613,000) (105,000) (105,000) (105,000)
Ending balance (in shares) at Jun. 30, 2022         300,541,695   98,326,436 202,215,259                          
Ending balance at Jun. 30, 2022 $ (139,216,000)   $ (139,216,000)   $ 10,000   $ 10,000   (48,403,000)   (48,403,000) 601,756,000   601,756,000   (691,865,000)   (691,865,000) (714,000)   (714,000)
Beginning balance (in shares) at Dec. 31, 2021 108,721,433 332,314,737 108,721,433 223,593,304                                  
Beginning balance at Dec. 31, 2021 $ 436,280,000 $ 436,280,000 $ 436,280,000                                    
Ending balance (in shares) at Sep. 30, 2022 332,314,737                                        
Ending balance at Sep. 30, 2022 $ 436,280,000                                        
Beginning balance (in shares) at Dec. 31, 2021         99,067,159 302,805,767 99,067,159 203,738,608                          
Beginning balance at Dec. 31, 2021 240,160,000 $ 240,160,000 $ 240,160,000   $ 10,000 $ 10,000 $ 10,000   (38,633,000) (38,633,000) (38,633,000) 571,501,000 571,501,000 571,501,000   (292,613,000) (292,613,000) (292,613,000) (105,000) (105,000) (105,000)
Increase (Decrease) in Stockholders' Equity                                          
Issuance of common stock (in shares)         4,421,663                                
Stock Issued During Period, Value, New Issues 14,332,000                     14,332,000                  
Repurchase or cancellation of common stock (in shares)         (6,408,889)                                
Stock Repurchased and Retired During Period, Value (4,174,000)                     (4,174,000)                  
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition 34,003,000                     34,003,000                  
Stockholders' Equity Note, Subscriptions Receivable, Vesting Of Common Stock (12,781,000)               (12,781,000)                        
Net loss (625,864,000)                             (625,864,000)          
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax (764,000)                                   (764,000)    
Ending balance (in shares) at Sep. 30, 2022         300,818,541                                
Ending balance at Sep. 30, 2022 $ (355,088,000)       $ 10,000       (51,414,000)     615,662,000       (918,477,000)     (869,000)    
Beginning balance (in shares) at Dec. 31, 2021 108,721,433 332,314,737 108,721,433 223,593,304                                  
Beginning balance at Dec. 31, 2021 $ 436,280,000 $ 436,280,000 $ 436,280,000                                    
Ending balance (in shares) at Dec. 31, 2022 332,314,737 332,314,737 108,721,433 223,593,304                                  
Ending balance at Dec. 31, 2022 $ 436,280,000 $ 436,280,000 $ 436,280,000                                    
Beginning balance (in shares) at Dec. 31, 2021         99,067,159 302,805,767 99,067,159 203,738,608                          
Beginning balance at Dec. 31, 2021 $ 240,160,000 240,160,000 240,160,000   $ 10,000 $ 10,000 $ 10,000   (38,633,000) (38,633,000) (38,633,000) 571,501,000 571,501,000 571,501,000   (292,613,000) (292,613,000) (292,613,000) (105,000) (105,000) (105,000)
Increase (Decrease) in Stockholders' Equity                                          
Issuance of common stock for options exercised (in shares) 998,529                                        
Issuance of common stock (in shares)         1,493,076                                
Stock Issued During Period, Value, New Issues $ 15,323,000                     15,323,000                  
Repurchase or cancellation of common stock (in shares)         (2,481,879)                                
Stock Repurchased and Retired During Period, Value (2,804,000)                     (2,804,000)                  
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition 42,608,000                     42,608,000                  
Stockholders' Equity Note, Subscriptions Receivable, Vesting Of Common Stock (15,267,000)               (15,267,000)                        
Net loss (888,802,000)                             (888,802,000)          
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax $ (1,318,000)                                   (1,318,000)    
Ending balance (in shares) at Dec. 31, 2022 299,783,421         299,783,421 98,078,356 201,705,065                          
Ending balance at Dec. 31, 2022 $ (610,100,000) $ (610,100,000) $ (610,100,000)     $ 30,000 $ 10,000 $ 20,000   (53,900,000) (53,900,000)   626,608,000 626,628,000 $ (20,000)   (1,181,415,000) (1,181,415,000)   (1,423,000) (1,423,000)
Ending balance (in shares) at Jun. 30, 2022 332,314,737   108,721,433 223,593,304                                  
Ending balance at Jun. 30, 2022 $ 436,280,000   $ 436,280,000                                    
Ending balance (in shares) at Jun. 30, 2022         300,541,695   98,326,436 202,215,259                          
Ending balance at Jun. 30, 2022 $ (139,216,000)   $ (139,216,000)   $ 10,000   $ 10,000   (48,403,000)   (48,403,000) 601,756,000   601,756,000   (691,865,000)   (691,865,000) (714,000)   (714,000)
Ending balance (in shares) at Sep. 30, 2022 332,314,737                                        
Ending balance at Sep. 30, 2022 $ 436,280,000                                        
Increase (Decrease) in Stockholders' Equity                                          
Issuance of common stock (in shares)         926,783                                
Stock Issued During Period, Value, New Issues 5,304,000                     5,304,000                  
Repurchase or cancellation of common stock (in shares)         (649,937)                                
Stock Repurchased and Retired During Period, Value (3,163,000)                     (3,163,000)                  
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition 11,765,000                     11,765,000                  
Stockholders' Equity Note, Subscriptions Receivable, Vesting Of Common Stock (3,011,000)               (3,011,000)                        
Net loss (226,612,000)                             (226,612,000)          
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax (155,000)                                   (155,000)    
Ending balance (in shares) at Sep. 30, 2022         300,818,541                                
Ending balance at Sep. 30, 2022 $ (355,088,000)       $ 10,000       (51,414,000)     615,662,000       (918,477,000)     (869,000)    
Beginning balance (in shares) at Dec. 31, 2022 332,314,737 332,314,737 108,721,433 223,593,304                                  
Beginning balance at Dec. 31, 2022 $ 436,280,000 $ 436,280,000 $ 436,280,000                                    
Beginning balance (in shares) at Dec. 31, 2022 299,783,421         299,783,421 98,078,356 201,705,065                          
Beginning balance at Dec. 31, 2022 $ (610,100,000) $ (610,100,000) $ (610,100,000)     $ 30,000 $ 10,000 $ 20,000   (53,900,000) (53,900,000)   626,608,000 626,628,000 (20,000)   (1,181,415,000) (1,181,415,000)   (1,423,000) (1,423,000)
Beginning balance (in shares) at Dec. 31, 2022 332,314,737 332,314,737 108,721,433 223,593,304                                  
Beginning balance at Dec. 31, 2022 $ 436,280,000 $ 436,280,000 $ 436,280,000                                    
Ending balance (in shares) at Jun. 30, 2023 332,314,737   108,721,433 223,593,304                                  
Ending balance at Jun. 30, 2023 $ 436,280,000   $ 436,280,000                                    
Beginning balance (in shares) at Dec. 31, 2022 299,783,421         299,783,421 98,078,356 201,705,065                          
Beginning balance at Dec. 31, 2022 $ (610,100,000) $ (610,100,000) (610,100,000)     $ 30,000 $ 10,000 $ 20,000   (53,900,000) (53,900,000)   626,608,000 626,628,000 (20,000)   (1,181,415,000) (1,181,415,000)   (1,423,000) (1,423,000)
Ending balance (in shares) at Jun. 30, 2023         300,676,355   98,370,492 202,305,863                          
Ending balance at Jun. 30, 2023 $ (732,248,000)   $ (732,248,000)   $ 30,000   $ 10,000 $ 20,000 (56,254,000)   (56,254,000) 642,531,000   642,551,000 (20,000) (1,316,823,000)   (1,316,823,000) (1,732,000)   (1,732,000)
Beginning balance (in shares) at Dec. 31, 2022 332,314,737 332,314,737 108,721,433 223,593,304                                  
Beginning balance at Dec. 31, 2022 $ 436,280,000 $ 436,280,000 $ 436,280,000                                    
Increase (Decrease) in Temporary Equity [Roll Forward]                                          
Conversion of convertible preferred stock to common stock (in shares) (332,314,737)                                        
Conversion of convertible preferred stock to common stock $ (436,280,000)                                        
Ending balance (in shares) at Sep. 30, 2023 0                                        
Ending balance at Sep. 30, 2023 $ 0                                        
Beginning balance (in shares) at Dec. 31, 2022 299,783,421         299,783,421 98,078,356 201,705,065                          
Beginning balance at Dec. 31, 2022 $ (610,100,000) $ (610,100,000) $ (610,100,000)     $ 30,000 $ 10,000 $ 20,000   $ (53,900,000) (53,900,000)   $ 626,608,000 626,628,000 (20,000)   $ (1,181,415,000) (1,181,415,000)   $ (1,423,000) (1,423,000)
Increase (Decrease) in Stockholders' Equity                                          
Conversion of convertible preferred stock to common stock (in shares)         332,314,737                                
Conversion of convertible preferred stock to common stock 436,280,000       $ 33,000             436,247,000                  
Conversion of pre-closing bridge notes to common stock (in shares)         105,000,000                                
Conversion of pre-closing bridge notes to common stock 750,000,000       $ 12,000             749,988,000                  
Issuance of common stock upon Business Combination close (in shares)         10,698,910                                
Issuance of common stock upon Business Combination close 37,967,000       $ 1,000             37,966,000                  
Exercise of warrants (in shares)         14,576,174                                
Sale of Private Placement Warrants 4,290,000       $ 1,000             4,289,000                  
Transaction costs related to the Business Combination (21,437,000)                     (21,437,000)                  
Recognition of derivative liability related to earnout (1,112,000)                     (1,112,000)                  
Assumption private & public placement warrants (1,276,000)                     (1,276,000)                  
Issuance of common stock for options exercised (in shares)         1,460,854                                
Issuance of common stock for options exercised 4,459,000                     4,459,000                  
Repurchase or cancellation of common stock (in shares)         (3,326,710)                                
Stock Repurchased and Retired During Period, Value (8,000)                     (8,000)                  
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition 41,272,000                     41,272,000                  
Tax withholding upon vesting of restricted stock units (4,790,000)                     (4,790,000)                  
Stockholders' Equity Note, Subscriptions Receivable, Vesting Of Common Stock (3,395,000)               (3,395,000)                        
Shares Issued, Shares, Share-Based Payment Arrangement, Forfeited         (15,440,633)                                
Forfeiture of shares 0       $ (2,000)       30,161,000     (30,159,000)                  
Forgiveness of officer loans 1,530,000               1,530,000                        
Shares transferred in settlement of loans (in shares)         (7,481,315)                                
Shares transferred in settlement of loans 0       $ (1,000)       15,200,000     (15,199,000)                  
Net loss (475,441,000)                             (475,441,000)          
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax $ (1,007,000)                                   (1,007,000)    
Ending balance (in shares) at Sep. 30, 2023 737,585,438       737,585,438                                
Ending balance at Sep. 30, 2023 $ 157,232,000       $ 74,000       (10,404,000)     1,826,848,000       (1,656,856,000)     (2,430,000)    
Ending balance (in shares) at Jun. 30, 2023 332,314,737   108,721,433 223,593,304                                  
Ending balance at Jun. 30, 2023 $ 436,280,000   $ 436,280,000                                    
Ending balance (in shares) at Jun. 30, 2023         300,676,355   98,370,492 202,305,863                          
Ending balance at Jun. 30, 2023 $ (732,248,000)   $ (732,248,000)   $ 30,000   $ 10,000 $ 20,000 (56,254,000)   $ (56,254,000) 642,531,000   $ 642,551,000 $ (20,000) (1,316,823,000)   $ (1,316,823,000) (1,732,000)   $ (1,732,000)
Increase (Decrease) in Temporary Equity [Roll Forward]                                          
Conversion of convertible preferred stock to common stock (in shares) (332,314,737)                                        
Conversion of convertible preferred stock to common stock $ (436,280,000)                                        
Ending balance (in shares) at Sep. 30, 2023 0                                        
Ending balance at Sep. 30, 2023 $ 0                                        
Increase (Decrease) in Stockholders' Equity                                          
Conversion of convertible preferred stock to common stock (in shares)         332,314,737                                
Conversion of convertible preferred stock to common stock 436,280,000       $ 33,000             436,247,000                  
Conversion of pre-closing bridge notes to common stock (in shares)         105,000,000                                
Conversion of pre-closing bridge notes to common stock 750,000,000       $ 12,000             749,988,000                  
Issuance of common stock upon Business Combination close (in shares)         10,698,910                                
Issuance of common stock upon Business Combination close 37,967,000       $ 1,000             37,966,000                  
Exercise of warrants (in shares)         14,576,174                                
Sale of Private Placement Warrants 4,290,000       $ 1,000             4,289,000                  
Transaction costs related to the Business Combination (21,437,000)                     (21,437,000)                  
Recognition of derivative liability related to earnout (1,112,000)                     (1,112,000)                  
Assumption private & public placement warrants (1,276,000)                     (1,276,000)                  
Issuance of common stock for options exercised (in shares)         106,744                                
Issuance of common stock for options exercised 2,253,000                     2,253,000                  
Repurchase or cancellation of common stock (in shares)         (2,865,535)                                
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition 27,547,000                     27,547,000                  
Tax withholding upon vesting of restricted stock units (4,790,000)                     (4,790,000)                  
Stockholders' Equity Note, Subscriptions Receivable, Vesting Of Common Stock (1,041,000)               (1,041,000)                        
Shares Issued, Shares, Share-Based Payment Arrangement, Forfeited         (15,440,633)                                
Forfeiture of shares 0       $ (2,000)       30,161,000     (30,159,000)                  
Forgiveness of officer loans 1,530,000               1,530,000                        
Shares transferred in settlement of loans (in shares)         (7,481,314)                                
Shares transferred in settlement of loans 0       $ (1,000)       15,200,000     (15,199,000)                  
Net loss (340,033,000)                             (340,033,000)          
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax $ (698,000)                                   (698,000)    
Ending balance (in shares) at Sep. 30, 2023 737,585,438       737,585,438                                
Ending balance at Sep. 30, 2023 $ 157,232,000       $ 74,000       $ (10,404,000)     $ 1,826,848,000       $ (1,656,856,000)     $ (2,430,000)    
v3.23.4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Net Cash Provided by (Used in) Operating Activities [Abstract]            
Net income (loss) $ (340,033) $ (226,612) $ (475,441) $ (625,864) $ (888,802) $ (301,128)
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract]            
Depreciation     4,694 10,767 13,674 7,647
Other Asset Impairment Charges     5,208 113,118 145,178 0
Amortization of Intangible Assets 9,300 9,000 28,098 26,078 35,368 19,573
Amortization of Debt Issuance Costs and Discounts     6,043 213,534 273,048 19,592
Other Noncash Income (Expense)     2,138 1,529    
Fair Value Adjustment of Warrants (861) 0 (861) 0 (28,901) 32,790
Change in fair value of convertible preferred stock warrants 0 (4,202) (266) (24,613)    
Embedded Derivative, Gain (Loss) on Embedded Derivative, Net 237,667 (29,089) 236,603 (306,866) (236,603) 0
Share-Based Payment Arrangement, Noncash Expense     37,398 31,021 38,557 55,215
Provision (Recovery) For Loan Repurchase Reserve 866 11,683 178 25,125 33,518 13,780
Unrealized Gain (Loss) on Derivatives     (819) 291 5,695 7,744
Mortgage Loans Held For Sale, Change in Fair Value     6,070 81,247 54,266 67,678
Operating Lease, Right-of-Use Asset, Periodic Reduction     5,446 10,521 8,791 24,752
Increase (Decrease) in Operating Capital [Abstract]            
Payment for Origination, Loan, Mortgage, Held-for-Sale     (2,607,781) (9,940,429) (10,508,885) (51,280,393)
Proceeds from Sale, Loan, Mortgage, Held-for-Sale     2,685,341 11,390,991 12,035,915 51,791,633
Increase (Decrease) in Operating Lease Liability     (11,247) (11,952) (13,608) (11,742)
Increase (Decrease) in Other Receivables     6,043 22,976 37,878 (11,149)
Increase (Decrease) in Prepaid Expense and Other Assets     15,035 (4,549) (2,941) (60,442)
Increase (Decrease) in Accounts Payable and Accrued Liabilities     4,648 (26,110) (40,557) (7,958)
Increase (Decrease) In Escrow Payable     (4,848) (5,162) (3,554) (14,594)
Increase (Decrease) in Other Operating Liabilities     (17,847) (2,863) (19,814) 11,895
Net Cash Provided by (Used in) Operating Activities, Total     (76,167) 978,790 938,223 361,215
Net Cash Provided by (Used in) Investing Activities [Abstract]            
Payments to Acquire Property, Plant, and Equipment     (332) (7,798) (11,735) (15,722)
Proceeds from Sale of Property, Plant, and Equipment     717 0 4,473 0
Payments to Develop Software     (8,563) (18,581) (23,548) (52,926)
Payments to Acquire Businesses, Net of Cash Acquired     (12,713) 0 (3,847) (5,074)
Payment for Contingent Consideration Liability, Investing Activities     0 (3,847)    
Proceeds from Maturities, Prepayments and Calls of Short-Term Investments     12,324 0    
Payments to Acquire Short-Term Investments     (33,425) 0    
Net Cash Provided by (Used in) Investing Activities, Total     (41,992) (30,226) (34,657) (68,703)
Net Cash Provided by (Used in) Financing Activities [Abstract]            
Issuance of post-closing convertible notes (issued to a related party. See Note 10)     528,586 0    
Exercise of convertible preferred stock warrants 1,500   1,460 0    
Proceeds from Business Combination     21,616 0    
Proceeds from issuance of common stock     16,351 0    
Proceeds from Lines of Credit     2,237,603 9,582,426 10,131,559 50,500,028
Repayments of Lines of Credit     (2,308,116) (11,072,666) (11,655,427) (51,040,074)
Finance Lease, Principal Payments     (1,062) (824) (1,122) (955)
Payments For (Repayments Of) Customer Deposits     (2,466) 0    
Repayments of Long-Term Lines of Credit     (146,449) (5,000) (5,000) 0
Payments of Debt Issuance Costs     (3,561) 0 0 (425)
Proceeds from Stock Options Exercised     343 2,440 59 18,791
Payment of equity financing costs     (16,634) 0    
Payments for Repurchase of Common Stock     0 (5,570) (7,169) (5,648)
Net cash provided by (used in) financing activities     327,671 (1,499,194) (1,537,100) 304,542
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations     (1,006) (764) 725 35
Net Change in Cash     208,506 (551,394) (632,809) 597,089
Cash - Beginning of period     346,065 978,874 978,874 381,785
Cash - End of period 554,571 427,480 554,571 427,480 346,065 978,874
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract]            
Operating bank account 526,765 398,037 526,765 398,037 317,959 938,319
Restricted cash, end of period 27,806 29,443 27,806 29,443 28,106 40,555
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Total 554,571 427,480 554,571 427,480 346,065 978,874
Supplemental Cash Flow Information [Abstract]            
Interest Paid, Excluding Capitalized Interest, Operating Activities     12,008 24,941 13,069 78,809
Income Taxes Paid, Net     (5,886) 1,333 1,828 35,774
Noncash Investing and Financing Items [Abstract]            
Capitalization of stock-based compensation related to internal use software $ 2,500 $ 800 3,874 2,967 4,051 8,972
Vesting of stock options early exercised in prior periods     195 1,152    
Vesting of common stock issued via notes receivable from stockholders     3,395 12,781    
Noncash Or Part Noncash Acquisition, Earnout     3,430 $ 0 $ 0 $ 3,875
Forgiveness of notes receivable from stockholders     $ 46,350      
v3.23.4
BETTER 10K - CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Feb. 28, 2023
Dec. 31, 2022
Sep. 30, 2022
Jun. 30, 2022
Dec. 31, 2021
Jan. 01, 2021
Dec. 31, 2020
Assets                    
Cash and Cash Equivalents, at Carrying Value $ 526,765 $ 526,765     $ 317,959 $ 398,037   $ 938,319    
Restricted Cash 27,806 27,806     28,106 29,443   40,555    
Mortgage loans held for sale, at fair value 160,025 160,025     248,826     1,854,435    
Other Receivables 10,449       16,285     54,162    
Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization 17,806       30,504     40,959 $ 27,454 $ 20,718
Operating Lease, Right-of-Use Asset 23,550       41,979     56,970 65,889 0
Intangible Assets, Net (Excluding Goodwill) 48,406 48,406     61,996     72,489    
Goodwill 32,492 32,492     18,525     19,811   10,995
Derivative Asset 3,717 3,717     3,048     9,296    
Prepaid Expense and Other Assets 56,208 56,208     66,572     90,998    
Embedded Derivative, Fair Value of Embedded Derivative Asset 0       236,603     0    
Loan Commitment, Asset 0       16,119     121,723    
Total Assets 937,055       1,086,522     3,299,717 146,103 67,563
Liabilities [Abstract]                    
Warehouse Agreement Borrowings 73,536 73,536     144,049     1,667,917    
Bridge Loan 0       750,000     477,333    
Long-Term Line of Credit 0       144,403     149,022    
Accounts Payable and Accrued Liabilities 103,435       88,983     133,256 134,729 123,849
Escrow Payable 3,153       8,001     11,555    
Derivative Liability 1,678 1,678     1,828     2,382    
Warrants and Rights Outstanding 0       3,096     31,997    
Operating Lease, Liability 33,307     $ 13,000 60,049     73,657 69,566 0
Total other liabilities 40,278       59,933     76,158 44,690 47,588
Total Liabilities 779,823       1,260,342     2,623,277 248,985 171,437
Commitments and Contingencies                
Convertible preferred stock 0 0 $ 436,280   436,280 436,280 $ 436,280 436,280   409,688
Equity, Attributable to Parent [Abstract]                    
Common stock 74       10     10    
Stockholders' Equity Note, Subscriptions Receivable (10,404) (10,400)     (53,900)     (38,633)    
Additional paid-in capital 1,826,848       626,628     571,501    
Retained earnings (1,656,856)       (1,181,415)     (292,613) 8,515 7,522
Accumulated Other Comprehensive Income (Loss), Net of Tax (2,430)       (1,423)     (105)    
Equity, Attributable to Parent, Total 157,232 $ 157,232 $ (732,248)   (610,100) $ (355,088) $ (139,216) 240,160 $ 8,515 $ 49,326
Liabilities and Equity, Total $ 937,055       $ 1,086,522     $ 3,299,717    
v3.23.4
BETTER 10K - CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Mortgage loans held for sale, at fair value $ 248,826 $ 1,854,435
Other Receivables 16,285 54,162
Total other liabilities $ 59,933 $ 76,158
Convertible preferred stock, par value (in dollars per share) $ 0.0001  
Convertible preferred stock, authorized (in shares) 602,405,839  
Convertible preferred stock, issued (in shares) 332,314,737  
Convertible preferred stock, outstanding (in shares) 332,314,737 108,721,433
Convertible preferred stock, liquidation preference $ 420,742  
Common stock, par value (in dollars per share) $ 0.0001  
Common stock, authorized (in shares) 1,086,027,188  
Common stock, issued (in shares) 299,783,421  
Common stock, outstanding (in shares) 299,783,421  
Period Prior To Reverse Recapitalization    
Convertible preferred stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Convertible preferred stock, authorized (in shares) 197,085,530 197,085,530
Convertible preferred stock, issued (in shares) 108,721,433 108,721,433
Convertible preferred stock, outstanding (in shares) 108,721,433 108,721,433
Convertible preferred stock, liquidation preference $ 420,742 $ 506,450
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, authorized (in shares) 355,309,046 355,309,046
Common stock, issued (in shares) 98,078,356 99,067,159
Common stock, outstanding (in shares) 98,078,356 99,067,159
Related party    
Mortgage loans held for sale, at fair value $ 8,320 $ 0
Other Receivables 0 37
Total other liabilities $ 440 $ 411
v3.23.4
BETTER 10K - CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Interest Income (Expense), Net [Abstract]            
Interest Income, Operating $ 3,667 $ 4,977 $ 12,527 $ 22,918 $ 26,714 $ 89,627
Interest Expense (2,758) (2,838) (9,544) (14,775) (17,059) (69,929)
Interest Income (Expense), Net, Total 909 2,139 2,983 8,143 9,655 19,698
Revenues, Net of Interest Expense, Total 16,449 28,653 67,569 376,448 382,976 1,241,670
Operating Expenses [Abstract]            
General and administrative expenses 59,189 46,499 113,392 161,293 194,565 231,220
Marketing and Advertising Expense 5,128 9,948 17,122 59,801 69,021 248,895
Research and Development Expense 20,732 29,414 66,639 100,354 124,912 144,490
Restructuring, Settlement and Impairment Provisions 679 45,781 11,798 212,490 247,693 17,048
Costs and Expenses, Total 108,055 205,951 291,945 1,109,612 1,253,806 1,481,346
Operating Income (Loss), Total (91,606) (177,298) (224,376) (733,164) (870,830) (239,676)
Other Income and Expenses [Abstract]            
Other Nonoperating Income (Expense) 977 746 5,187 861 3,741 0
Fair Value Adjustment of Warrants (861) 0 (861) 0 (28,901) 32,790
Embedded Derivative, Gain (Loss) on Embedded Derivative, Net (237,667) 29,089 (236,603) 306,866 236,603 0
Nonoperating Income (Expense), Total (247,768) (49,366) (248,526) 108,750 (16,872) (63,835)
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total (339,374) (226,664) (472,902) (624,414) (887,702) (303,511)
Income Tax Expense (Benefit) 659 (52) 2,539 1,450 1,100 (2,383)
Net income (loss) (340,033) (226,612) (475,441) (625,864) (888,802) (301,128)
Other Comprehensive Income (Loss), Net of Tax [Abstract]            
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax (698) (155) (1,007) (764) (1,318) 35
Comprehensive Income (Loss), Net of Tax, Attributable to Parent, Total $ (340,731) $ (226,767) $ (476,448) $ (626,628) $ (890,120) $ (301,093)
Earnings Per Share [Abstract]            
Basic net income (loss) per share $ (0.68) $ (0.77) $ (1.30) $ (2.16) $ (9.33) $ (3.46)
Diluted net income (loss) per share $ (0.68) $ (0.77) $ (1.30) $ (2.16) $ (9.33) $ (3.46)
Weighted average common shares outstanding - Basic (in shares) 496,577,751 292,660,334 364,817,445 289,934,149 95,303,684 86,984,646
Diluted weighted average shares outstanding 496,577,751 292,660,334 364,817,445 289,934,149 95,303,684 86,984,646
Non-Funding Debt            
Other Income and Expenses [Abstract]            
Interest expense on debt $ (11,939) $ (3,304) $ (18,237) $ (10,077) $ (13,450) $ (11,834)
Pre-Closing Bridge Notes            
Other Income and Expenses [Abstract]            
Interest expense on debt 0 (80,099) 0 (213,513) (272,667) (19,211)
Mortgage Platform            
Revenues [Abstract]            
Revenues 14,207 11,087 54,927 106,586 105,658 1,088,223
Operating Expenses [Abstract]            
Expenses 19,166 55,545 70,809 292,915 327,815 700,113
Cash Offer Program            
Revenues [Abstract]            
Revenues 0 9,739 304 226,096 228,721 39,361
Operating Expenses [Abstract]            
Expenses 0 9,813 398 227,509 230,144 39,505
Other Platform            
Revenues [Abstract]            
Revenues 1,333 5,688 9,355 35,623 38,942 94,388
Operating Expenses [Abstract]            
Expenses $ 3,161 $ 8,951 $ 11,787 $ 55,250 $ 59,656 $ 100,075
v3.23.4
BETTER 10K - CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
General and administrative expenses $ 59,189 $ 46,499 $ 113,392 $ 161,293 $ 194,565 $ 231,220
Marketing and Advertising Expense 5,128 9,948 17,122 59,801 69,021 248,895
Mortgage Platform            
Expenses 19,166 55,545 70,809 292,915 327,815 700,113
Cash Offer Program            
Expenses 0 9,813 398 227,509 230,144 39,505
Other Platform            
Expenses $ 3,161 $ 8,951 $ 11,787 $ 55,250 59,656 100,075
Related party            
General and administrative expenses         583 1,585
Marketing and Advertising Expense         55 575
Related party | Mortgage Platform            
Expenses         $ 1,940 $ 396
v3.23.4
BETTER 10K - CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - USD ($)
Total
Period Prior To Reverse Recapitalization
Cumulative Effect, Period of Adoption, Adjustment
Common Stock
Common Stock
Period Prior To Reverse Recapitalization
Receivables from Stockholder
Receivables from Stockholder
Period Prior To Reverse Recapitalization
Additional Paid-in Capital
Additional Paid-in Capital
Period Prior To Reverse Recapitalization
Accumulated Deficit
Accumulated Deficit
Period Prior To Reverse Recapitalization
Accumulated Deficit
Cumulative Effect, Period of Adoption, Adjustment
AOCI Attributable to Parent [Member]
AOCI Attributable to Parent [Member]
Period Prior To Reverse Recapitalization
Beginning balance (in shares) at Dec. 31, 2020 107,634,678                          
Beginning balance at Dec. 31, 2020 $ 409,688,000                          
Increase (Decrease) in Temporary Equity [Roll Forward]                            
Exercise of convertible preferred stock warrants (in shares) 1,086,755                          
Exercise of convertible preferred stock warrants $ 26,592,000                          
Ending balance (in shares) at Dec. 31, 2021 108,721,433 108,721,433                        
Ending balance at Dec. 31, 2021 $ 436,280,000                          
Beginning balance (in shares) at Dec. 31, 2020       81,239,084                    
Beginning balance at Dec. 31, 2020 49,326,000   $ 993,000 $ 8,000   $ (365,000)   $ 42,301,000   $ 7,522,000   $ 993,000 $ (140,000)  
Increase (Decrease) in Stockholders' Equity                            
Issuance of common stock (in shares)       19,433,510                    
Stock Issued During Period, Value, New Issues 57,062,000     $ 2,000       57,060,000            
Repurchase or cancellation of common stock (in shares)       (1,605,435)                    
Stock Repurchased and Retired During Period, Value (5,648,000)             (5,648,000)            
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition 64,187,000             64,187,000            
Stockholders' Equity Note, Subscriptions Receivable, Vesting Of Common Stock (38,268,000)         (38,268,000)                
Adjustments To Additional Paid In Capital, Capital Contribution From Issuance Of Notes 291,878,000             291,878,000            
Loan commitment asset 121,723,000             121,723,000            
Net income (loss) (301,128,000)                 (301,128,000)        
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax 35,000                       35,000  
Ending balance (in shares) at Dec. 31, 2021   99,067,159   99,067,159                    
Ending balance at Dec. 31, 2021 $ 240,160,000     $ 10,000   (38,633,000)   571,501,000   (292,613,000)     (105,000)  
Beginning balance (in shares) at Dec. 31, 2021 108,721,433 108,721,433                        
Beginning balance at Dec. 31, 2021 $ 436,280,000                          
Ending balance (in shares) at Jun. 30, 2022 332,314,737                          
Ending balance at Jun. 30, 2022 $ 436,280,000                          
Beginning balance (in shares) at Dec. 31, 2021   99,067,159   99,067,159                    
Beginning balance at Dec. 31, 2021 240,160,000     $ 10,000   (38,633,000)   571,501,000   (292,613,000)     (105,000)  
Ending balance (in shares) at Jun. 30, 2022       300,541,695                    
Ending balance at Jun. 30, 2022 $ (139,216,000)     $ 10,000   (48,403,000)   601,756,000   (691,865,000)     (714,000)  
Beginning balance (in shares) at Dec. 31, 2021 108,721,433 108,721,433                        
Beginning balance at Dec. 31, 2021 $ 436,280,000                          
Ending balance (in shares) at Sep. 30, 2022 332,314,737                          
Ending balance at Sep. 30, 2022 $ 436,280,000                          
Beginning balance (in shares) at Dec. 31, 2021   99,067,159   99,067,159                    
Beginning balance at Dec. 31, 2021 240,160,000     $ 10,000   (38,633,000)   571,501,000   (292,613,000)     (105,000)  
Increase (Decrease) in Stockholders' Equity                            
Issuance of common stock (in shares)       4,421,663                    
Stock Issued During Period, Value, New Issues 14,332,000             14,332,000            
Repurchase or cancellation of common stock (in shares)       (6,408,889)                    
Stock Repurchased and Retired During Period, Value (4,174,000)             (4,174,000)            
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition 34,003,000             34,003,000            
Stockholders' Equity Note, Subscriptions Receivable, Vesting Of Common Stock (12,781,000)         (12,781,000)                
Net income (loss) (625,864,000)                 (625,864,000)        
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax (764,000)                       (764,000)  
Ending balance (in shares) at Sep. 30, 2022       300,818,541                    
Ending balance at Sep. 30, 2022 $ (355,088,000)     $ 10,000   (51,414,000)   615,662,000   (918,477,000)     (869,000)  
Beginning balance (in shares) at Dec. 31, 2021 108,721,433 108,721,433                        
Beginning balance at Dec. 31, 2021 $ 436,280,000                          
Ending balance (in shares) at Dec. 31, 2022 332,314,737 108,721,433                        
Ending balance at Dec. 31, 2022 $ 436,280,000 $ 436,280,000                        
Beginning balance (in shares) at Dec. 31, 2021   99,067,159   99,067,159                    
Beginning balance at Dec. 31, 2021 240,160,000     $ 10,000   (38,633,000)   571,501,000   (292,613,000)     (105,000)  
Increase (Decrease) in Stockholders' Equity                            
Issuance of common stock (in shares)       1,493,076                    
Stock Issued During Period, Value, New Issues 15,323,000             15,323,000            
Repurchase or cancellation of common stock (in shares)       (2,481,879)                    
Stock Repurchased and Retired During Period, Value (2,804,000)             (2,804,000)            
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition 42,608,000             42,608,000            
Stockholders' Equity Note, Subscriptions Receivable, Vesting Of Common Stock (15,267,000)         (15,267,000)                
Net income (loss) (888,802,000)                 (888,802,000)        
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax $ (1,318,000)                       (1,318,000)  
Ending balance (in shares) at Dec. 31, 2022 299,783,421 98,078,356     98,078,356                  
Ending balance at Dec. 31, 2022 $ (610,100,000) $ (610,100,000)     $ 10,000   $ (53,900,000)   $ 626,628,000   $ (1,181,415,000)     $ (1,423,000)
Ending balance (in shares) at Jun. 30, 2022 332,314,737                          
Ending balance at Jun. 30, 2022 $ 436,280,000                          
Ending balance (in shares) at Jun. 30, 2022       300,541,695                    
Ending balance at Jun. 30, 2022 $ (139,216,000)     $ 10,000   (48,403,000)   601,756,000   (691,865,000)     (714,000)  
Ending balance (in shares) at Sep. 30, 2022 332,314,737                          
Ending balance at Sep. 30, 2022 $ 436,280,000                          
Increase (Decrease) in Stockholders' Equity                            
Issuance of common stock (in shares)       926,783                    
Stock Issued During Period, Value, New Issues 5,304,000             5,304,000            
Repurchase or cancellation of common stock (in shares)       (649,937)                    
Stock Repurchased and Retired During Period, Value (3,163,000)             (3,163,000)            
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition 11,765,000             11,765,000            
Stockholders' Equity Note, Subscriptions Receivable, Vesting Of Common Stock (3,011,000)         (3,011,000)                
Net income (loss) (226,612,000)                 (226,612,000)        
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax (155,000)                       (155,000)  
Ending balance (in shares) at Sep. 30, 2022       300,818,541                    
Ending balance at Sep. 30, 2022 $ (355,088,000)     $ 10,000   (51,414,000)   615,662,000   (918,477,000)     (869,000)  
Beginning balance (in shares) at Dec. 31, 2022 332,314,737 108,721,433                        
Beginning balance at Dec. 31, 2022 $ 436,280,000 $ 436,280,000                        
Beginning balance (in shares) at Dec. 31, 2022 299,783,421 98,078,356     98,078,356                  
Beginning balance at Dec. 31, 2022 $ (610,100,000) $ (610,100,000)     $ 10,000   (53,900,000)   626,628,000   (1,181,415,000)     (1,423,000)
Beginning balance (in shares) at Dec. 31, 2022 332,314,737 108,721,433                        
Beginning balance at Dec. 31, 2022 $ 436,280,000 $ 436,280,000                        
Ending balance (in shares) at Jun. 30, 2023 332,314,737                          
Ending balance at Jun. 30, 2023 $ 436,280,000                          
Beginning balance (in shares) at Dec. 31, 2022 299,783,421 98,078,356     98,078,356                  
Beginning balance at Dec. 31, 2022 $ (610,100,000) $ (610,100,000)     $ 10,000   (53,900,000)   626,628,000   (1,181,415,000)     (1,423,000)
Ending balance (in shares) at Jun. 30, 2023       300,676,355                    
Ending balance at Jun. 30, 2023 $ (732,248,000)     $ 30,000   (56,254,000)   642,531,000   (1,316,823,000)     (1,732,000)  
Beginning balance (in shares) at Dec. 31, 2022 332,314,737 108,721,433                        
Beginning balance at Dec. 31, 2022 $ 436,280,000 $ 436,280,000                        
Ending balance (in shares) at Sep. 30, 2023 0                          
Ending balance at Sep. 30, 2023 $ 0                          
Beginning balance (in shares) at Dec. 31, 2022 299,783,421 98,078,356     98,078,356                  
Beginning balance at Dec. 31, 2022 $ (610,100,000) $ (610,100,000)     $ 10,000   $ (53,900,000)   $ 626,628,000   $ (1,181,415,000)     $ (1,423,000)
Increase (Decrease) in Stockholders' Equity                            
Repurchase or cancellation of common stock (in shares)       (3,326,710)                    
Stock Repurchased and Retired During Period, Value (8,000)             (8,000)            
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition 41,272,000             41,272,000            
Stockholders' Equity Note, Subscriptions Receivable, Vesting Of Common Stock (3,395,000)         (3,395,000)                
Net income (loss) (475,441,000)                 (475,441,000)        
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax $ (1,007,000)                       (1,007,000)  
Ending balance (in shares) at Sep. 30, 2023 737,585,438     737,585,438                    
Ending balance at Sep. 30, 2023 $ 157,232,000     $ 74,000   (10,404,000)   1,826,848,000   (1,656,856,000)     (2,430,000)  
Ending balance (in shares) at Jun. 30, 2023 332,314,737                          
Ending balance at Jun. 30, 2023 $ 436,280,000                          
Ending balance (in shares) at Jun. 30, 2023       300,676,355                    
Ending balance at Jun. 30, 2023 $ (732,248,000)     $ 30,000   (56,254,000)   642,531,000   (1,316,823,000)     (1,732,000)  
Ending balance (in shares) at Sep. 30, 2023 0                          
Ending balance at Sep. 30, 2023 $ 0                          
Increase (Decrease) in Stockholders' Equity                            
Repurchase or cancellation of common stock (in shares)       (2,865,535)                    
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition 27,547,000             27,547,000            
Stockholders' Equity Note, Subscriptions Receivable, Vesting Of Common Stock (1,041,000)         (1,041,000)                
Net income (loss) (340,033,000)                 (340,033,000)        
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax $ (698,000)                       (698,000)  
Ending balance (in shares) at Sep. 30, 2023 737,585,438     737,585,438                    
Ending balance at Sep. 30, 2023 $ 157,232,000     $ 74,000   $ (10,404,000)   $ 1,826,848,000   $ (1,656,856,000)     $ (2,430,000)  
v3.23.4
BETTER 10K - CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Net Cash Provided by (Used in) Operating Activities [Abstract]        
Net income (loss) $ (475,441) $ (625,864) $ (888,802) $ (301,128)
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract]        
Depreciation 4,694 10,767 13,674 7,647
Other Asset Impairment Charges 5,208 113,118 145,178 0
Amortization of Intangible Assets 28,098 26,078 35,368 19,573
Amortization of Debt Issuance Costs and Discounts 6,043 213,534 273,048 19,592
Fair Value Adjustment of Warrants (861) 0 (28,901) 32,790
Embedded Derivative, Gain (Loss) on Embedded Derivative, Net 236,603 (306,866) (236,603) 0
Share-Based Payment Arrangement, Noncash Expense 37,398 31,021 38,557 55,215
Provision (Recovery) For Loan Repurchase Reserve, Net Of Charge Offs     33,518 10,102
Unrealized Gain (Loss) on Derivatives (819) 291 5,695 7,744
Mortgage Loans Held For Sale, Change in Fair Value 6,070 81,247 54,266 67,678
Operating Lease, Right-of-Use Asset, Periodic Reduction 5,446 10,521 8,791 24,752
Increase (Decrease) in Operating Capital [Abstract]        
Payment for Origination, Loan, Mortgage, Held-for-Sale (2,607,781) (9,940,429) (10,508,885) (51,280,393)
Proceeds from Sale, Loan, Mortgage, Held-for-Sale 2,685,341 11,390,991 12,035,915 51,791,633
Increase (Decrease) in Operating Lease Liability (11,247) (11,952) (13,608) (11,742)
Increase (Decrease) in Other Receivables 6,043 22,976 37,878 (11,149)
Increase (Decrease) in Prepaid Expense and Other Assets 15,035 (4,549) (2,941) (60,442)
Increase (Decrease) in Accounts Payable and Accrued Liabilities 4,648 (26,110) (40,557) (7,958)
Increase (Decrease) In Escrow Payable (4,848) (5,162) (3,554) (14,594)
Increase (Decrease) in Other Operating Liabilities (17,847) (2,863) (19,814) 11,895
Net Cash Provided by (Used in) Operating Activities, Total (76,167) 978,790 938,223 361,215
Net Cash Provided by (Used in) Investing Activities [Abstract]        
Payments to Acquire Property, Plant, and Equipment (332) (7,798) (11,735) (15,722)
Proceeds from Sale of Property, Plant, and Equipment 717 0 4,473 0
Payments to Develop Software (8,563) (18,581) (23,548) (52,926)
Payments to Acquire Businesses, Net of Cash Acquired (12,713) 0 (3,847) (5,074)
Proceeds from sale of mortgage servicing rights     0 5,019
Net Cash Provided by (Used in) Investing Activities, Total (41,992) (30,226) (34,657) (68,703)
Net Cash Provided by (Used in) Financing Activities [Abstract]        
Proceeds from Lines of Credit 2,237,603 9,582,426 10,131,559 50,500,028
Repayments of Lines of Credit (2,308,116) (11,072,666) (11,655,427) (51,040,074)
Finance Lease, Principal Payments (1,062) (824) (1,122) (955)
Borrowings on corporate line of credit     0 80,000
Repayments of Long-Term Lines of Credit (146,449) (5,000) (5,000) 0
Proceeds from issuance of Pre-Closing Bridge Notes     0 458,122
Excess capital/proceeds from issuance of Pre-Closing Bridge Notes     0 291,878
Payments of Debt Issuance Costs (3,561) 0 0 (425)
Proceeds from Stock Options Exercised 343 2,440 59 18,791
Proceeds From (Repayments Of) Stock Options Exercised Not Yet Vested     0 2,825
Payments for Repurchase of Common Stock 0 (5,570) (7,169) (5,648)
Net cash provided by (used in) financing activities 327,671 (1,499,194) (1,537,100) 304,542
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations (1,006) (764) 725 35
Net Change in Cash 208,506 (551,394) (632,809) 597,089
Cash - Beginning of period 346,065 978,874 978,874 381,785
Cash - End of period 554,571 427,480 346,065 978,874
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract]        
Cash and Cash Equivalents, at Carrying Value 526,765 398,037 317,959 938,319
Restricted Cash 27,806 29,443 28,106 40,555
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Total 554,571 427,480 346,065 978,874
Supplemental Cash Flow Information [Abstract]        
Interest Paid, Excluding Capitalized Interest, Operating Activities 12,008 24,941 13,069 78,809
Income Taxes Paid, Net (5,886) 1,333 1,828 35,774
Noncash Investing and Financing Items [Abstract]        
Capitalized stock-based compensation costs 3,874 2,967 4,051 8,972
Noncash Vesting Of Stock Options Exercsied In Prior Periods     16,383 1,154
Stockholders' Equity Note, Subscriptions Receivable, Vesting Of Common Stock 3,395 12,781 15,267 38,268
Noncash Change In Loan Commitment Asset     0 121,723
Cashless exercise of convertible preferred stock warrants     0 26,592
Noncash Or Part Noncash Acquisition, Earnout $ 3,430 $ 0 $ 0 $ 3,875
v3.23.4
AURORA 10Q - UNAUDITED AND AUDITED CONDENSED BALANCE SHEETS - USD ($)
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Dec. 31, 2022
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Jan. 01, 2021
Dec. 31, 2020
Current assets:                      
Cash and Cash Equivalents, at Carrying Value $ 526,765,000 $ 526,765,000     $ 317,959,000 $ 398,037,000     $ 938,319,000    
Total Assets 937,055,000       1,086,522,000       3,299,717,000 $ 146,103,000 $ 67,563,000
Current liabilities:                      
Total Liabilities 779,823,000       1,260,342,000       2,623,277,000 248,985,000 171,437,000
Commitments and Contingencies                  
Class A ordinary shares subject to possible redemption, 212,598 and 24,300,287 shares at redemption value of $10.36 and $10.15 per share as of June 30, 2023 and December 31, 2022 0 0 $ 436,280,000   436,280,000 436,280,000 $ 436,280,000   436,280,000   409,688,000
Shareholders' Equity                      
Ordinary shares 74,000       10,000       10,000    
Additional paid-in capital 1,826,848,000       626,628,000       571,501,000    
Retained earnings (1,656,856,000)       (1,181,415,000)       (292,613,000) 8,515,000 7,522,000
Equity, Attributable to Parent, Total 157,232,000 $ 157,232,000 (732,248,000)   (610,100,000) $ (355,088,000) (139,216,000)   240,160,000 $ 8,515,000 49,326,000
Liabilities and Equity, Total $ 937,055,000       1,086,522,000       3,299,717,000    
Aurora Acquisition Corp                      
Current assets:                      
Cash and Cash Equivalents, at Carrying Value     1,228,847   285,307       37,645    
Accounts Receivable     1,250,000   0       502,956    
Prepaid expenses and other current assets     75,959   133,876       526,674    
Total Current Assets     2,554,806   419,183       1,067,275    
Cash held in Trust Account     21,317,257   282,284,619       278,022,397    
Total Assets     23,872,063   282,703,802       279,089,672    
Current liabilities:                      
Accounts payable and accrued offering costs     3,604,839   4,711,990       5,682,639    
Deferred credit liability     16,250,000   7,500,000       0    
Total Current Liabilities     20,267,234   15,024,385       7,094,934    
Warrant Liability     480,601   472,512       13,340,717    
Total Liabilities     20,747,835   15,496,897       28,940,751    
Commitments and Contingencies                  
Shareholders' Equity                      
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding     0   0       0    
Additional paid-in capital     54,851   18,389,006       13,692,181    
Retained earnings     866,886   2,188,367       (6,547,175)    
Equity, Attributable to Parent, Total     922,616 $ 1,773,701 20,578,418   $ 17,976,555 $ 8,156,091 7,146,051   $ 5,000
Liabilities and Equity, Total     23,872,063   282,703,802       279,089,672    
Aurora Acquisition Corp | Related party                      
Current liabilities:                      
Related party loans     412,395   2,812,395       1,412,295    
Class A ordinary share | Aurora Acquisition Corp                      
Shareholders' Equity                      
Ordinary shares     184   350       350    
Class A ordinary shares subject to possible redemption | Aurora Acquisition Corp                      
Current liabilities:                      
Class A ordinary shares subject to possible redemption, 212,598 and 24,300,287 shares at redemption value of $10.36 and $10.15 per share as of June 30, 2023 and December 31, 2022     2,201,612 $ 2,181,658 246,628,487       243,002,870    
Class B ordinary shares | Aurora Acquisition Corp                      
Shareholders' Equity                      
Ordinary shares     $ 695   $ 695       $ 695    
v3.23.4
AURORA 10Q - UNAUDITED AND AUDITED CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares
Sep. 30, 2023
Aug. 24, 2023
Jun. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Jun. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Class A ordinary stock subject to possible redemption, outstanding (in shares) 0   332,314,737 332,314,737 332,314,737 332,314,737 108,721,433 107,634,678
Ordinary shares, par value, (in dollars per share) $ 0.0001     $ 0.0001        
Common stock, authorized (in shares) 3,300,000,000     1,086,027,188        
Ordinary shares issued 737,585,438     299,783,421        
Ordinary shares outstanding 737,585,438     299,783,421        
Class A ordinary share                
Ordinary shares, par value, (in dollars per share) $ 0.0001              
Common stock, authorized (in shares) 1,800,000,000     24,452,565        
Ordinary shares issued   91,300,735   24,452,565        
Ordinary shares outstanding       24,452,565        
Class B ordinary shares                
Ordinary shares, par value, (in dollars per share) $ 0.0001              
Common stock, authorized (in shares) 700,000,000     588,261,164        
Ordinary shares issued   574,407,420   171,441,780        
Ordinary shares outstanding       171,441,780        
Aurora Acquisition Corp                
Preference shares, par value, (per share)     $ 0.0001 $ 0.0001     $ 0.0001  
Preference shares, share authorized     5,000,000 5,000,000     5,000,000  
Preference shares, share issued     0 0     0  
Preference shares, share outstanding     0 0     0  
Aurora Acquisition Corp | Class A ordinary share                
Ordinary shares, par value, (in dollars per share)     $ 0.0001 $ 0.0001     $ 0.0001  
Common stock, authorized (in shares)     500,000,000 500,000,000     500,000,000  
Aurora Acquisition Corp | Class A ordinary shares subject to possible redemption                
Class A ordinary stock subject to possible redemption, outstanding (in shares)     212,598 24,300,287     24,300,287  
Class A common stock subject to possible redemption, price per share     $ 10.36 $ 10.15        
Aurora Acquisition Corp | Class A ordinary shares not subject to possible redemption                
Ordinary shares, par value, (in dollars per share)     $ 0.0001 $ 0.0001        
Common stock, authorized (in shares)     500,000,000 500,000,000        
Ordinary shares issued     1,836,240 3,500,000     3,500,000  
Ordinary shares outstanding     1,836,240 3,500,000     3,500,000  
Aurora Acquisition Corp | Class B ordinary shares                
Ordinary shares, par value, (in dollars per share)     $ 0.0001 $ 0.0001     $ 0.0001  
Common stock, authorized (in shares)     50,000,000 50,000,000     50,000,000  
Ordinary shares issued     6,950,072 6,950,072     6,950,072  
Ordinary shares outstanding     6,950,072 6,950,072     6,950,072  
v3.23.4
AURORA 10Q - UNAUDITED STATEMENTS OF OPERATIONS - USD ($)
 3 Months Ended 6 Months Ended 9 Months Ended 12 Months Ended
Jun. 11, 2023
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Jun. 30, 2023
Jun. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Operating Income (Loss), Total   $ (91,606,000)     $ (177,298,000)         $ (224,376,000) $ (733,164,000) $ (870,830,000) $ (239,676,000)
Other income (expense):                          
Change in fair value of warrants   861,000     0         861,000 0 28,901,000 (32,790,000)
Net income (loss)   $ (340,033,000)     $ (226,612,000)         $ (475,441,000) $ (625,864,000) $ (888,802,000) $ (301,128,000)
Basic weighted average shares outstanding   496,577,751     292,660,334         364,817,445 289,934,149 95,303,684 86,984,646
Diluted weighted average shares outstanding   496,577,751     292,660,334         364,817,445 289,934,149 95,303,684 86,984,646
Basic net income (loss) per share   $ (0.68)     $ (0.77)         $ (1.30) $ (2.16) $ (9.33) $ (3.46)
Diluted net income (loss) per share   $ (0.68)     $ (0.77)         $ (1.30) $ (2.16) $ (9.33) $ (3.46)
Aurora Acquisition Corp                          
Formation and operating costs     $ 1,836,939     $ 2,630,587   $ 3,667,595 $ 3,721,876     $ 8,577,543 $ 8,120,280
Operating Income (Loss), Total     (1,836,939)     (2,630,587)   (3,667,595) (3,721,876)     (8,577,543) (8,120,280)
Other income (expense):                          
Interest earned on marketable securities held in Trust Account     192,302     420,489   2,156,230 443,751     4,262,222 19,527
Change in fair value of warrants     253,138     3,813,346   (8,089) 5,891,413     12,868,205 1,576,196
Gain on deferred underwriting fee     0     182,658   0 182,658     182,658 0
Gain on extinguishment of debt $ 560,000   560,368     0   560,368 0        
Net income (loss)     $ (831,131) $ (127,955)   $ 1,785,906 $ 1,010,040 $ (959,086) $ 2,795,946     $ 8,735,542 $ (6,527,175)
Class A ordinary shares subject to possible redemption | Aurora Acquisition Corp                          
Other income (expense):                          
Basic weighted average shares outstanding     212,598     24,300,287   7,541,254 24,300,287     24,300,287 19,827,082
Diluted weighted average shares outstanding     212,598     24,300,287   7,541,254 24,300,287     24,300,287 19,827,082
Basic net income (loss) per share     $ (0.09)     $ 0.05   $ (0.06) $ 0.08     $ 0.25 $ (0.22)
Diluted net income (loss) per share     $ (0.09)     $ 0.05   $ (0.06) $ 0.08     $ 0.25 $ (0.22)
Non-Redeemable Class A and Class B Common Stock | Aurora Acquisition Corp                          
Other income (expense):                          
Basic weighted average shares outstanding     8,786,372     10,450,072   9,282,724 10,450,072     10,450,072 9,590,182
Diluted weighted average shares outstanding     8,786,372     10,450,072   9,282,724 10,450,072     10,450,072 9,590,182
Basic net income (loss) per share     $ (0.09)     $ 0.05   $ (0.06) $ 0.08     $ 0.25 $ (0.22)
Diluted net income (loss) per share     $ (0.09)     $ 0.05   $ (0.06) $ 0.08     $ 0.25 $ (0.22)
v3.23.4
AURORA 10Q - UNAUDITED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)
Total
Aurora Acquisition Corp
Common Stock
Additional Paid-in Capital
Additional Paid-in Capital
Aurora Acquisition Corp
Accumulated Deficit
Accumulated Deficit
Aurora Acquisition Corp
Class A ordinary share
Common Stock
Aurora Acquisition Corp
Class B ordinary shares
Common Stock
Aurora Acquisition Corp
Beginning balance (in shares) at Dec. 31, 2020                 7,200,000
Beginning balance at Dec. 31, 2020 $ 49,326,000 $ 5,000 $ 8,000 $ 42,301,000 $ 24,280 $ 7,522,000 $ (20,000)   $ 720
Increase (Decrease) in Stockholders' Equity                  
Redemption of Class A ordinary shares   0              
Net income (loss) (301,128,000) (6,527,175)       (301,128,000) (6,527,175)    
Ending balance (in shares) at Dec. 31, 2021               3,500,000 6,950,072
Ending balance at Dec. 31, 2021 240,160,000 7,146,051 10,000 571,501,000 13,692,181 (292,613,000) (6,547,175) $ 350 $ 695
Increase (Decrease) in Stockholders' Equity                  
Net income (loss)   1,010,040         1,010,040    
Ending balance (in shares) at Mar. 31, 2022               3,500,000 6,950,072
Ending balance at Mar. 31, 2022   8,156,091     13,692,181   (5,537,135) $ 350 $ 695
Beginning balance (in shares) at Dec. 31, 2021               3,500,000 6,950,072
Beginning balance at Dec. 31, 2021 240,160,000 7,146,051 10,000 571,501,000 13,692,181 (292,613,000) (6,547,175) $ 350 $ 695
Increase (Decrease) in Stockholders' Equity                  
Redemption of Class A ordinary shares   (287,884)              
Net income (loss)   2,795,946              
Ending balance (in shares) at Jun. 30, 2022               3,500,000 6,950,072
Ending balance at Jun. 30, 2022 (139,216,000) 17,976,555 10,000 601,756,000 21,726,739 (691,865,000) (3,751,229) $ 350 $ 695
Beginning balance (in shares) at Dec. 31, 2021               3,500,000 6,950,072
Beginning balance at Dec. 31, 2021 240,160,000 7,146,051 10,000 571,501,000 13,692,181 (292,613,000) (6,547,175) $ 350 $ 695
Increase (Decrease) in Stockholders' Equity                  
Net income (loss) (625,864,000)         (625,864,000)      
Ending balance at Sep. 30, 2022 (355,088,000)   10,000 615,662,000   (918,477,000)      
Beginning balance (in shares) at Dec. 31, 2021               3,500,000 6,950,072
Beginning balance at Dec. 31, 2021 240,160,000 7,146,051 10,000 571,501,000 13,692,181 (292,613,000) (6,547,175) $ 350 $ 695
Increase (Decrease) in Stockholders' Equity                  
Redemption of Class A ordinary shares   (3,625,617)              
Remeasurement for Class A ordinary shares subject to redemption amount   (3,625,617)     (3,625,617)        
Derecognition of deferred underwriting fee   8,322,442     8,322,442        
Net income (loss) (888,802,000) 8,735,542       (888,802,000) 8,735,542    
Ending balance (in shares) at Dec. 31, 2022               3,500,000 6,950,072
Ending balance at Dec. 31, 2022 (610,100,000) 20,578,418     18,389,006   2,188,367 $ 350 $ 695
Beginning balance (in shares) at Mar. 31, 2022               3,500,000 6,950,072
Beginning balance at Mar. 31, 2022   8,156,091     13,692,181   (5,537,135) $ 350 $ 695
Increase (Decrease) in Stockholders' Equity                  
Remeasurement for Class A ordinary shares subject to redemption amount   (287,884)     (287,884)        
Derecognition of deferred underwriting fee   8,322,442     8,322,442        
Net income (loss)   1,785,906         1,785,906    
Ending balance (in shares) at Jun. 30, 2022               3,500,000 6,950,072
Ending balance at Jun. 30, 2022 (139,216,000) 17,976,555 10,000 601,756,000 21,726,739 (691,865,000) (3,751,229) $ 350 $ 695
Increase (Decrease) in Stockholders' Equity                  
Net income (loss) (226,612,000)         (226,612,000)      
Ending balance at Sep. 30, 2022 (355,088,000)   10,000 615,662,000   (918,477,000)      
Beginning balance (in shares) at Dec. 31, 2022               3,500,000 6,950,072
Beginning balance at Dec. 31, 2022 (610,100,000) 20,578,418     18,389,006   2,188,367 $ 350 $ 695
Increase (Decrease) in Stockholders' Equity                  
Interest adjustment to redemption value   (1,676,767)     (1,676,767)        
Redemption of Class A ordinary shares   (16,999,995)     (16,637,434)   (362,395) $ (166)  
Redemption of Class A ordinary shares (in shares)               (1,663,760)  
Net income (loss)   (127,955)         (127,955)    
Ending balance (in shares) at Mar. 31, 2023               1,836,240 6,950,072
Ending balance at Mar. 31, 2023   1,773,701     74,805   1,698,017 $ 184 $ 695
Beginning balance (in shares) at Dec. 31, 2022               3,500,000 6,950,072
Beginning balance at Dec. 31, 2022 (610,100,000) 20,578,418     18,389,006   2,188,367 $ 350 $ 695
Increase (Decrease) in Stockholders' Equity                  
Redemption of Class A ordinary shares   (16,999,995)              
Net income (loss)   (959,086)              
Ending balance (in shares) at Jun. 30, 2023               1,836,240 6,950,072
Ending balance at Jun. 30, 2023 (732,248,000) 922,616 30,000 642,531,000 54,851 (1,316,823,000) 866,886 $ 184 $ 695
Beginning balance (in shares) at Dec. 31, 2022               3,500,000 6,950,072
Beginning balance at Dec. 31, 2022 (610,100,000) 20,578,418     18,389,006   2,188,367 $ 350 $ 695
Increase (Decrease) in Stockholders' Equity                  
Net income (loss) (475,441,000)         (475,441,000)      
Ending balance at Sep. 30, 2023 157,232,000   74,000 1,826,848,000   (1,656,856,000)      
Beginning balance (in shares) at Mar. 31, 2023               1,836,240 6,950,072
Beginning balance at Mar. 31, 2023   1,773,701     74,805   1,698,017 $ 184 $ 695
Increase (Decrease) in Stockholders' Equity                  
Remeasurement for Class A ordinary shares subject to redemption amount   (19,954)     (19,954)        
Net income (loss)   (831,131)         (831,131)    
Ending balance (in shares) at Jun. 30, 2023               1,836,240 6,950,072
Ending balance at Jun. 30, 2023 (732,248,000) $ 922,616 30,000 642,531,000 $ 54,851 (1,316,823,000) $ 866,886 $ 184 $ 695
Increase (Decrease) in Stockholders' Equity                  
Net income (loss) (340,033,000)         (340,033,000)      
Ending balance at Sep. 30, 2023 $ 157,232,000   $ 74,000 $ 1,826,848,000   $ (1,656,856,000)      
v3.23.4
AURORA 10Q - UNAUDITED CONDENSED STATEMENT OF CASH FLOWS - USD ($)
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Net Cash Provided by (Used in) Financing Activities [Abstract]    
Cash - Beginning of period $ 346,065,000 $ 978,874,000
Aurora Acquisition Corp    
Net Cash Provided by (Used in) Operating Activities [Abstract]    
Net income (loss) (959,086) 2,795,946
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract]    
Interest earned on marketable securities held in Trust Account (2,156,230) 0
Fair Value Adjustment of Warrants 8,089 (5,891,413)
Gain on deferred underwiting fee 0 (182,658)
Increase (Decrease) in Operating Capital [Abstract]    
Prepaid expenses and other current assets 57,917 202,299
Accounts receivable (1,250,000) 502,956
Accounts payable and accrued offering costs (1,107,150) 2,114,151
Deferred credit liability 8,750,000 0
Net Cash Provided by (Used in) Operating Activities, Total 3,343,540 (458,719)
Net Cash Provided by (Used in) Investing Activities [Abstract]    
Investment of cash into Trust Account 0 (443,751)
Cash withdrawn from Trust Account in connection with redemption 263,123,592 0
Net Cash Provided by (Used in) Investing Activities, Total 263,123,592 (443,751)
Net Cash Provided by (Used in) Financing Activities [Abstract]    
Proceeds from promissory note - related party 0 900,100
Repayment of promissory note - related party (2,400,000) 0
Redemption of Class A ordinary shares (263,123,592) 0
Net cash provided by (used in) financing activities (265,523,592) 900,100
Net Change in Cash 943,540 (2,370)
Cash - Beginning of period 285,307 37,645
Cash - End of period 1,228,847 35,275
Supplemental Disclosure of Non-Cash Investing and Financing Activities:    
Adjustment to redemption value 16,999,995 287,884
Deferred underwriting fee payable $ 0 $ 8,322,442
v3.23.4
CONSOLIDATED BALANCE SHEETS - USD ($)
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Dec. 31, 2022
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Mar. 10, 2021
Mar. 08, 2021
Jan. 01, 2021
Dec. 31, 2020
Current assets:                          
Cash and Cash Equivalents, at Carrying Value $ 526,765,000 $ 526,765,000     $ 317,959,000 $ 398,037,000     $ 938,319,000        
Total Assets 937,055,000       1,086,522,000       3,299,717,000     $ 146,103,000 $ 67,563,000
Current liabilities:                          
Total Liabilities 779,823,000       1,260,342,000       2,623,277,000     248,985,000 171,437,000
Commitments and Contingencies                      
Class A ordinary shares subject to possible redemption, 212,598 and 24,300,287 shares at redemption value of $10.36 and $10.15 per share as of June 30, 2023 and December 31, 2022 0 0 $ 436,280,000   436,280,000 436,280,000 $ 436,280,000   436,280,000       409,688,000
Shareholders' Equity                          
Ordinary shares 74,000       10,000       10,000        
Additional paid-in capital 1,826,848,000       626,628,000       571,501,000        
Retained earnings (1,656,856,000)       (1,181,415,000)       (292,613,000)     8,515,000 7,522,000
Equity, Attributable to Parent, Total 157,232,000 $ 157,232,000 (732,248,000)   (610,100,000) $ (355,088,000) (139,216,000)   240,160,000     $ 8,515,000 49,326,000
Liabilities and Equity, Total $ 937,055,000       1,086,522,000       3,299,717,000        
Aurora Acquisition Corp                          
Current assets:                          
Cash and Cash Equivalents, at Carrying Value     1,228,847   285,307       37,645        
Accounts Receivable     1,250,000   0       502,956        
Prepaid expenses and other current assets     75,959   133,876       526,674        
Total Current Assets     2,554,806   419,183       1,067,275        
Cash held in Trust Account     21,317,257   282,284,619       278,022,397        
Total Assets     23,872,063   282,703,802       279,089,672        
Current liabilities:                          
Accounts payable and accrued offering costs     3,604,839   4,711,990       5,682,639        
Deferred credit liability     16,250,000   7,500,000       0        
Total Current Liabilities     20,267,234   15,024,385       7,094,934        
Warrant Liability     480,601   472,512       13,340,717        
Deferred underwriting fee payable         0       8,505,100 $ 22,542,813 $ 8,505,100    
Total Liabilities     20,747,835   15,496,897       28,940,751        
Commitments and Contingencies                      
Shareholders' Equity                          
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding     0   0       0        
Additional paid-in capital     54,851   18,389,006       13,692,181        
Retained earnings     866,886   2,188,367       (6,547,175)        
Equity, Attributable to Parent, Total     922,616 $ 1,773,701 20,578,418   $ 17,976,555 $ 8,156,091 7,146,051       $ 5,000
Liabilities and Equity, Total     23,872,063   282,703,802       279,089,672        
Aurora Acquisition Corp | Related party                          
Current liabilities:                          
Related party loans     412,395   2,812,395       1,412,295        
Class A ordinary share | Aurora Acquisition Corp                          
Shareholders' Equity                          
Ordinary shares     184   350       350        
Class A ordinary shares subject to possible redemption | Aurora Acquisition Corp                          
Current liabilities:                          
Class A ordinary shares subject to possible redemption, 212,598 and 24,300,287 shares at redemption value of $10.36 and $10.15 per share as of June 30, 2023 and December 31, 2022     2,201,612 $ 2,181,658 246,628,487       243,002,870        
Class B ordinary shares | Aurora Acquisition Corp                          
Shareholders' Equity                          
Ordinary shares     $ 695   $ 695       $ 695        
v3.23.4
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares
Dec. 31, 2022
Dec. 31, 2021
Class A ordinary stock subject to possible redemption, outstanding (in shares) 332,314,737 108,721,433
Ordinary shares, par value, (in dollars per share) $ 0.0001  
Common stock, authorized (in shares) 1,086,027,188  
Ordinary shares issued 299,783,421  
Ordinary shares outstanding 299,783,421  
Class A ordinary share    
Common stock, authorized (in shares) 24,452,565  
Ordinary shares issued 24,452,565  
Ordinary shares outstanding 24,452,565  
Class B ordinary shares    
Common stock, authorized (in shares) 588,261,164  
Ordinary shares issued 171,441,780  
Ordinary shares outstanding 171,441,780  
Aurora Acquisition Corp    
Preference shares, par value, (per share) $ 0.0001 $ 0.0001
Preference shares, share authorized 5,000,000 5,000,000
Preference shares, share issued 0 0
Preference shares, share outstanding 0 0
Aurora Acquisition Corp | Class A ordinary share    
Ordinary shares, par value, (in dollars per share) $ 0.0001 $ 0.0001
Common stock, authorized (in shares) 500,000,000 500,000,000
Aurora Acquisition Corp | Class A ordinary shares subject to possible redemption    
Class A ordinary stock subject to possible redemption, outstanding (in shares) 24,300,287 24,300,287
Class A common stock subject to possible redemption, price per share $ 10.15  
Aurora Acquisition Corp | Class A ordinary shares not subject to possible redemption    
Ordinary shares, par value, (in dollars per share) $ 0.0001  
Common stock, authorized (in shares) 500,000,000  
Ordinary shares issued 3,500,000 3,500,000
Ordinary shares outstanding 3,500,000 3,500,000
Aurora Acquisition Corp | Class B ordinary shares    
Ordinary shares, par value, (in dollars per share) $ 0.0001 $ 0.0001
Common stock, authorized (in shares) 50,000,000 50,000,000
Ordinary shares issued 6,950,072 6,950,072
Ordinary shares outstanding 6,950,072 6,950,072
Aurora Acquisition Corp | Common stock subject to redemption    
Class A common stock subject to possible redemption, price per share $ 10.15 $ 10.00
v3.23.4
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Operating Income (Loss), Total $ (870,830,000) $ (239,676,000)
Other income (expense):    
Change in fair value of warrants 28,901,000 (32,790,000)
Net income (loss) $ (888,802,000) $ (301,128,000)
Basic weighted average shares outstanding 95,303,684 86,984,646
Diluted weighted average shares outstanding 95,303,684 86,984,646
Basic net income (loss) per share $ (9.33) $ (3.46)
Diluted net income (loss) per share $ (9.33) $ (3.46)
Aurora Acquisition Corp    
Formation and operating costs $ 8,577,543 $ 8,120,280
Operating Income (Loss), Total (8,577,543) (8,120,280)
Other income (expense):    
Interest earned on marketable securities held in Trust Account 4,262,222 19,527
Change in fair value of warrants 12,868,205 1,576,196
Change in fair value of over-allotment option liability 0 296,905
Offering Costs Derivative Warrant Liabilities 0 (299,523)
Gain on deferred underwriting fee 182,658 0
Net income (loss) $ 8,735,542 $ (6,527,175)
Class A ordinary shares subject to possible redemption | Aurora Acquisition Corp    
Other income (expense):    
Basic weighted average shares outstanding 24,300,287 19,827,082
Diluted weighted average shares outstanding 24,300,287 19,827,082
Basic net income (loss) per share $ 0.25 $ (0.22)
Diluted net income (loss) per share $ 0.25 $ (0.22)
Non-Redeemable Class A and Class B Common Stock | Aurora Acquisition Corp    
Other income (expense):    
Basic weighted average shares outstanding 10,450,072 9,590,182
Diluted weighted average shares outstanding 10,450,072 9,590,182
Basic net income (loss) per share $ 0.25 $ (0.22)
Diluted net income (loss) per share $ 0.25 $ (0.22)
v3.23.4
AURORA 10K - CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)
Total
Aurora Acquisition Corp
Common Stock
Additional Paid-in Capital
Additional Paid-in Capital
Aurora Acquisition Corp
Accumulated Deficit
Accumulated Deficit
Aurora Acquisition Corp
Class A ordinary share
Common Stock
Aurora Acquisition Corp
Class A ordinary shares subject to possible redemption
Common Stock
Aurora Acquisition Corp
Class B ordinary shares
Common Stock
Aurora Acquisition Corp
Beginning balance at Dec. 31, 2020 $ 49,326,000 $ 5,000 $ 8,000 $ 42,301,000 $ 24,280 $ 7,522,000 $ (20,000)   $ 0 $ 720
Beginning balance (in shares) at Dec. 31, 2020                 0 7,200,000
Increase (Decrease) in Stockholders' Equity                    
Sale of 24,300,287 Units, net of underwriting discounts and offering expenses   $ 214,438,838     214,436,408       $ 2,430  
Sale of units (in shares)   24,300,287             24,300,287  
Sale of 3,500,000 Private Placement Units   $ 35,000,000     34,999,650       $ 350  
Sale of Private Placement Warrants   6,860,057     6,860,057          
Ordinary shares subject to redemption (as restated) (in shares)                 (24,300,287)  
Ordinary shares subject to redemption (as restated)   (243,002,870)     (243,000,440)       $ (2,430)  
Surrender and cancellation of Founder Shares (in shares)                   (249,928)
Surrender and cancellation of Founder Shares   0     25         $ (25)
Over-allotment option liability   (296,905)     (296,905)          
Expenses paid by the Sponsor   669,106     669,106          
Net income (loss) (301,128,000) (6,527,175)       (301,128,000) (6,527,175)      
Ending balance at Dec. 31, 2021 240,160,000 7,146,051 10,000 571,501,000 13,692,181 (292,613,000) (6,547,175) $ 350 $ 350 $ 695
Ending balance (in shares) at Dec. 31, 2021               3,500,000 3,500,000 6,950,072
Increase (Decrease) in Stockholders' Equity                    
Sale of Private Placement Units (in shares)                 3,500,000  
Net income (loss)   1,010,040         1,010,040      
Ending balance at Mar. 31, 2022   8,156,091     13,692,181   (5,537,135) $ 350   $ 695
Ending balance (in shares) at Mar. 31, 2022               3,500,000   6,950,072
Beginning balance at Dec. 31, 2021 240,160,000 7,146,051 10,000 571,501,000 13,692,181 (292,613,000) (6,547,175) $ 350 $ 350 $ 695
Beginning balance (in shares) at Dec. 31, 2021               3,500,000 3,500,000 6,950,072
Increase (Decrease) in Stockholders' Equity                    
Net income (loss)   2,795,946                
Ending balance at Jun. 30, 2022 (139,216,000) 17,976,555 10,000 601,756,000 21,726,739 (691,865,000) (3,751,229) $ 350   $ 695
Ending balance (in shares) at Jun. 30, 2022               3,500,000   6,950,072
Beginning balance at Dec. 31, 2021 240,160,000 7,146,051 10,000 571,501,000 13,692,181 (292,613,000) (6,547,175) $ 350 $ 350 $ 695
Beginning balance (in shares) at Dec. 31, 2021               3,500,000 3,500,000 6,950,072
Increase (Decrease) in Stockholders' Equity                    
Net income (loss) (625,864,000)         (625,864,000)        
Ending balance at Sep. 30, 2022 (355,088,000)   10,000 615,662,000   (918,477,000)        
Beginning balance at Dec. 31, 2021 240,160,000 7,146,051 10,000 571,501,000 13,692,181 (292,613,000) (6,547,175) $ 350 $ 350 $ 695
Beginning balance (in shares) at Dec. 31, 2021               3,500,000 3,500,000 6,950,072
Increase (Decrease) in Stockholders' Equity                    
Remeasurement for Class A ordinary shares subject to redemption amount   (3,625,617)     (3,625,617)          
Derecognition of deferred underwriting fee   8,322,442     8,322,442          
Net income (loss) (888,802,000) 8,735,542       (888,802,000) 8,735,542      
Ending balance at Dec. 31, 2022 (610,100,000) 20,578,418     18,389,006   2,188,367 $ 350 $ 350 $ 695
Ending balance (in shares) at Dec. 31, 2022               3,500,000 3,500,000 6,950,072
Beginning balance at Mar. 31, 2022   8,156,091     13,692,181   (5,537,135) $ 350   $ 695
Beginning balance (in shares) at Mar. 31, 2022               3,500,000   6,950,072
Increase (Decrease) in Stockholders' Equity                    
Remeasurement for Class A ordinary shares subject to redemption amount   (287,884)     (287,884)          
Derecognition of deferred underwriting fee   8,322,442     8,322,442          
Net income (loss)   1,785,906         1,785,906      
Ending balance at Jun. 30, 2022 (139,216,000) 17,976,555 10,000 601,756,000 21,726,739 (691,865,000) (3,751,229) $ 350   $ 695
Ending balance (in shares) at Jun. 30, 2022               3,500,000   6,950,072
Increase (Decrease) in Stockholders' Equity                    
Net income (loss) (226,612,000)         (226,612,000)        
Ending balance at Sep. 30, 2022 (355,088,000)   10,000 615,662,000   (918,477,000)        
Beginning balance at Dec. 31, 2022 (610,100,000) 20,578,418     18,389,006   2,188,367 $ 350 $ 350 $ 695
Beginning balance (in shares) at Dec. 31, 2022               3,500,000 3,500,000 6,950,072
Increase (Decrease) in Stockholders' Equity                    
Net income (loss)   (127,955)         (127,955)      
Ending balance at Mar. 31, 2023   1,773,701     74,805   1,698,017 $ 184   $ 695
Ending balance (in shares) at Mar. 31, 2023               1,836,240   6,950,072
Beginning balance at Dec. 31, 2022 (610,100,000) 20,578,418     18,389,006   2,188,367 $ 350 $ 350 $ 695
Beginning balance (in shares) at Dec. 31, 2022               3,500,000 3,500,000 6,950,072
Increase (Decrease) in Stockholders' Equity                    
Net income (loss)   (959,086)                
Ending balance at Jun. 30, 2023 (732,248,000) 922,616 30,000 642,531,000 54,851 (1,316,823,000) 866,886 $ 184   $ 695
Ending balance (in shares) at Jun. 30, 2023               1,836,240   6,950,072
Beginning balance at Dec. 31, 2022 (610,100,000) 20,578,418     18,389,006   2,188,367 $ 350 $ 350 $ 695
Beginning balance (in shares) at Dec. 31, 2022               3,500,000 3,500,000 6,950,072
Increase (Decrease) in Stockholders' Equity                    
Sale of Private Placement Warrants 4,290,000   1,000 4,289,000            
Net income (loss) (475,441,000)         (475,441,000)        
Ending balance at Sep. 30, 2023 157,232,000   74,000 1,826,848,000   (1,656,856,000)        
Beginning balance at Mar. 31, 2023   1,773,701     74,805   1,698,017 $ 184   $ 695
Beginning balance (in shares) at Mar. 31, 2023               1,836,240   6,950,072
Increase (Decrease) in Stockholders' Equity                    
Remeasurement for Class A ordinary shares subject to redemption amount   (19,954)     (19,954)          
Net income (loss)   (831,131)         (831,131)      
Ending balance at Jun. 30, 2023 (732,248,000) $ 922,616 30,000 642,531,000 $ 54,851 (1,316,823,000) $ 866,886 $ 184   $ 695
Ending balance (in shares) at Jun. 30, 2023               1,836,240   6,950,072
Increase (Decrease) in Stockholders' Equity                    
Sale of Private Placement Warrants 4,290,000   1,000 4,289,000            
Net income (loss) (340,033,000)         (340,033,000)        
Ending balance at Sep. 30, 2023 $ 157,232,000   $ 74,000 $ 1,826,848,000   $ (1,656,856,000)        
v3.23.4
AURORA 10K - CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - Aurora Acquisition Corp
 12 Months Ended
Dec. 31, 2021
shares
Sale of units (in shares) 24,300,287
Private Placement  
Sale of Private Placement Units (in shares) 3,500,000
v3.23.4
AURORA 10K - CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
 6 Months Ended 9 Months Ended 12 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract]            
Fair Value Adjustment of Warrants     $ (861,000) $ 0 $ (28,901,000) $ 32,790,000
Increase (Decrease) in Operating Capital [Abstract]            
Accounts payable and accrued offering costs     4,648,000 (26,110,000) (40,557,000) (7,958,000)
Net Cash Provided by (Used in) Operating Activities, Total     (76,167,000) 978,790,000 938,223,000 361,215,000
Net Cash Provided by (Used in) Investing Activities [Abstract]            
Net Cash Provided by (Used in) Investing Activities, Total     (41,992,000) (30,226,000) (34,657,000) (68,703,000)
Net Cash Provided by (Used in) Financing Activities [Abstract]            
Net cash provided by (used in) financing activities     327,671,000 (1,499,194,000) (1,537,100,000) 304,542,000
Net Change in Cash     208,506,000 (551,394,000) (632,809,000) 597,089,000
Cash - Beginning of period $ 346,065,000 $ 978,874,000 346,065,000 978,874,000 978,874,000 381,785,000
Cash - End of period     554,571,000 427,480,000 346,065,000 978,874,000
Aurora Acquisition Corp            
Net Cash Provided by (Used in) Operating Activities [Abstract]            
Net income (loss) (959,086) 2,795,946     8,735,542 (6,527,175)
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract]            
Fair Value Adjustment of Warrants 8,089 (5,891,413)     (12,868,205) (1,576,196)
Offering cost allocated to warrant liability         0 299,523
Expenses paid by the Sponsor         0 669,106
Interest earned on marketable securities held in Trust Account (2,156,230) 0     (4,262,222) (19,527)
Gain on deferred underwiting fee 0 (182,658)     (182,658) 0
Change in fair value of over-allotment option liability         0 (296,905)
Increase (Decrease) in Operating Capital [Abstract]            
Related party receivable         502,956 (502,956)
Prepaid expenses and other current assets 57,917 202,299     392,798 (521,674)
Accounts payable and accrued offering costs (1,107,150) 2,114,151     (970,649) 5,232,795
Deferred credit liability 8,750,000 0     7,500,000 0
Net Cash Provided by (Used in) Operating Activities, Total 3,343,540 (458,719)     (1,152,438) (3,243,009)
Net Cash Provided by (Used in) Investing Activities [Abstract]            
Investment of cash into Trust Account 0 (443,751)     0 (278,002,870)
Net Cash Provided by (Used in) Investing Activities, Total 263,123,592 (443,751)     0 (278,002,870)
Net Cash Provided by (Used in) Financing Activities [Abstract]            
Proceeds from sale of Units, net of underwriting discounts paid         0 238,142,813
Proceeds from sale of Private Placement Units         0 35,000,000
Proceeds from sale of Private Placement Warrants         0 6,860,057
Proceeds from promissory note - related party 0 900,100     1,400,100 1,280,654
Net cash provided by (used in) financing activities (265,523,592) 900,100     1,400,100 281,283,524
Net Change in Cash 943,540 (2,370)     247,662 37,645
Cash - Beginning of period 285,307 37,645 $ 285,307 $ 37,645 37,645 0
Cash - End of period 1,228,847 35,275     285,307 37,645
Supplemental Disclosure of Non-Cash Investing and Financing Activities:            
Deferred Offering Cost         0 557,663
Proceeds from Promissory Note with Related Party for Offering Cost         0 105,927
Initial classification of Class A ordinary share subject to possible redemption         0 243,002,870
Deferred underwriting fee payable 0 8,322,442     8,322,442 8,505,100
Initial Classification of Warrant liability         0 14,916,913
Reclass of permanent equity to temporary equity $ 16,999,995 $ 287,884     $ 3,625,617 $ 0
v3.23.4
Organization and Nature of the Business
 9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND NATURE OF THE BUSINESS
1. Organization and Nature of the Business
Better Home & Finance Holding Company, formerly known as Aurora Acquisition Corp. (“Aurora”), together with its subsidiaries (collectively, the “Company”), provides a comprehensive set of homeownership offerings in the United States while expanding in the United Kingdom. The Company’s offerings include mortgage loans, real estate agent services, title and homeowner’s insurance, and other homeownership offerings, such as the Company’s cash offer program. The Company leverages Tinman, its proprietary technology platform, to optimize the mortgage process from the initial application, to the integration of a suite of additional homeownership offerings, to the sale of loans to a network of loan purchasers.
Mortgage loans originated within the United States are through the Company’s wholly-owned subsidiary Better Mortgage Corporation (“BMC”). BMC is an approved Title II Single Family Program Lender with the Department of Housing and Urban Development’s (“HUD”) Federal Housing Administration (“FHA”), and is an approved seller and servicer with the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FMCC”). The Company has expanded into the U.K. and offers a multitude of financial products and services to consumers via regulated entities obtained through acquisitions.
On August 22, 2023 (the “Closing Date”), the Company consummated the previously announced Business Combination (the “Business Combination”), pursuant to the terms of the Agreement and Plan of Merger, dated as of May 10, 2021, as amended as of October 27, 2021, November 9, 2021, November 30, 2021, August 26, 2022, February 24, 2023 and June 23, 2023 (as amended, the “Merger Agreement”), by and among Aurora, Better Holdco, Inc. (“Better”), and Aurora Merger Sub I, Inc., formerly a wholly owned subsidiary of Aurora (“Merger Sub”). On the Closing Date, Merger Sub merged with and into Better, with Better surviving the merger (the “First Merger”) and Better merged with and into Aurora, with Aurora surviving the merger and changing its name to “Better Home & Finance Holding Company” (referred to as “Better Home & Finance” or the “Company”) (such merger, the “Second Merger,” and together with the First Merger, the “Business Combination” and the completion thereof, the “Closing”).
Better Home & Finance Class A common stock and warrants are listed on the Nasdaq Global Market and the Nasdaq Capital Market, respectively, under the ticker symbols “BETR” and “BETRW.” 
1. ORGANIZATION AND NATURE OF THE BUSINESS
Better Holdco, Inc. and its subsidiaries (together, the “Company”) provide a comprehensive set of homeownership offerings. The Company’s offerings include mortgage loans, real estate agent services, title and homeowner’s insurance, and other homeownership offerings, such as the Company’s cash offer program. The Company leverages Tinman, its proprietary technology platform, to optimize the mortgage process from the initial application, to the integration of a suite of additional homeownership offerings, to the sale of loans to a network of loan purchasers.
The Company originates mortgage loans throughout the United States through its wholly-owned subsidiary Better Mortgage Corporation (“BMC”). BMC is an approved Title II Single Family Program Lender with the Department of Housing and Urban Development’s (“HUD”) Federal Housing Administration (“FHA”), and is an approved seller and servicer with the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FMCC”).
The Company commenced operations in 2015 and is headquartered in New York. The Company’s fiscal year ends on December 31.
In May 2021, the Company entered into a definitive merger agreement (“Merger Agreement” or the “Merger”) with Aurora Acquisition Corp (“Aurora”), a special purpose acquisition company (“SPAC”) traded on the NASDAQ under “AURC”, which will transform the Company into a publicly listed company. The transaction will be accounted for as a reverse recapitalization and the Company has been determined to be the accounting acquirer. Pursuant to the Merger Agreement, the Company will merge with Aurora Merger Sub I, Inc. (“Merger Sub”), a wholly owned subsidiary of Aurora, with the Company surviving as a wholly owned subsidiary of Aurora (the “First Merger”). Immediately following the First Merger, the Company will merge with and into its parent, Aurora, with Aurora surviving and changing its corporate name from “Aurora Acquisition Corp.” to “Better Home & Finance Holding Company” (the “Second Merger”). The Second Merger together with the First Merger will be referred to as “the Merger”.
The stock consideration will consist of a number of shares of Better Home & Finance Holding Company (“Better Home & Finance”) Class A common stock, Better Home & Finance Class B common stock or Better Home & Finance Class C common stock equal to (A) 690,000,000 shares, minus (B) the aggregate amount of Better Home & Finance Class B common stock that would be issuable upon the net exercise or conversion, as applicable, of the Better Awards (the “Stock Consideration”). Better Awards include all (i) options to purchase shares of the Company’s common stock, (ii) restricted stock units based on shares of the Company’s common stock, and (iii) restricted shares of the Company’s common stock outstanding as of immediately prior to the First Merger. As a result of and upon the closing of the Merger Agreement, among other things, (i) all outstanding shares of the Company’s common stock as of immediately prior to the effective time of the First Merger, will be cancelled in exchange for the right to receive the Stock Consideration; (ii) all Better Awards outstanding as of immediately prior to the effective time of the First Merger will be converted, based on the Exchange Ratio, into awards based on shares of Better Home & Finance Class B common stock; and (iii) all of the Company’s warrants outstanding as of immediately prior to the effective time of the First Merger will, in accordance with the warrant holders’ agreements, be conditionally exercised and eligible to receive their portion of the Stock Consideration or be converted, based on the Exchange Ratio, into warrants to purchase shares of Better Home & Finance Class A common stock. The Exchange Ratio is the quotient obtained by dividing (a) 690,000,000 by (b) the number of aggregate fully diluted common shares of the Company. Amounts remaining in Aurora’s trust account as of immediately following the effective time of the Merger will be retained by Better Home & Finance following the closing of the Merger.
In November 2021, in connection with the Merger Agreement, the Company entered into Amendment No.3 (“Amendment No. 3”) to the Merger. In order to provide the Company with immediate liquidity, the structure of the Merger Agreement was amended to replace the $1.5 billion private investment into public equity (“PIPE”), including the use of such proceeds for a $950.0 million secondary purchase of shares of existing stockholders of the Company, with $750.0 million of bridge notes (the “Pre-Closing Bridge Notes”) and $750.0 million of post-closing convertible notes (“Post-Closing Convertible Notes”). Amendment No. 3 also extended the end date of the Merger Agreement from February 12, 2022 to September 30, 2022, among other amendments.
The Pre-Closing Bridge Notes were issued in December 2021 in the amount of $750.0 million as part of a convertible bridge note purchase agreement (“Pre-Closing Bridge Note Purchase Agreement”) and Amendment No. 3. The Pre-Closing Bridge Notes were funded by Novator Capital Ltd. (the “Sponsor” or “Novator”) and SB Northstar LP (“Softbank”) in an aggregate principal amount of $100.0 million and $650.0 million, respectively. Under the terms of the Pre-Closing Bridge Note Purchase Agreement immediately prior to the closing of the Second Merger, Aurora will be deemed to automatically assume each Pre-Closing Bridge Note and the outstanding principal amount under each Pre-Closing Bridge Note will automatically be converted into a number of shares of Class A Common Stock of Aurora, based on a conversion ratio of $10 of principal amount payable on a Pre-Closing Bridge Note at the time of conversion to one share of Aurora Class A Common Stock. In the event that the Merger Agreement has not been consummated by the maturity date of the Pre-Closing Bridge Notes which was December 2, 2022, and has since been extended, or the Merger Agreement is withdrawn, then on the maturity date or upon withdrawal, the Pre-Closing Bridge Notes will convert into a new series of preferred stock with terms consistent with those of the Company’s Series D Preferred Stock. If the Merger Agreement is not consummated due to a breach by Aurora, the Sponsor or SoftBank, the Pre-Closing Bridge Notes will convert into the Company’s common stock. See Note 11 for further details on the Pre-Closing Bridge Notes.
The Post-Closing Convertible Notes are in an amount equal to $750.0 million and is reduced dollar for dollar by any remaining cash in Aurora’s trust account released to Better Home & Finance. As further discussed in Note 11, the First Novator Letter Agreement gives the Sponsor the right, but not the obligation, to fund any portion or none of its Post-Closing Convertible Notes. SoftBank’s commitment shall be reduced on a dollar-for-dollar basis by the amount that is not funded by the Sponsor. In the event that the Sponsor elects not to fund in full its Post-Closing Convertible Note, then SoftBank is only obligated to fund $550.0 million of its Post-Closing Convertible Note. See Note 11 for further details on the First Novator Letter Agreement, Second Novator Letter Agreement, and Deferral Letter Agreement.
On August 26, 2022, in connection with the Merger Agreement, the Company entered into Amendment No.4 (the “Amendment No. 4”) to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) to March 8, 2023.
In consideration of extending the Agreement End Date, the Company will reimburse Aurora for certain reasonable and documented expenses in an aggregate sum not to exceed $15.0 million. The reimbursement payments will be structured in three tranches, in each case subject to receipt by the Company of reasonable documentation related to the expenses: (i) the first payment of up to $7.5 million will be made within 5 business days after the date of Amendment No. 4; (ii) the second payment of up to $3.8 million will be made on January 2, 2023; and (iii) the third payment of up to $3.8 million will become due upon termination of the Merger Agreement by mutual consent of the parties thereto, and shall be payable on March 8, 2023 (or any earlier termination date, as applicable). For the year ended December 31, 2022, the Company has paid Aurora $7.5 million in reimbursements. Subsequent to December 31, 2022, the Company has made the second and third payment, each $3.8 million, totaling $7.5 million. The parties have also agreed to amend the Merger Agreement to provide a waiver from the exclusivity provisions thereof to allow the Company to discuss alternative financing structures with SoftBank.
On February 24, 2023, the parties entered into Amendment No.5 to the Merger Agreement, which amended the Merger Agreement to extend the Agreement End Date (as defined in the Merger Agreement) from March 8, 2023 to September 30, 2023.
Going concern consideration—In connection with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205-40, “Basis of Presentation - Going Concern,” the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
For the year ended December 31, 2022, the Company incurred a net loss of $888.8 million and used $632.8 million in cash. As a result the Company has an accumulated deficit of $1.2 billion as of December 31, 2022. The Company’s cash and cash equivalents as of December 31, 2022 was $318.0 million. Management expects losses and negative cash flows to continue in the near term, primarily due to a difficult interest rate environment that has had a
significant impact on the Company’s business which is dependent on mortgage applications for new home purchases and applications to refinance existing mortgage loans.
In response to the difficult interest rate environment and impact on the business, the Company commenced an operational restructuring plan late in 2021, which primarily consisted of reductions in headcount, reassessment of vendor relationships, reductions in the Company’s real estate footprint, and other cost reductions. The Company will continue its cost reduction initiatives through the near term. There is no assurance that reductions in costs will offset the reduction in revenues experienced as a result of the difficult interest rate environment.
The Company’s primary sources of funding have been raises of preferred stock, issuance of convertible debt, warehouse and corporate lines of credit, and cash generated from operations.
In order for the Company to continue as a going concern, the Company must obtain additional sources of funding, refinance existing lines of credit, and increase revenues while decreasing expenses to a point where the Company can better fund its operations. Upon consummation of the Merger, the Company will become a publicly listed company, which will give it the ability to draw on additional funding, including the Post-Closing Convertible Notes, which will provide the Company with increased financial flexibility to execute its strategic objectives. The Merger had not been completed as of December 31, 2022, and has still not been completed as of May 11, 2023, the date the consolidated financial statements were issued. Subsequent to December 31, 2022, Better Holdco amended the Merger Agreement to extend the maturity from March 8, 2023, to September 30, 2023.
Management has determined that the expected future losses and negative cash flows paired with the possibility of being unable to raise additional funding, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the consolidated financial statements are issued.
Immaterial restatement corrections and reclassifications to previously issued consolidated financial statements
Immaterial restatement corrections—Subsequent to the issuance of the Company's consolidated financial statements as of and for the year ended December 31, 2021, the Company identified immaterial errors which required correction of the Company's previously issued consolidated financial statements for the year ended December 31, 2021. The impact of these errors in the prior year are not material to the consolidated financial statements in that year and are primarily related to the timing and classification of certain revenue and expense line items and the related balance sheet impacts on the Company’s consolidated financial statements. Additionally, the Company corrected the presentation of deferred tax liabilities from accounts payable and accrued expenses to properly present it with net deferred tax assets within prepaid expenses and other assets as of December 31, 2021. Consequently, the Company has corrected these immaterial errors in the year to which they relate.
Reclassifications—The Company also made certain reclassifications to prior years' consolidated statement of operations and comprehensive loss to conform to the current year presentation as follows: (1) the Company reclassified revenue and expense amounts related to its cash offer program from other platform revenue and other platform expenses to separately present as cash offer program revenue and cash offer program expenses, respectively, and (2) the Company has also reclassified expenses related to its restructuring program, specifically employee termination benefits, which were previously recorded as compensation and benefits within mortgage platform, other platform, general and administrative, marketing and advertising, and technology and product development expenses to separately present restructuring and impairment expenses.
The corrections to our consolidated balance sheet as of December 31, 2021 were as follows:
December 31, 2021
(Amounts in thousands)As Previously ReportedCorrectionsAs Corrected
Assets
Mortgage loans held for sale, at fair value
$1,851,161 $3,274 $1,854,435 
Other receivables, net
51,246 2,916 54,162 
Prepaid expenses and other assets110,075 (19,077)90,998 
Total Assets
$3,312,604 $(12,887)$3,299,717 
Liabilities, Convertible Preferred Stock, and Stockholders’ Equity (Deficit)
Liabilities
Accounts payable and accrued expenses$148,767 $(15,511)$133,256 
Total Liabilities
2,638,788 (15,511)2,623,277 
Accumulated deficit(295,237)2,624 (292,613)
Total Stockholders’ Equity 237,536 2,624 240,160 
Total Liabilities, Convertible Preferred Stock, and Stockholders’ Equity
$3,312,604 $(12,887)$3,299,717 
The reclassifications and corrections to our consolidated statement of operations and comprehensive loss for the year ended December 31, 2021 were as follows:
Year Ended December 31, 2021
(Amounts in thousands, except per share amounts)As Previously ReportedReclassificationsCorrectionsAs Reclassified and Corrected
Revenues:
Mortgage platform revenue, net$1,081,421 $— $6,802 $1,088,223 
Cash offer program revenue— 39,361 39,361 
Other platform revenue133,749 (39,361)94,388 
Net interest income (expense)
Interest income88,965 — 662 89,627 
Net interest income19,036 — 662 19,698 
Total net revenues1,234,206 — 7,464 1,241,670 
Expenses:
Mortgage platform expenses 710,132 (11,636)1,617 700,113 
Cash offer program expenses— 39,505 39,505 
Other platform expenses140,479 (40,404)100,075 
General and administrative expenses 232,669 (2,517)1,068 231,220 
Marketing and advertising expenses249,275 (380)248,895 
Technology and product development expenses143,951 (1,616)2,155 144,490 
Restructuring and impairment expenses— 17,048 17,048 
Total expenses1,476,506 — 4,840 1,481,346 
Loss from operations(242,300)— 2,624 (239,676)
Loss before income tax expense (benefit)(306,135)— 2,624 (303,511)
Net loss$(303,752)$— $2,624 $(301,128)
Other comprehensive loss:
Comprehensive loss$(303,717)$— $2,624 $(301,093)
Per share data:
Basic$(3.49)$— $0.03 $(3.46)
Diluted$(3.49)$— $0.03 $(3.46)
The reclassifications and corrections to the consolidated statement of changes in convertible preferred stock and stockholders’ equity (deficit) include the change to net loss as noted above for the year ended December 31, 2021.
The reclassifications and corrections had no impact on net cash flows from operating activities, cash flows from investing activities, or cash flows from financing activities for the year ended December 31, 2021.
v3.23.4
Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2. Summary of Significant Accounting Policies
Basis of Presentation—The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Business Combination has been accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Aurora was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Better issuing stock for the net assets of Aurora, accompanied by a recapitalization. All share amounts in periods prior to the Business Combination have been retroactively adjusted using the Exchange Ratio for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization. The financials of Better are presented here for all comparative periods.
In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position and its results of operations, changes in convertible preferred stock and stockholders’ equity (deficit) and cash flows. The results of operations and other information for the nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2023. The unaudited condensed consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes of Better thereto for the year ended December 31, 2022.
Consolidation—The accompanying condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates—The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant items subject to such estimates and assumptions include the fair value of mortgage loans held for sale, the fair value of derivative assets and liabilities, including bifurcated derivatives, interest rate lock commitments and forward sale commitments, the determination of a valuation allowance on the Company’s deferred tax assets, capitalization of internally developed software and its associated useful life, determination of fair value of the Company’s common stock, stock option and RSUs at grant date, the fair value of acquired intangible assets and goodwill, the provision for loan repurchase reserves, the incremental borrowing rate used in determining lease liabilities and warrant liabilities.
Business Combinations—The Company includes the financial results of businesses that the Company acquires from the date of acquisition. The Company records all assets acquired and liabilities assumed at fair value, with the excess of the purchase price over the aggregate fair values recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. During the measurement period the Company may record adjustments to the assets acquired and liabilities assumed. Transaction costs associated with business combinations are expensed as incurred.
Short-term investments—Short term investments consist of fixed income securities, typically U.K. government treasury securities and U.K. government agency securities with maturities ranging from 91 days to one year. Management determines the appropriate classification of short-term investments at the time of purchase. Short-term investments reported as held-to-maturity are those investments which the Company has both the positive intent and ability to hold to maturity and are stated at amortized cost on the condensed consolidated balance sheets. All of the Company’s short term investments are classified as held to maturity. The Company has not recognized any impairments on these investments to date and any unrealized gains or losses on these investments are immaterial.
Allowance for Credit Losses - Held to Maturity (“HTM”) Short-term Investments—The Company's HTM Short-term investments are also required to utilize the Current Expected Credit Loss (“CECL”) approach to estimate expected credit losses. Management measures expected credit losses on short-term investments on a collective basis by major security types that share similar risk characteristics, such as financial asset type and collateral type adjusted for current conditions and reasonable and supportable forecasts. Management classifies the short term investments portfolio by security types, such as U.K. government agency.
The U.K. government treasury securities and U.K. government agency securities are issued by U.K. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.K. government as to timely repayment of principal and interest, are highly rated by major rating agencies, and have a long history of no credit losses. Therefore, credit losses for these securities were immaterial as the Company does not currently expect any material credit losses.
Mortgage Loans Held for Sale, at Fair Value—The Company sells its mortgage loans held for sale (“LHFS”) to loan purchasers. These loans can be sold in one of two ways, servicing released, or servicing retained. If a loan is sold servicing released, the Company has sold all the rights to the loan and the associated servicing rights.
If a loan is sold servicing retained, the Company has sold the loan and kept the servicing rights, and thus the Company is responsible for collecting monthly principal and interest payments and performing certain escrow services for the borrower. The loan purchaser, in turn, pays a fee for these services. The Company generally sells all of its loans servicing released. For interim servicing, the Company engages a third-party sub-servicer to collect monthly payments and perform associated services.
LHFS consists of loans originated for sale by BMC. The Company elects the fair value option, in accordance with Accounting Standard Codification (“ASC”) 825 – Financial Instruments (“ASC 825”), for all LHFS with changes in fair value recorded in mortgage platform revenue, net in the condensed consolidated statements of
operations and comprehensive loss. Management believes that the election of the fair value option for LHFS improves financial reporting by presenting the most relevant market indication of LHFS. The fair value of LHFS is based on market prices and yields at period end. The Company accounts for the gains or losses resulting from sales of mortgage loans based on the guidance of ASC 860-20 – Sales of Financial Assets (“ASC 860”).
The Company issues interest rate lock commitments (“IRLC”) to originate mortgage loans and the fair value of the IRLC, adjusted for the probability that a given IRLC will close and fund, is recognized within mortgage platform revenue, net. Subsequent changes in the fair value of the IRLC are measured at each reporting period within mortgage platform revenue, net until the loan is funded. When the loan is funded, the IRLC is derecognized and the LHFS is recognized based on the fair value of the loan. The LHFS is subsequently remeasured at fair value at each reporting period and the changes in fair value are included within mortgage platform revenue, net until the loan is sold on the secondary market. When the loan is sold on the secondary market, the LHFS is derecognized and the gain/(loss) is included within mortgage platform revenue, net based on the cash settlement.
LHFS are considered sold when the Company surrenders control over the loans. Control is considered to have been surrendered when the transferred loans have been isolated from the Company, are beyond the reach of the Company and its creditors, and the loan purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred loans. The Company typically considers the above criteria to have been met upon receipt of sales proceeds from the loan purchaser.
Loan Repurchase Reserve—The Company sells LHFS in the secondary market and in connection with those sales, makes customary representations and warranties to the relevant loan purchasers about various characteristics of each loan, such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local laws. In the event of a breach of its representations and warranties, the Company may be required to repurchase the loan with the identified defects.
The loan repurchase reserve on loans sold relates to expenses incurred due to the potential repurchase of loans, indemnification of losses based on alleged violations or representations and warranties, which are customary to the mortgage banking industry. Provisions for potential losses are charged to expenses and are included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss. The loan repurchase reserve represents the Company’s estimate of the total losses expected to occur and is considered to be adequate by management based upon the Company’s evaluation of the potential exposure related to the loan sale agreements over the life of the associated loans sold. The Company records the loan repurchase reserve within other liabilities on the consolidated balance sheets.
Fair Value Measurements—Assets and liabilities recorded at fair value on a recurring basis on the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The price used to measure fair value is not adjusted for transaction costs. The principal market is the market in which the Company would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability, it is assumed that the Company has access to the market as of the measurement date. If no market for the asset exists, or if the Company does not have access to the principal market, a hypothetical market is used.
The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:
Level 1—Unadjusted quoted market prices in active markets for identical assets or liabilities;
Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Assets and liabilities measured at fair value on a recurring basis include LHFS, derivative assets and liabilities, including IRLCs and forward sale commitments, MSRs, bifurcated derivatives, convertible preferred stock warrants and warrant liabilities. Common stock warrants are measured at fair value at issuance only and are classified as equity on the condensed consolidated balance sheets. When developing fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments, the Company must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are based primarily upon the Company’s own estimates, and the measurements reflect information and assumptions that management believes a market participant would use in pricing the asset or liability.
Upon the Closing of the Business Combination and issuance of the Post-Closing Convertible Notes, the Loan commitment asset was reclassified as a discount to the Post-Closing Convertible Notes and was amortized as part of interest expense over the term of the note.
Warehouse Lines of Credit—Warehouse lines of credit represent the outstanding balance of the Company’s warehouse borrowings collateralized by mortgage loans held for sale or related borrowings collateralized by restricted cash. Generally, warehouse lines of credit are used as interim, short-term financing which bears interest at a fixed margin over an index rate, such as the Secured Oversight Financing Rate (“SOFR”). The outstanding balance of the Company’s warehouse lines of credit will fluctuate based on its lending volume. The advances received under the warehouse lines of credit are based upon a percentage of the fair value or par value of the mortgage loans collateralizing the advance, depending upon the type of mortgage loan. Should the fair value of the pledged mortgage loans decline, the warehouse provider may require the Company to provide additional cash collateral or mortgage loans to maintain the required collateral level under the relevant warehouse line. The Company did not incur any significant issuance costs related to its warehouse lines of credit.
Post-Closing Convertible Notes—As part of the Closing of the Business Combination, the Company issued convertible notes. Upon initial issuance, convertible notes are evaluated for redemption and conversion features that could result in embedded derivatives that require bifurcation from the notes. Upon initial issuance, any embedded derivatives are measured at fair value. Convertible notes proceeds are allocated between the carrying value of the notes and the fair value of embedded derivatives on the initial issuance date. Any portion of proceeds allocated to embedded derivatives are treated as reductions in, or discounts to, the carrying value of the convertible notes on the issuance date. Embedded derivatives are adjusted to fair value at each reporting period, with the change in fair value included within the consolidated statements of operations and comprehensive income (loss). See Note 10 for further details on the Company’s Post-Closing Convertible Notes.
Corporate Line of Credit, net of discount and debt issuance costs—The Company had a line of credit arrangement with a third-party lender. Debt and other related issuance costs are deferred and amortized through the maturity date of the line of credit as interest and amortization on non-funding debt expense. Any modifications of the line of credit arrangement are analyzed as to whether they are an extinguishment or modification of debt on a lender-by-lender basis, which is determined by whether (1) the lender remains the same, and (2) the change in the debt terms is considered substantial. Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised terms (see Note 10).
Warrant Liabilities—The Company assumed publicly-traded warrants (“Public Warrants”) issued in Aurora’s initial public offering, private placement warrants issued by Aurora in connection with its formation and warrants attached to certain private placement units (collectively, the “Private Warrants” and, together with the Public Warrants, the “Warrants”). Each Warrant issued entitles the holder to purchase one share of Better Home & Finance Holding Company Class A common stock at an exercise price of $11.50 per share, subject to certain adjustments, at any time commencing 30 days after the consummation of the Business Combination (which for the avoidance of doubt was September 21, 2023). The Public Warrants are publicly traded and may be exercised on a cashless basis
upon the occurrence of certain conditions. The Private Warrants are exercisable on a cashless basis and are not redeemable by the Company so long as they are held by the initial purchasers or their permitted transferees, subject to certain exceptions. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.
The Company evaluated the Public Warrants and Private Warrants and concluded that both meet the definition of a derivative and will be accounted for at fair value in accordance with ASC Topic 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, as the Public Warrants and Private Warrants are not considered indexed to the Company's stock.
Income Taxes—Income taxes are calculated in accordance with ASC 740, Accounting for Income Taxes. An estimated annual effective tax rate is applied to year-to-date income (loss). At the end of each interim period, the estimated effective tax rate expected to be applicable for the full year is calculated. This method differs from that described in the Company’s income taxes policy footnote in the audited consolidated financial statements and related notes thereto for the year ended December 31, 2022, which describes the Company’s annual significant income tax accounting policy and related methodology.
Revenue Recognition—The Company generates revenue from the following streams:
1)Mortgage platform revenue, net includes revenues generated from the Company's mortgage production process. See Note 4. The components of mortgage platform revenue, net are as follows:
1.Net gain (loss) on sale of loans—This represents the premium or discount the Company receives in excess of the loan principal amount and certain fees charged by loan purchasers upon sale of loans into the secondary market. Net gain (loss) on sale of loans includes unrealized changes in the fair value of LHFS which are recognized on a loan by loan basis as part of current period earnings until the loan is sold on the secondary market. The fair value of LHFS is measured based on observable market data. Also included within net gain (loss) on sale of loans is the day one recognition of the fair value of MSRs and any subsequent changes in the measurement of the fair value of the MSRs for loans sold servicing retained, including any gain or loss on subsequent sales of MSRs.
2.Integrated relationship revenue (loss)—Includes fees that the Company receives for originating loans on behalf of an integrated relationship partner which are recognized as revenue (loss) upon the integrated relationship partner’s funding of the loan. Some of the loans originated on behalf of the integrated relationship partner are purchased by the Company. Subsequent changes in fair value of loans purchased by the Company are included as part of current period earnings. These loans may be sold in the secondary market at the Company’s discretion for which any gain on sale is included in this account. For loans sold on the secondary market, the integrated relationship partner will receive a portion of the execution proceeds. A portion of the execution proceeds that is to be allocated to the integrated relationship partner is accrued as a reduction of integrated relationship revenue (loss) when the loan is initially purchased from the integrated relationship partner.
3.Changes in fair value of IRLCs and forward sale commitments—IRLCs include the fair value upon issuance with subsequent changes in the fair value recorded in each reporting period until the loan is sold on the secondary market. Fair value of forward sale commitments hedging IRLC and LHFS are measured based on quoted prices for similar assets.
2)Cash offer program revenue—The Company’s product offering includes a cash offer program (“Better Cash Offer”) where the Company works with a Buyer to identify and purchase a home directly from a property Seller. The Company will then subsequently sell the home to the Buyer. The Buyer may lease the home from the Company while the Buyer and Company go through the customary closing process to transfer ownership of the home to the Buyer. Arrangements where the Buyer leases the home from the Company are accounted for under ASC 842 while arrangements where the Buyer does not lease the home are accounted for under ASC 606. The Buyer does not directly or indirectly contract with the Seller.
For arrangements under the Better Cash Offer program that do not involve a lease, upon closing on the sale of the home from the Seller to the Company, the Company holds legal title of the home. The Company is responsible for any obligations related to the home while it holds title and is the legal owner and such is considered the principal in the transaction. The Company holds in inventory any homes where the Buyer does not subsequently purchase from the Company as well as homes held while the Company is waiting to transfer the home to the Buyer. Inventory of homes are included within prepaid expenses and other assets on the condensed consolidated balance sheets.
The Company recognizes revenue at the time of the closing of the home sale when title to and possession of the home are transferred to the Buyer. The amount of revenue recognized for each home sale is equal to the full sales price of the home. The contracts with the Buyers contain a single performance obligation that is satisfied upon the closing of the transaction and is typically completed in 1 to 90 days. The Company does not offer warranties for sold homes, and there are no continuing performance obligations following the transaction close date.
Also included in Better Cash Offer program revenue is revenue from transactions where the Company purchases the home from the Seller and subsequently leases the home to the Buyer until the title is transferred to the Buyer which is accounted for under ASC 842 in line with the Company’s accounting policy on sales-type leases as described above.
3)Other platform revenue consists of revenue from the Company’s additional homeownership offerings which primarily consist of title insurance, settlement services, and other homeownership offerings.
Title insurance, settlement services, and other homeownership offerings—Revenue from title insurance, settlement services, and other homeownership offerings is recognized based on ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”). ASC 606 outlines a single comprehensive model in accounting for revenue arising from contracts with customers. The core principle, involving a five-step process, of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The Company offers title insurance as an agent and works with third-party providers that underwrite the title insurance policies. For title insurance, the Company recognizes revenue from fees upon the completion of the performance obligation which is when the mortgage transaction closes. For title insurance, the Company is the agent in the transactions as the Company does not control the ability to direct the fulfillment of the service, is not primarily responsible for fulfilling the performance of the service, and does not assume the risk in a claim against a policy.
Settlement services revenue includes fees charged for services such as title search fees, wire fees, policy and document preparation, and other mortgage settlement services. The Company recognizes revenues from settlement services upon completion of the performance obligation which is when the mortgage transaction closes. The Company may use a third-party to fulfill these services, but the Company is considered the principal in the transaction as it directs the fulfillment of the services and ultimately bears the risk of nonperformance. As the Company is the principal, revenues from settlement services are presented on a gross basis.
Performance obligations for title insurance and settlement services are typically completed 40 to 60 days after the commencement of the loan origination process. Payment for these services is typically settled in cash as part of closing costs to the borrower upon closing of the mortgage transaction.
Other homeownership offerings consists primarily of real estate services. For real estate services, the Company generates revenues from fees related to real estate agent services, including cooperative brokerage fees from the Company’s network of third-party real estate agents, as well as brokerage fees earned when the Company provides it’s in-house real estate agents to assist customers in the purchase or sale of a home. The Company recognizes revenues from real estate services upon completion of the performance obligation which is when the mortgage transaction closes. Performance obligations for real
estate services are typically completed 40 to 60 days after the commencement of the home search process. Payment for these services is typically settled in cash as part of closing costs to the borrower upon closing of the mortgage transaction.
4)Net interest income (expense)—Includes interest income from LHFS calculated based on the note rate of the respective loan as well as interest expense on warehouse lines of credit.
Mortgage Platform Expenses—Mortgage platform expenses consist primarily of origination expenses, appraisal fees, processing expenses, underwriting, closing fees, servicing costs, and sales and operations personnel related expenses. Sales and operations personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. These expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Cash Offer Program Expenses—Better Cash Offer program expenses include the full cost of the home, including transaction closing costs and costs for maintaining the home before the legal title of the home is transferred to the Buyer. Better Cash Offer program expenses are recognized when title is transferred to the Buyer for arrangements recognized under ASC 606 and when the lease commences for arrangements recognized under ASC 842.
Other Platform Expenses—Other platform expenses relate to other non-mortgage homeownership activities, including settlement service expenses, lead generation, and personnel related costs. Settlement service expenses consist of fees for transactional services performed by third-party providers for borrowers while lead generation expenses consist of fees for services related to real estate agents. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. Other platform expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
General and Administrative Expenses—General and administrative expenses include personnel related expenses, including stock-based compensation and benefits for executive, finance, accounting, legal, and other administrative personnel. In addition, general and administrative expenses include external legal, tax and accounting services, and allocated occupancy expenses and related overhead based on headcount. General and administrative expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Marketing and Advertising Expenses—Marketing and advertising expenses consist of customer acquisition expenses, brand costs, paid advertising, and personnel related costs for brand teams. For customer acquisition expenses, the Company primarily generates loan origination leads through third-party financial service websites for which they incur “pay-per-click” expenses. A majority of the Company’s marketing and advertising expenses are incurred from leads purchased from these third-party financial service websites. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. Marketing and advertising expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Technology and Product Development Expenses—Technology and product development expenses consist of employee compensation, amortization of capitalized internal-use software costs related to the Company’s technology platform, and expenses related to vendors engaged in product management, design, development, and testing of the Company’s websites and products. Employee compensation consists of stock-based compensation and benefits related to the Company’s technology team, product and creative team, and engineering team. Technology and product development expenses also include allocated occupancy expenses and related overhead based on headcount. Technology and product development expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Segments—The Company has one reportable segment. The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a company-wide basis for purposes of allocating resources and evaluating financial performance.
Emerging Growth Company and Smaller Reporting Company Status—Under the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies. The JOBS Act does not preclude an emerging growth company from early adopting new or revised accounting standards. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) it affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
Better’s consolidated revenues were below $1.235 billion for the year ended December 31, 2022. Aurora had no consolidated revenues for the year ended December 31, 2022 and qualified as an emerging growth company. As a result, Better Home & Finance qualifies as an emerging growth company and is eligible for relief from regulatory requirements provided to emerging growth companies. The Company also is a smaller reporting company, as defined in the rules under the Securities Exchange Act of 1934 (the “Exchange Act”). Even after the Company no longer qualifies as an emerging growth company, the Company may still qualify as a smaller reporting company, which would allow it to continue taking advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation in the Company’s periodic reports and proxy statements. In addition, for so long as the Company continues to qualify as a non-accelerated filer, it will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).
Recently Adopted Accounting Standards
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In addition, in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified the scope and application of the original guidance. Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (or “LIBOR”) by September 30, 2023. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The guidance is effective for all companies as of March 12, 2020 and can generally be applied through December 31, 2022. In December 2022, FASB issued ASU 2022-06, Reference Rate Reform ("Topic 848"): Deferral of the Sunset Date of Topic 848, because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The adoption of the new guidance did not have a material impact on the condensed consolidated financial statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation—The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Consolidation—The accompanying consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates—The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant items subject to such estimates and assumptions include the fair value of mortgage loans held for sale, the fair value of derivative assets and liabilities, including bifurcated derivatives, interest rate lock commitments and forward sale commitments, the determination of a valuation allowance on the Company’s deferred tax assets, capitalization of internally developed software and its associated useful life, determination of fair value of the Company’s common stock, convertible preferred stock and convertible preferred stock warrants, stock option and RSUs at grant date, the fair value of acquired intangible assets and goodwill, the fair value of loan commitment asset, the provision for loan repurchase reserves, and the incremental borrowing rate used in determining lease liabilities.
Business Combinations—The Company includes the financial results of businesses that the Company acquires from the date of acquisition. The Company records all assets acquired and liabilities assumed at fair value, with the excess of the purchase price over the aggregate fair values recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. During the measurement period the Company may record adjustments to the assets acquired and liabilities assumed. Transaction costs associated with business combinations are expensed as incurred.
Cash and Cash Equivalents—Cash and cash equivalents consists of cash on hand and other highly liquid and short-term investments with maturities of 90 days or less at acquisition. Of the cash and cash equivalents balances as of December 31, 2022 and 2021, $1.7 million and $3.3 million, respectively, were insured by the Federal Deposit Insurance Corporation (“FDIC”).
Restricted Cash—Restricted cash primarily consists of amounts provided as collateral for the Company’s various warehouse lines of credit as well as escrow funds received from and held on behalf of borrowers. In some instances, the Company may administer funds that are legally owned by a third-party which are excluded from the Company’s consolidated balance sheets. As of December 31, 2022 and 2021, the Company held $28.1 million and $40.6 million, respectively, of restricted balances in accordance with the covenants of the agreements relating to its warehouse lines of credit (Note 5) and escrow funds (Note 13).
Mortgage Loans Held for Sale, at Fair Value—The Company sells its mortgage loans held for sale (“LHFS”) to loan purchasers. These loans can be sold in one of two ways, servicing released, or servicing retained. If a loan is sold servicing released, the Company has sold all the rights to the loan and the associated servicing rights.
If a loan is sold servicing retained, the Company has sold the loan and kept the servicing rights, and thus the Company is responsible for collecting monthly principal and interest payments and performing certain escrow services for the borrower. The loan purchaser, in turn, pays a fee for these services. The Company generally sells all of its loans servicing released. For interim servicing, the Company engages a third-party sub-servicer to collect monthly payments and perform associated services.
LHFS consists of loans originated for sale by BMC. The Company elects the fair value option, in accordance with Accounting Standard Codification (“ASC”) 825 – Financial Instruments (“ASC 825”), for all LHFS with changes in fair value recorded in mortgage platform revenue, net in the consolidated statements of operations and comprehensive loss. Management believes that the election of the fair value option for LHFS improves financial
reporting by presenting the most relevant market indication of LHFS. The fair value of LHFS is based on market prices and yields at period end. The Company accounts for the gains or losses resulting from sales of mortgage loans based on the guidance of ASC 860-20 – Sales of Financial Assets (“ASC 860”).
The Company issues interest rate lock commitments (“IRLC”) to originate mortgage loans and the fair value of the IRLC, adjusted for the probability that a given IRLC will close and fund, is recognized within mortgage platform revenue, net. Subsequent changes in the fair value of the IRLC are measured at each reporting period within mortgage platform revenue, net until the loan is funded. When the loan is funded, the IRLC is derecognized and the LHFS is recognized based on the fair value of the loan. The LHFS is subsequently remeasured at fair value at each reporting period and the changes in fair value are included within mortgage platform revenue, net until the loan is sold on the secondary market. When the loan is sold on the secondary market, the LHFS is derecognized and the gain/(loss) is included within mortgage platform revenue, net based on the cash settlement.
LHFS are considered sold when the Company surrenders control over the loans. Control is considered to have been surrendered when the transferred loans have been isolated from the Company, are beyond the reach of the Company and its creditors, and the loan purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred loans. The Company typically considers the above criteria to have been met upon receipt of sales proceeds from the loan purchaser.
Loan Repurchase Reserve—The Company sells LHFS in the secondary market and in connection with those sales, makes customary representations and warranties to the relevant loan purchasers about various characteristics of each loan, such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local laws. In the event of a breach of its representations and warranties, the Company may be required to repurchase the loan with the identified defects.
The loan repurchase reserve on loans sold relates to expenses incurred due to the potential repurchase of loans, indemnification of losses based on alleged violations or representations and warranties, which are customary to the mortgage banking industry. Provisions for potential losses are charged to expenses and are included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss. The loan repurchase reserve represents the Company’s estimate of the total losses expected to occur and is considered to be adequate by management based upon the Company’s evaluation of the potential exposure related to the loan sale agreements over the life of the associated loans sold. The Company records the loan repurchase reserve within other liabilities on the consolidated balance sheets. See Note 14.
Other Receivables, Net—Other receivables, net are reported net of an allowance for doubtful accounts. Management’s estimate of the allowance is based on historical collection experience and a review of the current status of other receivables. It is reasonably possible that management’s estimate of the allowance will change. No allowance has been taken as of December 31, 2022 and 2021, respectively, as the balances reflect amounts fully collectible.
Other receivables, net consist primarily of amounts due from a third party loan sub-servicer, margin account balances with brokers, a major integrated relationship partner, and servicing partners of loan purchasers.
Derivatives and Hedging Activities—The Company enters into IRLCs to originate mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. These IRLCs are not designated as accounting hedging instruments and are reflected in the consolidated balance sheets as derivative assets or liabilities at fair value with changes in fair value are recorded in current period earnings. Unrealized gains and losses on the IRLCs are recorded as derivative assets or liabilities on the consolidated balance sheets and in mortgage platform revenue, net within the consolidated statements of operations and comprehensive loss. The fair value of IRLCs are measured based on the value of the underlying mortgage loan, quoted MBS prices, estimates of the fair value of the mortgage servicing rights, and adjusted by the estimated loan funding probability, or “pull-through factor”.
The Company enters into forward sales commitment contracts for the sale of its mortgage loans held for sale or in the pipeline. These contracts are loan sales agreements in which the Company commits in principle to delivering a
mortgage loan of a specified principal amount and quality to a loan purchaser at a specified price on or before a specified date. Generally, the price the loan purchaser will pay the Company is agreed upon prior to the loan being funded (i.e., on the same day the Company commits to lend funds to a potential borrower). Under the majority of the forward sales commitment contracts if the Company fails to deliver the agreed-upon mortgage loans by the specified date, the Company must pay a “pair-off” fee to compensate the loan purchaser. The Company’s forward sale commitments are not designated as accounting hedging instruments and are reflected in the consolidated balance sheets as derivative assets or liabilities at fair value with changes in fair value are recorded in current period earnings. Unrealized gains and losses from changes in fair value on forward sales commitments are recorded as derivative assets or liabilities on the consolidated balance sheets and in mortgage platform revenue, net within the consolidated statements of operations and comprehensive loss. Forward commitments are entered into under arrangements between the Company and counterparties under Master Securities Forward Transaction Agreements, which contain a legal right to offset amounts due to and from the same counterparty and can be settled on a net basis. The Company does not utilize any other derivative instruments to manage risk.
Fair Value Measurements—Assets and liabilities recorded at fair value on a recurring basis on the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The price used to measure fair value is not adjusted for transaction costs. The principal market is the market in which the Company would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability, it is assumed that the Company has access to the market as of the measurement date. If no market for the asset exists, or if the Company does not have access to the principal market, a hypothetical market is used.
The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:
Level 1—Unadjusted quoted market prices in active markets for identical assets or liabilities;
Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Assets and liabilities measured at fair value on a recurring basis include LHFS, derivative assets and liabilities, including IRLCs and forward sale commitments, MSRs, bifurcated derivatives, and convertible preferred stock warrants. Common stock warrants are measured at fair value at issuance only and are classified as equity on the consolidated balance sheets. When developing fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments, the Company must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are based primarily upon the Company’s own estimates, and the measurements reflect information and assumptions that management believes a market participant would use in pricing the asset or liability.
Property and Equipment—Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation expense is computed on the straight-line method over the estimated useful life of the asset, generally three to five years for computer and hardware and four to seven years for furniture and equipment. Leasehold improvements are depreciated over the shorter of the related lease term or the estimated useful life of the assets. Expenditures for maintenance and repairs necessary to maintain property and equipment in efficient operating condition are charged to operations as incurred while costs of additions and improvements are capitalized.
The Company’s property and equipment are considered long-lived assets and are reviewed for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the sum of the undiscounted cash flows expected to result from the use and eventual disposal of the asset and the asset’s carrying amount.
If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized to the extent the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of their carrying amount or the fair value of the asset, less costs to sell.
Goodwill—Goodwill represents the excess of the purchase price of an acquired business over the fair value of the assets acquired, less liabilities assumed in connection with the acquisition. Goodwill is tested for impairment at least annually on the first day of the fourth quarter at each reporting unit level, or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired, and is required to be written down when impaired.
The guidance for goodwill impairment testing begins with an optional qualitative assessment to determine whether it is more likely than not that goodwill is impaired. The Company is not required to perform a quantitative impairment test unless it is determined, based on the results of the qualitative assessment, that it is more likely than not that goodwill is impaired. The quantitative impairment test is prepared at the reporting unit level. In performing the impairment test, management compares the estimated fair values of the applicable reporting units to their aggregate carrying values, including goodwill. If the carrying amounts of a reporting unit including goodwill were to exceed the fair value of the reporting unit, an impairment loss is recognized within the consolidated statements of operations and comprehensive loss in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company currently has only one reporting unit.
Internal Use Software and Other Intangible Assets, Net—The Company reports and accounts for acquired intellectual properties included in other intangible asset with an indefinite life, such as domain name, under ASC 350, Intangibles-Goodwill and Other (“ASC 350”). Intangible assets with indefinite lives are recorded at their estimated fair value at the date of acquisition and are tested for impairment on an annual basis as well as when there is reason to suspect that their values have been diminished or impaired. Any write-downs will be included in results from operations.
Intangible assets with finite lives are recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives using the straight-line method.
The Company capitalizes certain development costs incurred in connection with its internal use software and website development. Software costs incurred in the preliminary stages of development are expensed as incurred. Once a software application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial software testing. The Company also capitalizes costs related to specific software upgrades and enhancements when it is probable the expenditures will result in additional features and functionality. Software maintenance costs are expensed as incurred. For website development, costs incurred in the planning stage are expensed as incurred whereas costs associated with the application and infrastructure development, graphics development, and content development are capitalized depending on the type of cost in each of those respective stages. Internal use software and website development are amortized on a straight-line basis over its estimated useful life, generally three years.
Loan Commitment Asset—The Merger Agreement, as discussed in Note 1, contains a commitment from SoftBank and the Sponsor to fund Post-Closing Convertible Notes, drawn at the Company’s discretion, available when certain criteria is met such as the closing of the Merger. The Company determined that the commitment represented a freestanding financial instrument (loan commitment asset) and was accounted for at fair value at inception in November 2021 and will not be remeasured to fair value in subsequent periods. The loan commitment asset will be assessed for impairment if there are events or circumstances that indicate that it is probable that the asset has been impaired. As both parties with the commitment to fund the Post-Closing Convertible notes are considered related parties and the terms of the Post-Closing Convertible Notes are not considered at market terms, the “Loan Commitment Asset” is considered a capital contribution from those parties and was recognized within additional-paid-in capital at inception in the consolidated balance sheets in the amount of $121.7 million as of
December 31, 2021. During the year ended December 31, 2022, the Company recognized $105.6 million of impairment on the loan commitment asset with $16.1 million remaining on the consolidated balance sheets, see Note 4. Upon the closing of the Merger and the Post-Closing Convertible Notes are issued, the Loan Commitment Asset will be considered a discount to the Post-Closing Convertible Notes and will be amortized as part of interest expense over the term of the note.
Impairment of Long-Lived Assets—Long‑lived assets, including property and equipment, right-of-use assets, capitalized software, and other finite-lived intangible assets, are evaluated for recoverability when events or changes in circumstances indicate that the asset may have been impaired. In evaluating an asset for recoverability, the Company considers the future cash flows expected to result from the continued use of the asset and the eventual disposition of the asset. If the sum of the expected future cash flows, on an undiscounted basis, is less than the carrying amount of the asset, an impairment loss equal to the excess of the carrying amount over the fair value of the asset is recognized.
Warehouse Lines of Credit—Warehouse lines of credit represent the outstanding balance of the Company’s warehouse borrowings collateralized by mortgage loans held for sale or related borrowings collateralized by restricted cash. Generally, warehouse lines of credit are used as interim, short-term financing which bears interest at a fixed margin over an index rate, such as SOFR or LIBOR. The outstanding balance of the Company’s warehouse lines of credit will fluctuate based on its lending volume. The advances received under the warehouse lines of credit are based upon a percentage of the fair value or par value of the mortgage loans collateralizing the advance, depending upon the type of mortgage loan. Should the fair value of the pledged mortgage loans decline, the warehouse provider may require the Company to provide additional cash collateral or mortgage loans to maintain the required collateral level under the relevant warehouse line. The Company did not incur any significant issuance costs related to its warehouse lines of credit.
Leases—The Company accounts for its leases in accordance with ASC 842, Leases (“ASC 842”) .
The Company’s lease portfolio primarily consists of operating leases for a number of small offices across the country for licensing purposes as well as several larger offices for employee and Company headquarters. The Company also leases various types of equipment, such as laptops and printers. The Company determines whether an arrangement is a lease at inception.
The Company has made an accounting policy election to exempt leases with an initial term of 12 months or less (“short-term leases”) from being recognized on the balance sheet. Short-term leases are not material in comparison to the Company’s overall lease portfolio. Payments related to short-term leases are recognized in the consolidated statement of operations and comprehensive loss on a straight-line basis over the lease term. The Company also elected not to separate non-lease components of a contract from the lease component to which they relate.
For leases with initial terms of greater than 12 months, the Company determines its classification as an operating or finance lease. At lease commencement, the Company recognizes a lease obligation and corresponding right-of-use asset based on the initial present value of the fixed lease payments using the Company's incremental borrowing rates for its population of leases. For leases that qualify as an operating lease, the right-of-use assets related to operating lease obligations are recorded in right-of-use assets in the consolidated balance sheets. The rate implicit on the Company’s leases are not readily determinable, therefore, management uses its incremental borrowing rate to discount the lease payments based on the information available at lease commencement. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow over a similar term, and with a similar security, in a similar economic environment, an amount equal to the fixed lease payments. The commencement date is the date the Company takes initial possession or control of the leased premise or asset, which is generally when the Company enters the leased premises and begins to make improvements in preparation for its intended use.
Non-cancelable lease terms for most of the Company's real estate leases typically range between 1-10 years and may also provide for renewal options. Renewal options are typically solely at the Company’s discretion and are only included within the lease term when the Company is reasonably certain that the renewal options would be exercised.
When a modification to the contractual terms occurs, the lease liability and right-of-use asset is remeasured based on the remaining lease payments and incremental borrowing rate as of the effective date of the modification.
The Company evaluates its right-of-use assets for impairment consistent with the impairments of long-lived assets policy disclosure described above.
Financing Leases—For leases that qualify as a finance lease, the right-of-use assets related to finance lease obligations are recorded in property and equipment as finance lease assets and are depreciated over the estimated useful life. The expense is included as a component of depreciation and amortization expense on the consolidated statements of operations and comprehensive loss.
Sales-Type Leases—The Company’s product offering includes a Cash Offer Program where the Company works with a prospective buyer (“Buyer”) to identify and purchase a home directly from a seller (“Seller”) and then subsequently sell the home to the Buyer (see further description of Cash Offer Program within the Revenue Recognition section below). In most instances, the Buyer will lease the home from the Company while the Buyer and Company go through the customary closing procedures to transfer ownership of the home to the Buyer. The Company accounts for these leases as a sales-type lease under ASC 842 and at lease commencement recognizes:
•Revenue for the lease payments, which includes the sales price of the home, which is included within cash offer program revenue on the consolidated statements of operations and comprehensive loss.
•Expenses for the cost of the home, including transaction closing costs, which is included within cash offer program expenses on the consolidated statements of operations and comprehensive loss;
•Net investment in the lease, which is included within prepaid expenses and other assets on the consolidated balance sheets, which consists of the minimum lease payments not yet received and the purchase price of the home to be financed through a mortgage.
When the Buyer has exercised the purchase option, the Company will derecognize the net investment in the lease which is offset by cash received from the Buyer for the purchase price of the home. For transactions that include a lease with the Buyer, the transaction from lease commencement to the closing and transfer of ownership of the home from the Company to the Buyer is typically completed in 1 to 90 days. The Cash Offer Program began in the fourth quarter of 2021 and as of December 31, 2022 and 2021, net investment in leases was $0.9 million and $11.1 million, respectively, and included within prepaid expenses and other assets on the consolidated balance sheets. The Company had no leases greater than 180 days and 30 days as of December 31, 2022 and 2021, respectively.
Corporate Line of Credit, net of discount and debt issuance costs—The Company has a line of credit arrangement with a third-party lender. Debt and other related issuance costs are deferred and amortized through the maturity date of the line of credit as interest and amortization on non-funding debt expense. Any modifications of the line of credit arrangement are analyzed as to whether they are an extinguishment or modification of debt on a lender-by-lender basis, which is determined by whether (1) the lender remains the same, and (2) the change in the debt terms is considered substantial. Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised terms (see Note 11).
Pre-Closing Bridge Notes—During 2021, the Company issued Pre-Closing Bridge Notes with the Sponsor and SoftBank as described in Note 1. Sponsor and Softbank are related parties through the merger relationship and the terms of the Pre-Closing Bridge Notes are not considered at market terms and as such the Pre-Closing Bridge Notes were initially recorded at fair value with the excess of proceeds over fair value recorded as capital contributions. At issuance, the Company recorded $291.9 million in excess capital/proceeds from issuance of Pre-Closing Bridge Notes on the consolidated statements of changes in convertible preferred stock and stockholders’ equity (deficit). The excess capital/proceeds from issuance of Pre-Closing Bridge Notes is deemed to be a discount on the Pre-Closing Bridge Notes. In accordance with ASC 835-10, the Company accretes the discount to interest expense on the Pre-Closing Bridge Notes using the effective interest method over the shorter of the term of the Pre-Closing Bridge Notes, or until conversion.
Upon initial issuance, Pre-Closing Bridge Notes are evaluated for redemption and conversion features that could result in embedded derivatives that require bifurcation from the Pre-Closing Bridge Notes. Embedded derivatives are recorded at fair value as bifurcated derivative within the consolidated balance sheets and are adjusted to fair value at each reporting period, with the change in fair value included in change in fair value of bifurcated derivative, within the consolidated statements of operations and comprehensive loss.
Upon issuance, conversion features included in the Pre-Closing Bridge Notes that were deemed to be embedded derivatives were immaterial. As of December 31, 2022 and 2021, the embedded features had a fair value of $236.6 million and none, respectively, and were included as bifurcated derivative assets within the consolidated balance sheets.
Warrants—The Company has used various fundraising methods, including the issuance of warrants. A warrant is a financial instrument that provides the holder of the warrant the right, but not the obligation, to buy a company’s stock in the future at a predetermined price.
Warrants to purchase convertible preferred stock are generally accounted for as a liability and are recorded at fair value on their initial issuance date and adjusted to fair value at each balance sheet date, with the change in fair value being recorded as changes in fair value of convertible preferred stock warrants, which is included in interest and other income (expense), net within the consolidated statements of operations and comprehensive loss.
Warrants to purchase common stock are accounted for as equity and are recorded at fair value on their initial issuance date.
Income Taxes—Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income or expense in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred income tax assets to the amount expected to be realized based on management’s consideration of all positive and contradictory evidence available. The Company evaluates uncertainty in income tax positions based on a more-likely-than-not recognition standard. If that threshold is met, the tax position is then measured at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. If applicable, the Company records interest and penalties as a component of income tax expense.
Deferred Revenue—Deferred revenue consists of fees paid to the Company in advance for the origination of loans. Such fees primarily include advance payments for loan origination and servicing on behalf of an integrated relationship partner. Deferred revenue is included within other liabilities on the consolidated balance sheets, see Note 13 for further details.
Foreign Currency Translation—The U.S. dollar is the functional currency of the Company’s consolidated entities operating in the United States. The Company’s non U.S. dollar functional currency operations include a non-operating service entity as well as several operating entities resulting from acquisitions. All balance sheet accounts have been translated using the exchange rates in effect as of the balance sheet date. Income statement amounts have been translated using the monthly average exchange rates for each month in the year. Accumulated net translation adjustments have been reported separately in other comprehensive loss in the consolidated statements of operations and comprehensive loss.
Revenue Recognition—The Company generates revenue from the following streams:
a)Mortgage platform revenue, net includes revenues generated from the Company's mortgage production process. See Note 3. The components of mortgage platform revenue, net are as follows:
i.Net gain (loss) on sale of loans—This represents the premium or discount the Company receives in excess of the loan principal amount and certain fees charged by loan purchasers upon sale of loans into the secondary market. Net gain (loss) on sale of loans includes unrealized changes in the fair value of
LHFS which are recognized on a loan by loan basis as part of current period earnings until the loan is sold on the secondary market. The fair value of LHFS is measured based on observable market data. Also included within net gain (loss) on sale of loans is the day one recognition of the fair value of MSRs and any subsequent changes in the measurement of the fair value of the MSRs for loans sold servicing retained, including any gain or loss on subsequent sales of MSRs.
ii.Integrated relationship revenue (loss)—Includes fees that the Company receives for originating loans on behalf of an integrated relationship partner which are recognized as revenue (loss) upon the integrated relationship partner’s funding of the loan. Some of the loans originated on behalf of the integrated relationship partner are purchased by the Company. Subsequent changes in fair value of loans purchased by the Company are included as part of current period earnings. These loans may be sold in the secondary market at the Company’s discretion for which any gain on sale is included in this account. For loans sold on the secondary market, the integrated relationship partner will receive a portion of the execution proceeds. A portion of the execution proceeds that is to be allocated to the integrated relationship partner is accrued as a reduction of integrated relationship revenue (loss) when the loan is initially purchased from the integrated relationship partner.
iii.Changes in fair value of IRLCs and forward sale commitments—IRLCs include the fair value upon issuance with subsequent changes in the fair value recorded in each reporting period until the loan is sold on the secondary market. Fair value of forward sale commitments hedging IRLC and LHFS are measured based on quoted prices for similar assets.
b)Cash offer program revenue—The Company’s product offering includes a Cash Offer Program where the Company works with a Buyer to identify and purchase a home directly from a property Seller. The Company will then subsequently sell the home to the Buyer. The Buyer may lease the home from the Company while the Buyer and Company go through the customary closing process to transfer ownership of the home to the Buyer. Arrangements where the Buyer leases the home from the Company are accounted for under ASC 842 while arrangements where the Buyer does not lease the home are accounted for under ASC 606. The Buyer does not directly or indirectly contract with the Seller.
For arrangements under the Cash Offer Program that do not involve a lease, upon closing on the sale of the home from the Seller to the Company, the Company holds legal title of the home. The Company is responsible for any obligations related to the home while it holds title and is the legal owner and such is considered the principal in the transaction. The Company holds in inventory any homes where the Buyer does not subsequently purchase from the Company as well as homes held while the Company is waiting to transfer the home to the Buyer. Inventory of homes are included within prepaid expenses and other assets on the consolidated balance sheets.
The Company recognizes revenue at the time of the closing of the home sale when title to and possession of the home are transferred to the Buyer. The amount of revenue recognized for each home sale is equal to the full sales price of the home. The contracts with the Buyers contain a single performance obligation that is satisfied upon the closing of the transaction and is typically completed in 1 to 90 days. The Company does not offer warranties for sold homes, and there are no continuing performance obligations following the transaction close date.
Also included in cash offer program revenue is revenue from transactions where the Company purchases the home from the Seller and subsequently leases the home to the Buyer until the title is transferred to the Buyer which is accounted for under ASC 842 in line with the Company’s accounting policy on sales-type leases as described above.
c)Other platform revenue consists of revenue from the Company’s additional homeownership offerings which primarily consist of title insurance, settlement services, and other homeownership offerings.
Title insurance, settlement services, and other homeownership offerings—Revenue from title insurance, settlement services, and other homeownership offerings is recognized based on ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”). ASC 606 outlines a single comprehensive model in accounting for revenue arising from contracts with customers. The core principle, involving a five-step process, of the revenue model is that
an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The Company offers title insurance as an agent and works with third-party providers that underwrite the title insurance policies. For title insurance, the Company recognizes revenue from fees upon the completion of the performance obligation which is when the mortgage transaction closes. For title insurance, the Company is the agent in the transactions as the Company does not control the ability to direct the fulfillment of the service, is not primarily responsible for fulfilling the performance of the service, and does not assume the risk in a claim against a policy.
Settlement services revenue includes fees charged for services such as title search fees, wire fees, policy and document preparation, and other mortgage settlement services. The Company recognizes revenues from settlement services upon completion of the performance obligation which is when the mortgage transaction closes. The Company may use a third-party to fulfill these services, but the Company is considered the principal in the transaction as it directs the fulfillment of the services and ultimately bears the risk of nonperformance. As the Company is the principal, revenues from settlement services are presented on a gross basis.
Performance obligations for title insurance and settlement services are typically completed 40 to 60 days after the commencement of the loan origination process. Payment for these services is typically settled in cash as part of closing costs to the borrower upon closing of the mortgage transaction.
d)Net interest income (expense)—Includes interest income from LHFS calculated based on the note rate of the respective loan as well as interest expense on warehouse lines of credit.
Mortgage Platform Expenses—Mortgage platform expenses consist primarily of origination expenses, appraisal fees, processing expenses, underwriting, closing fees, servicing costs, and sales and operations personnel related expenses. Sales and operations personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. These expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Cash Offer Program Expenses—Cash offer program expenses include the full cost of the home, including transaction closing costs and costs for maintaining the home before the legal title of the home is transferred to the Buyer. Cash offer program expenses are recognized when title is transferred to the Buyer for arrangements recognized under ASC 606 and when the lease commences for arrangements recognized under ASC 842.
Other Platform Expenses—Other platform expenses relate to other non-mortgage homeownership activities, including settlement service expenses, lead generation, and personnel related costs. Settlement service expenses consist of fees for transactional services performed by third-party providers for borrowers while lead generation expenses consist of fees for services related to real estate agents. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. Other platform expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
General and Administrative Expenses—General and administrative expenses include personnel related expenses, including stock-based compensation and benefits for executive, finance, accounting, legal, and other administrative personnel. In addition, general and administrative expenses include external legal, tax and accounting services, and allocated occupancy expenses and related overhead based on headcount. General and administrative expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Marketing and Advertising Expenses—Marketing and advertising expenses consist of customer acquisition expenses, brand costs, paid advertising, and personnel related costs for brand teams. For customer acquisition expenses, the Company primarily generates loan origination leads through third-party financial service websites for which they incur “pay-per-click” expenses. A majority of the Company’s marketing and advertising expenses are incurred from leads purchased from these third-party financial service websites. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related
overhead based on headcount. Marketing and advertising expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Technology and Product Development Expenses—Technology and product development expenses consist of employee compensation, amortization of capitalized internal-use software costs related to the Company’s technology platform, and expenses related to vendors engaged in product management, design, development, and testing of the Company’s websites and products. Employee compensation consists of stock-based compensation and benefits related to the Company’s technology team, product and creative team, and engineering team. Technology and product development expenses also include allocated occupancy expenses and related overhead based on headcount. Technology and product development expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Stock-Based Compensation—The Company measures and records the expense related to stock-based compensation awards based on the fair value of those awards as determined on the date of grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period and uses the straight-line method to recognize stock-based compensation. For stock-based compensation with performance conditions, the Company records stock-based compensation expense when it is deemed probable that the performance condition will be met.
The Company uses the Black-Scholes-Merton (“Black-Scholes”) option-pricing model to determine the fair value of stock options. The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions, which determine the fair value of stock-based compensation awards, including the option’s expected term and the price volatility of the underlying stock. The Company calculates the fair value of stock options granted using the following assumptions:
a)Expected Volatility—The Company estimated volatility for option grants by evaluating the average historical volatility of a peer group of companies for the period immediately preceding the option grant for a term that is approximately equal to the options’ expected term.
b)Expected Term—The expected term of the Company’s options represents the period that the stock-based awards are expected to be outstanding. The Company has elected to use the midpoint of the stock options vesting term and contractual expiration period to compute the expected term, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.
c)Risk-Free Interest Rate—The risk-free interest rate is based on the implied yield currently available on US Treasury zero-coupon issues with a term that is equal to the options’ expected term at the grant date.
d)Dividend Yield—The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, the dividend yield has been estimated to be zero.
Forfeitures of stock options and RSUs are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from initial estimates.
The Company records compensation expense related to stock options issued to non-employees, including consultants based on the fair value of the stock options on the grant date over the service performance period as the stock options vest.
The Company also generally allows stock option holders to early exercise stock options prior to the vesting date. The early exercise of stock options not yet vested are not reflected within stockholders’ equity or on the consolidated balance sheets as they relate to unvested share awards and therefore are considered non-substantive exercises.
Net Income (Loss) Per Share—The Company follows the two-class method when computing net income (loss) per share, as the Company has issued shares that meet the definition of participating securities. The two-class method determines net income (loss) per share for each class of common and participating securities according to
dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. In periods where there is net income, we apply the two-class method to calculate basic and diluted net income (loss) per share of common stock, as our convertible preferred stock is a participating security. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. In periods where there is a net loss, the two-class method of computing earnings per share does not apply as the Company’s convertible preferred stock does not contractually participate in losses.
Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income (loss) attributable to common stockholders is computed by adjusting net income (loss) attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares. For purpose of this calculation, outstanding stock options, including stock options exercised not yet vested, convertible notes, convertible preferred stock and warrants to purchase shares of convertible preferred stock are considered potential dilutive common shares.
The Company's convertible preferred stock contractually entitles the holders of such shares to participate in dividends but does not contractually require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss attributable to common stockholders, such losses are not allocated to such participating securities. In addition, as the convertible preferred stock can convert into common stock, the Company uses the more dilutive of the two-class method or the if-converted method in the calculation of diluted net income (loss) per share.
Diluted net income (loss) per share is the amount of net income (loss) available to each share of common stock outstanding during the reporting period, adjusted to include the effect of potentially dilutive common shares. For periods in which the Company reports net losses, basic and diluted net loss per share attributable to common stockholders are the same because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. For the years ended December 31, 2022 and 2021, the Company reported a net loss attributable to common stockholders.
Segments—The Company has one reportable segment. The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a company-wide basis for purposes of allocating resources and evaluating financial performance.
Recently Adopted Accounting Standards
The Company has early adopted ASC 842 in its 2021 annual consolidated financial statements effective January 1, 2021 using a modified retrospective approach. The Company has applied the new lease requirements to leases outstanding as of the adoption date through a cumulative effect adjustment to retained earnings. The Company has elected to utilize the package of practical expedients available under ASC 842, which permit the Company to not reassess the lease identification, lease classification and initial direct costs associated with any expired or existing contracts as of the date of adoption. The Company has also made accounting policy elections to: a) exempt leases with an initial term of 12 months or less from being recognized on the balance sheet, and b) not separate non-lease components of a contract from the lease component to which they relate.
Upon adoption, effective as of January 1, 2021, the Company has recognized an ROU asset and a corresponding lease liability, primarily related to operating leases for office space, of $65.9 million and $69.6 million, respectively, on the consolidated balance sheet based on the discounted value of future lease payments over the lease term, which includes renewal options that are reasonably assured of being exercised. The Company expects to continue entering into new lease arrangements in the ordinary course of business.
Summary of Modified Retrospective Adjustments to Balance Sheet Presentation—The following table summarizes the impact of the modified retrospective adoption of ASC 842 on the Company’s consolidated balance sheet:
As of January 1, 2021
(Amounts in thousands)Balance as of December 31, 2020Adjustments due to ASC 842Balance as of January 1, 2021
Accounts Receivable$46,845 $5,915 $52,760 
Property and equipment, net20,718 6,736 27,454 
Right-of-use asset— 65,889 65,889 
Total Assets
$67,563 $78,540 $146,103 
Accounts payable and accrued expenses$123,849 $10,880 $134,729 
Other liabilities47,588 (2,898)44,690 
Lease liabilities— 69,566 69,566 
Total Liabilities
171,437 77,548 248,985 
Retained earnings7,522 993 8,515 
Total Stockholders’ Equity
$7,522 $993 $8,515 
In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The standard simplifies the accounting for certain convertible instruments by removing models with specific features, amends guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share (EPS) calculations as a result of these changes. This standard is effective for public companies for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and for all other entities beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2020. The Company early adopted ASU 2020-06 on January 1, 2021 using a modified retrospective approach, and such adoption did not have a material effect on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In addition, in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified the scope and application of the original guidance. Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (or “LIBOR”) by June 30, 2023. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The guidance is effective for all companies as of March 12, 2020 and can generally be applied through December 31, 2022. In December 2022, FASB issued ASU 2022-06, Reference Rate Reform ("Topic 848"): Deferral of the Sunset Date of Topic 848, because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The adoption of the new guidance did not have a material impact on the consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this standard were issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investments in leases and other commitments to extend credit held by a reporting entity at each reporting date. The amendments require that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the
amortized cost basis. The standard eliminates the current framework of recognizing probable incurred losses and instead requires an entity to use its current estimate of all expected credit losses over the contractual life. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets. The amendments in this standard are effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and for all other entities beginning after December 15, 2022, including interim periods within those fiscal years. The Company early adopted ASU 2016-13 on January 1, 2021, and such adoption did not have a material effect on the Company’s consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the application of ASC 740 - Income Taxes while maintaining or improving the usefulness of information provided to users of financial statements. The modifications include removal of certain exceptions and simplification to existing requirements. The amendments in ASU 2019-12 are effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and for all other entities beginning after December 15, 2021, and interim periods within those fiscal years beginning after December 15, 2022. The Company early adopted ASU 2019-12 on January 1, 2021, and such adoption did not have a material effect on the Company’s consolidated financial statements.
v3.23.4
Business Combination
 9 Months Ended
Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract]  
Business Combination
3. Business Combination
The Business Combination has been accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Aurora was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Better issuing stock for the net assets of Aurora, accompanied by a recapitalization. The net assets of Aurora were recorded at fair value (which approximated historical cost considering the nature of the assets transferred), with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of Better.
At the Closing of and in connection with the Business Combination, the following occurred:
•Exchange of Legacy Better Stock—Each outstanding share of Better common stock prior to the Business Combination (“Legacy Better Stock”), each warrant to purchase preferred stock was exercised and all series of preferred stock were converted to common stock and exchanged for approximately 3.06 shares (the "Exchange Ratio") of the Company’s common stock. Outstanding options to purchase Legacy Better common stock and restricted stock units ("RSUs") were converted into the right to receive options or
warrants to purchase shares of Class B common stock or RSUs representing the right to receive shares of Class B common stock, as applicable, on the same terms and conditions that are in effect with respect to such options or RSUs on the day of the closing of the Business Combination, subject to adjustments using the Exchange Ratio.
•Private and Public Warrants—6,075,047 redeemable public warrants to acquire shares of Aurora (“Public Warrants”), together with 3,733,358 private warrants to acquire shares of Aurora (“Private Warrants” and, together with the Public Warrants, the “Warrants”), have converted into warrants to acquire shares of Better Home & Finance Class A common stock. As contemplated by the Sponsor Agreement, dated as of May 10, 2021, by and among Aurora and Novator Capital Sponsor Ltd. (“Sponsor”) (as amended, the “Sponsor Agreement”), Sponsor forfeited 1,715,014 Private Warrants, effective as of the Closing Date, which comprised 50% of the Private Warrants held by Sponsor on May 10, 2021. Each Warrant entitles the holder to purchase one share of the Company’s Class A common stock at an exercise price of $11.50 per share, subject to certain adjustments. The Warrants became exercisable at any time commencing 30 days after the completion of the Business Combination (which for the avoidance of doubt was September 21, 2023), and will expire five years after the Business Combination or earlier upon redemption or liquidation.
•Sponsor locked-up Shares—Pursuant to the Sponsor Agreement, the Sponsor forfeited upon Closing 50% of the Aurora private warrants and 20% of the Sponsor’s shares of Better Home & Finance Class A common stock as of the Closing became subject to transfer restrictions, contingent upon the price of Better Home & Finance Class A common stock exceeding certain thresholds (the “Sponsor Locked-Up Shares”). The Sponsor Locked-Up Shares will be released in three tranches if the volume weighted average price (the “VWAP”) of Better Home & Finance Class A common stock exceeds certain price thresholds: (i) one-third of such shares will be released if VWAP for any 20 trading days during any consecutive 30-trading day period exceeds $12.50 per share, (ii) one-third of such shares will be released if the VWAP for any 20 trading days during any consecutive 30-trading day period exceeds $15.00 per share, and (iii) one-third of such shares will be released if the VWAP for any 20 trading days during any consecutive 30-trading day period exceeds $17.50 per share. In addition to the transfer restriction, upon certain change in control events included in the Sponsor Agreement, if there is a change in control event within five years following the Closing, the shares which have not reached the thresholds stated above will be forfeited. If after five years there is no such change in control event, the lock-up period will go on in perpetuity until the price thresholds are met.
•Aurora Trust Account—The Company received gross cash consideration of $21.4 million as a result of the reverse recapitalization as well as $0.2 million from Aurora’s operating cash account.
•Post-Closing Convertible Notes—The Company received $528.6 million from SoftBank as a result of issuing notes, see Note 10 for further details.
•Sponsor Share Purchase—The purchase for $17.0 million by the Sponsor of 1.7 million shares of Better Home & Finance Class A common stock.
•Conversion of Convertible Preferred Stock and Exercise of Convertible Preferred Stock Warrants—See Note 17 for further details.
•Conversion of Pre-Closing Bridge Notes—See Note 10 for further details.
•Transaction or Exchange costs—The Company incurred $21.4 million of equity issuance costs, consisting of financial advisory, legal, share registration, and other professional fees, which are recorded to additional paid-in capital as a reduction of transaction proceeds.
The number of shares of common stock issued immediately following the Business Combination was as follows:
Number of Shares
Class AClass BClass C
Legacy Better Stockholders40,601,825 574,407,420 6,877,283 
Legacy Aurora Shareholders210,098 — — 
Sponsor and affiliates of Aurora10,488,812 — — 
Pre-Closing Bridge Note Investors40,000,000 — 65,000,000 
Total91,300,735 574,407,420 71,877,283 
v3.23.4
Revenue and Sales-Type Leases
 9 Months Ended
Sep. 30, 2023
Revenue [Abstract]  
REVENUE AND SALES-TYPE LEASES
4. Revenue and Sales-Type Leases
Revenue— The Company disaggregates revenue based on the following revenue streams:
Mortgage platform revenue, net consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Net gain (loss) on sale of loans$7,120 $(10,125)$36,689 $(59,105)
Integrated partnership revenue (loss)3,067 2,265 9,797 (8,526)
Changes in fair value of IRLCs and forward sale commitments4,019 18,947 8,441 174,217 
Total mortgage platform revenue, net$14,207 $11,087 $54,927 $106,586 
Cash offer program revenue consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Revenue related to ASC 606$— $749 $— $11,333 
Revenue related to ASC 842— 8,991 304 214,764 
Total cash offer program revenue$— $9,739 $304 $226,096 
Other platform revenue consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Real estate services$651 $3,983 $6,214 $20,735 
Title insurance13 220 45 6,975 
Settlement services2 130 15 4,190 
Other homeownership offerings668 1,355 3,082 3,723 
Total other platform revenue$1,333 $5,688 $9,355 $35,623 
Sales-type Leases—The following table presents the revenue and expenses recognized at the commencement date of sales-type leases for the periods indicated:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Cash offer program revenue$— $8,991 $304 $214,764 
Cash offer program expenses$— $8,944 $278 $215,972 
3. REVENUE AND SALES-TYPE LEASES
Revenue— The Company disaggregates revenue based on the following revenue streams:
Mortgage platform revenue, net consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Net (loss) gain on sale of loans$(63,372)$937,611 
Integrated partnership (loss) revenue(9,166)84,135 
Changes in fair value of IRLCs and forward sale commitments178,196 66,477 
Total mortgage platform revenue, net$105,658 $1,088,223 
Cash offer program revenue consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Revenue related to ASC 606$12,313 $8,725 
Revenue related to ASC 842216,408 30,636 
Total cash offer program revenue$228,721 $39,361 
Other platform revenue consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Title insurance$7,010 $39,602 
Settlement services4,222 31,582 
Real estate services23,053 20,602 
Other homeownership offerings4,657 2,601 
Total other platform revenue$38,942 $94,388 
Sales-type Leases—The following table presents the revenue and expenses recognized at the commencement date of sales-type leases for the periods indicated:
Year Ended December 31,
(Amounts in thousands)20222021
Cash offer program revenue$216,408 $30,636 
Cash offer program expenses$217,609 $30,780 
v3.23.4
Restructuring and Impairments
 9 Months Ended
Sep. 30, 2023
Restructuring and Related Activities [Abstract]  
RESTRUCTURING AND IMPAIRMENTS
5. Restructuring and Impairments
In December 2021, the Company initiated an operational restructuring program that included plans for costs reductions in response to a difficult interest rate environment as well as a slowing housing market. The restructuring program, which continued during the nine months ended September 30, 2023, consists of reductions in headcount and any associated costs which primarily include one-time employee termination benefits. The Company expects the restructuring initiatives to continue at least through the end of 2023.
Due to the reduced headcount, the Company has also reduced its real estate footprint. The Company has impaired right-of-use assets related to office space that is no longer in use or has been completely abandoned. Leases where the Company is unable to terminate or amend the lease with the landlord remain on the balance sheet under lease liabilities. In February 2023, the Company entered into a lease amendment with a landlord to surrender an office floor and reassign the lease to a third party. The amendment relieves the Company of the primary obligation under the original lease and as such is considered a termination of the original lease. In February 2023, the Company impaired the right-of-use asset of $13.0 million and removed the lease liability of $13.0 million related to one of the office spaces and as part of the amendment the Company incurred a loss of $5.3 million which included a $4.7 million payment in cash to the third party and $0.6 million other related fees to terminate the lease early. For the three months ended September 30, 2023 and 2022, the Company impaired property and equipment of none and $0.2 million, respectively, which was related to termination of lease agreement and sale of laptops resulting from a reduction in the workforce. For the nine months ended September 30, 2023 and 2022, the Company impaired property and equipment of $4.8 million and $3.1 million, respectively, which was related to the termination of the lease agreements and sale of laptops resulting from a reduction in the workforce.
The Company assessed the loan commitment asset for impairment as there were factors that indicated that it was probable that the asset had been impaired on September 30, 2022 as the probability of the Company meeting the criteria to draw on the Post-Closing Convertible declined.
For the three and nine months ended September 30, 2023 and 2022, the Company’s restructuring and impairment expenses consists of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Employee one-time termination benefits$765 $5,277 $2,320 $99,291 
Impairment of loan commitment asset— 38,330 — 105,604 
Impairments of Right-of-Use Assets— 1,897 413 4,391 
Real estate restructuring loss— — 5,284 — 
(Gain) on lease settlement(86)— (1,063)— 
Impairment of property and equipment— 197 4,844 3,124 
Other impairments80 80 
Total Restructuring and Impairments$679 $45,781 $11,798 $212,490 
As of September 30, 2023 and December 31, 2022, respectively, the Company had an immaterial liability related to employee one-time termination benefits that were yet to be paid. The cumulative amount of one-time termination benefits, impairment of loan commitment asset, impairment of right-of-use assets, and impairment of
property and equipment as of September 30, 2023 is $121.6 million, $105.6 million, $6.6 million, and $8.9 million, respectively.
4. RESTRUCTURING AND IMPAIRMENTS
In December 2020, the Company initiated an operational restructuring program that included plans for costs reductions in response to a difficult interest rate environment as well as a slowing housing market. The restructuring program, which continued during the years ended December 31, 2022 and 2021, consists of reductions in headcount and any associated costs which primarily include one-time employee termination benefits. The Company expects the restructuring initiatives to continue at least through the full year 2023.
Due to the reduced headcount, the Company has also reduced its real estate footprint. The Company has impaired right-of-use assets related to office space that is no longer in use or has been completely abandoned. Leases where the Company is unable to terminate or amend the lease with the landlord remain on the balance sheet under lease liabilities. As of December 31, 2022, no leases have been amended or terminated. The Company has also impaired the right-of-use assets for equipment that is no longer used or abandoned as a result of the reduced headcount. Refer to Note 7 for further details on the Company’s leasing activities.
The Company assessed the loan commitment asset for impairment as there were factors that indicated that it was probable that the asset had been impaired on June 30, 2022 and subsequently on September 30, 2022 as the probability of the Company meeting the criteria to draw on the Post-Closing Convertible declined. Based on that assessment the Company recorded an impairment loss of $67.3 million and $38.3 million on June 30, 2022 and September 30, 2022, respectively. For the years ended December 31, 2022 and 2021, the Company recorded an impairment loss of $105.6 million and none, respectively.
The write-off of capitalized merger transaction costs are costs incurred and capitalized in relation to the Merger. These costs were written off on December 31, 2022 as Amendment No.5 to the Merger Agreement was not executed until February 24, 2023 which extended the Agreement End Date from March 8, 2023 to September 30, 2023.
For the years ended December 31, 2022 and 2021, the Company’s restructuring and impairment expenses consists of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Impairment of Loan Commitment Asset$105,604 $— 
Employee one-time termination benefits102,261 17,048 
Impairments of Right-of-Use Assets—Real Estate3,707 — 
Impairments of Right-of-Use Assets—Equipment2,494 — 
Write-off of capitalized merger transaction costs27,287 — 
Impairments of intangible assets1,964 — 
Impairment of property and equipment 4,042 — 
Other impairments333 — 
Total Restructuring and Impairments$247,693 $17,048 
As of December 31, 2022 and 2021, respectively, the Company had an immaterial liability related to employee one-time termination benefits that were yet to be paid.
v3.23.4
Mortgage Loans Held for Sale and Warehouse Lines of Credit
 9 Months Ended
Sep. 30, 2023
Mortgage Loans Held For Sale And Warehouse Agreement Borrowings [Abstract]  
MORTGAGE LOANS HELD FOR SALE AND WAREHOUSE LINES OF CREDIT
5. MORTGAGE LOANS HELD FOR SALE AND WAREHOUSE LINES OF CREDIT
The Company has the following outstanding warehouse lines of credit:
December 31,
(Amounts in thousands)MaturityFacility Size20222021
Funding Facility 1 (1)
July 10, 2023$500,000 $89,673 $286,804 
Funding Facility 2 (2)
October 31, 2022— — 171,649 
Funding Facility 3 (3)
September 30, 2022— — 55,622 
Funding Facility 4 (4)
January 30, 2023500,000 9,845 409,616 
Funding Facility 5 (5)
May 31, 2022— — 622,573 
Funding Facility 6 (6)
August 31, 2022— — 4,184 
Funding Facility 7 (7)
August 25, 2022— — 7,279 
Funding Facility 8 (8)
March 8, 2023500,000 44,531 94,181 
Funding Facility 9 (9)
April 6, 2022— — 1,433 
Funding Facility 10 (10)
July 5, 2022— — 14,576 
Total warehouse lines of credit$1,500,000 $144,049 $1,667,917 
__________________
(1)Interest charged under the facility is the greater of i) a) thirty day term SOFR plus three and one-eight percent for each repurchase and non-qualifying mortgage loans, and b) interest rate charged on the note (“Note Rate”) minus one and one-half percent and ii) a) thirty day term SOFR plus two and one-eight percent for each mortgage loans that is not a non-qualifying or a repurchase mortgage loan, and b) the Note Rate minus one and one-eighth percent. Cash collateral deposit of $10.0 million is maintained.
(2)Interest charged under the facility was at the one month SOFR plus 1.75%, with a floor rate of one month LIBOR at 1.00%, as defined in agreement. Cash collateral deposit of $2.5 million was maintained until maturity. Funding Facility 2 matured on October 31, 2022 and the company did not extend beyond maturity.
(3)Interest charged under the facility was at the respective one month LIBOR plus 1.75%, with a floor rate of 2.25%, as defined in the agreement. Cash collateral deposit of $4.5 million was maintained until maturity. Funding Facility 3 matured on September 30, 2022 and the company did not extend beyond maturity.
(4)Interest charged under the facility is at the one month SOFR plus 1.77%. There is no cash collateral deposit maintained as of December 31, 2022. Subsequent to December 31, 2022, the facility was amended to decrease capacity to $250.0 million and to extend maturity to June 6, 2023.
(5)Interest charged under the facility was at the one month LIBOR plus 1.76% - 2.25%, with a floor rate of 0.50%. There was no cash collateral deposit maintained. Funding Facility 5 matured on May 31, 2022 and the company did not extend beyond maturity.
(6)Interest charged under the facility was at the one month SOFR plus 1.50% - 1.75%. Cash collateral deposit of $4.5 million was maintained. Funding Facility 6 matured on August 31, 2022 and the company did not extend beyond maturity.
(7)Interest charged under the facility was at the Adjusted one month Term SOFR plus 1.75% - 2.25%, with a floor rate of one month LIBOR at 0.38%. There was no cash collateral deposit maintained. Funding Facility 7 matured on August 25, 2022 and the company did not extend beyond maturity.
(8)Interest charged under the facility is at the one month SOFR plus 1.60% - 1.85%. Cash collateral deposit of $5.0 million is maintained. Subsequent to December 31, 2022, the facility was amended to decrease capacity to $250.0 million and to extend the maturity to June 6, 2023.
(9)Interest charged under the facility was at the one month LIBOR plus 1.60%, with a floor rate of one month LIBOR at 0.50%, as defined in the agreement. There was no cash collateral deposit maintained. Funding Facility 9 matured on April 6, 2022 and the company did not extend beyond maturity.
(10)Interest charged under the facility was at the one month LIBOR plus 1.88%, with a floor rate of one month LIBOR at 0.25%, as defined in the agreement. There was no cash collateral deposit maintained. Funding Facility 10 matured on July 5, 2022 and the company did not extend beyond maturity.
The unpaid principal amounts of the Company’s LHFS are also pledged as collateral under the relevant warehouse funding facilities. The Company’s LHFS are summarized below by those pledged as collateral and those fully funded by the Company:
December 31,
(Amounts in thousands)20222021
Funding Facility 1$101,598 $309,003 
Funding Facility 2— 186,698 
Funding Facility 3— 67,106 
Funding Facility 410,218 439,767 
Funding Facility 5— 681,521 
Funding Facility 6— 5,016 
Funding Facility 7— 9,828 
Funding Facility 846,356 110,845 
Funding Facility 9— 4,420 
Funding Facility 10— 16,666 
Total LHFS pledged as collateral158,172 1,830,870 
Company-funded LHFS136,599 5,944 
Company-funded Home Equity Line of Credit8,320 — 
Total LHFS303,091 1,836,814 
Fair value adjustment(54,266)17,621 
Total LHFS at fair value$248,826 $1,854,435 
Average days loans held for sale, other than Company-funded LHFS, for the years ended December 31, 2022 and 2021 were approximately 18 days and 20 days, respectively. This is defined as the average days between funding and sale for loans funded during each period. As of December 31, 2022 and 2021, the Company had an immaterial amount of loans either 90 days past due or non-performing.
As of December 31, 2022 and 2021, the weighted average annualized interest rate for the warehouse lines of credit was 6.00% and 2.36%, respectively. The warehouse lines of credit contain certain restrictive covenants that require the Company to maintain certain minimum net worth, liquid assets, current ratios, liquidity ratios, leverage ratios, and earnings. In addition, these warehouse lines also require the Company to maintain compensating cash balances which aggregated to $15.0 million and $29.0 million as of December 31, 2022 and 2021, respectively, and are included in restricted cash on the accompanying consolidated balance sheets. The Company was in compliance with all financial covenants under the warehouse lines as of December 31, 2022 and 2021, respectively.
v3.23.4
Goodwill and Internal Use Software and Other Intangible Assets, Net
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTERNAL USE SOFTWARE AND OTHER INTANGIBLE ASSETS, NET
7. Goodwill and Internal Use Software and Other Intangible Assets, Net
In January 2023, the Company completed an acquisition of Goodholm Finance Ltd. (“Goodholm”), a regulated U.K. based mortgage lender and servicer, providing outsourced administration of mortgages, loans and collection portfolios. The Company paid a total cash consideration of $2.9 million for the acquisition. In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$283 
Property and equipment20 
Indefinite lived intangibles - Licenses1,186 
Goodwill1,741 
Other assets (1)
65 
Accounts payable and accrued expenses (1)
(161)
Other liabilities (1)
(193)
Net assets acquired$2,941 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
Intangible assets acquired consist of regulatory licenses. The acquisition was not material to the Company's condensed consolidated financial statements. Accordingly, pro forma results of this acquisition have not been presented.
In April 2023, the Company completed the acquisition of a U.K.-based banking entity after obtaining regulatory approval from the financial control authorities in the U.K. The Company acquired Birmingham Bank Ltd. (“Birmingham”), a regulated bank, offering a range of financial products and services to consumers and small businesses. The acquisition will allow the Company to grow and expand operations in the U.K. by enabling the Company to improve the mortgage process for U.K. mortgage borrowers. The Company acquired 100% of the equity of Birmingham for a total consideration of $19.3 million, which consists of $15.9 million in cash and $3.4 million in deferred consideration in the form of an earn out which is included within other liabilities on the condensed consolidated balance sheet at the acquisition date.
In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$2,907 
Accounts receivable (1)
60 
Short-term investments8,729 
Other assets7,530 
Property and equipment83 
Finite lived intangibles854 
Indefinite lived intangibles - Licenses31 
Goodwill12,300 
Accounts payable and accrued expenses (1)
(248)
Customer deposits(12,374)
Other liabilities (1)
(586)
Net assets acquired$19,286 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
Intangible assets acquired consist of trade name, core deposits intangibles, and regulatory licenses. The acquisition was not material to the Company's condensed consolidated financial statements. Accordingly, pro forma results of this acquisition have not been presented.
Changes in the carrying amount of goodwill, net consisted of the following:
Nine Months Ended September 30,
(Amounts in thousands)2023
Balance at beginning of period$18,525 
Goodwill acquired—Goodholm & Birmingham 14,041 
Effect of foreign currency exchange rate changes(74)
Balance at end of period$32,492 
No impairment of goodwill was recognized for the three and nine months ended September 30, 2023 and 2022.
Internal use software and other intangible assets, net consisted of the following:
As of September 30, 2023
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$136,092 $(94,835)$41,257 
Intellectual property and other6.24,322 (1,402)2,920 
Total Intangible assets with finite lives, net140,413 (96,237)44,176 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other2,410 — 2,410 
Total Internal use software and other intangible assets, net$144,643 $(96,237)$48,406 
As of December 31, 2022
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$123,734 $(67,319)$56,415 
Intellectual property and other7.53,449 (838)2,611 
Total Intangible assets with finite lives, net127,183 (68,157)59,026 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,150 — 1,150 
Total Internal use software and other intangible assets, net$130,153 $(68,157)$61,996 
The Company capitalized $5.0 million and $3.0 million in internal use software and website development costs during the three months ended September 30, 2023 and 2022, respectively. Included in capitalized internal use software and website development costs are $2.5 million and $0.8 million of stock-based compensation costs for the three months ended September 30, 2023 and 2022, respectively. Amortization expense totaled $9.3 million and $9.0 million during the three months ended September 30, 2023 and 2022, respectively. For the three months ended September 30, 2023 and 2022, no impairment was recognized relating to intangible assets. The Company capitalized $12.4 million and $22.8 million in internal use software and website development costs during the nine months ended September 30, 2023 and 2022, respectively. Included in capitalized internal use software and website development costs are $3.9 million and $3.0 million of stock-based compensation costs for the nine months ended September 30, 2023 and 2022, respectively. Amortization expense totaled $28.1 million and $26.1 million during the nine months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, no impairment was recognized relating to intangible assets.
8. GOODWILL AND INTERNAL USE SOFTWARE AND OTHER INTANGIBLE ASSETS, NET
In September 2021, the Company completed acquisitions of two U.K. based companies. The Company acquired Trussle Lab Ltd (“Trussle”), a digital mortgage broker that uses a technology platform to make the mortgage process easier, more transparent, and cheaper for the end consumer, and LHE Holdings Limited (“LHE”), a residential property trading platform that enables investors to buy and sell fractional shares of individual properties. The companies were acquired mainly for expansion efforts in international markets.
The Company paid a total cash consideration of $1.4 million for the acquisition of Trussle. In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$781 
Finite lived intangibles - Intellectual property and other3,943 
Indefinite lived intangibles - Licenses and other277 
Goodwill3,317 
Other assets (1)
2,088 
Accounts payable and accrued expenses (1)
(5,512)
Other liabilities (1)
(3,510)
Total recognized assets and liabilities$1,384 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
For the acquisition of LHE, the Company paid a total consideration of $10.1 million. Of the total consideration, $6.2 million was paid in cash at closing. As of December 31, 2021, $3.9 million of the deferred acquisition consideration was included within accounts payable and accrued expenses on the consolidated balance sheets. The amount of deferred acquisition consideration was subsequently paid in March 2022. In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$1,739 
Finite lived intangibles - Intellectual property and other2,601 
Indefinite lived intangibles - Licenses and other1,038 
Goodwill4,420 
Other assets (1)
1,478 
Accounts payable and accrued expenses (1)
(1,172)
Total recognized assets and liabilities$10,104 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
Intangible assets acquired from both companies include trade names, intellectual property, licenses, and in-process research and development (“IPR&D”). The goodwill is non-tax deductible and primarily attributable to expected synergies from the integration of the operations of the acquisitions and the Company.
The acquisitions were not material to the Company's consolidated financial statements, either individually or in the aggregate. Accordingly, pro forma results of these acquisitions have not been presented.
In June 2022, the Company entered into a Share Purchase Agreement to acquire a banking entity for a total consideration of approximately $15.2 million. The banking entity is a U.K. based entity offering a wide range of financial products and services to consumers and small businesses. The acquisition will allow the Company to grow and expand operations in the U.K. by enabling the Company to improve the mortgage process for U.K. mortgage borrowers. The acquisition had not closed as of December 31, 2022 as it is subject to the approval of the Prudential Regulation Authority in the U.K. During the fourth quarter of 2022, the Company made a $2.4 million equity investment into the banking entity as an advance of the total consideration to provide liquidity until regulatory approval is obtained. On December 31, 2022, the Company impaired the equity investment in the amount of $0.3 million which is included in restructuring and impairment expenses on the consolidated statements of operations and comprehensive loss. The acquisition is not expected to be material to the Company's operations as a whole. See Note 22 for further information relating to subsequent regulatory approval.
Changes in the carrying amount of goodwill, net consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year$19,811 $10,995 
Goodwill acquired (Trussle and LHE)— 7,737 
Measurement period adjustment(375)1,269 
Effect of foreign currency exchange rate changes(911)(190)
Balance at end of year$18,525 $19,811 
No impairment of goodwill was recognized for the years ended December 31, 2022 and 2021.
Internal use software and other intangible assets, net consisted of the following:
As of December 31, 2022
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$123,734 $(67,319)$56,416 
Intellectual property and other7.53,449 (838)2,611 
Total Intangible assets with finite lives, net127,184 (68,157)59,026 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,150 — 1,150 
Total Internal use software and other intangible assets, net$130,153 $(68,157)$61,996 
As of December 31, 2021
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$96,155 $(32,832)$63,323 
Intellectual property and other7.56,384 (320)6,064 
Total Intangible assets with finite lives, net102,539 (33,152)69,387 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,282 — 1,282 
Total Internal use software and other intangible assets, net$105,641 $(33,152)$72,489 
The Company capitalized $27.6 million and $61.9 million in internal use software and website development costs during the years ended December 31, 2022 and 2021, respectively. Included in capitalized internal use software and website development costs are $4.1 million and $9.0 million of stock-based compensation costs for the years ended December 31, 2022 and 2021, respectively. Amortization expense totaled $35.4 million and $19.6 million during the years ended December 31, 2022 and 2021, respectively. For the years ended December 31, 2022 and 2021, $2.0 million and none impairment was recognized relating to intangible assets (see Note 4).
Amortization expense related to intangible assets as of December 31, 2022 is expected to be as follows:
(Amounts in thousands)Total
2023$34,554 
202420,338 
20253,296 
2026574 
2027 and thereafter264 
Total$59,026 
v3.23.4
Prepaid Expenses and Other Assets
 9 Months Ended
Sep. 30, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
PREPAID EXPENSES AND OTHER ASSETS
8. Prepaid Expenses and Other Assets
Prepaid expenses and other assets consisted of the following:
As of September 30,As of December 31,
(Amounts in thousands)20232022
Prepaid expenses$27,095 $26,366 
Tax receivables9,717 18,139 
Security Deposits15,233 14,369 
Loans held for investment4,163 — 
Prepaid compensation asset— 5,615 
Inventory—Homes— 1,139 
Net investment in lease$— $944 
Total prepaid expenses and other assets$56,208 $66,572 
Prepaid Compensation Asset—Prepaid compensation asset, which is related to prepaid expenses and other assets as shown in the table above, consists of a one-time retention bonus given to Kevin Ryan, Chief Financial Officer of the Company, in the form of a forgivable loan of $6.0 million, with an annual compounding interest rate of 3.5% on August 18, 2022. Subject to Mr. Ryan’s active employment by the Company and status of good standing on each of December 1, 2023, December 1, 2024, December 1, 2025 and December 1, 2026, 25% of the principal amount of, and accrued and unpaid interest on, the loan will be forgivable on each such dates. Further, the outstanding principal and interest will be forgivable upon Mr. Ryan’s death, termination as part of a reduction in force, the elimination or substantial reduction of Mr. Ryan’s role, a change in control of the Company, the Company’s insolvency or filing of bankruptcy or Mr. Ryan’s termination by the Company without cause. The loan will also be forgiven if it would violate applicable law, including Section 402 of the Sarbanes-Oxley Act as implemented in Section 13(k) of the Exchange Act. In the event of Mr. Ryan’s voluntary separation from the Company or termination by the Company for cause, any outstanding principal and interest will be due in full on the date that is twenty-four (24) months from the date of termination. The Company was recognizing the expense ratably over time until December 1, 2026 or until forgiveness based on the events discussed above.
In August 2023, in connection with and prior to the closing of the Merger, the Company has forgiven Mr. Ryan’s loan in the amount of $6.0 million plus accrued interest of $0.2 million and as such the Company is in compliance with Section 402 of the Sarbanes-Oxley Act as implemented in Section 13(k) of the Exchange Act.
As a result of the forgiveness, the Company has recognized $4.8 million and $0.1 million of compensation expense during the three months ended September 30, 2023 and 2022, respectively. The Company has recognized $5.5 million and $0.1 million of compensation expense during the nine months ended September 30, 2023 and 2022, respectively. In addition, the Company has agreed to reimburse and make whole Mr. Ryan with the withholding taxes incurred in connection with the forgiveness of the loan which resulted in additional compensation expense of $3.9 million for the three and nine months ended September 30, 2023.
Loans Held for Investment—The Company holds a small amount of loans held for investment, which were acquired as part of the Birmingham acquisition in April 2023. For these loans, management has the intent and ability to hold for the foreseeable future or until maturity or payoff and are reported at amortized cost, which is the principal amount outstanding, net of cumulative charge-offs, unamortized net deferred loan origination fees and costs and unamortized premiums or discounts on purchased loans.
The allowance for credit losses is a valuation account that is deducted from the loans held for investment amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged-off against the allowance when management believes the loan balance is deemed to be uncollectible. Management's estimation of expected credit losses is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts, including expected defaults and
prepayments. The Company recognized an immaterial current expected credit loss for loans held for investment as of September 30, 2023.
9. PREPAID EXPENSES AND OTHER ASSETS
Prepaid expenses and other assets consisted of the following:
As of December 31,
(Amounts in thousands)20222021
Other prepaid expenses$26,366 $22,931 
Net investment in lease944 11,058 
Tax receivables18,139 20,250 
Prefunded loans in escrow — 12,148 
Merger transaction costs— 14,263 
Security Deposits14,369 9,226 
Prepaid compensation asset5,615 — 
Inventory—Homes
1,139 1,122 
Total prepaid expenses and other assets$66,572 $90,998 
Prepaid compensation asset consists of a one-time retention bonus given to Kevin Ryan, Chief Financial Officer of the Company, in the form of a forgivable loan of $6,000,000, with an annual compounding interest rate of 3.5% on August 18, 2022. Subject to Mr. Ryan’s active employment by the Company and status of good standing on each of December 1, 2023, December 1, 2024, December 1, 2025 and December 1, 2026, the principal and compound interest of the loan will be forgivable on each such dates. Further, the outstanding principal and interest will be forgivable upon Mr. Ryan’s death, termination as part of a reduction in force, the elimination or substantial reduction of Mr. Ryan’s role, a change in control of the Company, the Company’s insolvency or filing of bankruptcy or Mr. Ryan’s termination by the Company without cause. In the event of Mr. Ryan’s voluntary separation from the Company or termination by the Company for cause, any outstanding principal and interest will be due in full on the date that is twenty-four (24) months from the date of termination.
v3.23.4
Customer Deposits
 9 Months Ended
Sep. 30, 2023
Deposits [Abstract]  
CUSTOMER DEPOSITS
9. Customer Deposits
The following table presents average balances and weighted average rates paid on deposits for the periods indicated:
Three Months Ended September 30, 2023Three Months Ended September 30, 2022
(Amounts in thousands)Average BalanceAverage Rate PaidAverage BalanceAverage Rate Paid
Notice$2,190 2.92 %$— — %
Term2,962 2.13 %— — %
Savings4,991 2.18 %— — %
Total Deposits$10,143 2.41 %$— — %
Nine Months Ended September 30, 2023Nine Months Ended September 30, 2022
(Amounts in thousands)Average BalanceAverage Rate PaidAverage BalanceAverage Rate Paid
Notice$2,842 2.62 %$— — %
Term2,402 1.66 %— — %
Savings5,511 1.97 %— — %
Total Deposits$10,755 2.08 %$— — %
The following table presents maturities of customer deposits:
(Amounts in thousands)As of September 30, 2023
Demand deposits$4,795 
Maturing In:
20232,608 
20242,299 
2025206 
2026— 
2027— 
Thereafter— 
Total$9,908 
Interest Expense on deposits is recorded in warehouse interest expense in the condensed consolidated statements of operations and comprehensive loss for the periods indicated as follows:
Three Months Ended September 30, 2023Nine Months Ended September 30, 2023
(Amounts in thousands)2023202220232022
Notice$22 $— $43 $— 
Term4 — 10 — 
Savings26 — 54 — 
Total Interest Expense$52 $— $107 — 
Deposits are for U.K. banking clients and are protected up to £85.0 thousand ($103.7 thousand) per eligible person by the Financial Services Compensation Scheme in the U.K. Of the total customer deposits as of September 30, 2023, $1.0 million were over the applicable insured amount.
v3.23.4
Corporate Line of Credit and Preclosing Bridge Notes
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
CORPORATE LINE OF CREDIT AND PRECLOSING BRIDGE NOTES
10. Corporate Line of Credit and Preclosing Bridge Notes
Corporate Line of Credit—As of September 30, 2023 and December 31, 2022, the Company had none and $144.4 million, respectively, of outstanding borrowings on the line of credit, which are recorded net of the unamortized portion of the warrant discount and debt issuance costs within corporate line of credit, net in the condensed consolidated balance sheets. The Company had none and $2.0 million of unamortized warrant issuance related discount and debt issuance costs as of September 30, 2023 and December 31, 2022, respectively.
In February 2023, the Company entered into a loan and security agreement (the “2023 Credit Facility”) with Clear Spring Life and Annuity Company, an entity affiliated with the previous agent and acting as an agent for such lenders (together, the “Lender”) to amend its previously existing loan and security agreement (the “2021 Credit Facility”). The terms of the 2023 Credit Facility granted relief from the acceleration of payments under minimum revenue triggers from the 2021 Credit Facility. The 2023 Credit Facility split the principal balance into two tranches, tranche “AB” in the amount of $96.7 million and Tranche “C” in the amount of $26.9 million. Tranche AB was backed by assets that the Company pledged, mainly loans held for sale that the Company fully owned while Tranche C was secured by other assets of the Company. Tranche AB had a fixed interest rate of 8.5% and Tranche C had a variable interest rate based on the SOFR reference rate for a one-month tenor plus 9.5%.
During the nine months ended September 30, 2023, the Company paid off $144.4 million owed in principal balance on the 2023 Credit Facility. The Company made the final principal payment to the Lender in August 2023 and as the Company repaid the 2023 Credit Facility in full earlier than what was contractually required, the Company paid a make-whole amount that represents minimum interest for the Lender in the amount of $4.5 million. The Company also amortized the remaining unamortized debt issuance costs in the amount of $5.1 million as part of interest and amortization on non-funding debt expense within the consolidated statements of operations and comprehensive loss.
For the three months ended September 30, 2023, the Company recorded a total of $11.3 million related to interest expense as follows: $6.1 million in interest expense related to the line of credit and $5.2 million in interest expense related to the amortization of deferred debt issuance costs and discount and other debt servicing fees which is included in interest and amortization on non-funding debt expense, net within the condensed consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2023, the Company recorded a total of $17.6 million related to interest expense as follows: $11.5 million in interest expense related to the line of credit and $6.0 million in interest expense related to the amortization of deferred debt issuance costs and discount and other debt servicing fees which is included in interest and amortization on non-funding debt expense, net within the condensed consolidated statements of operations and comprehensive loss.
For the three months ended September 30, 2022, the Company recorded a total of $2.8 million related to interest expense as follows: $2.4 million in interest expense related to the line of credit and $0.3 million in interest expense related to the amortization of deferred debt issuance costs and discount and other debt servicing fees which is included in interest and amortization on non-funding debt expense within the consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2022, the Company recorded a total of $9.6 million related to interest expense as follows: $8.5 million in interest expense related to the line of credit and $0.8 million in interest expense related to the amortization of deferred debt issuance costs and discount and other debt servicing fees which is included in interest and amortization on non-funding debt expense within the consolidated statements of operations and comprehensive loss.
Pre-Closing Bridge Notes—The carrying value of the Pre-Closing Bridge Notes as of December 31, 2022 is $750.0 million and is included in the condensed consolidated balance sheets. In connection with the Closing of the Business Combination, the Pre-Closing Bridge Notes held by SoftBank in an aggregate principal amount of $650.0 million automatically converted into Better Home & Finance Class C common stock at a conversion price of $10.00 per share (the “Bridge Note Conversion”). In connection with the Bridge Note Conversion, the Company issued an
aggregate 65.0 million shares of Better Home & Finance Class C common stock to a trust designated by SoftBank to distribute such shares to SoftBank upon satisfaction of certain conditions. In addition, pursuant to the letter agreement, dated as of February 7, 2023, by and among Aurora, the Company and the Sponsor (the “Second Novator Letter Agreement”) and the letter agreement, dated August 22, 2023, by and among Aurora, Better and the Sponsor (the “Novator Exchange Agreement”), the Pre-Closing Bridge Notes held by the Sponsor in an aggregate principal amount of $100.0 million were exchanged for 40.0 million shares of Better Home & Finance Class A common stock.
The Company recorded none and $80.1 million in interest expense on Pre-Closing Bridge Notes from the amortization of the discount during the three months ended September 30, 2023 and 2022, respectively, included within the condensed consolidated statements of operations and comprehensive loss. The Company recorded none and $213.5 million in interest expense on Pre-Closing Bridge Notes from the amortization of the discount during the nine months ended September 30, 2023 and 2022, respectively, included within the condensed consolidated statements of operations and comprehensive loss.
Issuance of Post-Closing Convertible Notes—In connection with the Closing of the Business Combination, the Company issued to SoftBank senior subordinated convertible notes in the aggregate principal amount of $528.6 million (the “Post-Closing Convertible Notes”), $550.0 million less approximately $21.4 million released to the Company at the Closing from Aurora’s trust account, pursuant to an Indenture, dated as of August 22, 2023 (the “Indenture”). The Post-Closing Convertible Notes bear 1% interest per annum and mature on August 22, 2028, unless earlier converted or redeemed. Per the Indenture, the Company may elect to pay all or any portion of interest in kind by issuing to the holder of such note an additional note or in cash. Upon issuing the Convertible Notes, the loan commitment asset on Better’s balance sheet as of December 31, 2022 in the amount of $16.1 million, associated with the right to draw the Post-Closing Convertible Notes, is reflected as a debt discount which will be amortized as part of interest expense over the term of the Post-Closing Convertible Notes. As of September 30, 2023, the carrying amount of the Post-Closing Convertible Notes was $513.0 million on the condensed consolidated balance sheets.
The Post-Closing Convertible Notes are convertible, at the option of SoftBank, into shares of the Company’s Class A common stock, with an initial conversion rate per $1,000 principal amount of Post-Closing Convertible Notes equal to (a) $1,000 divided by (b) a dollar amount equal to 115% of the First Anniversary VWAP (as defined in the Indenture), subject to adjustments as described therein. The Indenture provides that the First Anniversary VWAP may be no less than $8.00 and no greater than $12.00, subject to adjustments as described therein. The Post-Closing Convertible Notes may be redeemed at the option of the Company at a redemption price of 115% of par plus accrued interest in cash, at any time on or before the 30th trading day prior to the maturity date of the Post-Closing Convertible Notes if the last reported sale price of the Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during the 30 trading day period ending on, and including, the trading day immediately preceding the date of notice of optional redemption.
The Post-Closing Convertible Notes permit the Company to designate up to $150 million of indebtedness that is senior to the Post-Closing Convertible Notes, in addition to certain other customary exceptions. In addition, the Indenture requires that if a domestic subsidiary of the Company guarantees other senior indebtedness of the Company, such subsidiary would also be required to guarantee the notes, subject to certain exceptions for non-profit subsidiaries and regulated mortgage origination subsidiaries.
For the three and nine months ended September 30, 2023, the Company recorded a total of $0.5 million and $0.5 million respectively, of interest expense related to the Post-Closing Convertible Notes. Interest expense from the Post-Closing Convertible Notes is included in interest and amortization on non-funding debt expense, net within the condensed consolidated statements of operations and comprehensive loss.
11. CORPORATE LINE OF CREDIT AND PRECLOSING BRIDGE NOTES
Corporate Line of Credit—In November 2021, the Company entered into an agreement (“2021 Credit Facility”) with certain lenders, and Biscay GSTF III, LLC, an entity affiliated with the previous agent and acting as
an agent for such lenders (the “Lender”) to amend its existing 2020 Credit Facility. The 2021 Credit Facility does not change the terms of the existing borrowings under the 2020 Credit Facility and only adds a new revolving facility which was never drawn on and unavailable as of December 31, 2022 as the additional revolving facility never closed.
The 2021 Credit Facility provides for a $150.0 million loan facility and matures on March 25, 2027. The terms of the 2021 Credit Facility include 8.0% annual interest, if the Company elects to make interest payments in cash, or 9.5% annual interest in kind which is added to the outstanding principal amount of the loan, and 0.5% unused commitment fee. The terms of the 2021 Credit Facility also include the ability to prepay amounts borrowed, at the Company’s discretion, which would include all accrued and unpaid interest on amounts borrowed as well as a “make-whole” premium that is reduced by the interest incurred through prepayment. As of December 31, 2022 and 2021, the make-whole is $5.2 million and $17.2 million, respectively.
As of December 31, 2022 and 2021, the Company had $146.4 million and $151.4 million, respectively, of outstanding borrowings on the line of credit, which are recorded net of the unamortized portion of the warrant discount and debt issuance costs within corporate line of credit, net in the consolidated balance sheets. The outstanding borrowings as of both December 31, 2022 and 2021 include $1.4 million of interest in kind that was added to the principal balance which was incurred as interest in kind in previous years. The Company had $2.0 million and $2.4 million of unamortized warrant issuance related discount and debt issuance costs as of December 31, 2022 and 2021, respectively. Warrant issuance related discounts and debt issuance costs are recorded as a discount to the outstanding borrowings on the line of credit and are amortized into interest and amortization on non-funding debt within the statements of operations and comprehensive loss over the term of the 2021 Credit Facility using the effective interest method.
During the years ended December 31, 2022 and 2021, the Company borrowed none and $80.0 million, respectively under the credit facility. During the years ended December 31, 2022 and 2021, the Company made a principal repayments of $5.0 million and none, respectively.
For the year ended December 31, 2022, the Company recorded a total of $13.2 million related to interest expense as follows: $12.1 million in interest expense related to the line of credit and $1.1 million in interest expense related to the amortization of deferred debt issuance costs and discount and other debt servicing fees which is included in interest and amortization on non-funding debt expense within the consolidated statements of operations and comprehensive loss.
For the year ended December 31, 2021, the Company recorded a total of $11.4 million related to interest expense as follows: $10.2 million in interest expense related to the line of credit, $0.2 million in interest expense from the unused commitment fee, and $1.0 million in interest expense related to the amortization of deferred debt issuance costs and discount and other debt servicing fees which is included in interest and amortization on non-funding debt expense within the consolidated statements of operations and comprehensive loss.
Under the terms of the 2021 Credit Facility, the Company is required to comply with certain financial and nonfinancial covenants. The terms of the 2021 Credit Facility also limit the Company’s ability to pay dividends and engage in mergers and acquisitions amongst other limitations, without prior approval from the Lender. Any failure by the Company to comply with these covenants and any other obligations under the 2021 Credit Facility could result in an event of default, which allows the Lender to accelerate the repayments of the amounts owed.
The Company was in compliance with its financial covenants as of December 31, 2022. The 2021 Credit Facility includes minimum revenue triggers, which if not met will accelerate repayments of amounts owed. During the fourth quarter of 2022, the Company triggered the acceleration of amounts owed due to the minimum revenue triggers which accelerated repayments to 12 equal monthly installments starting in December 2022 through December 2023. The Company was in discussions with the Lender in anticipation of triggering the acceleration and obtained verbal relief from the accelerated repayment while both parties continued to work on an amendment to the 2021 Credit Facility. As of December 31, 2022, the Company has not made any repayments of amounts owed and has not finalized the amendment, see Note 22 Subsequent Events for further details.
Pre-Closing Bridge Notes—The Company recorded $272.7 million and $19.2 million in interest expense on Pre-Closing Bridge Notes from the amortization of the discount during the years ended December 31, 2022 and 2021, respectively, included within the consolidated statements of operations and comprehensive loss. The carrying value of the Pre-Closing Bridge Notes as of December 31, 2022 and 2021 is $750.0 million and $477.3 million, respectively, and is included in the consolidated balance sheets.
The Pre-Closing Bridge Notes were issued in December 2021, matured on December 2, 2022, and carry a zero percent coupon interest rate. The Pre-Closing Bridge Notes are not repayable in cash and include various conversion features. Under the terms of the Pre-Closing Bridge Note Purchase Agreement immediately prior to the closing of the Second Merger, as defined in Note 1, Aurora will be deemed to automatically assume each Pre-Closing Bridge Note and the outstanding principal amount under each Pre-Closing Bridge Note will automatically be converted into a number of shares of Class A Common Stock of Aurora, based on a conversion ratio of $10 of principal amount payable on the Pre-Closing Bridge Note at the time of conversion to one share of Aurora Class A Common Stock. In the event that the Merger Agreement has not been consummated by the maturity date of the Pre-Closing Bridge Notes or the Merger Agreement is withdrawn, then on the maturity date or upon withdrawal, the Pre-Closing Bridge Notes will convert into a new series of preferred stock with terms consistent with those of the Company’s Series D Preferred Stock. If the Merger Agreement is not consummated due to a breach by Aurora, the Sponsor or SoftBank, the Pre-Closing Bridge Notes will convert into the Company’s common stock.
Since the maturity date of the Pre-Closing Bridge Notes was December 2, 2022, the Pre-Closing Bridge Notes became, by their terms, automatically convertible into Better Home & Finance Class A common stock. However, in connection with the First Novator Letter Agreement, the Maturity Date of the Pre-Closing Bridge Notes held by the Sponsor was extended to March 8, 2023, subject to SoftBank consenting to extending the maturity of its Pre-Closing Bridge Notes accordingly. Since such consent was not received from SoftBank and the Company has not amended its certificate of incorporation to facilitate such conversion, the Pre-Closing Bridge Notes held by the Sponsor and SoftBank have not converted. The Company and the Sponsor ultimately entered into the Deferral Letter Agreement, pursuant to which the Maturity Date of the Pre-Closing Bridge Notes held by the Sponsor was deferred to September 30, 2023. As the Pre-Closing Bridge Notes have not converted per terms of the Pre-Closing Bridge Note Purchase Agreement, the Pre-Closing Bridge Notes are still considered legal form debt as of December 31, 2022 and as such are classified as debt in the consolidated balance sheets, with the Company continuing to amortize the discount on the Pre-Closing Bridge Notes using the original maturity date of December 2, 2022. Additionally, as described further below, both the First Novator Letter Agreement and the Second Novator Letter Agreement included additional exchange features that permit the Sponsor to exchange its Pre-Closing Bridge Notes at different price levels.
SoftBank continues to hold its Pre-Closing Bridge Note, which may be converted pursuant to its terms into a new series of preferred stock of the Company, which series will be identical to the Company’s Series D Preferred Stock, pursuant to the terms thereof. As of December 31, 2022, SoftBank’s Pre-Closing Bridge Note has not yet been converted or otherwise deferred due to ongoing negotiations.
The Pre-Closing Bridge Notes have matured on December 2, 2022, however as they have not converted per terms of the Pre-Closing Bridge Note Purchase Agreement, the Pre-Closing Bridge Notes are still considered legal form debt as of December 31, 2022 and as such are classified as debt in the consolidated balance sheets. The First Novator Letter Agreement, as discussed and defined below, extend the maturity to March 8, 2023 for the Pre-Closing Bridge Notes held by the Sponsor was subject to the consent of SoftBank which was not obtained and therefore not enforceable. As such the Company continued to amortize the discount on the Pre-Closing Bridge Notes using the original maturity date of December 2, 2022. The Second Novator Letter Agreement, as discussed and defined below, was entered into subsequent to December 31, 2022 and is not subject to SoftBank’s consent. In order to convert the Pre-Closing Bridge Notes into a new series of preferred stock, the Company would need to perform a series of legal steps including amending its certificate of incorporation, which it has not yet done. As such, the liability remains on the balance sheet as of December 31, 2022.
First Novator Letter Agreement—On August 26, 2022, Aurora, the Company and the Sponsor entered into a letter agreement (the “First Novator Letter Agreement”) to extend the maturity date of the Pre-Closing Bridge Notes held by Sponsor to March 8, 2023, subject to SoftBank consenting to extending the maturity of its bridge notes
accordingly. Furthermore, pursuant to the First Novator Letter Agreement, subject to the Company receiving requisite shareholder approval therefor (which the Company has agreed to use reasonable best efforts to obtain), the parties agreed that, if the Merger has not been consummated by the maturity date of the Pre-Closing Bridge Notes, Sponsor will have the option, without limiting its rights under the Pre-Closing Bridge Note Purchase Agreement, to alternatively exchange its Pre-Closing Bridge Notes as follows: (x) $75 million of its $100 million aggregate principal amount of Pre-Closing Bridge Notes would be exchanged for newly issued shares of the Company’s Class B common stock at a price per share reflecting a 75% discount to a $6.9 billion pre-money equity valuation of the Company and (y) the remaining $25 million of Sponsor’s bridge notes would be exchanged for the Company’s preferred stock at price per share reflecting a $6.9 billion pre-money equity valuation of the Company. As the extended maturity date has passed and the Merger has not been consummated, Sponsor will have the alternative exchange options described in the First Novator Letter Agreement. The conversion terms of the Pre-Closing Bridge Notes held by SoftBank are not modified by the terms of the First Novator Letter Agreement nor has SoftBank consented to the extension under the First Novator Letter Agreement.
Per the First Novator Letter Agreement, the Sponsor shall have the right, but not the obligation, to fund any portion or none of its Post-Closing Convertible Note. Additionally, the parties to the First Novator Letter Agreement agreed that if the Sponsor does not fund all or a portion of its Post-Closing Convertible Note, then SoftBank’s commitment to fund its Post-Closing Convertible Note shall be reduced on a dollar-for-dollar basis by the amount that is not funded by the Sponsor, such that if the Sponsor elects not to fund in full its Post-Closing Convertible Note, then SoftBank is only obligated to fund $550,000,000 of its Post-Closing Convertible Note. The conversion terms of the Pre-Closing Bridge Notes held by SoftBank are not modified by the terms of the First Novator Letter Agreement.
Deferral Letter Agreement—On February 7, 2023, the Company and the Sponsor entered into a letter agreement (the “Deferral Letter Agreement”) to defer the maturity date of the Pre-Closing Bridge Notes held by the Sponsor until September 30, 2023. Following the expiration of this deferral period, the Pre-Closing Bridge Notes held by the Sponsor may be exchanged or converted in accordance with the terms of the Pre-Closing Bridge Notes, the First Novator Letter Agreement or the Second Novator Letter Agreement, as applicable. The conversion terms of the Pre-Closing Bridge Notes held by SoftBank are not modified by the terms of the Deferral Letter Agreement.
Second Novator Letter Agreement—On February 7, 2023, Aurora, the Company and Sponsor entered into a letter agreement (the “Second Novator Letter Agreement”) pursuant to which, subject to the Company receiving requisite shareholder approval therefor (which the Company has agreed to use reasonable best efforts to obtain), the parties agreed that, if the Merger has not been consummated by the maturity date of the Pre-Closing Bridge Notes (as deferred by the Deferral Letter Agreement), the Sponsor will have the option, without limiting its rights under the Pre-Closing Bridge Note Purchase Agreement, to alternatively exchange its Pre-Closing Bridge Notes as follows: (x) for a number of shares of the Company’s preferred stock at a conversion price that represents a 50% discount to the $6.9 billion pre-money equity valuation of Better or (y) for a number of shares of the Company’s Class B common stock at a price per share that represents a 75% discount to the $6.9 billion pre-money equity valuation of the Company. The conversion terms of the Pre-Closing Bridge Notes held by SoftBank are not modified by the terms of the Second Novator Letter Agreement.
v3.23.4
Related Party Transactions
 9 Months Ended
Sep. 30, 2023
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS
11. Related Party Transactions
The Company has entered into a number of commercial agreements with related parties, which management believes provide the Company with products or services that are beneficial to its commercial objectives. Often these products and services have been tailored to the Company’s specific needs or are part of new pilot programs, both for
the Company and the counterparty, for which there are not clear alternative vendors offering comparable services to compare pricing with. It is reasonable to assume that none of these related party commercial agreements were structured at arm’s length and therefore may be beneficial to the counterparty.
1/0 Capital—The Company is a party to an employee and expense allocation agreement with 1/0 Capital, LLC (“1/0 Capital”), an entity affiliated with 1/0 Real Estate, LLC (“1/0 Real Estate”) (an entity wholly owned by 1/0 Holdco, in which Vishal Garg, the Chief Executive Officer of the Company, and the Company’s executive officers each hold a more than five percent ownership interest). Under the employee and expense allocation agreement, 1/0 Capital provides the Company access to certain employees in exchange for reasonable consideration in the form of fees based on their time, as well as IT support services. Any intellectual property created under the agreement by 1/0 Capital employees working on behalf of the Company belongs to the Company. The term of the agreement will continue in perpetuity. The services provided by 1/0 Capital are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with this agreement, the Company reduced the accrued expense by $27.0 thousand and $187.3 thousand in the three months ended September 30, 2023 and 2022, respectively. As part of this agreement, the Company may provide access to certain of its employees for use by 1/0 Capital which reduced the amounts owed to 1/0 Capital by none and none for the three months ended September 30, 2023 and 2022, respectively. The Company recorded a reduction of expenses of $27.0 thousand and $187.3 thousand for the three months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss. The Company incurred gross expenses of $6.4 thousand and $386.8 thousand in the nine months ended September 30, 2023 and 2022, respectively. As part of this agreement, the Company may provide access to certain of its employees for use by 1/0 Capital which reduced the amounts owed to 1/0 Capital by none and $18.2 thousand for the nine months ended September 30, 2023 and 2022, respectively. The Company recorded net expenses of $6.4 thousand and $368.6 thousand for the nine months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss. The Company is invoiced on a net basis and recorded a $144.4 thousand and $177.0 thousand payable as of September 30, 2023 and December 31, 2022, respectively, included within other liabilities, respectively, on the condensed consolidated balance sheets.
TheNumber—The Company originally entered into a data analytics services agreement in August 2016 with TheNumber, LLC (“TheNumber”), an entity affiliated with both Vishal Garg, the Chief Executive Officer of the Company, and 1/0 Real Estate.
In September 2021, the Company and TheNumber entered into a technology integration and license agreement, which was amended in November 2021, to develop a consumer credit profile technology which is to be launched in three stages. The first stage involves testing TheNumber’s limited graph Application Programming Interface (“API”) in a testing environment with test data. The second stage involves data such as credit, income, and assets of staged borrowers meeting certain measures of speed and performance. The third stage requires TheNumber to run the product and serve all borrowers on the production side as well as provide data to the Company from its rich data set. The listed services provided by TheNumber are lead generation, market rate analysis, lead growth analysis, property listing analysis, automated valuation models, and financial risk analysis. Both parties agreed to jointly develop all aspects of this program, and the agreement provides for the utilization of TheNumber employees by the Company. In January 2023, the agreement was extended for an additional year. The services provided by TheNumber are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with these agreements, the Company paid expenses of $66.9 thousand and $617.7 thousand for the three months ended September 30, 2023 and 2022 respectively, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company paid expenses of $438.0 thousand and $1,123.0 thousand for the nine months ended September 30, 2023 and 2022 respectively, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss and had a payable of $204.3 thousand and $232.0 thousand as of September 30, 2023 and December 31, 2022, respectively, within other liabilities on the condensed consolidated balance sheets.
Holy Machine—In January 2018, the Company entered into a consulting agreement (the “2018 Holy Machine Consulting Agreement”) with Holy Machine LLC (“Holy Machine”) an entity controlled by Aaron Schildkrout, a former member of Better’s board of directors (the “Better Board”). Aaron Schildkrout resigned from the Better
Board on June 8, 2022 and as an advisor shortly thereafter. The 2018 Holy Machine Consulting Agreement provided for consulting services related to executive recruiting and such other services as mutually agreed upon, and grants Holy Machine 603,024 options with a 4-year vesting period and no cliff at two times the fair market value of the Company. Further, any inventions, discoveries, improvements or works of authorship made by Holy Machine and the results thereof that may be considered works made for hire shall be assigned to the Company and be the Company’s exclusive property to which the Company has the exclusive right to obtain and own all copyrights. In May 2020, the parties entered into an amendment to the 2018 Holy Machine Consulting Agreement to insert terms relating to compliance with applicable laws, contracts, and indemnification among the parties. No other terms of the 2018 Holy Machine Consulting Agreement were altered. The agreement ended in November 2022.
In July 2020, the Company and Holy Machine entered into a new consulting agreement (the “2020 Holy Machine Consulting Agreement”). The 2020 Holy Machine Consulting Agreement granted Holy Machine (i) the option to purchase 764,143 shares of Better’s common stock, with an accompanying stock option agreement having a term of 10 years, at the then fair market value at the time of the grant and (ii) the option to purchase 764,143 shares of Better’s common stock, with an accompanying stock option agreement having a term of 10 years, with an exercise price per share equal to (a) $5.14 minus (b) the then current fair market value at the time of grant. Both tranches of granted options vest each month on the same day of the month as the vesting commencement date of April 18, 2020, subject to Holy Machine continuing to provide consulting services through each such date, and both have change in control vesting provisions which would result in 100% of unvested options vesting should there be a change of control of the Company, as defined in such a stock option agreement. The services provided by Holy Machine were not integral to the Company’s technology platform and amounts incurred were not material to the Company. During the second quarter of 2022, Aaron Schildkrout resigned from the Better Board and resigned as an advisor to Better shortly thereafter. The Company recorded none and $37.5 thousand of expenses during the three months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss. The Company recorded none and $137.5 thousand of expenses during the nine months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss and a payable of none and none as of September 30, 2023 and December 31, 2022, respectively, within other liabilities on the condensed consolidated balance sheets.
Notable—In October 2021, the Company entered into a private label and consumer lending program agreement (the “2021 Notable Program Agreement”) to provide home improvement lines of credit to qualified borrowers of the Company with Notable Finance, LLC (“Notable”), an entity in which Vishal Garg, the Chief Executive Officer of the Company, and 1/0 Real Estate collectively hold a majority ownership interest. The program is intended to be used by qualified customers of the Company for home improvement purchases (the “Home Improvement Line of Credit”).
This program required Notable to originate and service the loan and in consideration, the Company pays Notable $600 for each loan originated pursuant to the agreement. In connection with the 2021 Notable Program Agreement, Notable provided an unsecured personal loan product with an initial 12-month “draw period” during which the customers can use the approved loan amount and only pay interest on the used loan fund. Following this initial 12-month draw period, the customers are no longer able to withdraw funds and there is a 3 or 5-year “fixed” period to pay back the loan in full in months installments.
For the three months ended September 30, 2023, the Company incurred $16.3 thousand of expenses under the agreement, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. For the three months ended September 30, 2022, the Company incurred $74.3 thousand of expenses under the agreement, $31.9 thousand of which are included within marketing expenses and $42.4 thousand of which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2023, the Company incurred $38.5 thousand of expenses under the agreement, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2022, the Company incurred $74.3 thousand of expenses under the agreement, $31.9 thousand of which are included within marketing expenses and $42.4 thousand of which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company recorded a payable of $10.0 thousand
and $15.0 thousand included within other liabilities on the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.
In January 2022, Better Trust I, a subsidiary of the Company entered into a master loan purchase agreement (the “Notable MLPA”) with Notable to purchase from Notable up to $20.0 million of unsecured home improvement loans underwritten and originated by Notable for the Company’s customers. Under the Notable MLPA, Notable originated home improvement loans, all of which Notable makes available for purchase by the Company. No additional cost outside the sale of the loan was contemplated by the Notable MLPA. The services provided by Notable are not integral to the Company’s technology platform and expenses incurred are not material to the Company. As of September 30, 2023 and December 31, 2022, the Company had $6.8 million and $8.3 million of unsecured home improvement loans from Notable, which are included within mortgage loans held for sale, at fair value on the condensed consolidated balance sheets.
Truework—The Company is a party to a data analytics services agreement with Zethos, Inc., (“Truework”), an entity in which Vishal Garg, the Chief Executive Officer of the Company, is an investor. Under the data analytics services agreement, Truework provides digital Verification of Employment (“VOE”) and Verification of Income (“VOI”) services to the Company during the mortgage loan origination process to confirm the employment and income of borrowers seeking a mortgage. This is data required for underwriting mortgages to the specifications of FNMA, FMCC, and private loan purchasers. These data services are standard product offerings of Truework, which they offer to a number of mortgage lenders. Truework is one of multiple vendors the Company uses for VOE and VOI services, the largest other one being The Work Number by Equifax. The Company uses the two vendors interchangeably based on estimated lowest cost and turnaround time. The Company originally entered into the data services agreement in September 2020, and amended the agreement in October 2021 to run until September 30, 2023. In connection with usage of the services, the Company reduced the accrued expense of $8.6 thousand for the three months ended September 30, 2023, which is included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company incurred expenses of $414.3 thousand for the three months ended September 30, 2022, which is included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive. The Company reduced the accrued expense of $7.4 thousand for the nine months ended September 30, 2023 and recorded the expense of $414.3 thousand nine months ended September 30, 2022, respectively, which is included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company recorded a payable of $101.2 thousand and $16.2 thousand included within other liabilities on the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.
Share Repurchases—During the first quarter of 2022, Better repurchased from former member of the Better Board, Gabrielle Toledano, a total of 33,995 shares of Better’s common stock for an aggregate purchase price of $254,154 to defray taxes associated with vesting of equity awards of such shares. Ms. Toledano subsequently resigned from the Better Board in April 2022.
During the third quarter of 2022, Better repurchased from General Counsel and Chief Compliance Officer Paula Tuffin a total of 82,527 shares of Better common stock for an aggregate purchase price of $399,600 to defray taxes associated with vesting of equity awards of such shares.
Notes Receivable from Stockholders—The Company, previously at times, entered into promissory note agreements with certain employees for the purpose of financing the exercise of the Company’s stock options. These employees may have the ability to use the promissory notes to exercise stock options that have not yet been vested by the respective employees. Interest is compounded and accrued based on any unpaid principal balance and is due upon the earliest of maturity, 120 days after an employee leaves the Company, the date the employee sells shares acquired through the promissory note agreement without prior written consent of the Company, or the day prior to the date that any change in the employee’s status would cause the loan to be a prohibited extension or maintenance of credit under Section 402 of the Sarbanes-Oxley Act. The Company no longer enters into promissory note agreements for the purpose of financing the exercise of the Company’s stock options and no longer allows for the early exercise of stock options
The Company included $10.4 million and $53.9 million of the notes, which include the outstanding principal amount and accrued interest, within notes receivable from stockholders in stockholders’ equity (deficit) on the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively. The balance as of September 30, 2023 does not include any promissory notes due from directors and officers of the Company. The balance as of December 31, 2022 includes $43.6 million of promissory notes due from directors and officers of the Company, of which $40.2 million was due from Vishal Garg. During the three months ended September 30, 2023, the Company reduced interest income from the promissory notes of $0.5 million, and during three months ended September 30, 2022, the Company recognized interest income from the promissory notes of $0.1 million which is included within interest income on the condensed consolidated statements of operations and comprehensive loss. During the nine months ended September 30, 2023, the Company reduced interest income from the promissory notes of $0.3 million, and nine months ended September 30, 2022, the company recognized interest income from the promissory notes of $0.3 million, which is included within interest income on the condensed consolidated statements of operations and comprehensive loss. The notes range in maturity from May 2025 to January 2026 and include interest rates ranging from 0.5% to 2.5% per annum. See Note 17 for further details on the accounting for notes receivable from stockholders.
In August 2023, Better derecognized $46.4 million related to the partial forgiveness by Better to executive officers Vishal Garg, Kevin Ryan, and Paula Tuffin for their outstanding notes and cancellation of the shares collateralizing the notes to satisfy the remaining principal which was forgiven and cancelled upon the Closing. Additionally, for the nine months ended September 30, 2023, the Company recognized additional compensation expense of $0.4 million to certain of the Company's executives in connection with taxes due for capital gains on the sale of shares for settlement of the notes outstanding.
12. RELATED PARTY TRANSACTIONS
The Company has entered into a number of commercial agreements with related parties, which management believes provide the Company with products or services that are beneficial to its commercial objectives. Often these products and services have been tailored to the Company’s specific needs or are part of new pilot programs, both for the Company and the counterparty, for which there are not clear alternative vendors offering comparable services to compare pricing with. It is reasonable to assume that none of these related party commercial agreements were structured at arm’s length and therefore may be beneficial to the counterparty.
1/0 Capital—The Company is a party to an employee and expense allocation agreement with 1/0 Capital, LLC (“1/0 Capital”), an entity affiliated with 1/0 Real Estate, LLC (“1/10 Real Estate”) (an entity wholly owned by 1/0 Holdco, in which Vishal Garg, the Chief Executive Officer of the Company, and the Company’s executive officers each hold a more than five percent ownership interest). Under the employee and expense allocation agreement, 1/0 Capital provides the Company access to certain employees in exchange for reasonable consideration in the form of
fees based on their time, as well as IT support services. Any intellectual property created under the agreement by 1/0 Capital employees working on behalf of the Company belongs to the Company. The term of the agreement will continue in perpetuity. The services provided by 1/0 Capital are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with this agreement, the Company incurred gross expenses of $0.5 million and $1.5 million during the years ended December 31, 2022 and 2021, respectively. As part of this agreement, the Company may provide access to certain of its employees for use by 1/0 Capital which reduced the amounts owed to 1/0 Capital by $18.2 thousand and $0.2 million for the years ended December 31, 2022 and 2021, respectively. The Company recorded net expenses of $0.4 million and $1.3 million for the years ended December 31, 2022 and 2021, respectively, and are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss. The Company is invoiced on a net basis and recorded a $177.0 thousand payable and a $6.1 thousand receivable as of December 31, 2022 and 2021, respectively, included within other liabilities and other receivables, net, respectively, on the consolidated balance sheets.
TheNumber—The Company originally entered into a data analytics services agreement in August 2016 with TheNumber, LLC (“TheNumber”), an entity affiliated with both Vishal Garg, the Chief Executive Officer, and 1/0 Real Estate.
In September 2021, the Company and TheNumber entered into a technology integration and license agreement, which was amended in November 2021, to develop a consumer credit profile technology which is to be launched in three stages. The first stage involves testing TheNumber’s limited graph Application Programming Interface (“API”) in a testing environment with test data. The second stage involves data such as credit, income, and assets of staged borrowers meeting certain measures of speed and performance. The third stage requires TheNumber to run the product and serve all borrowers on the production side as well as provide data to the Company from its rich data set. The listed services provided by TheNumber are lead generation, market rate analysis, lead growth analysis, property listing analysis, automated valuation models, and financial risk analysis. Both parties agreed to jointly develop all aspects of this program, and the agreement provides for the utilization of TheNumber employees by the Company. Subsequent to December 31, 2022, the agreement was extended into 2023. The services provided by TheNumber are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with these agreements, the Company paid expenses of $1.4 million and $0.1 million for the years ended December 31, 2022 and 2021 respectively, which are included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss and a payable of $0.2 million and none as of December 31, 2022 and 2021, respectively, within other liabilities on the consolidated balance sheets.
Holy Machine—In January 2018, the Company entered into a consulting agreement (the “2018 Holy Machine Consulting Agreement”) with Holy Machine LLC (“Holy Machine”) an entity controlled by Aaron Schildkrout, a member of the Company’s board of directors (the “Board of Directors”) at such time. During the year ended December 31, 2022, Aaron Schildkrout resigned from the Board of Directors on June 8, 2022 and as an advisor shortly thereafter. The 2018 Holy Machine Consulting Agreement provided for consulting services related to executive recruiting and such other services as mutually agreed upon, and grants Holy Machine 603,024 options with a 4-year vesting period and no cliff at two times the then fair market value of the Company. Further, any inventions, discoveries, improvements or works of authorship made by Holy Machine and the results thereof that may be considered works for made for hire shall be assigned to the Company and be the Company’s exclusive property to which the Company has the exclusive right to obtain and own all copyrights. The term of the agreement ended in November 2022, although any party may terminate the agreement at any time. In May 2020, the parties entered into an amendment to the 2018 Holy Machine Consulting Agreement to insert terms relating to compliance with applicable laws, contracts, and indemnification among the parties. No other terms of the 2018 Holy Machine Consulting Agreement were altered.
In July 2020, the Company and Holy Machine entered into a new consulting agreement (the “2020 Holy Machine Consulting Agreement”). The 2020 Holy Machine Consulting Agreement grants Holy Machine (i) the option to purchase 250,000 shares of the Company’s common stock, with an accompanying stock option agreement having a term of 10 years, at the then fair market value at the time of the grant and (ii) the option to purchase 250,000 shares of the Company’s common stock, with an accompanying stock option agreement having a term of 10 years, with an exercise price per share equal to (a) $15.71 minus (b) the then current fair market value at the time of grant. Both tranches of granted options vest each month on the same day of the month as the vesting commencement
date of April 18, 2020, subject to Holy Machine continuing to provide consulting services through each such date, and both have change in control vesting provisions which would result in 100% of unvested options vesting should there be a change of control of the Company, as defined in such a stock option agreement. The term will continue until the services are completed or terminated. The services provided by Holy Machine are not integral to the Company’s technology platform and amounts incurred are not material to the Company. The Company recorded $0.1 million and $0.3 million of expenses during the years ended December 31, 2022 and 2021, respectively, which are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss and a payable of none and $50.0 thousand as of December 31, 2022 and 2021, respectively, within other liabilities on the consolidated balance sheets.
Embark—In November 2020, the Company entered into a license agreement with Embark Corp (“Embark”), a company for which Vishal Garg served as a director and Vishal Garg’s spouse serves as chief executive officer, and in which Vishal Garg and his spouse collectively hold a 25.8% ownership interest. Vishal Garg resigned from the board of directors effective October 1, 2021. The agreement provides the Company the use of one floor of office space in midtown Manhattan, New York City, for a period of 15 months. In connection with the agreement, the Company is obligated to pay Embark $127.0 thousand annually plus applicable taxes and utilities. For the year ended December 31, 2021, the Company incurred $80.7 thousand of expenses under the agreement which are included within general and administrative expenses on the statements of operations and comprehensive loss. The agreement was terminated in June 2021.
Notable—In October 2021, the Company entered into a private label and consumer lending program agreement (the “2021 Notable Program Agreement”) to provide home improvement lines of credit to qualified borrowers of the Company with Notable Finance, LLC (“Notable”), an entity in which Vishal Garg and 1/0 Real Estate collectively hold a majority ownership interest. The program is intended to be used by qualified customers of the Company for home improvement purchases (the “Home Improvement Line of Credit”).
This program required Notable to originate and service the loan and in consideration, the Company pays Notable $600 for each loan originated pursuant to the agreement. In connection with the 2021 Notable Program Agreement, Notable provided a branded prepaid card, similar to a gift card, which converts into an unsecured line of credit in certain circumstances.
For the years ended December 31, 2022 and 2021, the Company incurred $0.1 million and $0.6 million, respectively, of expenses under the agreement, of which $42.9 thousand and none are included within mortgage platform expenses, and $55.3 thousand and $0.6 million are included within marketing and advertising expenses on the consolidated statements of operations and comprehensive loss. The Company recorded a payable of $15.0 thousand and $0.3 million included within other liabilities on the consolidated balance sheets as of December 31, 2022 and 2021, respectively.
In January 2022, Better Trust I, a subsidiary of the Company entered into a master loan purchase agreement (the “Notable MLPA”) with Notable to purchase from Notable up to $20.0 million of unsecured home improvement loans underwritten and originated by Notable for the Company’s customers. Under the Notable MLPA, Notable originated home improvement loans, all of which Notable makes available for purchase by the Company. No additional cost outside the sale of the loan was contemplated by the Notable MLPA. The services provided by Notable are not integral to the Company’s technology platform and expenses incurred are not material to the Company. As of December 31, 2022, the Company had $8.3 million of unsecured home improvement loans from Notable, which are included within mortgage loans held for sale, at fair value on the consolidated balance sheets.
Truework—The Company is a party to a data analytics services agreement with Zethos, Inc., (“Truework”), an entity in which Vishal Garg, the Chief Executive Officer, is an investor. Under the data analytics services agreement, Truework provides digital Verification of Employment (VOE) and Verification of Income (VOI) services to the Company during the mortgage loan origination process to confirm the employment and income of borrowers seeking a mortgage. This is data required for underwriting mortgages to the specifications of Fannie Mae, Freddie Mac, and private loan purchasers. These data services are standard product offerings of Truework, which they offer to a number of mortgage lenders. Truework is one of multiple vendors the Company uses for VOE and VOI services, the largest other one being The Work Number by Equifax. The Company uses the two vendors
interchangeably based on estimated lowest cost and turnaround time. The Company originally entered into the data services agreement in June 2020, and amended the agreement in October 2021 to run until September 30, 2023. In connection with usage of the services, the Company incurred expenses of $0.5 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively, which is included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss and a payable of $16.2 thousand and $19.2 thousand included within other liabilities on the consolidated balance sheets as of December 31, 2022 and 2021, respectively.
Share Repurchases—During the first quarter of 2022, the Company repurchased from former director Gabrielle Toledano a total of 11,122 shares of common stock for an aggregate purchase price of $254,154 to defray taxes associated with vesting of equity awards of such shares. Ms. Toledano subsequently resigned from the Company’s Board in April 2022.
During the second quarter of 2022, the Company repurchased from General Counsel and Chief Compliance Officer Paula Tuffin a total of 27,000 shares of common stock for an aggregate purchase price of $399,600 to defray taxes associated with vesting of equity awards of such shares.
Notes Receivable from Stockholders—The Company, at times, enters into promissory note agreements with certain employees for the purpose of financing the exercise of the Company’s stock options. These employees may have the ability to use the promissory notes to exercise stock options that have not yet been vested by the respective employees. Interest is compounded and accrued based on any unpaid principal balance and is due upon the earliest of maturity, 120 days after an employee leaves the Company, the date the employee sells shares acquired through the promissory note agreement without prior written consent of the Company, or the day prior to the date that any change in the employee’s status would cause the loan to be a prohibited extension or maintenance of credit under Section 402 of the Sarbanes Oxley Act of 2002. The Company included $53.9 million and $38.6 million of the notes, which include the outstanding principal amount and accrued interest, within notes receivable from stockholders in stockholders’ equity (deficit) on the consolidated balance sheets as of December 31, 2022 and 2021, respectively. The balance as of December 31, 2022 includes $43.6 million of promissory notes due from directors and officers of the Company, of which $40.2 million is due from Vishal Garg. The balance as of December 31, 2021 includes $33.9 million of promissory notes due from directors and officers of the Company, of which $29.9 million was due from Vishal Garg. During the years ended December 31, 2022 and 2021, the Company recognized interest income from the promissory notes of $0.7 million and $0.3 million, respectively, which is included within interest income on the consolidated statements of operations and comprehensive loss. The notes range in maturity from May 2025 to January 2026 and include interest rates ranging from 0.5% to 2.5% per annum.
v3.23.4
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES
12. Commitments and Contingencies
Litigation—The Company, among other things, engages in mortgage lending, title and settlement services, and other financial technology services. The Company operates in a highly regulated industry and may be subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies. While the ultimate outcome of these matters cannot be predicted with certainty due to inherent uncertainties in litigation, management is of the opinion that these matters will not have a material impact on the condensed consolidated financial statements of the Company. The Company accrues for losses when they are probable to occur and such losses are reasonably estimable, and discloses pending litigation if the Company believes a possibility exists that the litigation will have a material effect on its financial results. Legal costs expected to be incurred are accounted for as they are incurred.
The Company is currently a party to pending legal claims and proceedings regarding an employee related labor dispute brought forth during the third quarter of 2020. The dispute alleges that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California and the State of Florida. The case is still in its early stages and has not yet reached the class certification stage and as such the ultimate outcome cannot be predicted with certainty due to inherent uncertainties in the legal claims. As part of the dispute, the Company included an estimated liability of $8.4 million as of both September 30, 2023 and December 31, 2022, which is included in accounts payable and accrued expenses on the condensed consolidated balance sheets. No additional expense was accrued for the nine months ended September 30, 2023. During the first quarter of 2023, the Company settled its employee related labor dispute in the State of Florida for an immaterial amount.
In September 2022, the former Head of Sales and Operations of the Company, Sarah Pierce, filed litigation against the Company, the Company’s founder and CEO Vishal Garg, and the Company’s Chief Administrative Officer and Senior Counsel Nicholas Calamari. The complaint alleges several causes of action including: violation of certain state labor laws, breach of fiduciary duty and defamation against Mr. Garg, aiding and abetting breach of fiduciary duty against Mr. Calamari, and intentional infliction of emotional distress against Mr. Garg and Mr. Calamari.
On September 29, 2023, the Court filed an Order granting the Company's motions to dismiss in part and denying the Company’s motions to dismiss in part. The following motions were granted: (i) the Company’s motion to dismiss Ms. Pierce’s Sarbanes-Oxley claim was granted; (ii) the Company’s motion to dismiss Ms. Pierce’s Dodd-Frank claim was granted; (iii) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for breach of fiduciary duty was granted; (iv) the Company's motion to dismiss Ms. Pierce’s defamation claim was granted; (v) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for intentional infliction of emotional distress was granted; (vi) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for tortious interference with contract was granted; and (vii) the Company’s motion to dismiss Ms. Pierce’s breach of contract claim was granted. The Company’s motion to dismiss Ms. Pierce's claim of retaliation was dismissed. Mr. Garg’s motion to dismiss Ms. Pierce’s defamation claim was denied, and the Company’s motion to dismiss Ms. Pierce’s defamation claim under the theory of respondeat superior was denied. The Company intends to vigorously defend this action.
Regulatory Matters—In the third quarter of 2021, following third-party audits of samples of loans produced during the fiscal years 2018, 2019, and 2021, the Company became aware of certain TILA-RESPA Integrated Disclosure (“TRID”) defects in the loan production process that resulted in the final closing costs disclosed in the closing disclosure, in some instances, being greater than those disclosed in the loan estimate. Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers. As of September 30, 2023 and December 31, 2022, the Company included an estimated liability of $9.3 million and $11.9 million, respectively, within accounts payable and accrued expenses on the condensed consolidated balance sheets. For the three months ended September 30, 2023, the Company reduced the accrual for these potential TRID defects by $3.0 million and is included within mortgage platform expenses in the condensed consolidated statement of operations and comprehensive loss. For the nine months ended September 30, 2023, the Company reduced the accrual for these potential TRID defects by $2.7 million and is included within mortgage platform expenses in the condensed consolidated statement of operations and comprehensive loss. This accrual is the Company’s best estimate of potential exposure on the larger population of loans based on the results obtained by the audited sample. The accrued amounts are for estimated refunds potentially due to consumers for TRID tolerance errors for loans produced from 2018 through 2022. The Company completed a TRID audit of 2022 files and is continuing to remediate TRID tolerance defects as necessary.
In the second quarter of 2022, Better and Aurora received a voluntary request for documents from the Division of Enforcement of the Securities and Exchange Commission (the “SEC”) and subsequently received several subpoenas, indicating that it is conducting an investigation relating to Aurora and Better to determine if violations of the federal securities laws had occurred. The SEC requested that Aurora and Better provide the SEC with certain information and documents. The voluntary and subpoena requests covered, among other things, certain aspects of Better’s business and operations, certain matters relating to certain actions and circumstances of the Company’s founder and Chief Executive Officer, Vishal Garg, and his other business activities, related party transactions, public statements made about the Company’s proprietary mortgage platform, Better’s financial condition, and allegations made in litigation filed by Sarah Pierce, Better’s former Head of Sales and Operations. On August 3, 2023, the SEC Division of Enforcement informed Aurora and Better that it has concluded its previously announced investigation and that the SEC does not intend to recommend an enforcement action against Aurora or Better.
Loan Commitments—The Company enters into IRLCs to fund mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. As of September 30, 2023 and December 31, 2022, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $211.9 million and $225.4 million, respectively. The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of September 30, 2023 and December 31, 2022, respectively, on the condensed consolidated balance sheets. See Note 15.
Forward Sale Commitments—In the ordinary course of business, the Company enters into contracts to sell existing LHFS or loans committed but yet to be funded into the secondary market at specified future dates. As of September 30, 2023 and December 31, 2022, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $294.0 million and $422.0 million, respectively. The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of
September 30, 2023 and December 31, 2022, respectively, on the condensed consolidated balance sheets. See Note 15.
Concentrations—See below for areas considered to be concentrations of credit risk for the Company:
Significant loan purchasers are those which represent more than 10% of the Company’s loan volume. During the three months ended September 30, 2023, the Company had three loan purchasers that accounted for 56%, 22% and 11% of loans sold by the Company. During the three months ended September 30, 2022, the Company had one loan purchaser that accounted for 59% of loans sold by the Company. During the nine months ended September 30, 2023 and 2022, the Company had one loan purchaser that accounted for 68% and 65% of loans sold by the Company.
Concentrations of credit risk associated with the LHFS carried at fair value are limited due to the large number of borrowers and their dispersion across many geographic areas throughout the United States. As of September 30, 2023, the Company originated 12% and 11% of its LHFS secured by properties in Texas and Florida, respectively. As of December 31, 2022, the company originated 11% of its LHFS secured by properties in each of California and Texas and 10% of its LHFS secured by properties in Florida.
The Company maintains cash and cash equivalent balances at various financial institutions. Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million. As of September 30, 2023 and December 31, 2022, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.
Advanced Loan Origination Fees (Deferred Revenue)—Deferred revenue primarily consists of advance payments for loan origination and servicing on behalf of an integrated relationship partner. The total advance was for $50.0 million and were recognized in revenue starting in August 2022 through August 2023. The Company must repay the advance in three tranches, $20.0 million due December 2022, $15.0 million due April 2023, and $15.0 million due October 2023, each to be reduced by the amount of loan origination revenue earned between the tranches. The Company repaid $12.9 million of the first tranche after reductions for loan origination revenue earned within mortgage platform revenue from August 2022 through December 31, 2022. In April 2023, the Company repaid $12.7 million of the second tranche after reductions for loan origination revenue earned within mortgage platform revenue from January 2023 through March 2023. As of September 30, 2023 and December 31, 2022, the Company included deferred revenue of $12.9 million and $30.0 million, respectively within other liabilities on the condensed consolidated balance sheets after reductions for loan origination revenue earned within mortgage platform revenue. Subsequent to September 30, 2023, in October 2023, the Company paid off $12.9 million of the third tranche.
Escrow Funds—In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement. The Company administers escrow deposits representing undisbursed amounts received for payment of property taxes, insurance and principal, and interest on mortgage loans held for sale. The Company also administers customer deposits in relation to other non-mortgage products and services that the Company offers. These funds are shown as restricted cash and there is a corresponding escrow payable on the consolidated balance sheet, as they are being held on behalf of the borrower or customer. The balance in these accounts as of September 30, 2023 and December 31, 2022 was $3.2 million and $8.0 million, respectively. In some instances the Company may administer funds that are legally owned by a third-party which are excluded from the condensed consolidated balance sheets which amounted to none and $0.3 million as of September 30, 2023 and December 31, 2022, respectively.
Customer Deposits—In relation to the Company’s banking activities tied to the Birmingham acquisition in the U.K., the Company offers individual savings accounts and other depository products with differing maturities and interest rates to its customers. The balance of customer deposits as of September 30, 2023 and December 31, 2022 was $9.9 million and none, respectively on the condensed consolidated balance sheets.
13. Risks and Uncertainties
In the normal course of business, companies in the mortgage lending industry encounter certain economic and regulatory risks. Economic risks include credit risk and interest rate risk, in either a rising or declining interest rate environment. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which loans are being held for sale by the Company.
Interest Rate Risk—The Company is subject to interest rate risk in a rising interest rate environment, as the Company may experience a decrease in loan production, as well as decreases in the fair value of LHFS, loan applications in process with locked-in rates, and commitments to originate loans, which may negatively impact the Company’s operations. To preserve the value of such fixed-rate loans or loan applications in process with locked-in rates, agreements are executed for best effort or mandatory loan sales to be settled at future dates with fixed prices. These loan sales take the form of short-term forward sales of mortgage-backed securities and commitments to sell loans to loan purchasers.
Alternatively, in a declining interest rate environment, customers may withdraw their loan applications that include locked-in rates with the Company. Additionally, when interest rates decline, interest income received from LHFS will decrease. The Company uses an interest rate hedging program to manage these risks. Through this program, mortgage-backed securities are purchased and sold forward.
For all counterparties with open positions as of September 30, 2023, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis. Net settlements entail paying or receiving cash based upon the change in market value of the existing instrument.
The Company currently uses forward sales of mortgage-backed securities, interest rate commitments from borrowers, and mandatory and/or best-efforts forward commitments to sell loans to loan purchasers to protect the Company from interest rate fluctuations. These short-term instruments, which do not require any payments to be paid to the counterparty in connection with the execution of the commitments, are generally executed simultaneously.
Credit Risk—The Company’s hedging program is not designated as formal hedging from an accounting standpoint, contains an element of risk because the counterparties to its mortgage securities transactions may be unable to meet their obligations. While the Company does not anticipate nonperformance by any counterparty, it is exposed to potential credit losses in the event the counterparty fails to perform. The Company’s exposure to credit risk in the event of default by the counterparty is the difference between the contract and the current market price. The Company minimizes its credit risk exposure by limiting the counterparties to well-established banks and securities dealers who meet established credit and capital guidelines.
Loan Repurchase Reserve—The Company sells loans to loan purchasers without recourse. As such, the loan purchasers have assumed the risk of loss or default by the borrower. However, the Company is usually required by these loan purchasers to make certain standard representations and warranties relating to the loan for up to three years post sale. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these loan purchasers for losses. In addition, if loans pay-off within a specified time frame the Company may be required to refund a portion of the sales proceeds to the loan purchasers. The Company repurchased $3.6 million (11 loans) and $37.9 million (82 loans) in unpaid principal balance of loans during the three months ended September 30, 2023 and 2022, respectively, related to its loan repurchase obligations. The Company repurchased $20.8 million (52 loans) and $97.0 million (221 loans) in unpaid principal balance of loans during the nine months ended September 30, 2023 and 2022, respectively, related to its loan repurchase obligations. The Company’s loan repurchase reserve as of September 30, 2023 and December 31, 2022 was $21.8 million and $26.7 million, respectively, and is included within other liabilities on the condensed consolidated balance sheets. The provision for the loan repurchase reserve
is included within mortgage platform expenses on the condensed consolidated statement of operations and comprehensive loss. The following presents the activity of the Company’s loan repurchase reserve:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Loan repurchase reserve at beginning of period$21,832 $21,070 $26,745 $17,540 
Provision866 11,683 178 25,125 
Charge-offs(945)(9,754)(5,170)(19,667)
Loan repurchase reserve at end of period$21,753 $22,999 $21,753 $22,999 
Borrowing Capacity—The Company funds the majority of mortgage loans on a short-term basis through committed and uncommitted warehouse lines as well as from operations for any amounts not advanced by warehouse lenders. As a result, the Company’s ability to fund current operations depends on its ability to secure these types of short-term financings. If the Company’s principal lenders decided to terminate or not to renew any of the warehouse lines with the Company, the loss of borrowing capacity could be detrimental to the Company’s condensed consolidated financial statements unless the Company found a suitable alternative source.
13. COMMITMENTS AND CONTINGENCIES
Litigation—The Company, among other things, engages in mortgage lending, title and settlement services, and other financial technology services. The Company operates in a highly regulated industry and may be subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies. While the ultimate outcome of these matters cannot be predicted with certainty due to inherent uncertainties in litigation, management is of the opinion that these matters will not have a material impact on the consolidated financial statements of the Company. The Company accrues for losses when they are probable to occur and such losses are reasonably estimable, and discloses pending litigation if the Company believes a possibility exists that the litigation will have a material effect on its financial results. Legal costs expected to be incurred are accounted for as they are incurred.
The Company is currently a party to pending legal claims and proceedings regarding an employee related labor dispute brought forth during the third quarter of 2020. The dispute alleges that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California and the State of Florida. The dispute is still in its infancy and the ultimate outcome cannot be predicted with certainty due to inherent uncertainties in the legal claims. As part of the dispute, the Company recorded an estimated liability of $8.4 million and $5.9 million, which is included in accounts payable and accrued expenses on the consolidated balance sheets as of December 31, 2022 and 2021, respectively. Subsequent to December 31, 2022, the Company settled its employee related labor dispute in the State of Florida for an immaterial amount.
In June 2022, the former Head of Sales and Operations of the Company, Sarah Pierce, filed litigation against the Company, the Company’s founder and CEO Vishal Garg, and the Company’s Chief Administrative Officer and Senior Counsel Nicholas Calamari. The complaint alleges several causes of action including: violation of certain state labor laws, breach of fiduciary duty and defamation against Mr. Garg, aiding and abetting breach of fiduciary duty against Mr. Calamari, and intentional infliction of emotional distress against Mr. Garg and Mr. Calamari. In addition, Ms. Pierce claims that she has filed a notice of claim with the Occupational Safety and Health Administration (“OSHA”) against the Company for retaliation in violation of the Sarbanes-Oxley Act which has been denied. The litigation is still in its early stages and as such no amounts have been estimated or accrued for by the Company related to this matter.
Investor Legal Matter—In July 2021, Pine Brook, a current investor in the Company, commenced litigation against the Company among other parties, seeking declaratory judgement in relation to a side letter which was entered into as part of the Series C Preferred Stock issuance by the Company in 2019. The dispute is whether the Company, in connection with the Merger Agreement described in Note 1, would be entitled to trigger a side letter provision allowing the Company to repurchase approximately 1.9 million shares of Series A Preferred Stock for a total price of $1.
On November 1, 2021, the Company and Pine Brook reached a settlement agreement pursuant to which (1) the Company is entitled to exercise its purchase right for half of the 1.9 million shares of Series A Preferred Stock subject to the side letter provision, (2) the Company and Aurora agreed to amend the Merger Agreement (see Note 1) to waive or remove the lock up for holders of 1% or more of the Company’s capital stock, and (3) Mr. Howard Newman immediately resigned from the Company’s board of directors. As a result of the settlement, each party granted one another customary releases.
Regulatory Matters—In September of 2021, the Company received a “Notice of Charges” from a state regulatory agency making several claims against the Company, alleging certain violations of state disclosure, advertising, licensable activity rules, and certain federal disclosure rules. In November 2021, the Company and the state regulatory agency reached a settlement agreement whereby the Company has agreed to pay an immaterial fine and provide additional training to management directly overseeing the origination of mortgage loans for property located in the state. The settlement does not impact the Company’s ability to do business in the state.
In the third quarter of 2021, following third-party audits of samples of loans produced during the fiscal years 2018, 2019, and 2021, the Company became aware of certain TILA-RESPA Integrated Disclosure (“TRID”) defects in the loan production process that resulted in the final closing costs disclosed in the closing disclosure, in some instances, being greater than those disclosed in the loan estimate. Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers. As of December 31, 2022 and 2021, the Company included an estimated liability of $11.9 million and $13.2 million, respectively, within accounts payable and accrued expenses on the consolidated balance sheets. For the year ended December 31, 2022, the Company reduced the estimated liability for these potential TRID defects in the amount of $1.3 million. The reduction of expense for the year ended December 31, 2022 of $1.3 million and the expense for the year ended December 31, 2021 of $13.2 million is included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss. This accrual is the Company’s best estimate of potential exposure on the larger population of loans based on the results obtained by the audited sample. The accrued amounts are for estimated refunds potentially due to consumers for TRID tolerance errors for loans produced from 2018 through 2022. The Company completed a TRID audit of 2022 files and is continuing to remediate TRID tolerance defects as necessary.
In the second quarter of 2022, the Company received a voluntary request for documents from the Division of Enforcement of the Securities and Exchange Commission (“SEC”) and subsequently received several subpoenas, indicating that it is conducting an investigation relating to Aurora and the Company to determine if violations of the federal securities laws have occurred. The SEC has requested that Aurora and the Company provide the SEC with certain information and documents. The voluntary and subpoena requests cover, among other things, certain aspects of the Company’s business and operations, certain matters relating to certain actions and circumstances of the Company’s Founder and CEO and his other business activities, related party transactions, public statements made about the Company’s proprietary mortgage platform, the Company’s financial condition, and allegations made in
litigation filed by Sarah Pierce, the Company’s former Head of Sales and Operations. The Company is cooperating with the SEC. As the investigation is ongoing, it is uncertain how long the investigation will continue or whether, at its conclusion, the SEC will bring an enforcement action against either Aurora or the Company or any of their personnel and, if it does, what remedies it may seek.
Loan Commitments—The Company enters into IRLCs to fund mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. As of December 31, 2022, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $225.4 million. The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of December 31, 2022 and 2021, respectively, on the consolidated balance sheets. See Note 16.
Forward Sale Commitments—In the ordinary course of business, the Company enters into contracts to sell existing LHFS or loans committed but yet to be funded into the secondary market at specified future dates. As of December 31, 2022, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $422.0 million. The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of December 31, 2022 and 2021, respectively, on the consolidated balance sheets. See Note 16.
Concentrations—See below for areas considered to be concentrations of credit risk for the Company:
Significant loan purchasers are those which represent more than 10% of the Company’s loan volume. During the years ended December 31, 2022 and 2021, the Company had one loan purchaser that accounted for 65% and 60% of loans sold by the Company, respectively.
Concentrations of credit risk associated with the LHFS carried at fair value are limited due to the large number of borrowers and their dispersion across many geographic areas throughout the United States. As of December 31, 2022, the Company originated 11% of its LHFS secured by properties in each of Texas and California and 10% of its LHFS secured by properties in Florida. As of December 31, 2021, the Company originated 15% of its LHFS secured by properties in California.
The Company maintains cash and cash equivalent balances at various financial institutions. Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million. As of December 31, 2022 and 2021, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.
As of December 31, 2022, the Company held a cash balance of $0.9 million at Silicon Valley Bank (“SVB”). On March 10, 2023, the California Department of Financial Protection and Innovation declared SVB insolvent and appointed the FDIC as receiver. On March 13, 2023, the FDIC announced that all deposits and substantially all assets of SVB were transferred to a bridge bank, and that all depositors will be made whole. Subsequent to December 31, 2022, the Company transferred cash held at SVB to other financial institutions and does not have any remaining material banking relationship with SVB outside of a standby letter of credit in place with SVB of approximately $6.5 million securing obligations under certain of the Company’s office lease agreements which is classified on the Company’s consolidated balance sheet within prepaid expenses and other assets. The Company does not expect this matter to materially impact its operations or ability to meet its cash obligations.
Escrow Funds—In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement. The Company administers escrow deposits representing undisbursed amounts received for payment of property taxes, insurance and principal, and interest on mortgage loans held for sale. These funds are shown as restricted cash and there is a corresponding escrow payable on the consolidated balance sheet, as they are being held on behalf of the borrower. The balance in these accounts as of December 31, 2022 and 2021 was $8.0 million and $11.6 million, respectively. In some instances the Company may administer funds that are legally owned by a third-party which are excluded from the consolidated balance sheets which amounted to $0.3 million and $2.0 million as of December 31, 2022 and 2021, respectively.
14. RISKS AND UNCERTAINTIES
In the normal course of business, companies in the mortgage lending industry encounter certain economic and regulatory risks. Economic risks include credit risk and interest rate risk, in either a rising or declining interest rate environment. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which loans are being held for sale by the Company.
Interest Rate Risk—The Company is subject to interest rate risk in a rising interest rate environment, as the Company may experience a decrease in loan production, as well as decreases in the fair value of LHFS, loan applications in process with locked-in rates, and commitments to originate loans, which may negatively impact the Company’s operations. To preserve the value of such fixed-rate loans or loan applications in process with locked-in rates, agreements are executed for best effort or mandatory loan sales to be settled at future dates with fixed prices. These loan sales take the form of short-term forward sales of mortgage-backed securities and commitments to sell loans to loan purchasers.
Alternatively, in a declining interest rate environment, customers may withdraw their loan applications that include locked-in rates with the Company. Additionally, when interest rates decline, interest income received from LHFS will decrease. The Company uses an interest rate hedging program to manage these risks. Through this program, mortgage-backed securities are purchased and sold forward.
For all counterparties with open positions as of December 31, 2022, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis. Net settlements entail paying or receiving cash based upon the change in market value of the existing instrument.
The Company currently uses forward sales of mortgage-backed securities, interest rate commitments from borrowers, and mandatory and/or best-efforts forward commitments to sell loans to loan purchasers to protect the Company from interest rate fluctuations. These short-term instruments, which do not require any payments to be paid to the counterparty in connection with the execution of the commitments, are generally executed simultaneously.
Credit Risk—The Company’s hedging program is not designated as formal hedging from an accounting standpoint, contains an element of risk because the counterparties to its mortgage securities transactions may be unable to meet their obligations. While the Company does not anticipate nonperformance by any counterparty, it is exposed to potential credit losses in the event the counterparty fails to perform. The Company’s exposure to credit risk in the event of default by the counterparty is the difference between the contract and the current market price. The Company minimizes its credit risk exposure by limiting the counterparties to well-established banks and securities dealers who meet established credit and capital guidelines.
Loan Repurchase Reserve—The Company sells loans to loan purchasers without recourse. As such, the loan purchasers have assumed the risk of loss or default by the borrower. However, the Company is usually required by these loan purchasers to make certain standard representations and warranties relating to the loan. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these loan purchasers for losses. In addition, if loans pay-off within a specified time frame the Company may be required to refund a portion of the sales proceeds to the loan purchasers. The Company repurchased $110.6 million (262 loans) and $29.1 million (95 loans) in unpaid principal balance of loans during the years ended December 31, 2022 and 2021, respectively related to its loan repurchase obligations. The Company’s loan repurchase reserve is included within other liabilities on the consolidated balance sheets. The provision for the loan repurchase reserve is included within mortgage platform expenses on the consolidated
statements of operations and comprehensive loss. The following presents the activity of the Company’s loan repurchase reserve:
Year Ended December 31,
(Amounts in thousands)20222021
Loan repurchase reserve at beginning of year$17,540 $7,438 
Provision33,518 13,780 
Charge-offs(24,313)(3,678)
Loan repurchase reserve at end of year$26,745 $17,540 
Borrowing Capacity—The Company funds the majority of mortgage loans on a short-term basis through committed and uncommitted warehouse lines as well as from operations for any amounts not advanced by warehouse lenders. As a result, the Company’s ability to fund current operations depends on its ability to secure these types of short-term financings. If the Company’s principal lenders decided to terminate or not to renew any of the warehouse lines with the Company, the loss of borrowing capacity could be detrimental to the Company’s consolidated financial statements unless the Company found a suitable alternative source.
v3.23.4
Risks and Uncertainties
 9 Months Ended
Sep. 30, 2023
Risks and Uncertainties [Abstract]  
RISKS AND UNCERTAINTIES
12. Commitments and Contingencies
Litigation—The Company, among other things, engages in mortgage lending, title and settlement services, and other financial technology services. The Company operates in a highly regulated industry and may be subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies. While the ultimate outcome of these matters cannot be predicted with certainty due to inherent uncertainties in litigation, management is of the opinion that these matters will not have a material impact on the condensed consolidated financial statements of the Company. The Company accrues for losses when they are probable to occur and such losses are reasonably estimable, and discloses pending litigation if the Company believes a possibility exists that the litigation will have a material effect on its financial results. Legal costs expected to be incurred are accounted for as they are incurred.
The Company is currently a party to pending legal claims and proceedings regarding an employee related labor dispute brought forth during the third quarter of 2020. The dispute alleges that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California and the State of Florida. The case is still in its early stages and has not yet reached the class certification stage and as such the ultimate outcome cannot be predicted with certainty due to inherent uncertainties in the legal claims. As part of the dispute, the Company included an estimated liability of $8.4 million as of both September 30, 2023 and December 31, 2022, which is included in accounts payable and accrued expenses on the condensed consolidated balance sheets. No additional expense was accrued for the nine months ended September 30, 2023. During the first quarter of 2023, the Company settled its employee related labor dispute in the State of Florida for an immaterial amount.
In September 2022, the former Head of Sales and Operations of the Company, Sarah Pierce, filed litigation against the Company, the Company’s founder and CEO Vishal Garg, and the Company’s Chief Administrative Officer and Senior Counsel Nicholas Calamari. The complaint alleges several causes of action including: violation of certain state labor laws, breach of fiduciary duty and defamation against Mr. Garg, aiding and abetting breach of fiduciary duty against Mr. Calamari, and intentional infliction of emotional distress against Mr. Garg and Mr. Calamari.
On September 29, 2023, the Court filed an Order granting the Company's motions to dismiss in part and denying the Company’s motions to dismiss in part. The following motions were granted: (i) the Company’s motion to dismiss Ms. Pierce’s Sarbanes-Oxley claim was granted; (ii) the Company’s motion to dismiss Ms. Pierce’s Dodd-Frank claim was granted; (iii) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for breach of fiduciary duty was granted; (iv) the Company's motion to dismiss Ms. Pierce’s defamation claim was granted; (v) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for intentional infliction of emotional distress was granted; (vi) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for tortious interference with contract was granted; and (vii) the Company’s motion to dismiss Ms. Pierce’s breach of contract claim was granted. The Company’s motion to dismiss Ms. Pierce's claim of retaliation was dismissed. Mr. Garg’s motion to dismiss Ms. Pierce’s defamation claim was denied, and the Company’s motion to dismiss Ms. Pierce’s defamation claim under the theory of respondeat superior was denied. The Company intends to vigorously defend this action.
Regulatory Matters—In the third quarter of 2021, following third-party audits of samples of loans produced during the fiscal years 2018, 2019, and 2021, the Company became aware of certain TILA-RESPA Integrated Disclosure (“TRID”) defects in the loan production process that resulted in the final closing costs disclosed in the closing disclosure, in some instances, being greater than those disclosed in the loan estimate. Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers. As of September 30, 2023 and December 31, 2022, the Company included an estimated liability of $9.3 million and $11.9 million, respectively, within accounts payable and accrued expenses on the condensed consolidated balance sheets. For the three months ended September 30, 2023, the Company reduced the accrual for these potential TRID defects by $3.0 million and is included within mortgage platform expenses in the condensed consolidated statement of operations and comprehensive loss. For the nine months ended September 30, 2023, the Company reduced the accrual for these potential TRID defects by $2.7 million and is included within mortgage platform expenses in the condensed consolidated statement of operations and comprehensive loss. This accrual is the Company’s best estimate of potential exposure on the larger population of loans based on the results obtained by the audited sample. The accrued amounts are for estimated refunds potentially due to consumers for TRID tolerance errors for loans produced from 2018 through 2022. The Company completed a TRID audit of 2022 files and is continuing to remediate TRID tolerance defects as necessary.
In the second quarter of 2022, Better and Aurora received a voluntary request for documents from the Division of Enforcement of the Securities and Exchange Commission (the “SEC”) and subsequently received several subpoenas, indicating that it is conducting an investigation relating to Aurora and Better to determine if violations of the federal securities laws had occurred. The SEC requested that Aurora and Better provide the SEC with certain information and documents. The voluntary and subpoena requests covered, among other things, certain aspects of Better’s business and operations, certain matters relating to certain actions and circumstances of the Company’s founder and Chief Executive Officer, Vishal Garg, and his other business activities, related party transactions, public statements made about the Company’s proprietary mortgage platform, Better’s financial condition, and allegations made in litigation filed by Sarah Pierce, Better’s former Head of Sales and Operations. On August 3, 2023, the SEC Division of Enforcement informed Aurora and Better that it has concluded its previously announced investigation and that the SEC does not intend to recommend an enforcement action against Aurora or Better.
Loan Commitments—The Company enters into IRLCs to fund mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. As of September 30, 2023 and December 31, 2022, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $211.9 million and $225.4 million, respectively. The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of September 30, 2023 and December 31, 2022, respectively, on the condensed consolidated balance sheets. See Note 15.
Forward Sale Commitments—In the ordinary course of business, the Company enters into contracts to sell existing LHFS or loans committed but yet to be funded into the secondary market at specified future dates. As of September 30, 2023 and December 31, 2022, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $294.0 million and $422.0 million, respectively. The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of
September 30, 2023 and December 31, 2022, respectively, on the condensed consolidated balance sheets. See Note 15.
Concentrations—See below for areas considered to be concentrations of credit risk for the Company:
Significant loan purchasers are those which represent more than 10% of the Company’s loan volume. During the three months ended September 30, 2023, the Company had three loan purchasers that accounted for 56%, 22% and 11% of loans sold by the Company. During the three months ended September 30, 2022, the Company had one loan purchaser that accounted for 59% of loans sold by the Company. During the nine months ended September 30, 2023 and 2022, the Company had one loan purchaser that accounted for 68% and 65% of loans sold by the Company.
Concentrations of credit risk associated with the LHFS carried at fair value are limited due to the large number of borrowers and their dispersion across many geographic areas throughout the United States. As of September 30, 2023, the Company originated 12% and 11% of its LHFS secured by properties in Texas and Florida, respectively. As of December 31, 2022, the company originated 11% of its LHFS secured by properties in each of California and Texas and 10% of its LHFS secured by properties in Florida.
The Company maintains cash and cash equivalent balances at various financial institutions. Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million. As of September 30, 2023 and December 31, 2022, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.
Advanced Loan Origination Fees (Deferred Revenue)—Deferred revenue primarily consists of advance payments for loan origination and servicing on behalf of an integrated relationship partner. The total advance was for $50.0 million and were recognized in revenue starting in August 2022 through August 2023. The Company must repay the advance in three tranches, $20.0 million due December 2022, $15.0 million due April 2023, and $15.0 million due October 2023, each to be reduced by the amount of loan origination revenue earned between the tranches. The Company repaid $12.9 million of the first tranche after reductions for loan origination revenue earned within mortgage platform revenue from August 2022 through December 31, 2022. In April 2023, the Company repaid $12.7 million of the second tranche after reductions for loan origination revenue earned within mortgage platform revenue from January 2023 through March 2023. As of September 30, 2023 and December 31, 2022, the Company included deferred revenue of $12.9 million and $30.0 million, respectively within other liabilities on the condensed consolidated balance sheets after reductions for loan origination revenue earned within mortgage platform revenue. Subsequent to September 30, 2023, in October 2023, the Company paid off $12.9 million of the third tranche.
Escrow Funds—In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement. The Company administers escrow deposits representing undisbursed amounts received for payment of property taxes, insurance and principal, and interest on mortgage loans held for sale. The Company also administers customer deposits in relation to other non-mortgage products and services that the Company offers. These funds are shown as restricted cash and there is a corresponding escrow payable on the consolidated balance sheet, as they are being held on behalf of the borrower or customer. The balance in these accounts as of September 30, 2023 and December 31, 2022 was $3.2 million and $8.0 million, respectively. In some instances the Company may administer funds that are legally owned by a third-party which are excluded from the condensed consolidated balance sheets which amounted to none and $0.3 million as of September 30, 2023 and December 31, 2022, respectively.
Customer Deposits—In relation to the Company’s banking activities tied to the Birmingham acquisition in the U.K., the Company offers individual savings accounts and other depository products with differing maturities and interest rates to its customers. The balance of customer deposits as of September 30, 2023 and December 31, 2022 was $9.9 million and none, respectively on the condensed consolidated balance sheets.
13. Risks and Uncertainties
In the normal course of business, companies in the mortgage lending industry encounter certain economic and regulatory risks. Economic risks include credit risk and interest rate risk, in either a rising or declining interest rate environment. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which loans are being held for sale by the Company.
Interest Rate Risk—The Company is subject to interest rate risk in a rising interest rate environment, as the Company may experience a decrease in loan production, as well as decreases in the fair value of LHFS, loan applications in process with locked-in rates, and commitments to originate loans, which may negatively impact the Company’s operations. To preserve the value of such fixed-rate loans or loan applications in process with locked-in rates, agreements are executed for best effort or mandatory loan sales to be settled at future dates with fixed prices. These loan sales take the form of short-term forward sales of mortgage-backed securities and commitments to sell loans to loan purchasers.
Alternatively, in a declining interest rate environment, customers may withdraw their loan applications that include locked-in rates with the Company. Additionally, when interest rates decline, interest income received from LHFS will decrease. The Company uses an interest rate hedging program to manage these risks. Through this program, mortgage-backed securities are purchased and sold forward.
For all counterparties with open positions as of September 30, 2023, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis. Net settlements entail paying or receiving cash based upon the change in market value of the existing instrument.
The Company currently uses forward sales of mortgage-backed securities, interest rate commitments from borrowers, and mandatory and/or best-efforts forward commitments to sell loans to loan purchasers to protect the Company from interest rate fluctuations. These short-term instruments, which do not require any payments to be paid to the counterparty in connection with the execution of the commitments, are generally executed simultaneously.
Credit Risk—The Company’s hedging program is not designated as formal hedging from an accounting standpoint, contains an element of risk because the counterparties to its mortgage securities transactions may be unable to meet their obligations. While the Company does not anticipate nonperformance by any counterparty, it is exposed to potential credit losses in the event the counterparty fails to perform. The Company’s exposure to credit risk in the event of default by the counterparty is the difference between the contract and the current market price. The Company minimizes its credit risk exposure by limiting the counterparties to well-established banks and securities dealers who meet established credit and capital guidelines.
Loan Repurchase Reserve—The Company sells loans to loan purchasers without recourse. As such, the loan purchasers have assumed the risk of loss or default by the borrower. However, the Company is usually required by these loan purchasers to make certain standard representations and warranties relating to the loan for up to three years post sale. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these loan purchasers for losses. In addition, if loans pay-off within a specified time frame the Company may be required to refund a portion of the sales proceeds to the loan purchasers. The Company repurchased $3.6 million (11 loans) and $37.9 million (82 loans) in unpaid principal balance of loans during the three months ended September 30, 2023 and 2022, respectively, related to its loan repurchase obligations. The Company repurchased $20.8 million (52 loans) and $97.0 million (221 loans) in unpaid principal balance of loans during the nine months ended September 30, 2023 and 2022, respectively, related to its loan repurchase obligations. The Company’s loan repurchase reserve as of September 30, 2023 and December 31, 2022 was $21.8 million and $26.7 million, respectively, and is included within other liabilities on the condensed consolidated balance sheets. The provision for the loan repurchase reserve
is included within mortgage platform expenses on the condensed consolidated statement of operations and comprehensive loss. The following presents the activity of the Company’s loan repurchase reserve:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Loan repurchase reserve at beginning of period$21,832 $21,070 $26,745 $17,540 
Provision866 11,683 178 25,125 
Charge-offs(945)(9,754)(5,170)(19,667)
Loan repurchase reserve at end of period$21,753 $22,999 $21,753 $22,999 
Borrowing Capacity—The Company funds the majority of mortgage loans on a short-term basis through committed and uncommitted warehouse lines as well as from operations for any amounts not advanced by warehouse lenders. As a result, the Company’s ability to fund current operations depends on its ability to secure these types of short-term financings. If the Company’s principal lenders decided to terminate or not to renew any of the warehouse lines with the Company, the loss of borrowing capacity could be detrimental to the Company’s condensed consolidated financial statements unless the Company found a suitable alternative source.
13. COMMITMENTS AND CONTINGENCIES
Litigation—The Company, among other things, engages in mortgage lending, title and settlement services, and other financial technology services. The Company operates in a highly regulated industry and may be subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies. While the ultimate outcome of these matters cannot be predicted with certainty due to inherent uncertainties in litigation, management is of the opinion that these matters will not have a material impact on the consolidated financial statements of the Company. The Company accrues for losses when they are probable to occur and such losses are reasonably estimable, and discloses pending litigation if the Company believes a possibility exists that the litigation will have a material effect on its financial results. Legal costs expected to be incurred are accounted for as they are incurred.
The Company is currently a party to pending legal claims and proceedings regarding an employee related labor dispute brought forth during the third quarter of 2020. The dispute alleges that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California and the State of Florida. The dispute is still in its infancy and the ultimate outcome cannot be predicted with certainty due to inherent uncertainties in the legal claims. As part of the dispute, the Company recorded an estimated liability of $8.4 million and $5.9 million, which is included in accounts payable and accrued expenses on the consolidated balance sheets as of December 31, 2022 and 2021, respectively. Subsequent to December 31, 2022, the Company settled its employee related labor dispute in the State of Florida for an immaterial amount.
In June 2022, the former Head of Sales and Operations of the Company, Sarah Pierce, filed litigation against the Company, the Company’s founder and CEO Vishal Garg, and the Company’s Chief Administrative Officer and Senior Counsel Nicholas Calamari. The complaint alleges several causes of action including: violation of certain state labor laws, breach of fiduciary duty and defamation against Mr. Garg, aiding and abetting breach of fiduciary duty against Mr. Calamari, and intentional infliction of emotional distress against Mr. Garg and Mr. Calamari. In addition, Ms. Pierce claims that she has filed a notice of claim with the Occupational Safety and Health Administration (“OSHA”) against the Company for retaliation in violation of the Sarbanes-Oxley Act which has been denied. The litigation is still in its early stages and as such no amounts have been estimated or accrued for by the Company related to this matter.
Investor Legal Matter—In July 2021, Pine Brook, a current investor in the Company, commenced litigation against the Company among other parties, seeking declaratory judgement in relation to a side letter which was entered into as part of the Series C Preferred Stock issuance by the Company in 2019. The dispute is whether the Company, in connection with the Merger Agreement described in Note 1, would be entitled to trigger a side letter provision allowing the Company to repurchase approximately 1.9 million shares of Series A Preferred Stock for a total price of $1.
On November 1, 2021, the Company and Pine Brook reached a settlement agreement pursuant to which (1) the Company is entitled to exercise its purchase right for half of the 1.9 million shares of Series A Preferred Stock subject to the side letter provision, (2) the Company and Aurora agreed to amend the Merger Agreement (see Note 1) to waive or remove the lock up for holders of 1% or more of the Company’s capital stock, and (3) Mr. Howard Newman immediately resigned from the Company’s board of directors. As a result of the settlement, each party granted one another customary releases.
Regulatory Matters—In September of 2021, the Company received a “Notice of Charges” from a state regulatory agency making several claims against the Company, alleging certain violations of state disclosure, advertising, licensable activity rules, and certain federal disclosure rules. In November 2021, the Company and the state regulatory agency reached a settlement agreement whereby the Company has agreed to pay an immaterial fine and provide additional training to management directly overseeing the origination of mortgage loans for property located in the state. The settlement does not impact the Company’s ability to do business in the state.
In the third quarter of 2021, following third-party audits of samples of loans produced during the fiscal years 2018, 2019, and 2021, the Company became aware of certain TILA-RESPA Integrated Disclosure (“TRID”) defects in the loan production process that resulted in the final closing costs disclosed in the closing disclosure, in some instances, being greater than those disclosed in the loan estimate. Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers. As of December 31, 2022 and 2021, the Company included an estimated liability of $11.9 million and $13.2 million, respectively, within accounts payable and accrued expenses on the consolidated balance sheets. For the year ended December 31, 2022, the Company reduced the estimated liability for these potential TRID defects in the amount of $1.3 million. The reduction of expense for the year ended December 31, 2022 of $1.3 million and the expense for the year ended December 31, 2021 of $13.2 million is included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss. This accrual is the Company’s best estimate of potential exposure on the larger population of loans based on the results obtained by the audited sample. The accrued amounts are for estimated refunds potentially due to consumers for TRID tolerance errors for loans produced from 2018 through 2022. The Company completed a TRID audit of 2022 files and is continuing to remediate TRID tolerance defects as necessary.
In the second quarter of 2022, the Company received a voluntary request for documents from the Division of Enforcement of the Securities and Exchange Commission (“SEC”) and subsequently received several subpoenas, indicating that it is conducting an investigation relating to Aurora and the Company to determine if violations of the federal securities laws have occurred. The SEC has requested that Aurora and the Company provide the SEC with certain information and documents. The voluntary and subpoena requests cover, among other things, certain aspects of the Company’s business and operations, certain matters relating to certain actions and circumstances of the Company’s Founder and CEO and his other business activities, related party transactions, public statements made about the Company’s proprietary mortgage platform, the Company’s financial condition, and allegations made in
litigation filed by Sarah Pierce, the Company’s former Head of Sales and Operations. The Company is cooperating with the SEC. As the investigation is ongoing, it is uncertain how long the investigation will continue or whether, at its conclusion, the SEC will bring an enforcement action against either Aurora or the Company or any of their personnel and, if it does, what remedies it may seek.
Loan Commitments—The Company enters into IRLCs to fund mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. As of December 31, 2022, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $225.4 million. The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of December 31, 2022 and 2021, respectively, on the consolidated balance sheets. See Note 16.
Forward Sale Commitments—In the ordinary course of business, the Company enters into contracts to sell existing LHFS or loans committed but yet to be funded into the secondary market at specified future dates. As of December 31, 2022, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $422.0 million. The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of December 31, 2022 and 2021, respectively, on the consolidated balance sheets. See Note 16.
Concentrations—See below for areas considered to be concentrations of credit risk for the Company:
Significant loan purchasers are those which represent more than 10% of the Company’s loan volume. During the years ended December 31, 2022 and 2021, the Company had one loan purchaser that accounted for 65% and 60% of loans sold by the Company, respectively.
Concentrations of credit risk associated with the LHFS carried at fair value are limited due to the large number of borrowers and their dispersion across many geographic areas throughout the United States. As of December 31, 2022, the Company originated 11% of its LHFS secured by properties in each of Texas and California and 10% of its LHFS secured by properties in Florida. As of December 31, 2021, the Company originated 15% of its LHFS secured by properties in California.
The Company maintains cash and cash equivalent balances at various financial institutions. Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million. As of December 31, 2022 and 2021, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.
As of December 31, 2022, the Company held a cash balance of $0.9 million at Silicon Valley Bank (“SVB”). On March 10, 2023, the California Department of Financial Protection and Innovation declared SVB insolvent and appointed the FDIC as receiver. On March 13, 2023, the FDIC announced that all deposits and substantially all assets of SVB were transferred to a bridge bank, and that all depositors will be made whole. Subsequent to December 31, 2022, the Company transferred cash held at SVB to other financial institutions and does not have any remaining material banking relationship with SVB outside of a standby letter of credit in place with SVB of approximately $6.5 million securing obligations under certain of the Company’s office lease agreements which is classified on the Company’s consolidated balance sheet within prepaid expenses and other assets. The Company does not expect this matter to materially impact its operations or ability to meet its cash obligations.
Escrow Funds—In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement. The Company administers escrow deposits representing undisbursed amounts received for payment of property taxes, insurance and principal, and interest on mortgage loans held for sale. These funds are shown as restricted cash and there is a corresponding escrow payable on the consolidated balance sheet, as they are being held on behalf of the borrower. The balance in these accounts as of December 31, 2022 and 2021 was $8.0 million and $11.6 million, respectively. In some instances the Company may administer funds that are legally owned by a third-party which are excluded from the consolidated balance sheets which amounted to $0.3 million and $2.0 million as of December 31, 2022 and 2021, respectively.
14. RISKS AND UNCERTAINTIES
In the normal course of business, companies in the mortgage lending industry encounter certain economic and regulatory risks. Economic risks include credit risk and interest rate risk, in either a rising or declining interest rate environment. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which loans are being held for sale by the Company.
Interest Rate Risk—The Company is subject to interest rate risk in a rising interest rate environment, as the Company may experience a decrease in loan production, as well as decreases in the fair value of LHFS, loan applications in process with locked-in rates, and commitments to originate loans, which may negatively impact the Company’s operations. To preserve the value of such fixed-rate loans or loan applications in process with locked-in rates, agreements are executed for best effort or mandatory loan sales to be settled at future dates with fixed prices. These loan sales take the form of short-term forward sales of mortgage-backed securities and commitments to sell loans to loan purchasers.
Alternatively, in a declining interest rate environment, customers may withdraw their loan applications that include locked-in rates with the Company. Additionally, when interest rates decline, interest income received from LHFS will decrease. The Company uses an interest rate hedging program to manage these risks. Through this program, mortgage-backed securities are purchased and sold forward.
For all counterparties with open positions as of December 31, 2022, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis. Net settlements entail paying or receiving cash based upon the change in market value of the existing instrument.
The Company currently uses forward sales of mortgage-backed securities, interest rate commitments from borrowers, and mandatory and/or best-efforts forward commitments to sell loans to loan purchasers to protect the Company from interest rate fluctuations. These short-term instruments, which do not require any payments to be paid to the counterparty in connection with the execution of the commitments, are generally executed simultaneously.
Credit Risk—The Company’s hedging program is not designated as formal hedging from an accounting standpoint, contains an element of risk because the counterparties to its mortgage securities transactions may be unable to meet their obligations. While the Company does not anticipate nonperformance by any counterparty, it is exposed to potential credit losses in the event the counterparty fails to perform. The Company’s exposure to credit risk in the event of default by the counterparty is the difference between the contract and the current market price. The Company minimizes its credit risk exposure by limiting the counterparties to well-established banks and securities dealers who meet established credit and capital guidelines.
Loan Repurchase Reserve—The Company sells loans to loan purchasers without recourse. As such, the loan purchasers have assumed the risk of loss or default by the borrower. However, the Company is usually required by these loan purchasers to make certain standard representations and warranties relating to the loan. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these loan purchasers for losses. In addition, if loans pay-off within a specified time frame the Company may be required to refund a portion of the sales proceeds to the loan purchasers. The Company repurchased $110.6 million (262 loans) and $29.1 million (95 loans) in unpaid principal balance of loans during the years ended December 31, 2022 and 2021, respectively related to its loan repurchase obligations. The Company’s loan repurchase reserve is included within other liabilities on the consolidated balance sheets. The provision for the loan repurchase reserve is included within mortgage platform expenses on the consolidated
statements of operations and comprehensive loss. The following presents the activity of the Company’s loan repurchase reserve:
Year Ended December 31,
(Amounts in thousands)20222021
Loan repurchase reserve at beginning of year$17,540 $7,438 
Provision33,518 13,780 
Charge-offs(24,313)(3,678)
Loan repurchase reserve at end of year$26,745 $17,540 
Borrowing Capacity—The Company funds the majority of mortgage loans on a short-term basis through committed and uncommitted warehouse lines as well as from operations for any amounts not advanced by warehouse lenders. As a result, the Company’s ability to fund current operations depends on its ability to secure these types of short-term financings. If the Company’s principal lenders decided to terminate or not to renew any of the warehouse lines with the Company, the loss of borrowing capacity could be detrimental to the Company’s consolidated financial statements unless the Company found a suitable alternative source.
v3.23.4
Net Loss Per Share
 9 Months Ended
Sep. 30, 2023
Earnings Per Share [Abstract]  
NET LOSS PER SHARE
14. Net Loss Per Share
The computation of net loss per share and weighted average shares of the Company's common stock outstanding during the periods presented is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands, except for share and per share amounts)2023202220232022
Basic net loss per share:
Net loss$(340,033)$(226,612)$(475,441)$(625,864)
Income allocated to participating securities— — — — 
Net loss attributable to common stockholders - Basic$(340,033)$(226,612)$(475,441)$(625,864)
Diluted net loss per share:
Net loss attributable to common stockholders - Basic$(340,033)$(226,612)$(475,441)$(625,864)
Interest expense and change in fair value of bifurcated derivatives on convertible notes— — — — 
Income allocated to participating securities— — — — 
Net loss income attributable to common stockholders - Diluted$(340,033)$(226,612)$(475,441)$(625,864)
Shares used in computation:
Weighted average common shares outstanding496,577,751292,660,334364,817,445289,934,149
Weighted-average effect of dilutive securities:——
Assumed exercise of stock options————
Assumed exercise of warrants————
Assumed conversion of convertible preferred stock————
Diluted weighted-average common shares outstanding496,577,751292,660,334364,817,445289,934,149
Earnings (loss) per share attributable to common stockholders:
Basic$(0.68)$(0.77)$(1.30)$(2.16)
Diluted$(0.68)$(0.77)$(1.30)$(2.16)
Basic and diluted earnings (loss) per share are the same for each class of common stock because they are entitled to the same dividend rights. Basic and diluted earnings (loss) per share are presented together as the amounts for basic and diluted earnings (loss) per share are the same for each class of common stock. There were no preferred dividends declared or accumulated during the three months ended September 30, 2023 and 2022. There were no preferred dividends declared or accumulated during the nine months ended September 30, 2023 and 2022. The Company applies the two-class method which requires earnings available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all earnings for the period had been distributed. The Company’s outstanding convertible preferred stock is a participating security as the holders of such shares participate in earnings but do not contractually participate in the Company’s losses. The Company's potentially dilutive securities, which include stock options, convertible preferred stock that would have been issued under the if-converted method, warrants to purchase shares of common stock, warrants to purchase shares of preferred stock, and stock options exercised, not vested, have been excluded from the computation of diluted net loss per share, as the effect would be to reduce the net loss per share. The Company excluded the following securities, presented based on amounts outstanding at each period end, from
the computation of diluted net loss per share attributable to common stockholders for the periods indicated as including them would have had an anti-dilutive effect:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Options to purchase common stock (1)
48,389 44,857 48,389 44,857 
Convertible preferred stock (2)
— 108,721 — 108,721 
Pre-Closing Bridge Notes
— 247,777 — 247,777 
Warrants to purchase convertible preferred stock (1)
— 6,649 — 6,649 
Total48,389 408,004 48,389 408,004 
__________________
(1)Securities have an antidilutive effect under the treasury stock method.
(2)Securities have an antidilutive effect under the if-converted method.
15. Net Income (Loss) per share
The computation of net loss per share and weighted average shares of the Company's common stock outstanding during the periods presented is as follows:
Year Ended December 31,
(Amounts in thousands, except for share and per share amounts)20222021
Basic net loss per share:
Net loss$(888,802)$(301,128)
Income allocated to participating securities— — 
Net loss attributable to common stockholders - Basic$(888,802)$(301,128)
Diluted net loss per share:
Net loss attributable to common stockholders - Basic$(888,802)$(301,128)
Interest expense and change in fair value of bifurcated derivatives on convertible notes— — 
Income allocated to participating securities— — 
Net loss income attributable to common stockholders - Diluted$(888,802)$(301,128)
Shares used in computation:
Weighted average common shares outstanding95,303,684 86,984,646 
Weighted-average effect of dilutive securities:
Assumed exercise of stock options— — 
Assumed exercise of warrants— — 
Assumed conversion of convertible preferred stock— — 
Diluted weighted-average common shares outstanding95,303,684 86,984,646 
Earnings (loss) per share attributable to common stockholders:
Basic$(9.33)$(3.46)
Diluted$(9.33)$(3.46)
Basic and diluted earnings (loss) per share are the same for each class of common stock because they are entitled to the same dividend rights. Basic and diluted earnings (loss) per share are presented together as the amounts for basic and diluted earnings (loss) per share are the same for each class of common stock. There were no preferred dividends declared or accumulated during the years ended December 31, 2022 and 2021. The Company applies the
two-class method which requires earnings available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all earnings for the period had been distributed. The Company’s outstanding convertible preferred stock is a participating security as the holders of such shares participate in earnings but do not contractually participate in the Company’s losses. The Company's potentially dilutive securities, which include stock options, convertible preferred stock that would have been issued under the if-converted method, warrants to purchase shares of common stock, warrants to purchase shares of preferred stock, and stock options exercised, not vested, have been excluded from the computation of diluted net loss per share, as the effect would be to reduce the net loss per share or increase net income(loss) per share. The Company excluded the following securities, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated as including them would have had an anti-dilutive effect:
Year Ended December 31,
(Amounts in thousands)20222021
Convertible preferred stock (2)
108,721 108,721 
Pre-Closing Bridge Notes
248,197 214,787 
Options to purchase common stock (1)
43,159 34,217 
Warrants to purchase convertible preferred stock (1)
4,774 3,948 
Warrants to purchase common stock(1)
1,875 1,875 
Total406,726 363,548 
__________________
(1)Securities have an antidilutive effect under the treasury stock method.
(2)Not applicable under the treasury stock method and therefore antidilutive.
v3.23.4
Fair Value Measurements
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
15. Fair Value Measurements
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
September 30, 2023
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $160,025 $— $160,025 
Derivative assets, at fair value (1)
— 3,506 211 3,717 
Total Assets$— $163,531 $211 $163,742 
Derivative liabilities, at fair value (1)
$— $— $1,678 $1,678 
Warrants and equity related liabilities, at fair value
$577 $950 $— $1,527 
Total Liabilities$577 $950 $1,678 $3,205 
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative, at fair value— — 236,603 236,603 
Total Assets$— $251,558 $236,919 $488,477 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities$— $— $4,924 $4,924 
__________________
(1)As of September 30, 2023 and December 31, 2022, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
Specific valuation techniques and inputs used in determining the fair value of each significant class of assets and liabilities are as follows:
Mortgage Loans Held for Sale—The Company originates certain LHFS to be sold to loan purchasers and elected to carry these loans at fair value in accordance with ASC 825. The fair value is primarily based on the price obtained for other mortgage loans with similar characteristics. The changes in fair value of these assets are largely driven by changes in interest rates subsequent to loan funding and receipt of principal payments associated with the relevant LHFS.
Derivative Assets and Liabilities—The Company uses derivatives to manage various financial risks. The fair values of derivative instruments are determined based on quoted prices for similar assets and liabilities, dealer quotes, and internal pricing models that are primarily sensitive to market observable data. The Company utilizes IRLCs and forward sale commitments. The fair value of IRLCs, which are related to mortgage loan commitments, is based on quoted market prices, adjusted by the pull-through factor, and includes the value attributable to the net servicing fee. The Company evaluated the significance and unobservable nature of the pull-through factor and determined that the classification of IRLCs should be Level 3 as of September 30, 2023 and December 31, 2022. Significant changes in the pull-through factor of the IRLCs, in isolation, could result in significant changes in the IRLCs’ fair value measurement. The value of IRLCs also rises and falls with changes in interest rates; for example, entering into interest rate lock commitments at low interest rates followed by an increase in interest rates in the market, will decrease the value of IRLC. The Company had purchases/issuances of approximately $0.1 million and $2.4 million of IRLCs during the three months ended September 30, 2023 and 2022, respectively. The Company had purchases/issuances of approximately $0.6 million and $5.0 million of IRLCs during the nine months ended September 30, 2023 and 2022, respectively.
The number of days from the date of the IRLC to expiration of the rate lock commitment outstanding as of September 30, 2023 was approximately 60 days on average. The Company attempts to match the maturity date of the IRLCs with the forward commitments. Derivatives are presented in the condensed consolidated balance sheets under derivative assets, at fair value and derivative liabilities, at fair value. During the three months ended September 30, 2023, the Company recognized $0.9 million of loss and $5.0 million of gains related to changes in fair value of IRLCs and forward sale commitments, respectively. During the nine months ended September 30, 2023, the Company recognized $0.1 million and $8.4 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. During the three months ended September 30, 2022, the Company recognized $7.0 million of losses and $26.2 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. During the nine months ended September 30, 2022, the Company recognized $14.3 million of losses and $188.6 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. Gains and losses related to changes in the fair value of IRLCs and forward sale commitments are included in mortgage platform revenue, net within the condensed consolidated statements of operations and comprehensive loss. Unrealized activity related to changes in the fair value of forward sale commitments were $1.5 million of gains and $13.2 million of gains, included in the $5.0 million of gains and $26.2 million of gains, during the three months ended September 30, 2023 and 2022, respectively. Unrealized activity related to changes in the fair value of forward sale commitments were $0.8 million of gains and $14.1 million of gains, included in the $8.4 million of gains and $188.6 million of gains, during the nine months ended September 30, 2023 and 2022, respectively. The notional and fair value of derivative financial instruments not designated as hedging instruments were as follows:
(Amounts in thousands)Notional ValueDerivative AssetDerivative Liability
Balance as of September 30, 2023
IRLCs$211,897 $211 $1,678 
Forward commitments$294,000 3,506 — 
Total$3,717 $1,678 
Balance as of December 31, 2022
IRLCs$225,372 $316 $1,828 
Forward commitments$422,000 2,732 — 
Total$3,048 $1,828 
Warrant and equity related liabilities—The warrant liability consists of Warrants and the Sponsor-Locked up Shares. The Warrants consist of Public Warrants and Private Warrants. The Public Warrants trade on the Nasdaq Capital Market under the ticker symbol “BETRW” and as such is considered a Level 1 input from an active market to derive the value. The Private Warrants and Sponsor-Locked up Shares, although not publicly traded on an active market, use inputs from the publicly traded Public Warrants and the Company’s publicly traded common stock,
respectively, and are further calibrated using unobservable inputs representing Level 2 measurements within the fair value hierarchy.
Convertible Preferred Stock Warrants—The Company issued Former Preferred Stock Warrants to certain investors and to the Lender under its corporate line of credit (see Note 10). The Company obtained a fair value analysis from a third party to assist in determination of the fair value of warrants. The Company used the Black-Scholes-Merton option-pricing model to estimate the fair value of the warrants at the issuance date and as of December 31, 2022, which is based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Significant changes in the unobservable inputs could result in significant changes in the fair value of the convertible preferred stock warrants. The warrant valuation was based on the intrinsic value of the Company’s underlying stock price and included certain assumptions such as risk free rate, volatility rate, and expected term.
Bifurcated Derivative—The Company’s Pre-Closing Bridge Notes included embedded features that were separately accounted for and were marked to fair value at each reporting period with changes included in change in fair value of bifurcated derivative on the consolidated statements of operations and comprehensive loss. The Company obtained a fair value analysis from a third party to assist in determination of the fair value of the bifurcated derivative. In estimating the fair value of the bifurcated derivative, management considered factors management believed were material to the valuation process, including, but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As there was no active market for the Company’s equity, the fair value of the bifurcated derivative was based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Management believed the combination of these factors provided an appropriate estimate of the expected fair value and reflected the best estimate of the fair value of the bifurcated derivative.
As of September 30, 2023 and December 31, 2022, Level 3 instruments include IRLCs, bifurcated derivative and convertible preferred stock warrants. The following table presents the rollforward of Level 3 IRLCs:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$(514)$197 $(1,513)$7,568 
Change in fair value of IRLCs(953)(6,976)46 (14,347)
Balance at end of period$(1,467)$(6,779)$(1,467)$(6,779)
The following table presents the rollforward of Level 3 bifurcated derivative:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$237,667 $277,777 $236,603 $— 
Change in fair value of bifurcated derivative(237,667)29,089 (236,603)306,866 
Balance at end of period$— $306,866 $— $306,866 
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$2,830 $11,586 $3,096 $31,997 
Exercises(2,830)— (2,830)— 
Change in fair value of convertible preferred stock warrants— (4,202)(266)(24,613)
Balance at end of period$— $7,384 $— $7,384 
Counterparty agreements for forward sale commitments contain master netting agreements, which contain a legal right to offset amounts due to and from the same counterparty and can be settled on a net basis. The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized Liabilities
Net Amounts Presented in the Condensed Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
September 30, 2023:$3,525 $(19)$3,506 
December 31, 2022$3,263 $(531)$2,732 
Offsetting of Forward Commitments - Liabilities
Balance as of:
September 30, 2023:$— $— $— 
December 31, 2022$— $— $— 
Significant Unobservable Inputs—The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
September 30, 2023
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
10.27% - 97.49%
85.1 %
December 31, 2022
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% - 96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94% - 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24 - 5.74
4.8
Fair value of common stock
$0.00 - $6.60
$1.60 
U.S. GAAP requires disclosure of fair value information about financial instruments, whether recognized or not recognized in the condensed consolidated financial statements, for which it is practical to estimate the fair value. In cases where quoted market prices are not available, fair values are based upon the estimation of discount rates to estimated future cash flows using market yields or other valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimates of fair value in both inactive and orderly markets. Accordingly, fair values are not necessarily indicative of the amount the Company could realize on disposition of the
financial instruments in a current market exchange. The use of market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.
The estimated fair value of the Company’s cash and cash equivalents, restricted cash, warehouse lines of credit, and escrow funds and customer deposits approximates their carrying values as these financial instruments are highly liquid or short-term in nature. The following table presents the carrying amounts and estimated fair value of financial instruments that are not recorded at fair value on a recurring or non-recurring basis:
September 30, 2023December 31, 2022
(Amounts in thousands)Fair Value LevelCarrying AmountFair ValueCarrying AmountFair Value
Short-term investmentsLevel 1$29,831 $29,884 $— $— 
Loans held for investmentLevel 3$4,163 $4,649 $— $— 
Post-Closing Convertible NotesLevel 3$513,001 $252,796 $— $— 
Loan commitment assetLevel 3$— $— $16,119 $54,654 
Pre-Closing Bridge NotesLevel 3$— $— $750,000 $269,067 
Corporate line of creditLevel 3$— $— $144,403 $145,323 
In determining the fair value of the Short term investments, management used observable inputs such as quoted prices in active markets for identical assets. The fair value of loans held for investment is determined by management estimates of the specific credit risk attributes of each pool of loans, in addition to the quoted secondary-market prices which account for the interest rate characteristics of each loan. The corporate line of credit was valued using a Black Derman Toy model which incorporates the option to prepay given the make-whole premium as well as other inputs such as risk-free rates and credit spreads. In determining the fair value of the loan commitment asset and the Pre-Closing Bridge Notes, management used factors that are material to the valuation process, including but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As a number of assumptions and estimates were involved that are largely unobservable, loans held for investment, loan commitment asset and Corporate line of credit were classified as Level 3 inputs within the fair value hierarchy.
16. FAIR VALUE MEASUREMENTS
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative— — 236,603 236,603 
Total Assets
$— $251,558 $236,919 $488,478 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities
$— $— $4,924 $4,924 
December 31, 2021
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $1,854,435 $— $1,854,435 
Derivative assets, at fair value (1)
— 812 8,484 9,296 
Bifurcated derivative— — — — 
Total Assets
$— $1,855,247 $8,484 $1,863,731 
Derivative liabilities, at fair value (1)
$— $1,466 $916 $2,382 
Convertible preferred stock warrants (2)
— — 31,997 31,997 
Total Liabilities
$— $1,466 $32,913 $34,379 
__________________
(1)As of December 31, 2022 and 2021, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
Specific valuation techniques and inputs used in determining the fair value of each significant class of assets and liabilities are as follows:
Mortgage Loans Held for Sale—The Company originates certain LHFS to be sold to loan purchasers and elected to carry these loans at fair value in accordance with ASC 825. The fair value is primarily based on the price obtained for other mortgage loans with similar characteristics. The changes in fair value of these assets are largely driven by changes in interest rates subsequent to loan funding and receipt of principal payments associated with the relevant LHFS.
Derivative Assets and Liabilities—The Company uses derivatives to manage various financial risks. The fair values of derivative instruments are determined based on quoted prices for similar assets and liabilities, dealer quotes, and internal pricing models that are primarily sensitive to market observable data. The Company utilizes IRLCs and forward sale commitments. The fair value of IRLCs, which are related to mortgage loan commitments, is based on quoted market prices, adjusted by the pull-through factor, and includes the value attributable to the net servicing fee. The Company evaluated the significance and unobservable nature of the pull-through factor and determined that the classification of IRLCs should be Level 3 as of December 31, 2022 and 2021. Significant changes in the pull-through factor of the IRLCs, in isolation, could result in significant changes in the IRLCs’ fair value measurement. The value of IRLCs also rises and falls with changes in interest rates; for example, entering into interest rate lock commitments at low interest rates followed by an increase in interest rates in the market, will decrease the value of IRLC. The Company had purchases/issuances of approximately $4.3 million and $50.7 million of IRLCs during the years ended December 31, 2022 and 2021, respectively.
The number of days from the date of the IRLC to expiration of the rate lock commitment outstanding as of December 31, 2022 and 2021 was approximately 60 days on average. The Company attempts to match the maturity date of the IRLCs with the forward commitments. Derivatives are presented in the consolidated balance sheets under derivative assets, at fair value and derivative liabilities, at fair value. During the year ended December 31, 2022, the Company recognized $9.1 million of losses and $187.3 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. During the year ended December 31, 2021, the Company recognized $32.4 million of losses and $95.4 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. Gains and losses related to changes in the fair value of IRLCs and forward sale commitments are included in mortgage platform revenue, net within the consolidated statements of operations and comprehensive loss. Unrealized activity related to changes in the fair value of forward sale commitments were $3.4 million of gains and $24.7 million of gains, included in the $187.3 million of gains and $95.4 million of gains,
during the years ended December 31, 2022 and 2021, respectively. The notional and fair value of derivative financial instruments not designated as hedging instruments were as follows:
(Amounts in thousands)Notional ValueDerivative AssetDerivative Liability    
Balance as of December 31, 2022
IRLCs$225,372 $316 $1,828 
Forward commitments$422,000 2,732 — 
Total$3,048 $1,828 
Balance as of December 31, 2021
IRLCs$2,560,577 $8,484 $916 
Forward commitments$2,818,700 812 1,466 
Total$9,296 $2,382 
Convertible Preferred Stock Warrants—The Company issued warrants to certain investors and to the Lender under its corporate line of credit (see Note 11). The Company obtains a fair value analysis from a third party to assist in determination of the fair value of warrants. The Company used the Black-Scholes option-pricing model to estimate the fair value of the warrants at the issuance date and as of December 31, 2022 and 2021, which is based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Significant changes in the unobservable inputs could result in significant changes in the fair value of the convertible preferred stock warrants. The warrant valuation was based on the intrinsic value of the Company’s underlying stock price and includes certain assumptions such as risk free rate, volatility rate, and expected term.
Bifurcated Derivative—The Company’s Pre-Closing Bridge Notes included embedded features that are separately accounted for and are marked to fair value at each reporting period with changes included in change in fair value of bifurcated derivative on the consolidated statements of operations and comprehensive loss. The Company obtains a fair value analysis from a third party to assist in determination of the fair value of the bifurcated derivative. In estimating the fair value of the bifurcated derivative, management considers factors management believes are material to the valuation process, including, but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As there is no active market for the Company’s equity, the fair value of the bifurcated derivative is based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Management believes the combination of these factors provides an appropriate estimate of the expected fair value and reflects the best estimate of the fair value of the bifurcated derivative.
As of December 31, 2022 and 2021, Level 3 instruments include IRLCs, bifurcated derivative, and convertible preferred stock warrants. The following table presents the rollforward of Level 3 IRLCs:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$7,568 $39,972 
Change in fair value of IRLCs(9,081)(32,404)
Balance at end of year
$(1,513)$7,568 
The following table presents the rollforward of Level 3 bifurcated derivative:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$— $— 
Change in fair value of bifurcated derivative236,603 — 
Balance at end of year
$236,603 $— 
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$31,997 $25,799 
Issuances— — 
Exercises— (26,592)
Change in fair value of convertible preferred stock warrants(28,901)32,790 
Balance at end of year
$3,096 $31,997 
Counterparty agreements for forward sale commitments contain master netting agreements, which contain a legal right to offset amounts due to and from the same counterparty and can be settled on a net basis. The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized LiabilitiesNet Amounts Presented in the Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
December 31, 2022:
$3,263 $(531)$2,732 
December 31, 2021
$2,598 $(1,786)$812 
Offsetting of Forward Commitments - Liabilities
Balance as of:
December 31, 2022:
$— $— $— 
December 31, 2021
$282 $(1,748)$(1,466)
Significant Unobservable Inputs—The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
December 31, 2022
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% -96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94%- 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24- 5.74
4.8 
Fair value of common stock
$0.00 - $6.60
$1.60 
December 31, 2021
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
5.01% - 99.43%
83.5 %
Convertible preferred stock warrants
Risk free rate
0.19% - 0.73%
0.27 %
Volatility rate
32.8% - 120.3%
65.0 %
Expected term (years)
0.5 - 2.0
0.7 
Fair value of common stock
$6.80 - $29.42
$14.91 
U.S. GAAP requires disclosure of fair value information about financial instruments, whether recognized or not recognized in the consolidated financial statements, for which it is practical to estimate the fair value. In cases where quoted market prices are not available, fair values are based upon the estimation of discount rates to estimated future cash flows using market yields or other valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimates of fair value in both inactive and orderly markets. Accordingly, fair values are not necessarily indicative of the amount the Company could realize on disposition of the financial instruments in a current market exchange. The use of market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.
The estimated fair value of the Company’s cash and cash equivalents, restricted cash, warehouse lines of credit, and escrow funds approximates their carrying values as these financial instruments are highly liquid or short-term in
nature. The following table presents the carrying amounts and estimated fair value of financial instruments that are not recorded at fair value on a recurring or non-recurring basis:
As of December 31,
20222021
(Amounts in thousands)Fair Value LevelCarrying AmountFair ValueCarrying AmountFair Value
Loan commitment assetLevel 3$16,119 $54,654 $121,723 $121,723 
Pre-Closing Bridge Notes
Level 3$750,000 $269,067 $477,333 $458,122 
Corporate line of creditLevel 3$144,403 $145,323 $149,022 $161,417 
The corporate line of credit was valued using a Black Derman Toy model which incorporates the option to prepay given the make-whole premium as well as other inputs such as risk-free rates and credit spreads. In determining the fair value of the loan commitment asset and the Pre-Closing Bridge Notes, management uses factors that are material to the valuation process, including but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As a number of assumptions and estimates were involved that are largely unobservable, loan commitment asset and Pre-Closing Bridge Notes are classified as Level 3 inputs within the fair value hierarchy.
v3.23.4
Income Taxes
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES
16. Income Taxes
On a consolidated basis, the Company recorded total income tax expense (benefit) of $0.7 million and $(0.1) million for the three months ended September 30, 2023 and 2022, respectively. The Company recorded total income tax expense of $2.5 million and $1.5 million for the nine months ended September 30, 2023 and 2022, respectively. The Company’s quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including the ability to accurately project the Company’s pre-tax income or loss for the year and the mix of earnings among various tax jurisdictions. The year-to-date effective tax rate, after discrete items, of (0.19)% for the three months ended September 30, 2023, changed from 0.02% for the three months ended September 30, 2022, as the Company is forecasting reduction in losses for 2023. The year-to-date effective tax rate, after discrete items, of (0.53)% for the nine months ended September 30, 2023, changed from (0.23)% for the nine months ended September 30, 2022, as the Company was subject to withholding taxes and is forecasting reduction in losses for 2023. The income tax expense for the three months ended September 30, 2023 primarily relates to the pre-tax income projections and dividend income withholding tax paid in certain foreign jurisdictions where the Company files standalone returns. The income tax expense for the nine months ended September 30, 2023 relates to the pre-tax income projections and dividend income withholding tax paid in certain foreign jurisdictions where the Company files standalone returns.
As of each reporting date, the Company considers existing evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred income tax assets. The Company is in a three year cumulative loss position as of September 30, 2023. Further, due to losses being estimated in the future, management continues to believe it is more likely than not that the benefit of the deferred income tax assets will not
be realized. In recognition of this risk, the Company continues to provide a full valuation allowance on deferred income tax assets.
17. INCOME TAXES
The Company is subject to US (federal, state and local) and foreign income taxes. The components of income (loss) before income tax expense (benefit) are as follows:
Year Ended December 31,
(Amounts in thousands)20222021
U.S.$(863,807)$(301,081)
Foreign(23,895)(2,430)
Income (loss) before income tax expense$(887,702)$(303,511)
The following table displays the components of the Company’s federal, state and local, and foreign income taxes.
Year Ended December 31,
(Amounts in thousands)20222021
Current Income Tax Expense (Benefit):
Federal$(658)$(6,145)
Foreign1,815 2,888 
State and local(130)1,118 
Total Current Income Tax Expense (Benefit)1,027 (2,139)
Deferred Income Tax Expense (Benefit):
Federal(140,025)(43,545)
Foreign(7,287)(2,556)
State and local(32,345)(15,613)
Valuation Allowance179,730 61,470 
Total Deferred Income Tax Expense (Benefit)73 (244)
Income Tax Expense (Benefit)$1,100 $(2,383)
The following table displays the difference between the U.S. federal statutory corporate tax rate and the effective tax rate.
Year Ended December 31,
20222021
US federal statutory corporate tax rate21.00 %21.00 %
State and local tax2.87 %4.74 %
Stock-based compensation-0.67 %-2.38 %
Fair value of warrants6.30 %-2.25 %
Others0.03 %-0.41 %
Foreign tax rate differential0.10 %— %
R&D tax credit0.13 %2.25 %
Unrecognized tax benefits0.07 %-0.77 %
Interest - Pre-Closing Bridge Notes-6.47 %-1.32 %
Restructuring costs-3.15 %— %
Change in valuation allowance-20.33 %-20.08 %
Effective Tax Rate-0.12 %0.78 %
The difference between the U.S. Federal statutory tax rate and the effective tax rate relates to permanent differences between book and taxable income with respect to reporting for income tax purposes. These differences will not be reversed in the future. These amounts were predominantly comprised of stock option expense, convertible notes, and change in fair value of warrants.
Deferred Income Tax Assets and Liabilities
The Company evaluates the deferred income tax assets for the recoverability using a consistent approach which considers the relative impact of negative and positive evidence, including the Company’s historical profitability and losses and projections of future taxable income (loss).
As of December 31, 2022, the Company continued to conclude that the negative evidence with respect to the recoverability of its deferred income tax assets outweighed the positive evidence. It is more likely than not that the deferred income tax assets will not be realized. As of December 31, 2022 and 2021 the Company had a 100% valuation allowance on its deferred tax assets. The Company’s framework for assessing the recoverability of deferred income tax assets requires it to weigh all available evidence, to the extent it exists, including:
•the sustainability of future profitability required to realize the deferred income tax assets,
•the cumulative net income or losses in the consolidated statements of operations and comprehensive income in recent years
The following table displays deferred income tax assets and deferred income tax liabilities:
As of December 31,
(Amounts in thousands)20222021
Deferred Income Tax Assets
Net operating loss$244,081 $86,009 
Non-qualified stock options3,624 4,341 
Reserves5,092 4,866 
Loan repurchase reserve12,991 4,656 
Restructuring reserve757 — 
Accruals112 3,447 
Deferred revenue7,688 5,311 
Other3,908 3,326 
Total Deferred Income Tax Assets278,253 111,956 
Deferred Income Tax Liabilities
Internal use software(3,167)(14,128)
Intangible assets(547)(1,259)
Depreciation(1,775)(3,193)
Other— (251)
Total Deferred Income Tax Liabilities(5,489)(18,831)
Net Deferred Tax Asset before Valuation Allowance272,764 93,125 
Less: Valuation Allowance(272,477)(92,766)
Deferred Income Tax Assets, Net$287 $359 
As of December 31, 2022 and 2021 the Company had federal net operating loss (“NOL”) carryforwards of approximately $843.4 million and $228.8 million, respectively, and state NOL carryforwards of $741.5 million and $357.4 million, respectively, which are available to offset future taxable income. As of December 31, 2022 and 2021 the Company had also foreign (U.K.) NOL carryforwards of approximately $96.2 million and $70.0 million, respectively, which are available to offset future taxable income. Certain U.S. federal and state NOLs as of December 31, 2022 will begin to expire in 2035.
Utilization of the NOL carryforwards for purposes of federal income tax is subject to an annual limitation pursuant to Internal Revenue Code Section 382 (“Section 382”) due to ownership changes that have occurred. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three-year period. The Company has assessed and concluded there have been multiple changes of control as defined by Section 382 since inception. As of December 31, 2022, the Company's deferred income tax asset relating to the Company's NOL carryforwards will be subject to an annual limitation pursuant to Section 382, thereby limiting the amount of NOL utilization each year.
A reconciliation of the beginning and ending balances of gross unrecognized tax benefits is as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Unrecognized tax benefits - January 1
$4,070 $1,710 
Gross increases - tax positions in prior period— — 
Gross decreases - tax positions in prior period(2,717)(1,080)
Gross increases - tax positions in current period— 3,440 
Settlement— — 
Lapse of statute of limitations— — 
Unrecognized tax benefits - December 31
$1,353 $4,070 
During 2022, the gross amount of the increases and decreases in unrecognized tax benefits as a result of tax positions taken during the current period were none and $2.7 million, respectively. Included in the balance of unrecognized tax benefits of $1.4 million as of December 31, 2022, are tax benefits that if recognized, will affect the effective tax rate. There is no interest or penalty provided for any uncertain tax positions. The Company does not expect a material change in uncertain tax positions in the next 12 months.
The Company files a consolidated federal income tax return, foreign income tax returns and various state consolidated or combined income tax returns. The Company’s major tax jurisdictions are U.S. federal, New York State, New York City, California, and India. The Company generally remains subject to examination for Federal income tax returns for the years 2019 and forward, state income tax returns for the years 2018 and forward, and foreign income tax return for the years 2018 and forward.
v3.23.4
Convertible Preferred Stock
 9 Months Ended
Sep. 30, 2023
Temporary Equity Disclosure [Abstract]  
CONVERTIBLE PREFERRED STOCK
17. Convertible Preferred Stock
In connection with the Business Combination, as described in Note 3, all series of Better convertible preferred stock were converted into Better common stock and subsequently converted to the Company’s common stock at the Exchange Ratio of approximately 3.06. All share amounts in periods prior to the Business Combination have been retroactively adjusted using the Exchange Ratio for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization.
As of December 31, 2022, the Company had outstanding the following series of convertible preferred stock:
As of
December 31, 2022
(Amounts in thousands, except share amounts)Shares
Authorized		Shares Issued and
outstanding
Series D Preferred Stock26,178,57423,786,379
Series D-1 Preferred Stock26,178,574—
Series D-2 Preferred Stock21,305,75820,390,896
Series D-3 Preferred Stock914,862914,862
Series D-4 Preferred Stock1,062,0091,062,009
Series D-5 Preferred Stock1,062,009—
Series C Preferred Stock132,946,826100,138,544
Series C-1 Preferred Stock132,946,8268,939,693
Series C-2 Preferred Stock18,624,35414,018,524
Series C-3 Preferred Stock19,741,8188,367,368
Series C-4 Preferred Stock2,171,0642,171,064
Series C-5 Preferred Stock18,624,3544,605,830
Series C-6 Preferred Stock19,741,81811,374,450
Series C-7 Preferred Stock9,833,6604,469,846
Series B Preferred Stock39,753,02428,583,364
Series B-1 Preferred Stock12,531,94011,169,660
Series A Preferred Stock93,850,53369,267,349
Series A-1 Preferred Stock24,937,83823,054,899
Total convertible preferred stock602,405,839332,314,737
Convertible Preferred Stock Warrants—Immediately prior to the Closing of the Business Combination, certain convertible preferred stock warrant holders exercised their warrants on a cash basis and the remaining convertible preferred stock warrant holders exercised their warrants on a net basis at the Closing. In August 2023, the Company received $1.5 million from preferred stock warrant holders that exercised their warrants on a cash basis with an offset to additional paid-in-capital and as the remaining convertible preferred stock warrants were exercise the entire convertible preferred stock liability of $2.8 million was reclassified to additional paid-in-capital.
As of December 31, 2022, the Company had outstanding the following convertible preferred stock warrants:
No. Warrants
(Amounts in thousands, except no. warrants and strike prices)December 31, 2022StrikeValuation at Issuance
September 2018Series C Preferred9/28/20189/28/20282,312,296$0.59 $170 
February 2019Series C Preferred2/6/20199/28/2028153,807$0.59 $12 
March 2019Series C Preferred3/29/20193/29/20261,146,214$1.12 $87 
April 2019Series C Preferred4/17/20194/17/20293,575,879$1.12 $313 
March 2020Series C Preferred3/25/20203/25/2027410,228$1.64 $201 
Total7,598,424
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes-Merton option-pricing model and their respective terms, as can be seen below:
(Amounts in thousands, except per share amounts)December 31, 2022
IssuanceFair value per shareFair Value
September 2018$0.54 $1,256 
February 2019$0.54 84 
March 2019$0.35 397 
April 2019$0.35 1,240 
March 2020$0.29 119 
Total$3,096 
Warrants for Series C Preferred Stock, related to the above issuances, were recorded as liabilities at fair value, resulting in a liability of $3.1 million as of December 31, 2022.
The change in fair value of warrants for the three months ended September 30, 2023 and 2022 was a gain of none and a gain of $4.2 million, respectively, and was recorded in change in fair value of convertible preferred stock within the condensed consolidated statements of operations and comprehensive loss. The change in fair value of warrants for the nine months ended September 30, 2023 and 2022 was a gain of $0.3 million and a gain of $24.6 million, respectively, and was recorded in change in fair value of convertible preferred stock warrants within the condensed consolidated statements of operations and comprehensive loss.
18. CONVERTIBLE PREFERRED STOCK
The Company had outstanding the following series of convertible preferred stock:
As of December 31,
20222021
(Amounts in thousands, except share amounts)Shares
Authorized		Shares Issued and
outstanding		Shares
Authorized		Shares Issued and
outstanding
Series D Preferred Stock8,564,688 7,782,048 8,564,688 7,782,048 
Series D-1 Preferred Stock8,564,688 — 8,564,688 — 
Series D-2 Preferred Stock6,970,478 6,671,168 6,970,478 6,671,168 
Series D-3 Preferred Stock299,310 299,310 299,310 299,310 
Series D-4 Preferred Stock347,451 347,451 347,451 347,451 
Series D-5 Preferred Stock347,451 — 347,451 — 
Series C Preferred Stock43,495,421 32,761,731 43,495,421 32,761,731 
Series C-1 Preferred Stock43,495,421 2,924,746 43,495,421 2,924,746 
Series C-2 Preferred Stock6,093,219 4,586,357 6,093,219 4,586,357 
Series C-3 Preferred Stock6,458,813 2,737,502 6,458,813 2,737,502 
Series C-4 Preferred Stock710,294 710,294 710,294 710,294 
Series C-5 Preferred Stock6,093,219 1,506,862 6,093,219 1,506,862 
Series C-6 Preferred Stock6,458,813 3,721,311 6,458,813 3,721,311 
Series C-7 Preferred Stock3,217,220 1,462,373 3,217,220 1,462,373 
Series B Preferred Stock13,005,760 9,351,449 13,005,760 9,351,449 
Series B-1 Preferred Stock4,100,000 3,654,311 4,100,000 3,654,311 
Series A Preferred Stock30,704,520 22,661,786 30,704,520 22,661,786 
Series A-1 Preferred Stock8,158,764 7,542,734 8,158,764 7,542,734 
Total convertible preferred stock197,085,530 108,721,433 197,085,530 108,721,433 
Voting Rights—The holders of outstanding shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series C-2 Preferred Stock, Series C-3 Preferred Stock, Series C-4 Preferred Stock, Series D Preferred Stock, Series D-2 Preferred Stock, and Series D-4 Preferred Stock are entitled to votes equal to the number of shares of Common B Stock into which the applicable series of preferred stock are convertible to as of the record date. The holders of Series A-1 Preferred Stock, Series B-1 Preferred Stock, Series C-1 Preferred Stock, Series C-5 Preferred Stock, Series C-6 Preferred Stock, Series C-7 Preferred Stock, Series D-1 Preferred Stock, Series D-3 Preferred Stock, and Series D-5 Preferred Stock have no voting rights.
Conversion Rights—Each share of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series C-2 Preferred Stock, Series C-3 Preferred Stock, Series C-4 Preferred Stock, Series D Preferred Stock, Series D-2 Preferred Stock, and Series D-4 Preferred Stock is convertible, at the option of the holder, at any time, and without payment of additional consideration into Common B Stock at the "Adjusted Conversion Ratio" as defined below.
Additionally, each share of Series A-1 Preferred Stock, Series B-1 Preferred Stock, Series C-1 Preferred Stock, Series C-5 Preferred Stock, Series C-6 Preferred Stock, Series D-1 Preferred Stock, and Series D-5 Preferred Stock are convertible, at the option of the holder, at any time, and without payment of additional consideration into Common B-1 Stock at the "Adjusted Conversion Ratio" as defined below.
The Adjusted Conversion Ratio is defined in the Company's Tenth Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) as equal to the applicable Preferred Stock Original Issue Price for the applicable share of preferred stock divided by the applicable Preferred Stock Conversion Price. The Preferred Stock
Conversion Price is equal to $1.00 for the Series A Preferred Stock and the Series A-1 Preferred Stock; $2.00 for the Series B Preferred Stock and the Series B-1 Preferred Stock; $3.42 for the Series C Preferred Stock C, Series C-1 Preferred Stock, and Series C-7 Preferred Stock; $2.46 for the Series C-2 Preferred Stock and Series C-5 Preferred Stock; $2.74 for the Series C-3 Preferred Stock and Series C-6 Preferred Stock; $2.39 for the Series C-4 Preferred Stock; $16.93 for the Series D Preferred Stock and Series D-1 Preferred Stock; $8.72 for the Series D-2 Preferred Stock; and $14.39 for the Series D-4 Preferred Stock and Series D-5 Preferred Stock.
The Series D Preferred Stock shall be automatically converted into Common B Stock upon the consummation of an underwritten public offering of shares of common stock to the public with a price per share to the public of not less than (i) 1.25 times $16.93 (the “Series D Original Issue Price”) if the underwritten public offering is completed by December 31, 2021, or (ii) 1.5 times the Series D Original Issue Price if the underwritten public offering is completed on or after January 1, 2022. If the Company consummates an underwritten public offering at an initial public offering price that is less than 1.25 times the Series D Original Issue Price by December 31, 2021 or less than 1.5 times the Series D Original Issue Price thereafter, the Company will force the conversion of the Series D Preferred Stock by issuing the holders the number of shares of Common B Stock resulting in a total aggregate value at the initial public offering price that would have been equal to 1.25 times the Series D Original Issue Price or 1.5 times the Series D Original Issue Price, respectively.
Upon a qualified transfer of any shares of Series A-1 Preferred Stock, Series B-1 Preferred Stock, Series C-1 Preferred Stock, Series C-5 Preferred Stock, Series C-6 Preferred Stock, Series D-1 Preferred Stock, or Series D-5 Preferred Stock, such shares have the right to convert all shares into an equivalent number of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series C-2 Preferred Stock, Series C-3 Preferred Stock, Series D Preferred Stock, or Series D-4 Preferred Stock, respectively, without the payment of additional consideration by the holder.
Certain holders (as specified in the Company's Certificate of Incorporation) of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock have the right to convert, under limited permitted transfers, to an equivalent number of shares of Series A-1 Preferred Stock, Series B-1 Preferred Stock, Series C-1 Preferred Stock, and Series D-1 Preferred Stock, respectively. Certain holders of Series C-2 Preferred Stock, Series C-3 Preferred Stock, Series D-4 Preferred Stock, and Common B Stock have the right to convert to an equivalent number of shares of Series C-5 Preferred Stock, Series C-6 Preferred Stock, Series D-5 Preferred Stock, and Common B-1 Stock, respectively.
Dividends—The convertible preferred stock shall first receive, or simultaneously receive, dividends declared on common stock, if any, on the basis as if the convertible preferred stock was converted to common stock. The Company has not declared any dividends on common stock to date.
Liquidation—In the event of any liquidation, dissolution or winding up of the Company, the holders of shares of each series of Series C Preferred Stock, Series C-1 Preferred Stock, Series C-2 Preferred Stock, Series C-3 Preferred Stock, Series C-4 Preferred Stock, Series C-5 Preferred Stock, Series C-6 Preferred Stock, Series C-7 Preferred Stock, Series D Preferred Stock, Series D-1 Preferred Stock, Series D-2 Preferred Stock, Series D-3 Preferred Stock, Series D-4 Preferred Stock, and Series D-5 Preferred Stock shall be entitled to receive, prior to any distributions to the holders of Series B Preferred Stock, Series B-1 Preferred Stock, Series A Preferred Stock, Series A-1 Preferred Stock and common stock, an amount per share equal to one time the applicable Preferred Stock Original Issue Price plus all declared but unpaid dividends on such shares (“Series C and Series D Preferred Stock Preference Amount”).
After the payment of the full above mentioned amount, the holders of shares of each of Series B Preferred Stock, Series B-1 Preferred Stock, Series A Preferred Stock, and Series A-1 Preferred Stock then outstanding shall be entitled to receive a pro-rata distribution before any payment shall be made to the holders of common stock an amount per share equal to, (a) in the case of the Series A Preferred Stock and Series A-1 Preferred Stock, one times the Preferred Stock Original Issue Price, plus any dividends declared and unpaid (“Series A Preferred Stock Preference Amount”), and (b) in the case of the Series B Preferred Stock and Series B-1 Preferred Stock, the greater of one times the applicable Preferred Stock Original Issue Price and the Alternative Series B Liquidation Preference
Amount, as subsequently defined, plus all declared but unpaid dividends (“Series B Preferred Stock Preference Amount”).
The Alternative Series B Liquidation Preference Amount is the quotient obtained by dividing (x) the value of the assets of the Company available for distribution to its stockholders in connect with a liquidation, dissolution or winding up of the Company or deemed liquidation event by (y) the fully-diluted share number. The Series C and Series D Preferred Stock Preference Amount, the Series A Preferred Stock Preference Amount, and the Series B Preferred Stock Preference Amount are together referred to as the Preferred Stock Preference Amount.
After the payment of the full Preferred Stock Preference Amount, the remaining assets of the Company shall be distributed on a pro rata basis among the holders of Common A Stock, Common B Stock, Common O stock, and then to Common B-1 Stock. The remaining assets of the Company shall be distributed among the holders of Series A Preferred Stock and Series A-1 Preferred Stock and the holders of common stock, with the Series A Preferred Stock and the Series A-1 Preferred Stock receiving sixty percent of the remainder until each holder of Series A Preferred Stock and Series A-1 Preferred Stock has received an additional amount per share equal to three times the applicable Preferred Stock Original Issue Price. The remaining assets of the Company shall be distributed among the holders of Series A Preferred Stock and Series A-1 Preferred Stock and common stock, with the Series A Preferred Stock and the A-1 Preferred Stock receiving five percent of the remainder until the amount paid to the common stock equals the amount paid to the Series A Preferred Stock and Series A-1 Preferred Stock. Following that distribution, the remaining assets of the Company shall be distributed on a pro rata basis among the holders of Series A Preferred Stock, Series A-1 Preferred Stock and common stock.
Redemption and Classification—The preferred stock is generally not redeemable at the option of any holder thereof except in limited circumstances as set forth in the Company’s Certificate of Incorporation. The Company has classified its convertible preferred stock as mezzanine equity on the consolidated balance sheets as the occurrence of certain deemed liquidation events that are outside the Company’s control may cause redemption with the holders of the convertible preferred stock. Convertible preferred stock is not remeasured at redemption value within mezzanine equity on the consolidated balance sheets as the convertible preferred stock is not currently redeemable and redemption is not expected.
Secondary Sale—In April and May 2021, certain of the Company’s investors sold various classes of shares through multiple tranches to SVF II Beaver LLC (“SoftBank II”), pursuant to a series of stock transfer agreements (collectively, the “SoftBank Transaction”), for a total consideration of $496.9 million. The total shares purchased by SoftBank II included 0.6 million shares of Series A Preferred Stock, 7.5 million shares of Series A-1 Preferred Stock, 0.4 million shares of Series B Preferred Stock, 2.0 million shares of Series B-1 Preferred Stock, 1.1 million shares of Series C Preferred Stock, 1.8 million shares of Series C-1 Preferred Stock, 0.7 million shares of Series C-2 Preferred Stock, 5.6 million shares of Common B Stock and 0.5 million of Common O Stock each at $24.47 per share.
In connection with the SoftBank Transaction, the Company entered into a contribution agreement with SoftBank II, pursuant to which upon the occurrence of certain “Realization Events,” SoftBank II agrees to make certain capital contributions to the Company. The consummation of the business combination with Aurora (as defined in Note 1) will constitute a Realization Event pursuant to the terms of the contribution agreement. Accordingly, SoftBank II will make a capital contribution to the Company in an amount equal to 25% of its aggregate return on its investment in the Company’s shares based on the value of the consideration received by the Company’s equity holders in the closing of the Merger Agreement (see Note 1).
Convertible Preferred Stock Warrants—The Company had outstanding the following convertible preferred stock warrants:
No. Warrants
(Amounts in thousands, except no. warrants and strike prices)As of December 31,
IssuanceShare ClassIssue DateExpiration Date20222021StrikeValuation at Issuance
September 2018Series C Preferred9/28/20189/28/2028756,500 756,500 $1.81 $170 
February 2019Series C Preferred2/6/20199/28/202850,320 50,320 $1.81 $12 
March 2019Series C Preferred3/29/20193/29/2026375,000 375,000 $3.42 $87 
April 2019Series C Preferred4/17/20194/17/20291,169,899 1,169,899 $3.42 $313 
March 2020Series C Preferred3/25/20203/25/2027134,212 134,212 $5.00 $201 
Total2,485,931 2,485,931 
In April and May 2021, one of the Company’s investors exercised 1.4 million warrants. The exercise was a cashless exercise, resulting in an issuance of 1.1 million shares of Series C Preferred Stock.
In connection with the Amended Merger Agreement, several of the Company’s holders of convertible preferred stock warrants expects to exercise their warrants contingent upon the consummation of the Merger as described in Note 1. The contingent exercise includes 1.2 million shares of Series C Preferred Stock at an exercise price per share of $3.42, 0.8 million shares of Series C Preferred Stock at an exercise of price per share of $1.81, and 1.5 million shares of Series C-7 Preferred Stock at an exercise of price per share of $3.42.
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes option-pricing model and their respective terms, as can be seen below:
December 31,
(Amounts in thousands, except per share amounts)20222021
IssuanceFair value per shareFair ValueFair value per shareFair Value
September 2018$1.66 $1,256 $13.70 $10,364 
February 2019$1.66 84 $13.70 689 
March 2019$1.06 397 $12.54 4,703 
April 2019$1.06 1,240 $12.54 14,671 
March 2020$0.89 119 $11.70 1,570 
Total$3,096 $31,997 
Warrants for Series C Preferred Stock, related to the above issuances, are recorded as liabilities at fair value, resulting in a liability of $3.1 million and $32.0 million as of December 31, 2022 and 2021, respectively. The change in fair value of warrants for the years ended December 31, 2022 and 2021 was a gain of $28.9 million and a loss of $32.8 million, respectively, and was recorded in change in fair value of warrants within the consolidated statements of operations and comprehensive loss.
v3.23.4
Stockholders' Equity
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
STOCKHOLDERS' EQUITY
18. Stockholders' Equity
On the Closing Date, the Company consummated the Business Combination pursuant to the terms of the Merger Agreement and on August 24, 2023, Better Home & Finance Class A common stock began trading and Public Warrants continued trading on the Nasdaq Global Market and the Nasdaq Capital Market, respectively, under the ticker symbols “BETR” and “BETRW”, respectively. Each outstanding share of Legacy Better common stock was exchanged for approximately 3.06 shares of the Company’s Class B common stock.
The Company’s authorized capital stock consists of 1.8 billion shares of Class A common stock, 700.0 million shares of Class B common stock, and 800.0 million shares of Class C common stock, each with a par value per share of $0.0001. Each holder of Class A common stock has the right to one vote per share and each holder of Class B common stock has the right to three votes per share. Except as described below or otherwise provided by the Company’s certificate of incorporation or required by applicable law, shares of Class C common stock are non-voting and will not entitle the holder thereof to any voting power. Shares of Class A common stock, Class B common stock and Class C common stock are treated equally, identically and ratably, on a per share basis, with respect to any dividends or distributions as may be declared and paid from time to time. Upon the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holders of Class A common stock, Class B common stock and Class C common stock will be entitled to receive ratably all assets of the Company
available for distribution to its stockholders unless disparate or different treatment of the shares of each such class with respect to distributions upon any such liquidation, dissolution or winding up is approved in advance by the affirmative vote of the holders of a majority of the then-outstanding shares of Class A common stock, Class B common stock and Class C common stock, each voting separately as a class.
Further, each share of Class B common stock is convertible into one fully paid and nonassessable share of Class A common stock or Class C common stock at the option of the holder thereof at any time upon written notice to the Company. Each share of Class C common stock is convertible into one fully paid and nonassessable share of Class A common stock at the option of the holder thereof at any time upon written notice to the Company.
All share amounts in periods prior to the Business Combination have been retroactively adjusted using the Exchange Ratio for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization. The Company's equity structure prior to the Closing consisted of different classes of common stock which is presented in the order of liquidation preference below:
As of December 31, 2022
(Amounts in thousands, except share amounts)Shares AuthorizedShares Issued and outstandingPar Value
Common A Stock24,452,56524,452,565$1 
Common B Stock588,261,164171,441,7805 
Common B-1 Stock236,938,220—— 
Common O Stock236,375,239103,889,0764 
Total common stock1,086,027,188299,783,421$10 
Pre-Closing Common Stock Warrants—Immediately prior to the Closing of the Business Combination, all common stock warrant holders exercised their warrants on a net basis. The Company had outstanding the following common stock warrants as of December 31, 2022:
(Amounts in thousands, except warrants, price, and per share amounts)
IssuanceShare
Class		Issue
Date		Expiration
Date		No.
Warrants		StrikeValuation at Issuance
March 2019Common B3/29/20193/29/20261,146,214$0.23 $179 
March 2020Common B3/25/20203/25/20274,584,856$1.12 $271 
Total equity warrants5,731,070
Private and Public Warrants—As of September 30, 2023 and December 31, 2022, the Company had a total of $1.1 million and none, respectively, of Warrants included as warrant liabilities within the condensed consolidated balance sheets. The change in fair value of Warrants for the three and nine months ended September 30, 2023 was a gain of $0.21 million and $0.21 million, respectively, and is included in change in fair value of warrant liabilities within the condensed consolidated statements of operations and comprehensive loss.
Sponsor locked-up Shares—As of September 30, 2023 and December 31, 2022, the Company had a total of $0.5 million and none, respectively, of Sponsor locked-up Share liabilities which are included within warrant liabilities in the condensed consolidated balance sheets. The change in fair value of Sponsor locked-up Shares for the three and nine months ended September 30, 2023was a gain of $0.65 million and $0.65 million, respectively, and was recorded in change in fair value of warrant liabilities within the condensed consolidated statements of operations and comprehensive loss.
Notes Receivable from Stockholders—The Company, in previous years, issued notes to stockholders to fund the payment of the exercise price of the stock options granted to such stockholders. The Company previously allowed stock option holders to early exercise stock options prior to the vesting date but no longer allows for the early exercise of stock options. The notes issued to stockholders to fund the exercises may include the exercise of stock options that have been vested by the holder as well as stock options that have not yet been vested by the
holder. As of September 30, 2023 and December 31, 2022, the Company had a total of $19.1 million and $65.2 million, respectively, of outstanding promissory notes.
Of the notes outstanding as of September 30, 2023 and December 31, 2022, $10.5 million and $53.9 million, respectively, were issued for the exercise of stock options vested and are recorded as a component of stockholders’ equity within the condensed consolidated balance sheets.
Of the notes outstanding as of September 30, 2023 and December 31, 2022, $8.5 million and $12.3 million, respectively, were issued for the early exercise of stock options not yet vested. Notes issued for the early exercise of stock options not yet vested are not reflected within stockholders’ equity on the condensed consolidated balance sheets as they relate to unvested share awards and therefore are considered non-substantive exercises. As the unvested share awards, exercised in conjunction with the notes, vest, they are recognized in the statement of equity within vesting of common stock issued via notes receivable from stockholders. The notes bear annual interest payable upon maturity of the respective note (see Note 11).
19. STOCKHOLDERS' EQUITY
The Company's equity structure consists of different classes of common stock which is presented in the order of liquidation preference below:
As of December 31,
20222021
(Amounts in thousands, except share amounts)
Shares
Authorized
Shares Issued and
outstanding
Par
Value
Shares
Authorized
Shares Issued and
outstanding
Par
Value
Common A Stock8,000,000 8,000,000 $1 8,000,000 8,000,000 $1 
Common B Stock192,457,901 56,089,586 5 192,457,901 56,089,586 5 
Common B-1 Stock77,517,666 — — 77,517,666 — — 
Common O Stock77,333,479 33,988,770 4 77,333,479 34,977,573 4 
Total common stock355,309,046 98,078,356 $10 355,309,046 99,067,159 $10 
Common Stock—The holders of Common A Stock, Common B Stock, and Common O Stock (collectively, “Voting Common Stock”) are entitled to one vote for each share. Shares of Common B-1 Stock do not have voting rights. Additionally, upon a qualified transfer, the holder can convert any shares of Common B-1 Stock into an equivalent number of shares of Common B Stock without the payment of additional consideration.
Common Stock Warrants—The Company had outstanding the following common stock warrants as of both December 31, 2022 and 2021, respectively:
(Amounts in thousands, except warrants, price, and per share amounts)
IssuanceShare
Class		Issue
Date		Expiration
Date		No.
Warrants		StrikeValuation at Issuance
March 2019Common B3/29/20193/29/2026375,000 $0.71 $179 
March 2020Common B3/25/20203/25/20271,500,000 $3.42 $271 
Total equity warrants1,875,000 
Notes Receivable from Stockholders—The Company issued notes to stockholders to fund the payment of the exercise price of the stock options granted to such stockholders. The Company also generally allows stock option holders to early exercise stock options prior to the vesting date. The notes issued to stockholders to fund the exercises may include the exercise of stock options that have been vested by the holder as well as stock options that have not yet been vested by the holder. As of December 31, 2022 and 2021, the Company had a total of $65.2 million and $67.8 million, respectively, of outstanding promissory notes.
Of the notes outstanding as of December 31, 2022 and 2021, $53.9 million and $38.6 million, respectively, were issued for the exercise of stock options vested and are recorded as a component of stockholders’ equity within the consolidated balance sheets.
Of the notes outstanding as of December 31, 2022 and 2021, $11.3 million and $29.2 million, respectively, were issued for the early exercise of stock options not yet vested. Notes issued for the early exercise of stock options not yet vested are not reflected within stockholders’ equity or on the consolidated balance sheets as they relate to unvested share awards and therefore are considered non-substantive exercises. The notes bear annual interest payable upon maturity of the respective note (see Note 12).
v3.23.4
Stock-Based Compensation
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION
19. Stock-Based Compensation
Equity Incentive Plans—On November 3, 2016, Better’s board of directors and stockholders adopted the Better 2016 Equity Incentive Plan (the “2016 Plan”), which provides for the grant of non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”) and deferred stock to eligible employees, directors and consultants of the Company. As of September 30, 2023, awards with respect to 1,212,059 shares of Class A common stock issuable upon the conversion of shares of Class B common stock into which such awards can be exercised have been granted under the 2016 Plan.
Stock options granted under the 2016 Plan are generally subject to a one-year cliff vesting period with respect to 25% of the award, and then 1/48th of the award vests each month thereafter so that the entire award is vested on the fourth anniversary of the vesting start date.
On May 15, 2017, Better’s board of directors and stockholders adopted the Better 2017 Equity Incentive Plan (the “2017 Plan”), which provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards and RSUs to eligible employees, directors and consultants of the Company. The 2017 Plan was most recently amended and approved by the stockholders of Better in August 2020. As of September 30, 2023, awards with respect to 77,053,345 shares of Class A Common Stock issuable upon the conversion of shares of Class B common stock into which such awards can be exercised have been granted under the 2017 Plan.
Stock options and RSUs granted under the 2017 Plan are generally subject to a one-year cliff vesting period with respect to 25% of the award, and then 1/48th of the award vests each month thereafter so that the entire award is vested on the fourth anniversary of the vesting start date. Certain RSUs were also subject to a liquidity vesting condition that was satisfied in connection with the Business Combination.
In connection with the Business Combination, the Better Home & Finance’s 2023 Incentive Equity Plan (the “2023 Plan”) became effective on August 22, 2023. The 2023 Plan allows for the issuance of stock options, stock appreciation rights, restricted stock awards, RSUs and other equity and equity-based awards for issuance to Better Home & Finance’s service providers. A total of 88,626,665 shares of Class A common stock were initially reserved for issuance pursuant to the 2023 Plan (the “Initial Share Reserve”). Shares subject to awards granted under the 2017 Plan that become available for issuance will again become available for issuance pursuant to the terms of the 2023 Plan, subject to certain adjustments as set forth in the 2023 Plan. The Initial Share Reserve will automatically increase on January 1 of each year beginning January 1, 2024 and ending in 2033, in an amount equal to the lesser of (i) five percent (5%) of the shares of Class A common stock outstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares of Class A common stock as is determined by the Board or committee of the Board; provided, however, that no more than 614,343,928 shares of Class A common stock may be issued upon the exercise of incentive stock options. As of September 30, 2023, no awards have been granted under the 2023 Plan.
In connection with the Business Combination, the Better Home & Finance 2023 Employee Stock Purchase Plan (the “ESPP”) became effective on August 22, 2023, pursuant to which eligible employees may purchase shares of Class A common stock at a discounted rate. A total of 16,113,939 shares of Class A common stock were initially reserved for issuance pursuant to the ESPP (the “ESPP Share Reserve”). The ESPP Share Reserve will automatically increase on January 1 of each year beginning January 1, 2024 and ending in 2033, in an amount equal to the lesser of (i) one percent (1%) of the shares of Class A common stock outstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares of Class A common stock as is determined by the Board; provided, however, that no more than 120,854,543 shares of Class A common stock may be issued under the ESPP. As of September 30, 2023, no shares have been issued under the ESPP.
The Company no longer allows for the early exercise of awards under the 2016 Plan or the 2017 Plan.
Stock-Based Compensation Expense—The total of all stock-based compensation expense related to employees are reported in the following line items within the condensed consolidated statements of operations and comprehensive loss:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Mortgage platform expenses4,176 1,491 5,905 4,941 
Other platform expenses1,493 426 1,837 675 
General and administrative expenses16,828 6,862 25,123 20,479 
Marketing expenses146 369 216 709 
Technology and product development expenses(1)
2,401 1,825 4,317 4,217 
Total stock-based compensation expense25,044 10,973 37,398 31,021 
__________________
(1)Technology and product development expense excludes $2.5 million and $0.8 million for the three months ended September 30, 2023 and 2022, respectively.Technology and product development expense excludes $3.9 million and $3.0 million of stock-based compensation expense for the nine months ended September 30, 2023 and 2022, which was capitalized (see Note 7).
20. STOCK-BASED COMPENSATION
Equity Incentive Plans—In November 2016, the Company adopted the Better Holdco Inc. 2016 Equity Incentive Plan (the “2016 Plan”) pursuant to which the Board of Directors may grant non-statutory stock options, stock appreciation rights, restricted stock awards, and restricted stock units to eligible employees, directors, and certain non-employees. In May 2017 the Company adopted the Better Holdco Inc. 2017 Equity Incentive Plan (the
“2017 Plan”) with the same terms as the 2016 Plan. At the date of the adoption of the 2017 Plan, 1,859,781 stock options granted from the 2016 plan were carried over. The 2017 Plan authorizes the Board of Directors to grant up to 31,871,248 shares of Common O Stock. Stock options must be granted with an exercise price equal to the Common O Stock’s fair market value at the date of grant. Stock options generally have 10-year terms and vest over a four-year period starting from the date specified in each agreement.
Stock Options—The following is a summary of stock option activity during the year ended December 31, 2022:
(Amounts in thousands, except options, prices, and averages)
Number of
Options
Weighted
Average
Exercise
Price
Intrinsic
Value
Weighted
Average
Remaining
Term
Outstanding—January 1, 202226,635,326 $8.23 
Options granted1,583,680 $13.63 
Options exercised(998,529)$1.76 
Options cancelled (forfeited)(8,322,168)$11.12 
Options cancelled (expired)(4,469,530)$5.99 
Outstanding—December 31, 202214,428,779 $8.47 $6,701 7.0
Vested and exercisable—December 31, 20227,399,689 $9.90 $6,021 6.3
Options expected to vest2,711,958 $5.20 $874 8.4
Options vested and expected to vest—December 31, 202210,111,647 $8.60 $6,895 6.9
As of December 31, 2022, total stock-based compensation cost not yet recognized related to unvested stock options was $19.4 million, which is expected to be recognized over a weighted-average period of 2.24 years.
Intrinsic value is calculated by subtracting the exercise price of the stock option from the fair value of the Company’s Common O Stock on December 31, 2022 for in-the-money stock options, multiplied by the number of shares of Common O Stock per each stock option. The total intrinsic value of stock options exercised during the years ended December 31, 2022, and 2021 was $8.6 million, and $157.9 million, respectively.
The weighted average grant-date fair value per share of stock options granted during the years ended December 31, 2022 and 2021 was $8.37 and $10.20, respectively.
The total grant date fair value of options vested for the years ended December 31, 2022 and 2021 was $26.7 million and $40.0 million, respectively.
The Company generally allows stock option holders to early exercise in exchange for cash prior to the vesting date. Shares of Common O Stock issued upon early exercise are considered shares restricted until the completion of the original vesting period of the options and are therefore classified to stock options exercised, not vested on the consolidated balance sheets within other liabilities based upon the respective exercise price of the stock option and are not remeasured. Upon the completion of the vesting period, the Company reclassifies the liability to additional paid in capital on the consolidated balance sheets. Included within other liabilities on the consolidated balance sheets as of December 31, 2022 and 2021 was $1.7 million and $6.1 million, respectively, of stock options exercised, not vested, which represents 1,944,049 and 3,872,691, respectively, of restricted shares.
Fair Value of Awards Granted—Since the Company’s common O stock is not publicly traded, the fair value of the shares of Common O Stock was approved by the Company’s Board of Directors as there was no public market for the Company’s common stock as of the date of the awards were granted.
In estimating the fair value of the Company’s Common O Stock, management uses the assistance of third-party valuation specialist and consider factors management believes are material to the valuation process, including, but
not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. Management believes the combination of these factors provides an appropriate estimate of the expected fair value and reflects the best estimate of the fair value of the Company’s Common O Stock at each grant date.
The expected volatility is based on the historical and implied volatility of similar companies whose stock or option prices are publicly available, after considering the industry, stage of life cycle, size, market capitalization, and financial leverage of the other companies. The risk-free interest rate assumption is based on observed U.S. Treasury yield curve interest rates in effect at the time of grant appropriate for the expected term of the stock options granted. As permitted under authoritative guidance, due to the limited amount of stock option exercises, the Company used the simplified method to compute the expected term for stock options granted to employees in the years ended December 31, 2022 , and 2021 respectively.
The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which affect the fair value of each stock option. The assumptions used to estimate the fair value of stock options granted are as follows:
Year Ended December 31,
20222021
(Amounts in dollars, except percentages)RangeWeighted AverageRangeWeighted Average
Fair value of Common O Stock
$3.41 - $14.8
$4.43 
$10.66 - $26.46
$15.46 
Expected volatility
72.58% - 76.74%
76.4 %
63.42 - 73.69%
65.8 %
Expected term (years)
5 - 6.02
6.0
5.0 - 6.3
6.0
Risk-free interest rate
1.96% - 4.22%
3.75 %
0.43% - 1.19%
0.73 %
Restricted Stock Units—During the year ended December 31, 2021, the Company began granting RSUs to employees. RSUs vest upon satisfaction of service-based condition, which is generally over four years. The following is a summary of RSU activity during the year ended December 31, 2022:
(Amounts in thousands, except shares and averages)
Number of
Shares
Weighted Average Grant Date Fair Value
Unvested—December 31, 20217,754,620 $25.35 
RSUs granted8,520,321 $8.69 
RSUs settled(4,464)$26.46 
RSUs vested(835,714)$0.01 
RSUs cancelled (expired)(8,234,474)$21.62 
RSUs cancelled (forfeited)(331,068)$26.46 
Unvested—December 31, 20226,869,221 $12.19 
As of December 31, 2022, total stock-based compensation cost not yet recognized related to unvested RSUs was $33.5 million, which is expected to be recognized over a weighted-average period of 2.72 years.
Stock-Based Compensation Expense—The total of all stock-based compensation expense related to employees are reported in the following line items within the consolidated statements of operations and comprehensive loss:
Year Ended December 31,
(Amounts in thousands)20222021
Mortgage platform expenses$5,256 $13,671 
Other platform expenses908 1,654 
General and administrative expenses26,681 27,559 
Marketing expenses486 1,159 
Technology and product development expenses(1)
5,226 11,172 
Total stock-based compensation expense$38,557 $55,215 
__________________
(1)Technology and product development expense excludes $4.1 million and $9.0 million of stock-based compensation expense, which was capitalized (see Note 8) for the years ended December 31, 2022 and 2021, respectively
v3.23.4
Regulatory Requirements
 9 Months Ended
Sep. 30, 2023
Mortgage Banking [Abstract]  
REGULATORY REQUIREMENTS
20. Regulatory Requirements
The Company is subject to various local, state, and federal regulations related to its loan production by the various states it operates in, as well as federal agencies such as the Consumer Financial Protection Bureau (“CFPB”), HUD, and the FHA and is subject to the requirements of the agencies to which it sells loans, such as FNMA and FMCC. As a result, the Company may become involved in requests for information, periodic reviews, investigations, and proceedings by such various federal, state, and local regulatory bodies and agencies.
The Company is required to meet certain minimum net worth, minimum capital ratio and minimum liquidity requirements, including those established by HUD, FMCC and FNMA. As of September 30, 2023, the Company was in compliance with all necessary requirements.
Additionally, the Company is subject to other financial requirements established by FNMA, which include a limit for a decline in net worth and quarterly profitability requirements. On March 12, 2023 and subsequently on May 19, 2023, FNMA provided notification to the Company that the Company had failed to meet FNMA’s financial requirements due to the Company’s decline in profitability and material decline in net worth. The material decline in net worth and decline in profitability permit FNMA to declare a breach of the Company’s contract with FNMA. The Company, following certain forbearance agreements from FNMA that instituted additional financial requirements on the Company that are pending FNMA’s administrative process for completion, remains in compliance with these requirements as of the date hereof. FNMA and other regulators and GSEs are not required to grant any forbearances, amendments, extensions or waivers and may determine not to do so.
As a result of failing to meet FNMA’s financial requirements, the Company has entered into a Pledge and Security Agreement with FNMA on July 24, 2023, to post additional cash collateral starting with $5.0 million which will be held through December 31, 2023. Each quarterly period after December 31, 2023, the required cash
collateral will be calculated based on an amount equal to the greater of: (i) FNMA’s origination representation and warranty exposure to the Company, multiplied by the average repurchase success rate for FNMA single-family responsible parties or (ii) $5.0 million.
21. REGULATORY REQUIREMENTS
The Company is subject to various local, state, and federal regulations related to its loan production by the various states it operates in, as well as federal agencies such as the Consumer Financial Protection Bureau (“CFPB”), U.S. Department of Housing and Urban Development (“HUD”), and The Federal Housing Administration (“FHA”) and is subject to the requirements of the agencies to which it sells loans, such as FNMA and FMCC. As a result, the Company may become involved in requests for information, periodic reviews, investigations, and proceedings by such various federal, state, and local regulatory bodies and agencies.
The Company is required to meet certain minimum net worth, minimum capital ratio and minimum liquidity requirements, including those established by HUD, FMCC and FNMA. As of December 31, 2022, the most restrictive of these requirements require the Company to maintain a minimum net worth of $1.0 million, liquidity of $0.2 million, and a minimum capital ratio of 6%. As of December 31, 2022, the Company was in compliance with these requirements.
Additionally, the Company is subject to other financial requirements established by FNMA, which include a limit for a decline in net worth and quarterly profitability requirements. On March 12, 2023 FNMA provided notification to the Company that the Company had failed to meet FNMA’s financial requirements due to the Company’s decline in profitability and material decline in net worth. The material decline in net worth and decline in profitability permit FNMA to declare a breach of the Company’s contract with FNMA. The Company, following certain forbearance agreements from FNMA that instituted additional financial requirements on the Company, remains in compliance with these requirements as of the date hereof. FNMA and other regulators and GSEs are not required to grant any forbearances, amendments, extensions or waivers and may determine not to do so.
v3.23.4
Subsequent Events
 9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS
21. Subsequent Events
The Company evaluated subsequent events from the date of the condensed consolidated balance sheets of September 30, 2023 through the date of the release of financial statements, and has determined that, there have been no subsequent events that require recognition or disclosure in the condensed consolidated financial statements, except as described in Note 1, Note 6, Note 10, Note 12 and as follows:
Nasdaq Delisting Notice—On October 12, 2023, the Company received a letter from the listing qualifications staff (the “Staff”) of Nasdaq notifying the Company that it is not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Rule”) for continued listing. The Bid Price Rule requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) (the “Compliance Period Rule”) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. The Notice has no immediate effect on the listing of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”), which continues to trade on The Nasdaq Global Market under the symbol “BETR.”
In accordance with the Compliance Period Rule, the Company has 180 calendar days to regain compliance. If the Company does not regain compliance during this 180-day period, then the Company may be eligible to transfer to The Nasdaq Capital Market and the Staff may grant the Company a second 180 calendar day period to regain compliance pursuant to the Compliance Period Rule, provided the Company meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement. In addition, the Company would be required to notify Nasdaq of its intent to cure the minimum bid price deficiency during the second compliance period by effecting a reverse stock split if necessary.
The Company will continue to monitor the closing bid price of its Common Stock and seek to regain compliance with all applicable Nasdaq requirements within the allotted compliance periods.
22. SUBSEQUENT EVENTS
The Company evaluated subsequent events from the date of the consolidated balance sheets of December 31, 2022 through May 11, 2023, the date the consolidated financial statements were issued, and has determined that, there have been no subsequent events that require recognition or disclosure in the consolidated financial statements, except as described in Note 1, Note 5, Note 11, Note 12, Note 13, and as follows:
Amended Corporate Line of Credit—In February 2023, the Company entered into a loan and security agreement (the “2023 Credit Facility”) with Clear Spring Life and Annuity Company, an entity affiliated with the previous agent and acting as an agent for such lenders (together the “Lender”) to amend the existing 2021 Credit Facility. Subsequent to year end, the Company paid down $20.0 million leaving $126.4 million owed in principal balance on the facility. The terms of the 2023 Credit Facility grant relief from the acceleration of payments under minimum revenue triggers from the 2021 Credit Facility. The 2023 Credit Facility splits the principal balance into two tranches, tranche “AB” in the amount of $99.9 million and tranche “C” in the amount of $26.5 million. Tranche
AB is backed by assets that the Company has pledged, mainly loans held for sale that the Company fully owns while tranche C is unsecured debt. Tranche AB has a fixed interest rate of 8.5% and tranche C has a variable interest rate based on the SOFR reference rate for a one-month tenor plus 9.5%. Tranche AB will be repaid with proceeds from sales of pledged assets. Tranche C will be repaid starting in June 2023, $5.0 million per month if the Company obtains commitments to raise $250.0 million in equity or debt by that same date or $200.0 million by June 2024. If the Company does not obtain commitments to raise equity or debt at such dates, the repayment amount will be $12.5 million per month for tranche C. The maturity date of the 2023 Credit Facility will be the earlier of 45 days after the Merger is consummated or in the event that the Merger is not consummated shall be March 25, 2027.
Lease Amendment and Reassignment—In February 2023, the Company entered into a lease amendment with a landlord to surrender an office floor and reassign the lease to a third party. The Company had a lease liability of $13.0 million related to the office space and as part of the amendment the Company paid $4.7 million in cash to the third party. The amendment relieves the Company of the primary obligation under the original lease and as such is considered a termination of the original lease.
Acquisition regulatory approval—In March 2023, the Company obtained regulatory approval from the financial control authorities in the U.K. to close on its acquisition of a banking entity in the U.K. The acquisition is for a total consideration of approximately $15.2 million. The Company subsequently closed on the acquisition on April 1, 2023.
v3.23.4
BETTER 10K - ORGANIZATION AND NATURE OF THE BUSINESS
 9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND NATURE OF THE BUSINESS
1. Organization and Nature of the Business
Better Home & Finance Holding Company, formerly known as Aurora Acquisition Corp. (“Aurora”), together with its subsidiaries (collectively, the “Company”), provides a comprehensive set of homeownership offerings in the United States while expanding in the United Kingdom. The Company’s offerings include mortgage loans, real estate agent services, title and homeowner’s insurance, and other homeownership offerings, such as the Company’s cash offer program. The Company leverages Tinman, its proprietary technology platform, to optimize the mortgage process from the initial application, to the integration of a suite of additional homeownership offerings, to the sale of loans to a network of loan purchasers.
Mortgage loans originated within the United States are through the Company’s wholly-owned subsidiary Better Mortgage Corporation (“BMC”). BMC is an approved Title II Single Family Program Lender with the Department of Housing and Urban Development’s (“HUD”) Federal Housing Administration (“FHA”), and is an approved seller and servicer with the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FMCC”). The Company has expanded into the U.K. and offers a multitude of financial products and services to consumers via regulated entities obtained through acquisitions.
On August 22, 2023 (the “Closing Date”), the Company consummated the previously announced Business Combination (the “Business Combination”), pursuant to the terms of the Agreement and Plan of Merger, dated as of May 10, 2021, as amended as of October 27, 2021, November 9, 2021, November 30, 2021, August 26, 2022, February 24, 2023 and June 23, 2023 (as amended, the “Merger Agreement”), by and among Aurora, Better Holdco, Inc. (“Better”), and Aurora Merger Sub I, Inc., formerly a wholly owned subsidiary of Aurora (“Merger Sub”). On the Closing Date, Merger Sub merged with and into Better, with Better surviving the merger (the “First Merger”) and Better merged with and into Aurora, with Aurora surviving the merger and changing its name to “Better Home & Finance Holding Company” (referred to as “Better Home & Finance” or the “Company”) (such merger, the “Second Merger,” and together with the First Merger, the “Business Combination” and the completion thereof, the “Closing”).
Better Home & Finance Class A common stock and warrants are listed on the Nasdaq Global Market and the Nasdaq Capital Market, respectively, under the ticker symbols “BETR” and “BETRW.” 
1. ORGANIZATION AND NATURE OF THE BUSINESS
Better Holdco, Inc. and its subsidiaries (together, the “Company”) provide a comprehensive set of homeownership offerings. The Company’s offerings include mortgage loans, real estate agent services, title and homeowner’s insurance, and other homeownership offerings, such as the Company’s cash offer program. The Company leverages Tinman, its proprietary technology platform, to optimize the mortgage process from the initial application, to the integration of a suite of additional homeownership offerings, to the sale of loans to a network of loan purchasers.
The Company originates mortgage loans throughout the United States through its wholly-owned subsidiary Better Mortgage Corporation (“BMC”). BMC is an approved Title II Single Family Program Lender with the Department of Housing and Urban Development’s (“HUD”) Federal Housing Administration (“FHA”), and is an approved seller and servicer with the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FMCC”).
The Company commenced operations in 2015 and is headquartered in New York. The Company’s fiscal year ends on December 31.
In May 2021, the Company entered into a definitive merger agreement (“Merger Agreement” or the “Merger”) with Aurora Acquisition Corp (“Aurora”), a special purpose acquisition company (“SPAC”) traded on the NASDAQ under “AURC”, which will transform the Company into a publicly listed company. The transaction will be accounted for as a reverse recapitalization and the Company has been determined to be the accounting acquirer. Pursuant to the Merger Agreement, the Company will merge with Aurora Merger Sub I, Inc. (“Merger Sub”), a wholly owned subsidiary of Aurora, with the Company surviving as a wholly owned subsidiary of Aurora (the “First Merger”). Immediately following the First Merger, the Company will merge with and into its parent, Aurora, with Aurora surviving and changing its corporate name from “Aurora Acquisition Corp.” to “Better Home & Finance Holding Company” (the “Second Merger”). The Second Merger together with the First Merger will be referred to as “the Merger”.
The stock consideration will consist of a number of shares of Better Home & Finance Holding Company (“Better Home & Finance”) Class A common stock, Better Home & Finance Class B common stock or Better Home & Finance Class C common stock equal to (A) 690,000,000 shares, minus (B) the aggregate amount of Better Home & Finance Class B common stock that would be issuable upon the net exercise or conversion, as applicable, of the Better Awards (the “Stock Consideration”). Better Awards include all (i) options to purchase shares of the Company’s common stock, (ii) restricted stock units based on shares of the Company’s common stock, and (iii) restricted shares of the Company’s common stock outstanding as of immediately prior to the First Merger. As a result of and upon the closing of the Merger Agreement, among other things, (i) all outstanding shares of the Company’s common stock as of immediately prior to the effective time of the First Merger, will be cancelled in exchange for the right to receive the Stock Consideration; (ii) all Better Awards outstanding as of immediately prior to the effective time of the First Merger will be converted, based on the Exchange Ratio, into awards based on shares of Better Home & Finance Class B common stock; and (iii) all of the Company’s warrants outstanding as of immediately prior to the effective time of the First Merger will, in accordance with the warrant holders’ agreements, be conditionally exercised and eligible to receive their portion of the Stock Consideration or be converted, based on the Exchange Ratio, into warrants to purchase shares of Better Home & Finance Class A common stock. The Exchange Ratio is the quotient obtained by dividing (a) 690,000,000 by (b) the number of aggregate fully diluted common shares of the Company. Amounts remaining in Aurora’s trust account as of immediately following the effective time of the Merger will be retained by Better Home & Finance following the closing of the Merger.
In November 2021, in connection with the Merger Agreement, the Company entered into Amendment No.3 (“Amendment No. 3”) to the Merger. In order to provide the Company with immediate liquidity, the structure of the Merger Agreement was amended to replace the $1.5 billion private investment into public equity (“PIPE”), including the use of such proceeds for a $950.0 million secondary purchase of shares of existing stockholders of the Company, with $750.0 million of bridge notes (the “Pre-Closing Bridge Notes”) and $750.0 million of post-closing convertible notes (“Post-Closing Convertible Notes”). Amendment No. 3 also extended the end date of the Merger Agreement from February 12, 2022 to September 30, 2022, among other amendments.
The Pre-Closing Bridge Notes were issued in December 2021 in the amount of $750.0 million as part of a convertible bridge note purchase agreement (“Pre-Closing Bridge Note Purchase Agreement”) and Amendment No. 3. The Pre-Closing Bridge Notes were funded by Novator Capital Ltd. (the “Sponsor” or “Novator”) and SB Northstar LP (“Softbank”) in an aggregate principal amount of $100.0 million and $650.0 million, respectively. Under the terms of the Pre-Closing Bridge Note Purchase Agreement immediately prior to the closing of the Second Merger, Aurora will be deemed to automatically assume each Pre-Closing Bridge Note and the outstanding principal amount under each Pre-Closing Bridge Note will automatically be converted into a number of shares of Class A Common Stock of Aurora, based on a conversion ratio of $10 of principal amount payable on a Pre-Closing Bridge Note at the time of conversion to one share of Aurora Class A Common Stock. In the event that the Merger Agreement has not been consummated by the maturity date of the Pre-Closing Bridge Notes which was December 2, 2022, and has since been extended, or the Merger Agreement is withdrawn, then on the maturity date or upon withdrawal, the Pre-Closing Bridge Notes will convert into a new series of preferred stock with terms consistent with those of the Company’s Series D Preferred Stock. If the Merger Agreement is not consummated due to a breach by Aurora, the Sponsor or SoftBank, the Pre-Closing Bridge Notes will convert into the Company’s common stock. See Note 11 for further details on the Pre-Closing Bridge Notes.
The Post-Closing Convertible Notes are in an amount equal to $750.0 million and is reduced dollar for dollar by any remaining cash in Aurora’s trust account released to Better Home & Finance. As further discussed in Note 11, the First Novator Letter Agreement gives the Sponsor the right, but not the obligation, to fund any portion or none of its Post-Closing Convertible Notes. SoftBank’s commitment shall be reduced on a dollar-for-dollar basis by the amount that is not funded by the Sponsor. In the event that the Sponsor elects not to fund in full its Post-Closing Convertible Note, then SoftBank is only obligated to fund $550.0 million of its Post-Closing Convertible Note. See Note 11 for further details on the First Novator Letter Agreement, Second Novator Letter Agreement, and Deferral Letter Agreement.
On August 26, 2022, in connection with the Merger Agreement, the Company entered into Amendment No.4 (the “Amendment No. 4”) to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) to March 8, 2023.
In consideration of extending the Agreement End Date, the Company will reimburse Aurora for certain reasonable and documented expenses in an aggregate sum not to exceed $15.0 million. The reimbursement payments will be structured in three tranches, in each case subject to receipt by the Company of reasonable documentation related to the expenses: (i) the first payment of up to $7.5 million will be made within 5 business days after the date of Amendment No. 4; (ii) the second payment of up to $3.8 million will be made on January 2, 2023; and (iii) the third payment of up to $3.8 million will become due upon termination of the Merger Agreement by mutual consent of the parties thereto, and shall be payable on March 8, 2023 (or any earlier termination date, as applicable). For the year ended December 31, 2022, the Company has paid Aurora $7.5 million in reimbursements. Subsequent to December 31, 2022, the Company has made the second and third payment, each $3.8 million, totaling $7.5 million. The parties have also agreed to amend the Merger Agreement to provide a waiver from the exclusivity provisions thereof to allow the Company to discuss alternative financing structures with SoftBank.
On February 24, 2023, the parties entered into Amendment No.5 to the Merger Agreement, which amended the Merger Agreement to extend the Agreement End Date (as defined in the Merger Agreement) from March 8, 2023 to September 30, 2023.
Going concern consideration—In connection with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205-40, “Basis of Presentation - Going Concern,” the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
For the year ended December 31, 2022, the Company incurred a net loss of $888.8 million and used $632.8 million in cash. As a result the Company has an accumulated deficit of $1.2 billion as of December 31, 2022. The Company’s cash and cash equivalents as of December 31, 2022 was $318.0 million. Management expects losses and negative cash flows to continue in the near term, primarily due to a difficult interest rate environment that has had a
significant impact on the Company’s business which is dependent on mortgage applications for new home purchases and applications to refinance existing mortgage loans.
In response to the difficult interest rate environment and impact on the business, the Company commenced an operational restructuring plan late in 2021, which primarily consisted of reductions in headcount, reassessment of vendor relationships, reductions in the Company’s real estate footprint, and other cost reductions. The Company will continue its cost reduction initiatives through the near term. There is no assurance that reductions in costs will offset the reduction in revenues experienced as a result of the difficult interest rate environment.
The Company’s primary sources of funding have been raises of preferred stock, issuance of convertible debt, warehouse and corporate lines of credit, and cash generated from operations.
In order for the Company to continue as a going concern, the Company must obtain additional sources of funding, refinance existing lines of credit, and increase revenues while decreasing expenses to a point where the Company can better fund its operations. Upon consummation of the Merger, the Company will become a publicly listed company, which will give it the ability to draw on additional funding, including the Post-Closing Convertible Notes, which will provide the Company with increased financial flexibility to execute its strategic objectives. The Merger had not been completed as of December 31, 2022, and has still not been completed as of May 11, 2023, the date the consolidated financial statements were issued. Subsequent to December 31, 2022, Better Holdco amended the Merger Agreement to extend the maturity from March 8, 2023, to September 30, 2023.
Management has determined that the expected future losses and negative cash flows paired with the possibility of being unable to raise additional funding, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the consolidated financial statements are issued.
Immaterial restatement corrections and reclassifications to previously issued consolidated financial statements
Immaterial restatement corrections—Subsequent to the issuance of the Company's consolidated financial statements as of and for the year ended December 31, 2021, the Company identified immaterial errors which required correction of the Company's previously issued consolidated financial statements for the year ended December 31, 2021. The impact of these errors in the prior year are not material to the consolidated financial statements in that year and are primarily related to the timing and classification of certain revenue and expense line items and the related balance sheet impacts on the Company’s consolidated financial statements. Additionally, the Company corrected the presentation of deferred tax liabilities from accounts payable and accrued expenses to properly present it with net deferred tax assets within prepaid expenses and other assets as of December 31, 2021. Consequently, the Company has corrected these immaterial errors in the year to which they relate.
Reclassifications—The Company also made certain reclassifications to prior years' consolidated statement of operations and comprehensive loss to conform to the current year presentation as follows: (1) the Company reclassified revenue and expense amounts related to its cash offer program from other platform revenue and other platform expenses to separately present as cash offer program revenue and cash offer program expenses, respectively, and (2) the Company has also reclassified expenses related to its restructuring program, specifically employee termination benefits, which were previously recorded as compensation and benefits within mortgage platform, other platform, general and administrative, marketing and advertising, and technology and product development expenses to separately present restructuring and impairment expenses.
The corrections to our consolidated balance sheet as of December 31, 2021 were as follows:
December 31, 2021
(Amounts in thousands)As Previously ReportedCorrectionsAs Corrected
Assets
Mortgage loans held for sale, at fair value
$1,851,161 $3,274 $1,854,435 
Other receivables, net
51,246 2,916 54,162 
Prepaid expenses and other assets110,075 (19,077)90,998 
Total Assets
$3,312,604 $(12,887)$3,299,717 
Liabilities, Convertible Preferred Stock, and Stockholders’ Equity (Deficit)
Liabilities
Accounts payable and accrued expenses$148,767 $(15,511)$133,256 
Total Liabilities
2,638,788 (15,511)2,623,277 
Accumulated deficit(295,237)2,624 (292,613)
Total Stockholders’ Equity 237,536 2,624 240,160 
Total Liabilities, Convertible Preferred Stock, and Stockholders’ Equity
$3,312,604 $(12,887)$3,299,717 
The reclassifications and corrections to our consolidated statement of operations and comprehensive loss for the year ended December 31, 2021 were as follows:
Year Ended December 31, 2021
(Amounts in thousands, except per share amounts)As Previously ReportedReclassificationsCorrectionsAs Reclassified and Corrected
Revenues:
Mortgage platform revenue, net$1,081,421 $— $6,802 $1,088,223 
Cash offer program revenue— 39,361 39,361 
Other platform revenue133,749 (39,361)94,388 
Net interest income (expense)
Interest income88,965 — 662 89,627 
Net interest income19,036 — 662 19,698 
Total net revenues1,234,206 — 7,464 1,241,670 
Expenses:
Mortgage platform expenses 710,132 (11,636)1,617 700,113 
Cash offer program expenses— 39,505 39,505 
Other platform expenses140,479 (40,404)100,075 
General and administrative expenses 232,669 (2,517)1,068 231,220 
Marketing and advertising expenses249,275 (380)248,895 
Technology and product development expenses143,951 (1,616)2,155 144,490 
Restructuring and impairment expenses— 17,048 17,048 
Total expenses1,476,506 — 4,840 1,481,346 
Loss from operations(242,300)— 2,624 (239,676)
Loss before income tax expense (benefit)(306,135)— 2,624 (303,511)
Net loss$(303,752)$— $2,624 $(301,128)
Other comprehensive loss:
Comprehensive loss$(303,717)$— $2,624 $(301,093)
Per share data:
Basic$(3.49)$— $0.03 $(3.46)
Diluted$(3.49)$— $0.03 $(3.46)
The reclassifications and corrections to the consolidated statement of changes in convertible preferred stock and stockholders’ equity (deficit) include the change to net loss as noted above for the year ended December 31, 2021.
The reclassifications and corrections had no impact on net cash flows from operating activities, cash flows from investing activities, or cash flows from financing activities for the year ended December 31, 2021.
v3.23.4
BETTER 10K - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2. Summary of Significant Accounting Policies
Basis of Presentation—The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Business Combination has been accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Aurora was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Better issuing stock for the net assets of Aurora, accompanied by a recapitalization. All share amounts in periods prior to the Business Combination have been retroactively adjusted using the Exchange Ratio for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization. The financials of Better are presented here for all comparative periods.
In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position and its results of operations, changes in convertible preferred stock and stockholders’ equity (deficit) and cash flows. The results of operations and other information for the nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2023. The unaudited condensed consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes of Better thereto for the year ended December 31, 2022.
Consolidation—The accompanying condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates—The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant items subject to such estimates and assumptions include the fair value of mortgage loans held for sale, the fair value of derivative assets and liabilities, including bifurcated derivatives, interest rate lock commitments and forward sale commitments, the determination of a valuation allowance on the Company’s deferred tax assets, capitalization of internally developed software and its associated useful life, determination of fair value of the Company’s common stock, stock option and RSUs at grant date, the fair value of acquired intangible assets and goodwill, the provision for loan repurchase reserves, the incremental borrowing rate used in determining lease liabilities and warrant liabilities.
Business Combinations—The Company includes the financial results of businesses that the Company acquires from the date of acquisition. The Company records all assets acquired and liabilities assumed at fair value, with the excess of the purchase price over the aggregate fair values recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. During the measurement period the Company may record adjustments to the assets acquired and liabilities assumed. Transaction costs associated with business combinations are expensed as incurred.
Short-term investments—Short term investments consist of fixed income securities, typically U.K. government treasury securities and U.K. government agency securities with maturities ranging from 91 days to one year. Management determines the appropriate classification of short-term investments at the time of purchase. Short-term investments reported as held-to-maturity are those investments which the Company has both the positive intent and ability to hold to maturity and are stated at amortized cost on the condensed consolidated balance sheets. All of the Company’s short term investments are classified as held to maturity. The Company has not recognized any impairments on these investments to date and any unrealized gains or losses on these investments are immaterial.
Allowance for Credit Losses - Held to Maturity (“HTM”) Short-term Investments—The Company's HTM Short-term investments are also required to utilize the Current Expected Credit Loss (“CECL”) approach to estimate expected credit losses. Management measures expected credit losses on short-term investments on a collective basis by major security types that share similar risk characteristics, such as financial asset type and collateral type adjusted for current conditions and reasonable and supportable forecasts. Management classifies the short term investments portfolio by security types, such as U.K. government agency.
The U.K. government treasury securities and U.K. government agency securities are issued by U.K. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.K. government as to timely repayment of principal and interest, are highly rated by major rating agencies, and have a long history of no credit losses. Therefore, credit losses for these securities were immaterial as the Company does not currently expect any material credit losses.
Mortgage Loans Held for Sale, at Fair Value—The Company sells its mortgage loans held for sale (“LHFS”) to loan purchasers. These loans can be sold in one of two ways, servicing released, or servicing retained. If a loan is sold servicing released, the Company has sold all the rights to the loan and the associated servicing rights.
If a loan is sold servicing retained, the Company has sold the loan and kept the servicing rights, and thus the Company is responsible for collecting monthly principal and interest payments and performing certain escrow services for the borrower. The loan purchaser, in turn, pays a fee for these services. The Company generally sells all of its loans servicing released. For interim servicing, the Company engages a third-party sub-servicer to collect monthly payments and perform associated services.
LHFS consists of loans originated for sale by BMC. The Company elects the fair value option, in accordance with Accounting Standard Codification (“ASC”) 825 – Financial Instruments (“ASC 825”), for all LHFS with changes in fair value recorded in mortgage platform revenue, net in the condensed consolidated statements of
operations and comprehensive loss. Management believes that the election of the fair value option for LHFS improves financial reporting by presenting the most relevant market indication of LHFS. The fair value of LHFS is based on market prices and yields at period end. The Company accounts for the gains or losses resulting from sales of mortgage loans based on the guidance of ASC 860-20 – Sales of Financial Assets (“ASC 860”).
The Company issues interest rate lock commitments (“IRLC”) to originate mortgage loans and the fair value of the IRLC, adjusted for the probability that a given IRLC will close and fund, is recognized within mortgage platform revenue, net. Subsequent changes in the fair value of the IRLC are measured at each reporting period within mortgage platform revenue, net until the loan is funded. When the loan is funded, the IRLC is derecognized and the LHFS is recognized based on the fair value of the loan. The LHFS is subsequently remeasured at fair value at each reporting period and the changes in fair value are included within mortgage platform revenue, net until the loan is sold on the secondary market. When the loan is sold on the secondary market, the LHFS is derecognized and the gain/(loss) is included within mortgage platform revenue, net based on the cash settlement.
LHFS are considered sold when the Company surrenders control over the loans. Control is considered to have been surrendered when the transferred loans have been isolated from the Company, are beyond the reach of the Company and its creditors, and the loan purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred loans. The Company typically considers the above criteria to have been met upon receipt of sales proceeds from the loan purchaser.
Loan Repurchase Reserve—The Company sells LHFS in the secondary market and in connection with those sales, makes customary representations and warranties to the relevant loan purchasers about various characteristics of each loan, such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local laws. In the event of a breach of its representations and warranties, the Company may be required to repurchase the loan with the identified defects.
The loan repurchase reserve on loans sold relates to expenses incurred due to the potential repurchase of loans, indemnification of losses based on alleged violations or representations and warranties, which are customary to the mortgage banking industry. Provisions for potential losses are charged to expenses and are included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss. The loan repurchase reserve represents the Company’s estimate of the total losses expected to occur and is considered to be adequate by management based upon the Company’s evaluation of the potential exposure related to the loan sale agreements over the life of the associated loans sold. The Company records the loan repurchase reserve within other liabilities on the consolidated balance sheets.
Fair Value Measurements—Assets and liabilities recorded at fair value on a recurring basis on the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The price used to measure fair value is not adjusted for transaction costs. The principal market is the market in which the Company would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability, it is assumed that the Company has access to the market as of the measurement date. If no market for the asset exists, or if the Company does not have access to the principal market, a hypothetical market is used.
The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:
Level 1—Unadjusted quoted market prices in active markets for identical assets or liabilities;
Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Assets and liabilities measured at fair value on a recurring basis include LHFS, derivative assets and liabilities, including IRLCs and forward sale commitments, MSRs, bifurcated derivatives, convertible preferred stock warrants and warrant liabilities. Common stock warrants are measured at fair value at issuance only and are classified as equity on the condensed consolidated balance sheets. When developing fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments, the Company must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are based primarily upon the Company’s own estimates, and the measurements reflect information and assumptions that management believes a market participant would use in pricing the asset or liability.
Upon the Closing of the Business Combination and issuance of the Post-Closing Convertible Notes, the Loan commitment asset was reclassified as a discount to the Post-Closing Convertible Notes and was amortized as part of interest expense over the term of the note.
Warehouse Lines of Credit—Warehouse lines of credit represent the outstanding balance of the Company’s warehouse borrowings collateralized by mortgage loans held for sale or related borrowings collateralized by restricted cash. Generally, warehouse lines of credit are used as interim, short-term financing which bears interest at a fixed margin over an index rate, such as the Secured Oversight Financing Rate (“SOFR”). The outstanding balance of the Company’s warehouse lines of credit will fluctuate based on its lending volume. The advances received under the warehouse lines of credit are based upon a percentage of the fair value or par value of the mortgage loans collateralizing the advance, depending upon the type of mortgage loan. Should the fair value of the pledged mortgage loans decline, the warehouse provider may require the Company to provide additional cash collateral or mortgage loans to maintain the required collateral level under the relevant warehouse line. The Company did not incur any significant issuance costs related to its warehouse lines of credit.
Post-Closing Convertible Notes—As part of the Closing of the Business Combination, the Company issued convertible notes. Upon initial issuance, convertible notes are evaluated for redemption and conversion features that could result in embedded derivatives that require bifurcation from the notes. Upon initial issuance, any embedded derivatives are measured at fair value. Convertible notes proceeds are allocated between the carrying value of the notes and the fair value of embedded derivatives on the initial issuance date. Any portion of proceeds allocated to embedded derivatives are treated as reductions in, or discounts to, the carrying value of the convertible notes on the issuance date. Embedded derivatives are adjusted to fair value at each reporting period, with the change in fair value included within the consolidated statements of operations and comprehensive income (loss). See Note 10 for further details on the Company’s Post-Closing Convertible Notes.
Corporate Line of Credit, net of discount and debt issuance costs—The Company had a line of credit arrangement with a third-party lender. Debt and other related issuance costs are deferred and amortized through the maturity date of the line of credit as interest and amortization on non-funding debt expense. Any modifications of the line of credit arrangement are analyzed as to whether they are an extinguishment or modification of debt on a lender-by-lender basis, which is determined by whether (1) the lender remains the same, and (2) the change in the debt terms is considered substantial. Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised terms (see Note 10).
Warrant Liabilities—The Company assumed publicly-traded warrants (“Public Warrants”) issued in Aurora’s initial public offering, private placement warrants issued by Aurora in connection with its formation and warrants attached to certain private placement units (collectively, the “Private Warrants” and, together with the Public Warrants, the “Warrants”). Each Warrant issued entitles the holder to purchase one share of Better Home & Finance Holding Company Class A common stock at an exercise price of $11.50 per share, subject to certain adjustments, at any time commencing 30 days after the consummation of the Business Combination (which for the avoidance of doubt was September 21, 2023). The Public Warrants are publicly traded and may be exercised on a cashless basis
upon the occurrence of certain conditions. The Private Warrants are exercisable on a cashless basis and are not redeemable by the Company so long as they are held by the initial purchasers or their permitted transferees, subject to certain exceptions. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.
The Company evaluated the Public Warrants and Private Warrants and concluded that both meet the definition of a derivative and will be accounted for at fair value in accordance with ASC Topic 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, as the Public Warrants and Private Warrants are not considered indexed to the Company's stock.
Income Taxes—Income taxes are calculated in accordance with ASC 740, Accounting for Income Taxes. An estimated annual effective tax rate is applied to year-to-date income (loss). At the end of each interim period, the estimated effective tax rate expected to be applicable for the full year is calculated. This method differs from that described in the Company’s income taxes policy footnote in the audited consolidated financial statements and related notes thereto for the year ended December 31, 2022, which describes the Company’s annual significant income tax accounting policy and related methodology.
Revenue Recognition—The Company generates revenue from the following streams:
1)Mortgage platform revenue, net includes revenues generated from the Company's mortgage production process. See Note 4. The components of mortgage platform revenue, net are as follows:
1.Net gain (loss) on sale of loans—This represents the premium or discount the Company receives in excess of the loan principal amount and certain fees charged by loan purchasers upon sale of loans into the secondary market. Net gain (loss) on sale of loans includes unrealized changes in the fair value of LHFS which are recognized on a loan by loan basis as part of current period earnings until the loan is sold on the secondary market. The fair value of LHFS is measured based on observable market data. Also included within net gain (loss) on sale of loans is the day one recognition of the fair value of MSRs and any subsequent changes in the measurement of the fair value of the MSRs for loans sold servicing retained, including any gain or loss on subsequent sales of MSRs.
2.Integrated relationship revenue (loss)—Includes fees that the Company receives for originating loans on behalf of an integrated relationship partner which are recognized as revenue (loss) upon the integrated relationship partner’s funding of the loan. Some of the loans originated on behalf of the integrated relationship partner are purchased by the Company. Subsequent changes in fair value of loans purchased by the Company are included as part of current period earnings. These loans may be sold in the secondary market at the Company’s discretion for which any gain on sale is included in this account. For loans sold on the secondary market, the integrated relationship partner will receive a portion of the execution proceeds. A portion of the execution proceeds that is to be allocated to the integrated relationship partner is accrued as a reduction of integrated relationship revenue (loss) when the loan is initially purchased from the integrated relationship partner.
3.Changes in fair value of IRLCs and forward sale commitments—IRLCs include the fair value upon issuance with subsequent changes in the fair value recorded in each reporting period until the loan is sold on the secondary market. Fair value of forward sale commitments hedging IRLC and LHFS are measured based on quoted prices for similar assets.
2)Cash offer program revenue—The Company’s product offering includes a cash offer program (“Better Cash Offer”) where the Company works with a Buyer to identify and purchase a home directly from a property Seller. The Company will then subsequently sell the home to the Buyer. The Buyer may lease the home from the Company while the Buyer and Company go through the customary closing process to transfer ownership of the home to the Buyer. Arrangements where the Buyer leases the home from the Company are accounted for under ASC 842 while arrangements where the Buyer does not lease the home are accounted for under ASC 606. The Buyer does not directly or indirectly contract with the Seller.
For arrangements under the Better Cash Offer program that do not involve a lease, upon closing on the sale of the home from the Seller to the Company, the Company holds legal title of the home. The Company is responsible for any obligations related to the home while it holds title and is the legal owner and such is considered the principal in the transaction. The Company holds in inventory any homes where the Buyer does not subsequently purchase from the Company as well as homes held while the Company is waiting to transfer the home to the Buyer. Inventory of homes are included within prepaid expenses and other assets on the condensed consolidated balance sheets.
The Company recognizes revenue at the time of the closing of the home sale when title to and possession of the home are transferred to the Buyer. The amount of revenue recognized for each home sale is equal to the full sales price of the home. The contracts with the Buyers contain a single performance obligation that is satisfied upon the closing of the transaction and is typically completed in 1 to 90 days. The Company does not offer warranties for sold homes, and there are no continuing performance obligations following the transaction close date.
Also included in Better Cash Offer program revenue is revenue from transactions where the Company purchases the home from the Seller and subsequently leases the home to the Buyer until the title is transferred to the Buyer which is accounted for under ASC 842 in line with the Company’s accounting policy on sales-type leases as described above.
3)Other platform revenue consists of revenue from the Company’s additional homeownership offerings which primarily consist of title insurance, settlement services, and other homeownership offerings.
Title insurance, settlement services, and other homeownership offerings—Revenue from title insurance, settlement services, and other homeownership offerings is recognized based on ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”). ASC 606 outlines a single comprehensive model in accounting for revenue arising from contracts with customers. The core principle, involving a five-step process, of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The Company offers title insurance as an agent and works with third-party providers that underwrite the title insurance policies. For title insurance, the Company recognizes revenue from fees upon the completion of the performance obligation which is when the mortgage transaction closes. For title insurance, the Company is the agent in the transactions as the Company does not control the ability to direct the fulfillment of the service, is not primarily responsible for fulfilling the performance of the service, and does not assume the risk in a claim against a policy.
Settlement services revenue includes fees charged for services such as title search fees, wire fees, policy and document preparation, and other mortgage settlement services. The Company recognizes revenues from settlement services upon completion of the performance obligation which is when the mortgage transaction closes. The Company may use a third-party to fulfill these services, but the Company is considered the principal in the transaction as it directs the fulfillment of the services and ultimately bears the risk of nonperformance. As the Company is the principal, revenues from settlement services are presented on a gross basis.
Performance obligations for title insurance and settlement services are typically completed 40 to 60 days after the commencement of the loan origination process. Payment for these services is typically settled in cash as part of closing costs to the borrower upon closing of the mortgage transaction.
Other homeownership offerings consists primarily of real estate services. For real estate services, the Company generates revenues from fees related to real estate agent services, including cooperative brokerage fees from the Company’s network of third-party real estate agents, as well as brokerage fees earned when the Company provides it’s in-house real estate agents to assist customers in the purchase or sale of a home. The Company recognizes revenues from real estate services upon completion of the performance obligation which is when the mortgage transaction closes. Performance obligations for real
estate services are typically completed 40 to 60 days after the commencement of the home search process. Payment for these services is typically settled in cash as part of closing costs to the borrower upon closing of the mortgage transaction.
4)Net interest income (expense)—Includes interest income from LHFS calculated based on the note rate of the respective loan as well as interest expense on warehouse lines of credit.
Mortgage Platform Expenses—Mortgage platform expenses consist primarily of origination expenses, appraisal fees, processing expenses, underwriting, closing fees, servicing costs, and sales and operations personnel related expenses. Sales and operations personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. These expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Cash Offer Program Expenses—Better Cash Offer program expenses include the full cost of the home, including transaction closing costs and costs for maintaining the home before the legal title of the home is transferred to the Buyer. Better Cash Offer program expenses are recognized when title is transferred to the Buyer for arrangements recognized under ASC 606 and when the lease commences for arrangements recognized under ASC 842.
Other Platform Expenses—Other platform expenses relate to other non-mortgage homeownership activities, including settlement service expenses, lead generation, and personnel related costs. Settlement service expenses consist of fees for transactional services performed by third-party providers for borrowers while lead generation expenses consist of fees for services related to real estate agents. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. Other platform expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
General and Administrative Expenses—General and administrative expenses include personnel related expenses, including stock-based compensation and benefits for executive, finance, accounting, legal, and other administrative personnel. In addition, general and administrative expenses include external legal, tax and accounting services, and allocated occupancy expenses and related overhead based on headcount. General and administrative expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Marketing and Advertising Expenses—Marketing and advertising expenses consist of customer acquisition expenses, brand costs, paid advertising, and personnel related costs for brand teams. For customer acquisition expenses, the Company primarily generates loan origination leads through third-party financial service websites for which they incur “pay-per-click” expenses. A majority of the Company’s marketing and advertising expenses are incurred from leads purchased from these third-party financial service websites. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. Marketing and advertising expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Technology and Product Development Expenses—Technology and product development expenses consist of employee compensation, amortization of capitalized internal-use software costs related to the Company’s technology platform, and expenses related to vendors engaged in product management, design, development, and testing of the Company’s websites and products. Employee compensation consists of stock-based compensation and benefits related to the Company’s technology team, product and creative team, and engineering team. Technology and product development expenses also include allocated occupancy expenses and related overhead based on headcount. Technology and product development expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Segments—The Company has one reportable segment. The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a company-wide basis for purposes of allocating resources and evaluating financial performance.
Emerging Growth Company and Smaller Reporting Company Status—Under the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies. The JOBS Act does not preclude an emerging growth company from early adopting new or revised accounting standards. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) it affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
Better’s consolidated revenues were below $1.235 billion for the year ended December 31, 2022. Aurora had no consolidated revenues for the year ended December 31, 2022 and qualified as an emerging growth company. As a result, Better Home & Finance qualifies as an emerging growth company and is eligible for relief from regulatory requirements provided to emerging growth companies. The Company also is a smaller reporting company, as defined in the rules under the Securities Exchange Act of 1934 (the “Exchange Act”). Even after the Company no longer qualifies as an emerging growth company, the Company may still qualify as a smaller reporting company, which would allow it to continue taking advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation in the Company’s periodic reports and proxy statements. In addition, for so long as the Company continues to qualify as a non-accelerated filer, it will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).
Recently Adopted Accounting Standards
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In addition, in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified the scope and application of the original guidance. Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (or “LIBOR”) by September 30, 2023. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The guidance is effective for all companies as of March 12, 2020 and can generally be applied through December 31, 2022. In December 2022, FASB issued ASU 2022-06, Reference Rate Reform ("Topic 848"): Deferral of the Sunset Date of Topic 848, because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The adoption of the new guidance did not have a material impact on the condensed consolidated financial statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation—The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Consolidation—The accompanying consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates—The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant items subject to such estimates and assumptions include the fair value of mortgage loans held for sale, the fair value of derivative assets and liabilities, including bifurcated derivatives, interest rate lock commitments and forward sale commitments, the determination of a valuation allowance on the Company’s deferred tax assets, capitalization of internally developed software and its associated useful life, determination of fair value of the Company’s common stock, convertible preferred stock and convertible preferred stock warrants, stock option and RSUs at grant date, the fair value of acquired intangible assets and goodwill, the fair value of loan commitment asset, the provision for loan repurchase reserves, and the incremental borrowing rate used in determining lease liabilities.
Business Combinations—The Company includes the financial results of businesses that the Company acquires from the date of acquisition. The Company records all assets acquired and liabilities assumed at fair value, with the excess of the purchase price over the aggregate fair values recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. During the measurement period the Company may record adjustments to the assets acquired and liabilities assumed. Transaction costs associated with business combinations are expensed as incurred.
Cash and Cash Equivalents—Cash and cash equivalents consists of cash on hand and other highly liquid and short-term investments with maturities of 90 days or less at acquisition. Of the cash and cash equivalents balances as of December 31, 2022 and 2021, $1.7 million and $3.3 million, respectively, were insured by the Federal Deposit Insurance Corporation (“FDIC”).
Restricted Cash—Restricted cash primarily consists of amounts provided as collateral for the Company’s various warehouse lines of credit as well as escrow funds received from and held on behalf of borrowers. In some instances, the Company may administer funds that are legally owned by a third-party which are excluded from the Company’s consolidated balance sheets. As of December 31, 2022 and 2021, the Company held $28.1 million and $40.6 million, respectively, of restricted balances in accordance with the covenants of the agreements relating to its warehouse lines of credit (Note 5) and escrow funds (Note 13).
Mortgage Loans Held for Sale, at Fair Value—The Company sells its mortgage loans held for sale (“LHFS”) to loan purchasers. These loans can be sold in one of two ways, servicing released, or servicing retained. If a loan is sold servicing released, the Company has sold all the rights to the loan and the associated servicing rights.
If a loan is sold servicing retained, the Company has sold the loan and kept the servicing rights, and thus the Company is responsible for collecting monthly principal and interest payments and performing certain escrow services for the borrower. The loan purchaser, in turn, pays a fee for these services. The Company generally sells all of its loans servicing released. For interim servicing, the Company engages a third-party sub-servicer to collect monthly payments and perform associated services.
LHFS consists of loans originated for sale by BMC. The Company elects the fair value option, in accordance with Accounting Standard Codification (“ASC”) 825 – Financial Instruments (“ASC 825”), for all LHFS with changes in fair value recorded in mortgage platform revenue, net in the consolidated statements of operations and comprehensive loss. Management believes that the election of the fair value option for LHFS improves financial
reporting by presenting the most relevant market indication of LHFS. The fair value of LHFS is based on market prices and yields at period end. The Company accounts for the gains or losses resulting from sales of mortgage loans based on the guidance of ASC 860-20 – Sales of Financial Assets (“ASC 860”).
The Company issues interest rate lock commitments (“IRLC”) to originate mortgage loans and the fair value of the IRLC, adjusted for the probability that a given IRLC will close and fund, is recognized within mortgage platform revenue, net. Subsequent changes in the fair value of the IRLC are measured at each reporting period within mortgage platform revenue, net until the loan is funded. When the loan is funded, the IRLC is derecognized and the LHFS is recognized based on the fair value of the loan. The LHFS is subsequently remeasured at fair value at each reporting period and the changes in fair value are included within mortgage platform revenue, net until the loan is sold on the secondary market. When the loan is sold on the secondary market, the LHFS is derecognized and the gain/(loss) is included within mortgage platform revenue, net based on the cash settlement.
LHFS are considered sold when the Company surrenders control over the loans. Control is considered to have been surrendered when the transferred loans have been isolated from the Company, are beyond the reach of the Company and its creditors, and the loan purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred loans. The Company typically considers the above criteria to have been met upon receipt of sales proceeds from the loan purchaser.
Loan Repurchase Reserve—The Company sells LHFS in the secondary market and in connection with those sales, makes customary representations and warranties to the relevant loan purchasers about various characteristics of each loan, such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local laws. In the event of a breach of its representations and warranties, the Company may be required to repurchase the loan with the identified defects.
The loan repurchase reserve on loans sold relates to expenses incurred due to the potential repurchase of loans, indemnification of losses based on alleged violations or representations and warranties, which are customary to the mortgage banking industry. Provisions for potential losses are charged to expenses and are included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss. The loan repurchase reserve represents the Company’s estimate of the total losses expected to occur and is considered to be adequate by management based upon the Company’s evaluation of the potential exposure related to the loan sale agreements over the life of the associated loans sold. The Company records the loan repurchase reserve within other liabilities on the consolidated balance sheets. See Note 14.
Other Receivables, Net—Other receivables, net are reported net of an allowance for doubtful accounts. Management’s estimate of the allowance is based on historical collection experience and a review of the current status of other receivables. It is reasonably possible that management’s estimate of the allowance will change. No allowance has been taken as of December 31, 2022 and 2021, respectively, as the balances reflect amounts fully collectible.
Other receivables, net consist primarily of amounts due from a third party loan sub-servicer, margin account balances with brokers, a major integrated relationship partner, and servicing partners of loan purchasers.
Derivatives and Hedging Activities—The Company enters into IRLCs to originate mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. These IRLCs are not designated as accounting hedging instruments and are reflected in the consolidated balance sheets as derivative assets or liabilities at fair value with changes in fair value are recorded in current period earnings. Unrealized gains and losses on the IRLCs are recorded as derivative assets or liabilities on the consolidated balance sheets and in mortgage platform revenue, net within the consolidated statements of operations and comprehensive loss. The fair value of IRLCs are measured based on the value of the underlying mortgage loan, quoted MBS prices, estimates of the fair value of the mortgage servicing rights, and adjusted by the estimated loan funding probability, or “pull-through factor”.
The Company enters into forward sales commitment contracts for the sale of its mortgage loans held for sale or in the pipeline. These contracts are loan sales agreements in which the Company commits in principle to delivering a
mortgage loan of a specified principal amount and quality to a loan purchaser at a specified price on or before a specified date. Generally, the price the loan purchaser will pay the Company is agreed upon prior to the loan being funded (i.e., on the same day the Company commits to lend funds to a potential borrower). Under the majority of the forward sales commitment contracts if the Company fails to deliver the agreed-upon mortgage loans by the specified date, the Company must pay a “pair-off” fee to compensate the loan purchaser. The Company’s forward sale commitments are not designated as accounting hedging instruments and are reflected in the consolidated balance sheets as derivative assets or liabilities at fair value with changes in fair value are recorded in current period earnings. Unrealized gains and losses from changes in fair value on forward sales commitments are recorded as derivative assets or liabilities on the consolidated balance sheets and in mortgage platform revenue, net within the consolidated statements of operations and comprehensive loss. Forward commitments are entered into under arrangements between the Company and counterparties under Master Securities Forward Transaction Agreements, which contain a legal right to offset amounts due to and from the same counterparty and can be settled on a net basis. The Company does not utilize any other derivative instruments to manage risk.
Fair Value Measurements—Assets and liabilities recorded at fair value on a recurring basis on the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The price used to measure fair value is not adjusted for transaction costs. The principal market is the market in which the Company would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability, it is assumed that the Company has access to the market as of the measurement date. If no market for the asset exists, or if the Company does not have access to the principal market, a hypothetical market is used.
The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:
Level 1—Unadjusted quoted market prices in active markets for identical assets or liabilities;
Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Assets and liabilities measured at fair value on a recurring basis include LHFS, derivative assets and liabilities, including IRLCs and forward sale commitments, MSRs, bifurcated derivatives, and convertible preferred stock warrants. Common stock warrants are measured at fair value at issuance only and are classified as equity on the consolidated balance sheets. When developing fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments, the Company must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are based primarily upon the Company’s own estimates, and the measurements reflect information and assumptions that management believes a market participant would use in pricing the asset or liability.
Property and Equipment—Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation expense is computed on the straight-line method over the estimated useful life of the asset, generally three to five years for computer and hardware and four to seven years for furniture and equipment. Leasehold improvements are depreciated over the shorter of the related lease term or the estimated useful life of the assets. Expenditures for maintenance and repairs necessary to maintain property and equipment in efficient operating condition are charged to operations as incurred while costs of additions and improvements are capitalized.
The Company’s property and equipment are considered long-lived assets and are reviewed for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the sum of the undiscounted cash flows expected to result from the use and eventual disposal of the asset and the asset’s carrying amount.
If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized to the extent the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of their carrying amount or the fair value of the asset, less costs to sell.
Goodwill—Goodwill represents the excess of the purchase price of an acquired business over the fair value of the assets acquired, less liabilities assumed in connection with the acquisition. Goodwill is tested for impairment at least annually on the first day of the fourth quarter at each reporting unit level, or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired, and is required to be written down when impaired.
The guidance for goodwill impairment testing begins with an optional qualitative assessment to determine whether it is more likely than not that goodwill is impaired. The Company is not required to perform a quantitative impairment test unless it is determined, based on the results of the qualitative assessment, that it is more likely than not that goodwill is impaired. The quantitative impairment test is prepared at the reporting unit level. In performing the impairment test, management compares the estimated fair values of the applicable reporting units to their aggregate carrying values, including goodwill. If the carrying amounts of a reporting unit including goodwill were to exceed the fair value of the reporting unit, an impairment loss is recognized within the consolidated statements of operations and comprehensive loss in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company currently has only one reporting unit.
Internal Use Software and Other Intangible Assets, Net—The Company reports and accounts for acquired intellectual properties included in other intangible asset with an indefinite life, such as domain name, under ASC 350, Intangibles-Goodwill and Other (“ASC 350”). Intangible assets with indefinite lives are recorded at their estimated fair value at the date of acquisition and are tested for impairment on an annual basis as well as when there is reason to suspect that their values have been diminished or impaired. Any write-downs will be included in results from operations.
Intangible assets with finite lives are recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives using the straight-line method.
The Company capitalizes certain development costs incurred in connection with its internal use software and website development. Software costs incurred in the preliminary stages of development are expensed as incurred. Once a software application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial software testing. The Company also capitalizes costs related to specific software upgrades and enhancements when it is probable the expenditures will result in additional features and functionality. Software maintenance costs are expensed as incurred. For website development, costs incurred in the planning stage are expensed as incurred whereas costs associated with the application and infrastructure development, graphics development, and content development are capitalized depending on the type of cost in each of those respective stages. Internal use software and website development are amortized on a straight-line basis over its estimated useful life, generally three years.
Loan Commitment Asset—The Merger Agreement, as discussed in Note 1, contains a commitment from SoftBank and the Sponsor to fund Post-Closing Convertible Notes, drawn at the Company’s discretion, available when certain criteria is met such as the closing of the Merger. The Company determined that the commitment represented a freestanding financial instrument (loan commitment asset) and was accounted for at fair value at inception in November 2021 and will not be remeasured to fair value in subsequent periods. The loan commitment asset will be assessed for impairment if there are events or circumstances that indicate that it is probable that the asset has been impaired. As both parties with the commitment to fund the Post-Closing Convertible notes are considered related parties and the terms of the Post-Closing Convertible Notes are not considered at market terms, the “Loan Commitment Asset” is considered a capital contribution from those parties and was recognized within additional-paid-in capital at inception in the consolidated balance sheets in the amount of $121.7 million as of
December 31, 2021. During the year ended December 31, 2022, the Company recognized $105.6 million of impairment on the loan commitment asset with $16.1 million remaining on the consolidated balance sheets, see Note 4. Upon the closing of the Merger and the Post-Closing Convertible Notes are issued, the Loan Commitment Asset will be considered a discount to the Post-Closing Convertible Notes and will be amortized as part of interest expense over the term of the note.
Impairment of Long-Lived Assets—Long‑lived assets, including property and equipment, right-of-use assets, capitalized software, and other finite-lived intangible assets, are evaluated for recoverability when events or changes in circumstances indicate that the asset may have been impaired. In evaluating an asset for recoverability, the Company considers the future cash flows expected to result from the continued use of the asset and the eventual disposition of the asset. If the sum of the expected future cash flows, on an undiscounted basis, is less than the carrying amount of the asset, an impairment loss equal to the excess of the carrying amount over the fair value of the asset is recognized.
Warehouse Lines of Credit—Warehouse lines of credit represent the outstanding balance of the Company’s warehouse borrowings collateralized by mortgage loans held for sale or related borrowings collateralized by restricted cash. Generally, warehouse lines of credit are used as interim, short-term financing which bears interest at a fixed margin over an index rate, such as SOFR or LIBOR. The outstanding balance of the Company’s warehouse lines of credit will fluctuate based on its lending volume. The advances received under the warehouse lines of credit are based upon a percentage of the fair value or par value of the mortgage loans collateralizing the advance, depending upon the type of mortgage loan. Should the fair value of the pledged mortgage loans decline, the warehouse provider may require the Company to provide additional cash collateral or mortgage loans to maintain the required collateral level under the relevant warehouse line. The Company did not incur any significant issuance costs related to its warehouse lines of credit.
Leases—The Company accounts for its leases in accordance with ASC 842, Leases (“ASC 842”) .
The Company’s lease portfolio primarily consists of operating leases for a number of small offices across the country for licensing purposes as well as several larger offices for employee and Company headquarters. The Company also leases various types of equipment, such as laptops and printers. The Company determines whether an arrangement is a lease at inception.
The Company has made an accounting policy election to exempt leases with an initial term of 12 months or less (“short-term leases”) from being recognized on the balance sheet. Short-term leases are not material in comparison to the Company’s overall lease portfolio. Payments related to short-term leases are recognized in the consolidated statement of operations and comprehensive loss on a straight-line basis over the lease term. The Company also elected not to separate non-lease components of a contract from the lease component to which they relate.
For leases with initial terms of greater than 12 months, the Company determines its classification as an operating or finance lease. At lease commencement, the Company recognizes a lease obligation and corresponding right-of-use asset based on the initial present value of the fixed lease payments using the Company's incremental borrowing rates for its population of leases. For leases that qualify as an operating lease, the right-of-use assets related to operating lease obligations are recorded in right-of-use assets in the consolidated balance sheets. The rate implicit on the Company’s leases are not readily determinable, therefore, management uses its incremental borrowing rate to discount the lease payments based on the information available at lease commencement. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow over a similar term, and with a similar security, in a similar economic environment, an amount equal to the fixed lease payments. The commencement date is the date the Company takes initial possession or control of the leased premise or asset, which is generally when the Company enters the leased premises and begins to make improvements in preparation for its intended use.
Non-cancelable lease terms for most of the Company's real estate leases typically range between 1-10 years and may also provide for renewal options. Renewal options are typically solely at the Company’s discretion and are only included within the lease term when the Company is reasonably certain that the renewal options would be exercised.
When a modification to the contractual terms occurs, the lease liability and right-of-use asset is remeasured based on the remaining lease payments and incremental borrowing rate as of the effective date of the modification.
The Company evaluates its right-of-use assets for impairment consistent with the impairments of long-lived assets policy disclosure described above.
Financing Leases—For leases that qualify as a finance lease, the right-of-use assets related to finance lease obligations are recorded in property and equipment as finance lease assets and are depreciated over the estimated useful life. The expense is included as a component of depreciation and amortization expense on the consolidated statements of operations and comprehensive loss.
Sales-Type Leases—The Company’s product offering includes a Cash Offer Program where the Company works with a prospective buyer (“Buyer”) to identify and purchase a home directly from a seller (“Seller”) and then subsequently sell the home to the Buyer (see further description of Cash Offer Program within the Revenue Recognition section below). In most instances, the Buyer will lease the home from the Company while the Buyer and Company go through the customary closing procedures to transfer ownership of the home to the Buyer. The Company accounts for these leases as a sales-type lease under ASC 842 and at lease commencement recognizes:
•Revenue for the lease payments, which includes the sales price of the home, which is included within cash offer program revenue on the consolidated statements of operations and comprehensive loss.
•Expenses for the cost of the home, including transaction closing costs, which is included within cash offer program expenses on the consolidated statements of operations and comprehensive loss;
•Net investment in the lease, which is included within prepaid expenses and other assets on the consolidated balance sheets, which consists of the minimum lease payments not yet received and the purchase price of the home to be financed through a mortgage.
When the Buyer has exercised the purchase option, the Company will derecognize the net investment in the lease which is offset by cash received from the Buyer for the purchase price of the home. For transactions that include a lease with the Buyer, the transaction from lease commencement to the closing and transfer of ownership of the home from the Company to the Buyer is typically completed in 1 to 90 days. The Cash Offer Program began in the fourth quarter of 2021 and as of December 31, 2022 and 2021, net investment in leases was $0.9 million and $11.1 million, respectively, and included within prepaid expenses and other assets on the consolidated balance sheets. The Company had no leases greater than 180 days and 30 days as of December 31, 2022 and 2021, respectively.
Corporate Line of Credit, net of discount and debt issuance costs—The Company has a line of credit arrangement with a third-party lender. Debt and other related issuance costs are deferred and amortized through the maturity date of the line of credit as interest and amortization on non-funding debt expense. Any modifications of the line of credit arrangement are analyzed as to whether they are an extinguishment or modification of debt on a lender-by-lender basis, which is determined by whether (1) the lender remains the same, and (2) the change in the debt terms is considered substantial. Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised terms (see Note 11).
Pre-Closing Bridge Notes—During 2021, the Company issued Pre-Closing Bridge Notes with the Sponsor and SoftBank as described in Note 1. Sponsor and Softbank are related parties through the merger relationship and the terms of the Pre-Closing Bridge Notes are not considered at market terms and as such the Pre-Closing Bridge Notes were initially recorded at fair value with the excess of proceeds over fair value recorded as capital contributions. At issuance, the Company recorded $291.9 million in excess capital/proceeds from issuance of Pre-Closing Bridge Notes on the consolidated statements of changes in convertible preferred stock and stockholders’ equity (deficit). The excess capital/proceeds from issuance of Pre-Closing Bridge Notes is deemed to be a discount on the Pre-Closing Bridge Notes. In accordance with ASC 835-10, the Company accretes the discount to interest expense on the Pre-Closing Bridge Notes using the effective interest method over the shorter of the term of the Pre-Closing Bridge Notes, or until conversion.
Upon initial issuance, Pre-Closing Bridge Notes are evaluated for redemption and conversion features that could result in embedded derivatives that require bifurcation from the Pre-Closing Bridge Notes. Embedded derivatives are recorded at fair value as bifurcated derivative within the consolidated balance sheets and are adjusted to fair value at each reporting period, with the change in fair value included in change in fair value of bifurcated derivative, within the consolidated statements of operations and comprehensive loss.
Upon issuance, conversion features included in the Pre-Closing Bridge Notes that were deemed to be embedded derivatives were immaterial. As of December 31, 2022 and 2021, the embedded features had a fair value of $236.6 million and none, respectively, and were included as bifurcated derivative assets within the consolidated balance sheets.
Warrants—The Company has used various fundraising methods, including the issuance of warrants. A warrant is a financial instrument that provides the holder of the warrant the right, but not the obligation, to buy a company’s stock in the future at a predetermined price.
Warrants to purchase convertible preferred stock are generally accounted for as a liability and are recorded at fair value on their initial issuance date and adjusted to fair value at each balance sheet date, with the change in fair value being recorded as changes in fair value of convertible preferred stock warrants, which is included in interest and other income (expense), net within the consolidated statements of operations and comprehensive loss.
Warrants to purchase common stock are accounted for as equity and are recorded at fair value on their initial issuance date.
Income Taxes—Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income or expense in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred income tax assets to the amount expected to be realized based on management’s consideration of all positive and contradictory evidence available. The Company evaluates uncertainty in income tax positions based on a more-likely-than-not recognition standard. If that threshold is met, the tax position is then measured at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. If applicable, the Company records interest and penalties as a component of income tax expense.
Deferred Revenue—Deferred revenue consists of fees paid to the Company in advance for the origination of loans. Such fees primarily include advance payments for loan origination and servicing on behalf of an integrated relationship partner. Deferred revenue is included within other liabilities on the consolidated balance sheets, see Note 13 for further details.
Foreign Currency Translation—The U.S. dollar is the functional currency of the Company’s consolidated entities operating in the United States. The Company’s non U.S. dollar functional currency operations include a non-operating service entity as well as several operating entities resulting from acquisitions. All balance sheet accounts have been translated using the exchange rates in effect as of the balance sheet date. Income statement amounts have been translated using the monthly average exchange rates for each month in the year. Accumulated net translation adjustments have been reported separately in other comprehensive loss in the consolidated statements of operations and comprehensive loss.
Revenue Recognition—The Company generates revenue from the following streams:
a)Mortgage platform revenue, net includes revenues generated from the Company's mortgage production process. See Note 3. The components of mortgage platform revenue, net are as follows:
i.Net gain (loss) on sale of loans—This represents the premium or discount the Company receives in excess of the loan principal amount and certain fees charged by loan purchasers upon sale of loans into the secondary market. Net gain (loss) on sale of loans includes unrealized changes in the fair value of
LHFS which are recognized on a loan by loan basis as part of current period earnings until the loan is sold on the secondary market. The fair value of LHFS is measured based on observable market data. Also included within net gain (loss) on sale of loans is the day one recognition of the fair value of MSRs and any subsequent changes in the measurement of the fair value of the MSRs for loans sold servicing retained, including any gain or loss on subsequent sales of MSRs.
ii.Integrated relationship revenue (loss)—Includes fees that the Company receives for originating loans on behalf of an integrated relationship partner which are recognized as revenue (loss) upon the integrated relationship partner’s funding of the loan. Some of the loans originated on behalf of the integrated relationship partner are purchased by the Company. Subsequent changes in fair value of loans purchased by the Company are included as part of current period earnings. These loans may be sold in the secondary market at the Company’s discretion for which any gain on sale is included in this account. For loans sold on the secondary market, the integrated relationship partner will receive a portion of the execution proceeds. A portion of the execution proceeds that is to be allocated to the integrated relationship partner is accrued as a reduction of integrated relationship revenue (loss) when the loan is initially purchased from the integrated relationship partner.
iii.Changes in fair value of IRLCs and forward sale commitments—IRLCs include the fair value upon issuance with subsequent changes in the fair value recorded in each reporting period until the loan is sold on the secondary market. Fair value of forward sale commitments hedging IRLC and LHFS are measured based on quoted prices for similar assets.
b)Cash offer program revenue—The Company’s product offering includes a Cash Offer Program where the Company works with a Buyer to identify and purchase a home directly from a property Seller. The Company will then subsequently sell the home to the Buyer. The Buyer may lease the home from the Company while the Buyer and Company go through the customary closing process to transfer ownership of the home to the Buyer. Arrangements where the Buyer leases the home from the Company are accounted for under ASC 842 while arrangements where the Buyer does not lease the home are accounted for under ASC 606. The Buyer does not directly or indirectly contract with the Seller.
For arrangements under the Cash Offer Program that do not involve a lease, upon closing on the sale of the home from the Seller to the Company, the Company holds legal title of the home. The Company is responsible for any obligations related to the home while it holds title and is the legal owner and such is considered the principal in the transaction. The Company holds in inventory any homes where the Buyer does not subsequently purchase from the Company as well as homes held while the Company is waiting to transfer the home to the Buyer. Inventory of homes are included within prepaid expenses and other assets on the consolidated balance sheets.
The Company recognizes revenue at the time of the closing of the home sale when title to and possession of the home are transferred to the Buyer. The amount of revenue recognized for each home sale is equal to the full sales price of the home. The contracts with the Buyers contain a single performance obligation that is satisfied upon the closing of the transaction and is typically completed in 1 to 90 days. The Company does not offer warranties for sold homes, and there are no continuing performance obligations following the transaction close date.
Also included in cash offer program revenue is revenue from transactions where the Company purchases the home from the Seller and subsequently leases the home to the Buyer until the title is transferred to the Buyer which is accounted for under ASC 842 in line with the Company’s accounting policy on sales-type leases as described above.
c)Other platform revenue consists of revenue from the Company’s additional homeownership offerings which primarily consist of title insurance, settlement services, and other homeownership offerings.
Title insurance, settlement services, and other homeownership offerings—Revenue from title insurance, settlement services, and other homeownership offerings is recognized based on ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”). ASC 606 outlines a single comprehensive model in accounting for revenue arising from contracts with customers. The core principle, involving a five-step process, of the revenue model is that
an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The Company offers title insurance as an agent and works with third-party providers that underwrite the title insurance policies. For title insurance, the Company recognizes revenue from fees upon the completion of the performance obligation which is when the mortgage transaction closes. For title insurance, the Company is the agent in the transactions as the Company does not control the ability to direct the fulfillment of the service, is not primarily responsible for fulfilling the performance of the service, and does not assume the risk in a claim against a policy.
Settlement services revenue includes fees charged for services such as title search fees, wire fees, policy and document preparation, and other mortgage settlement services. The Company recognizes revenues from settlement services upon completion of the performance obligation which is when the mortgage transaction closes. The Company may use a third-party to fulfill these services, but the Company is considered the principal in the transaction as it directs the fulfillment of the services and ultimately bears the risk of nonperformance. As the Company is the principal, revenues from settlement services are presented on a gross basis.
Performance obligations for title insurance and settlement services are typically completed 40 to 60 days after the commencement of the loan origination process. Payment for these services is typically settled in cash as part of closing costs to the borrower upon closing of the mortgage transaction.
d)Net interest income (expense)—Includes interest income from LHFS calculated based on the note rate of the respective loan as well as interest expense on warehouse lines of credit.
Mortgage Platform Expenses—Mortgage platform expenses consist primarily of origination expenses, appraisal fees, processing expenses, underwriting, closing fees, servicing costs, and sales and operations personnel related expenses. Sales and operations personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. These expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Cash Offer Program Expenses—Cash offer program expenses include the full cost of the home, including transaction closing costs and costs for maintaining the home before the legal title of the home is transferred to the Buyer. Cash offer program expenses are recognized when title is transferred to the Buyer for arrangements recognized under ASC 606 and when the lease commences for arrangements recognized under ASC 842.
Other Platform Expenses—Other platform expenses relate to other non-mortgage homeownership activities, including settlement service expenses, lead generation, and personnel related costs. Settlement service expenses consist of fees for transactional services performed by third-party providers for borrowers while lead generation expenses consist of fees for services related to real estate agents. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. Other platform expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
General and Administrative Expenses—General and administrative expenses include personnel related expenses, including stock-based compensation and benefits for executive, finance, accounting, legal, and other administrative personnel. In addition, general and administrative expenses include external legal, tax and accounting services, and allocated occupancy expenses and related overhead based on headcount. General and administrative expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Marketing and Advertising Expenses—Marketing and advertising expenses consist of customer acquisition expenses, brand costs, paid advertising, and personnel related costs for brand teams. For customer acquisition expenses, the Company primarily generates loan origination leads through third-party financial service websites for which they incur “pay-per-click” expenses. A majority of the Company’s marketing and advertising expenses are incurred from leads purchased from these third-party financial service websites. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related
overhead based on headcount. Marketing and advertising expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Technology and Product Development Expenses—Technology and product development expenses consist of employee compensation, amortization of capitalized internal-use software costs related to the Company’s technology platform, and expenses related to vendors engaged in product management, design, development, and testing of the Company’s websites and products. Employee compensation consists of stock-based compensation and benefits related to the Company’s technology team, product and creative team, and engineering team. Technology and product development expenses also include allocated occupancy expenses and related overhead based on headcount. Technology and product development expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Stock-Based Compensation—The Company measures and records the expense related to stock-based compensation awards based on the fair value of those awards as determined on the date of grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period and uses the straight-line method to recognize stock-based compensation. For stock-based compensation with performance conditions, the Company records stock-based compensation expense when it is deemed probable that the performance condition will be met.
The Company uses the Black-Scholes-Merton (“Black-Scholes”) option-pricing model to determine the fair value of stock options. The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions, which determine the fair value of stock-based compensation awards, including the option’s expected term and the price volatility of the underlying stock. The Company calculates the fair value of stock options granted using the following assumptions:
a)Expected Volatility—The Company estimated volatility for option grants by evaluating the average historical volatility of a peer group of companies for the period immediately preceding the option grant for a term that is approximately equal to the options’ expected term.
b)Expected Term—The expected term of the Company’s options represents the period that the stock-based awards are expected to be outstanding. The Company has elected to use the midpoint of the stock options vesting term and contractual expiration period to compute the expected term, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.
c)Risk-Free Interest Rate—The risk-free interest rate is based on the implied yield currently available on US Treasury zero-coupon issues with a term that is equal to the options’ expected term at the grant date.
d)Dividend Yield—The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, the dividend yield has been estimated to be zero.
Forfeitures of stock options and RSUs are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from initial estimates.
The Company records compensation expense related to stock options issued to non-employees, including consultants based on the fair value of the stock options on the grant date over the service performance period as the stock options vest.
The Company also generally allows stock option holders to early exercise stock options prior to the vesting date. The early exercise of stock options not yet vested are not reflected within stockholders’ equity or on the consolidated balance sheets as they relate to unvested share awards and therefore are considered non-substantive exercises.
Net Income (Loss) Per Share—The Company follows the two-class method when computing net income (loss) per share, as the Company has issued shares that meet the definition of participating securities. The two-class method determines net income (loss) per share for each class of common and participating securities according to
dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. In periods where there is net income, we apply the two-class method to calculate basic and diluted net income (loss) per share of common stock, as our convertible preferred stock is a participating security. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. In periods where there is a net loss, the two-class method of computing earnings per share does not apply as the Company’s convertible preferred stock does not contractually participate in losses.
Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income (loss) attributable to common stockholders is computed by adjusting net income (loss) attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares. For purpose of this calculation, outstanding stock options, including stock options exercised not yet vested, convertible notes, convertible preferred stock and warrants to purchase shares of convertible preferred stock are considered potential dilutive common shares.
The Company's convertible preferred stock contractually entitles the holders of such shares to participate in dividends but does not contractually require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss attributable to common stockholders, such losses are not allocated to such participating securities. In addition, as the convertible preferred stock can convert into common stock, the Company uses the more dilutive of the two-class method or the if-converted method in the calculation of diluted net income (loss) per share.
Diluted net income (loss) per share is the amount of net income (loss) available to each share of common stock outstanding during the reporting period, adjusted to include the effect of potentially dilutive common shares. For periods in which the Company reports net losses, basic and diluted net loss per share attributable to common stockholders are the same because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. For the years ended December 31, 2022 and 2021, the Company reported a net loss attributable to common stockholders.
Segments—The Company has one reportable segment. The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a company-wide basis for purposes of allocating resources and evaluating financial performance.
Recently Adopted Accounting Standards
The Company has early adopted ASC 842 in its 2021 annual consolidated financial statements effective January 1, 2021 using a modified retrospective approach. The Company has applied the new lease requirements to leases outstanding as of the adoption date through a cumulative effect adjustment to retained earnings. The Company has elected to utilize the package of practical expedients available under ASC 842, which permit the Company to not reassess the lease identification, lease classification and initial direct costs associated with any expired or existing contracts as of the date of adoption. The Company has also made accounting policy elections to: a) exempt leases with an initial term of 12 months or less from being recognized on the balance sheet, and b) not separate non-lease components of a contract from the lease component to which they relate.
Upon adoption, effective as of January 1, 2021, the Company has recognized an ROU asset and a corresponding lease liability, primarily related to operating leases for office space, of $65.9 million and $69.6 million, respectively, on the consolidated balance sheet based on the discounted value of future lease payments over the lease term, which includes renewal options that are reasonably assured of being exercised. The Company expects to continue entering into new lease arrangements in the ordinary course of business.
Summary of Modified Retrospective Adjustments to Balance Sheet Presentation—The following table summarizes the impact of the modified retrospective adoption of ASC 842 on the Company’s consolidated balance sheet:
As of January 1, 2021
(Amounts in thousands)Balance as of December 31, 2020Adjustments due to ASC 842Balance as of January 1, 2021
Accounts Receivable$46,845 $5,915 $52,760 
Property and equipment, net20,718 6,736 27,454 
Right-of-use asset— 65,889 65,889 
Total Assets
$67,563 $78,540 $146,103 
Accounts payable and accrued expenses$123,849 $10,880 $134,729 
Other liabilities47,588 (2,898)44,690 
Lease liabilities— 69,566 69,566 
Total Liabilities
171,437 77,548 248,985 
Retained earnings7,522 993 8,515 
Total Stockholders’ Equity
$7,522 $993 $8,515 
In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The standard simplifies the accounting for certain convertible instruments by removing models with specific features, amends guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share (EPS) calculations as a result of these changes. This standard is effective for public companies for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and for all other entities beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2020. The Company early adopted ASU 2020-06 on January 1, 2021 using a modified retrospective approach, and such adoption did not have a material effect on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In addition, in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified the scope and application of the original guidance. Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (or “LIBOR”) by June 30, 2023. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The guidance is effective for all companies as of March 12, 2020 and can generally be applied through December 31, 2022. In December 2022, FASB issued ASU 2022-06, Reference Rate Reform ("Topic 848"): Deferral of the Sunset Date of Topic 848, because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The adoption of the new guidance did not have a material impact on the consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this standard were issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investments in leases and other commitments to extend credit held by a reporting entity at each reporting date. The amendments require that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the
amortized cost basis. The standard eliminates the current framework of recognizing probable incurred losses and instead requires an entity to use its current estimate of all expected credit losses over the contractual life. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets. The amendments in this standard are effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and for all other entities beginning after December 15, 2022, including interim periods within those fiscal years. The Company early adopted ASU 2016-13 on January 1, 2021, and such adoption did not have a material effect on the Company’s consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the application of ASC 740 - Income Taxes while maintaining or improving the usefulness of information provided to users of financial statements. The modifications include removal of certain exceptions and simplification to existing requirements. The amendments in ASU 2019-12 are effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and for all other entities beginning after December 15, 2021, and interim periods within those fiscal years beginning after December 15, 2022. The Company early adopted ASU 2019-12 on January 1, 2021, and such adoption did not have a material effect on the Company’s consolidated financial statements.
v3.23.4
BETTER 10K - REVENUE AND SALES-TYPE LEASES
 9 Months Ended
Sep. 30, 2023
Revenue [Abstract]  
REVENUE AND SALES-TYPE LEASES
4. Revenue and Sales-Type Leases
Revenue— The Company disaggregates revenue based on the following revenue streams:
Mortgage platform revenue, net consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Net gain (loss) on sale of loans$7,120 $(10,125)$36,689 $(59,105)
Integrated partnership revenue (loss)3,067 2,265 9,797 (8,526)
Changes in fair value of IRLCs and forward sale commitments4,019 18,947 8,441 174,217 
Total mortgage platform revenue, net$14,207 $11,087 $54,927 $106,586 
Cash offer program revenue consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Revenue related to ASC 606$— $749 $— $11,333 
Revenue related to ASC 842— 8,991 304 214,764 
Total cash offer program revenue$— $9,739 $304 $226,096 
Other platform revenue consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Real estate services$651 $3,983 $6,214 $20,735 
Title insurance13 220 45 6,975 
Settlement services2 130 15 4,190 
Other homeownership offerings668 1,355 3,082 3,723 
Total other platform revenue$1,333 $5,688 $9,355 $35,623 
Sales-type Leases—The following table presents the revenue and expenses recognized at the commencement date of sales-type leases for the periods indicated:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Cash offer program revenue$— $8,991 $304 $214,764 
Cash offer program expenses$— $8,944 $278 $215,972 
3. REVENUE AND SALES-TYPE LEASES
Revenue— The Company disaggregates revenue based on the following revenue streams:
Mortgage platform revenue, net consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Net (loss) gain on sale of loans$(63,372)$937,611 
Integrated partnership (loss) revenue(9,166)84,135 
Changes in fair value of IRLCs and forward sale commitments178,196 66,477 
Total mortgage platform revenue, net$105,658 $1,088,223 
Cash offer program revenue consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Revenue related to ASC 606$12,313 $8,725 
Revenue related to ASC 842216,408 30,636 
Total cash offer program revenue$228,721 $39,361 
Other platform revenue consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Title insurance$7,010 $39,602 
Settlement services4,222 31,582 
Real estate services23,053 20,602 
Other homeownership offerings4,657 2,601 
Total other platform revenue$38,942 $94,388 
Sales-type Leases—The following table presents the revenue and expenses recognized at the commencement date of sales-type leases for the periods indicated:
Year Ended December 31,
(Amounts in thousands)20222021
Cash offer program revenue$216,408 $30,636 
Cash offer program expenses$217,609 $30,780 
v3.23.4
BETTER 10K - RESTRUCTURING AND IMPAIRMENTS
 9 Months Ended
Sep. 30, 2023
Restructuring and Related Activities [Abstract]  
RESTRUCTURING AND IMPAIRMENTS
5. Restructuring and Impairments
In December 2021, the Company initiated an operational restructuring program that included plans for costs reductions in response to a difficult interest rate environment as well as a slowing housing market. The restructuring program, which continued during the nine months ended September 30, 2023, consists of reductions in headcount and any associated costs which primarily include one-time employee termination benefits. The Company expects the restructuring initiatives to continue at least through the end of 2023.
Due to the reduced headcount, the Company has also reduced its real estate footprint. The Company has impaired right-of-use assets related to office space that is no longer in use or has been completely abandoned. Leases where the Company is unable to terminate or amend the lease with the landlord remain on the balance sheet under lease liabilities. In February 2023, the Company entered into a lease amendment with a landlord to surrender an office floor and reassign the lease to a third party. The amendment relieves the Company of the primary obligation under the original lease and as such is considered a termination of the original lease. In February 2023, the Company impaired the right-of-use asset of $13.0 million and removed the lease liability of $13.0 million related to one of the office spaces and as part of the amendment the Company incurred a loss of $5.3 million which included a $4.7 million payment in cash to the third party and $0.6 million other related fees to terminate the lease early. For the three months ended September 30, 2023 and 2022, the Company impaired property and equipment of none and $0.2 million, respectively, which was related to termination of lease agreement and sale of laptops resulting from a reduction in the workforce. For the nine months ended September 30, 2023 and 2022, the Company impaired property and equipment of $4.8 million and $3.1 million, respectively, which was related to the termination of the lease agreements and sale of laptops resulting from a reduction in the workforce.
The Company assessed the loan commitment asset for impairment as there were factors that indicated that it was probable that the asset had been impaired on September 30, 2022 as the probability of the Company meeting the criteria to draw on the Post-Closing Convertible declined.
For the three and nine months ended September 30, 2023 and 2022, the Company’s restructuring and impairment expenses consists of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Employee one-time termination benefits$765 $5,277 $2,320 $99,291 
Impairment of loan commitment asset— 38,330 — 105,604 
Impairments of Right-of-Use Assets— 1,897 413 4,391 
Real estate restructuring loss— — 5,284 — 
(Gain) on lease settlement(86)— (1,063)— 
Impairment of property and equipment— 197 4,844 3,124 
Other impairments80 80 
Total Restructuring and Impairments$679 $45,781 $11,798 $212,490 
As of September 30, 2023 and December 31, 2022, respectively, the Company had an immaterial liability related to employee one-time termination benefits that were yet to be paid. The cumulative amount of one-time termination benefits, impairment of loan commitment asset, impairment of right-of-use assets, and impairment of
property and equipment as of September 30, 2023 is $121.6 million, $105.6 million, $6.6 million, and $8.9 million, respectively.
4. RESTRUCTURING AND IMPAIRMENTS
In December 2020, the Company initiated an operational restructuring program that included plans for costs reductions in response to a difficult interest rate environment as well as a slowing housing market. The restructuring program, which continued during the years ended December 31, 2022 and 2021, consists of reductions in headcount and any associated costs which primarily include one-time employee termination benefits. The Company expects the restructuring initiatives to continue at least through the full year 2023.
Due to the reduced headcount, the Company has also reduced its real estate footprint. The Company has impaired right-of-use assets related to office space that is no longer in use or has been completely abandoned. Leases where the Company is unable to terminate or amend the lease with the landlord remain on the balance sheet under lease liabilities. As of December 31, 2022, no leases have been amended or terminated. The Company has also impaired the right-of-use assets for equipment that is no longer used or abandoned as a result of the reduced headcount. Refer to Note 7 for further details on the Company’s leasing activities.
The Company assessed the loan commitment asset for impairment as there were factors that indicated that it was probable that the asset had been impaired on June 30, 2022 and subsequently on September 30, 2022 as the probability of the Company meeting the criteria to draw on the Post-Closing Convertible declined. Based on that assessment the Company recorded an impairment loss of $67.3 million and $38.3 million on June 30, 2022 and September 30, 2022, respectively. For the years ended December 31, 2022 and 2021, the Company recorded an impairment loss of $105.6 million and none, respectively.
The write-off of capitalized merger transaction costs are costs incurred and capitalized in relation to the Merger. These costs were written off on December 31, 2022 as Amendment No.5 to the Merger Agreement was not executed until February 24, 2023 which extended the Agreement End Date from March 8, 2023 to September 30, 2023.
For the years ended December 31, 2022 and 2021, the Company’s restructuring and impairment expenses consists of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Impairment of Loan Commitment Asset$105,604 $— 
Employee one-time termination benefits102,261 17,048 
Impairments of Right-of-Use Assets—Real Estate3,707 — 
Impairments of Right-of-Use Assets—Equipment2,494 — 
Write-off of capitalized merger transaction costs27,287 — 
Impairments of intangible assets1,964 — 
Impairment of property and equipment 4,042 — 
Other impairments333 — 
Total Restructuring and Impairments$247,693 $17,048 
As of December 31, 2022 and 2021, respectively, the Company had an immaterial liability related to employee one-time termination benefits that were yet to be paid.
v3.23.4
BETTER 10K - MORTGAGE LOANS HELD FOR SALE AND WAREHOUSE LINES OF CREDIT
 9 Months Ended
Sep. 30, 2023
Mortgage Loans Held For Sale And Warehouse Agreement Borrowings [Abstract]  
MORTGAGE LOANS HELD FOR SALE AND WAREHOUSE LINES OF CREDIT
5. MORTGAGE LOANS HELD FOR SALE AND WAREHOUSE LINES OF CREDIT
The Company has the following outstanding warehouse lines of credit:
December 31,
(Amounts in thousands)MaturityFacility Size20222021
Funding Facility 1 (1)
July 10, 2023$500,000 $89,673 $286,804 
Funding Facility 2 (2)
October 31, 2022— — 171,649 
Funding Facility 3 (3)
September 30, 2022— — 55,622 
Funding Facility 4 (4)
January 30, 2023500,000 9,845 409,616 
Funding Facility 5 (5)
May 31, 2022— — 622,573 
Funding Facility 6 (6)
August 31, 2022— — 4,184 
Funding Facility 7 (7)
August 25, 2022— — 7,279 
Funding Facility 8 (8)
March 8, 2023500,000 44,531 94,181 
Funding Facility 9 (9)
April 6, 2022— — 1,433 
Funding Facility 10 (10)
July 5, 2022— — 14,576 
Total warehouse lines of credit$1,500,000 $144,049 $1,667,917 
__________________
(1)Interest charged under the facility is the greater of i) a) thirty day term SOFR plus three and one-eight percent for each repurchase and non-qualifying mortgage loans, and b) interest rate charged on the note (“Note Rate”) minus one and one-half percent and ii) a) thirty day term SOFR plus two and one-eight percent for each mortgage loans that is not a non-qualifying or a repurchase mortgage loan, and b) the Note Rate minus one and one-eighth percent. Cash collateral deposit of $10.0 million is maintained.
(2)Interest charged under the facility was at the one month SOFR plus 1.75%, with a floor rate of one month LIBOR at 1.00%, as defined in agreement. Cash collateral deposit of $2.5 million was maintained until maturity. Funding Facility 2 matured on October 31, 2022 and the company did not extend beyond maturity.
(3)Interest charged under the facility was at the respective one month LIBOR plus 1.75%, with a floor rate of 2.25%, as defined in the agreement. Cash collateral deposit of $4.5 million was maintained until maturity. Funding Facility 3 matured on September 30, 2022 and the company did not extend beyond maturity.
(4)Interest charged under the facility is at the one month SOFR plus 1.77%. There is no cash collateral deposit maintained as of December 31, 2022. Subsequent to December 31, 2022, the facility was amended to decrease capacity to $250.0 million and to extend maturity to June 6, 2023.
(5)Interest charged under the facility was at the one month LIBOR plus 1.76% - 2.25%, with a floor rate of 0.50%. There was no cash collateral deposit maintained. Funding Facility 5 matured on May 31, 2022 and the company did not extend beyond maturity.
(6)Interest charged under the facility was at the one month SOFR plus 1.50% - 1.75%. Cash collateral deposit of $4.5 million was maintained. Funding Facility 6 matured on August 31, 2022 and the company did not extend beyond maturity.
(7)Interest charged under the facility was at the Adjusted one month Term SOFR plus 1.75% - 2.25%, with a floor rate of one month LIBOR at 0.38%. There was no cash collateral deposit maintained. Funding Facility 7 matured on August 25, 2022 and the company did not extend beyond maturity.
(8)Interest charged under the facility is at the one month SOFR plus 1.60% - 1.85%. Cash collateral deposit of $5.0 million is maintained. Subsequent to December 31, 2022, the facility was amended to decrease capacity to $250.0 million and to extend the maturity to June 6, 2023.
(9)Interest charged under the facility was at the one month LIBOR plus 1.60%, with a floor rate of one month LIBOR at 0.50%, as defined in the agreement. There was no cash collateral deposit maintained. Funding Facility 9 matured on April 6, 2022 and the company did not extend beyond maturity.
(10)Interest charged under the facility was at the one month LIBOR plus 1.88%, with a floor rate of one month LIBOR at 0.25%, as defined in the agreement. There was no cash collateral deposit maintained. Funding Facility 10 matured on July 5, 2022 and the company did not extend beyond maturity.
The unpaid principal amounts of the Company’s LHFS are also pledged as collateral under the relevant warehouse funding facilities. The Company’s LHFS are summarized below by those pledged as collateral and those fully funded by the Company:
December 31,
(Amounts in thousands)20222021
Funding Facility 1$101,598 $309,003 
Funding Facility 2— 186,698 
Funding Facility 3— 67,106 
Funding Facility 410,218 439,767 
Funding Facility 5— 681,521 
Funding Facility 6— 5,016 
Funding Facility 7— 9,828 
Funding Facility 846,356 110,845 
Funding Facility 9— 4,420 
Funding Facility 10— 16,666 
Total LHFS pledged as collateral158,172 1,830,870 
Company-funded LHFS136,599 5,944 
Company-funded Home Equity Line of Credit8,320 — 
Total LHFS303,091 1,836,814 
Fair value adjustment(54,266)17,621 
Total LHFS at fair value$248,826 $1,854,435 
Average days loans held for sale, other than Company-funded LHFS, for the years ended December 31, 2022 and 2021 were approximately 18 days and 20 days, respectively. This is defined as the average days between funding and sale for loans funded during each period. As of December 31, 2022 and 2021, the Company had an immaterial amount of loans either 90 days past due or non-performing.
As of December 31, 2022 and 2021, the weighted average annualized interest rate for the warehouse lines of credit was 6.00% and 2.36%, respectively. The warehouse lines of credit contain certain restrictive covenants that require the Company to maintain certain minimum net worth, liquid assets, current ratios, liquidity ratios, leverage ratios, and earnings. In addition, these warehouse lines also require the Company to maintain compensating cash balances which aggregated to $15.0 million and $29.0 million as of December 31, 2022 and 2021, respectively, and are included in restricted cash on the accompanying consolidated balance sheets. The Company was in compliance with all financial covenants under the warehouse lines as of December 31, 2022 and 2021, respectively.
v3.23.4
BETTER 10K - PROPERTY AND EQUIPMENT
 9 Months Ended
Sep. 30, 2023
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT
6. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
As of December 31,
(Amounts in thousands)20222021
Computer and Hardware$18,688 $23,850 
Furniture and equipment3,105 4,559 
Land and buildings3,030 — 
Leasehold improvements21,661 19,866 
Finance lease assets3,761 3,761 
Total property and equipment50,245 52,035 
Less: Accumulated depreciation(19,741)(11,076)
Property and equipment, net$30,504 $40,959 
Total depreciation expense on property and equipment for the years ended December 31, 2022 and 2021 was $13.7 million and $7.6 million, respectively. Finance lease assets primarily include furniture and IT equipment. An impairment of $3.0 million and none was recognized for the years ended December 31, 2022 and 2021, respectively, related to computer and hardware.
v3.23.4
BETTER 10K - LEASES
 9 Months Ended
Sep. 30, 2023
Leases [Abstract]  
LEASES
7. LEASES
The below table presents the lease related assets and liabilities recorded on the accompanying balance sheet:
As of December 31,
(Amounts in thousands)Balance Sheet Caption20222021
Assets:
Operating lease right-of-use assetsRight-of-use asset$41,979 $56,970 
Finance lease right-of-use assetsProperty and equipment, net2,162 2,683 
Total leased assets$44,141 $59,653 
Liabilities:
Operating lease liabilitiesLease liabilities$60,049 $73,657 
Finance lease liabilitiesOther liabilities1,062 2,184 
Total lease liabilities$61,111 $75,841 
The components of operating lease costs were as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Operating lease cost$18,245 $16,539 
Short-term lease cost544 406 
Variable lease cost2,713 3,209 
Total operating lease cost$21,502 $20,154 
Operating lease costs are reported in the following line items within the consolidated statements of operations and comprehensive loss:
Year Ended December 31,
(Amounts in thousands)20222021
Mortgage platform expenses$14,450 $13,363 
General and administrative expenses1,900 2,485 
Marketing and advertising expenses253 159 
Technology and product development expenses2,711 2,053 
Other platform expenses2,188 2,094 
Total operating lease costs$21,502 $20,154 
The components of finance lease costs were as follows:
Year Ended Year Ended December 31, 2022
(Amounts in thousands)Depreciation and AmortizationInterest ExpenseTotal
Total finance lease cost$520 $273 $793 
The components of finance lease costs were as follows:
Year Ended Year Ended December 31, 2021
(Amounts in thousands)Depreciation and AmortizationInterest ExpenseTotal
Total finance lease cost$520 $439 $959 
Supplemental cash flow and non-cash information related to leases were as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Cash paid for amounts included in measurement of operating lease liabilities$18,836 $15,177 
Right-of-use assets obtained in exchange for lease liabilities:
Upon adoption of ASC 842$— $65,889 
New leases entered into during the year$4,520 $15,834 
Supplemental balance sheet information related to leases was as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Operating leases
Weighted average remaining lease term (in years)6.66.1
Weighted average discount rate5.4 %5.1 %
Finance leases
Weighted average remaining lease term (in years)0.31.3
Weighted average discount rate16.2 %16.2 %
As of December 31, 2022, the maturity analysis of finance and operating lease liabilities are as follows:
(Amounts in thousands)Finance LeasesOperating LeasesTotal
2023$1,101 $16,772 $17,872 
2024— 13,979 13,979 
2025— 11,680 11,680 
2026— 9,073 9,073 
2027— 5,460 5,460 
2028 and beyond— 12,156 12,156 
Total lease payments1,101 69,119 70,220 
Less amount representing interest(39)(9,070)(9,109)
Total lease liabilities$1,062 $60,049 $61,111 
Sales-type Leases—The following table presents the revenue, expenses, and gross margin recognized at the commencement date of sales-type leases for the periods indicated:
Year Ended December 31,
(Amounts in thousands)20222021
Cash offer program revenue$216,408 $30,557 
Cash offer program expenses217,609 30,720 
Gross Margin$(1,201)$(163)
The future maturity of the Company’s customer lease payments of $0.9 million and $11.1 million occurs within the next 180 days as of December 31, 2022 and 2021.
LEASES
7. LEASES
The below table presents the lease related assets and liabilities recorded on the accompanying balance sheet:
As of December 31,
(Amounts in thousands)Balance Sheet Caption20222021
Assets:
Operating lease right-of-use assetsRight-of-use asset$41,979 $56,970 
Finance lease right-of-use assetsProperty and equipment, net2,162 2,683 
Total leased assets$44,141 $59,653 
Liabilities:
Operating lease liabilitiesLease liabilities$60,049 $73,657 
Finance lease liabilitiesOther liabilities1,062 2,184 
Total lease liabilities$61,111 $75,841 
The components of operating lease costs were as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Operating lease cost$18,245 $16,539 
Short-term lease cost544 406 
Variable lease cost2,713 3,209 
Total operating lease cost$21,502 $20,154 
Operating lease costs are reported in the following line items within the consolidated statements of operations and comprehensive loss:
Year Ended December 31,
(Amounts in thousands)20222021
Mortgage platform expenses$14,450 $13,363 
General and administrative expenses1,900 2,485 
Marketing and advertising expenses253 159 
Technology and product development expenses2,711 2,053 
Other platform expenses2,188 2,094 
Total operating lease costs$21,502 $20,154 
The components of finance lease costs were as follows:
Year Ended Year Ended December 31, 2022
(Amounts in thousands)Depreciation and AmortizationInterest ExpenseTotal
Total finance lease cost$520 $273 $793 
The components of finance lease costs were as follows:
Year Ended Year Ended December 31, 2021
(Amounts in thousands)Depreciation and AmortizationInterest ExpenseTotal
Total finance lease cost$520 $439 $959 
Supplemental cash flow and non-cash information related to leases were as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Cash paid for amounts included in measurement of operating lease liabilities$18,836 $15,177 
Right-of-use assets obtained in exchange for lease liabilities:
Upon adoption of ASC 842$— $65,889 
New leases entered into during the year$4,520 $15,834 
Supplemental balance sheet information related to leases was as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Operating leases
Weighted average remaining lease term (in years)6.66.1
Weighted average discount rate5.4 %5.1 %
Finance leases
Weighted average remaining lease term (in years)0.31.3
Weighted average discount rate16.2 %16.2 %
As of December 31, 2022, the maturity analysis of finance and operating lease liabilities are as follows:
(Amounts in thousands)Finance LeasesOperating LeasesTotal
2023$1,101 $16,772 $17,872 
2024— 13,979 13,979 
2025— 11,680 11,680 
2026— 9,073 9,073 
2027— 5,460 5,460 
2028 and beyond— 12,156 12,156 
Total lease payments1,101 69,119 70,220 
Less amount representing interest(39)(9,070)(9,109)
Total lease liabilities$1,062 $60,049 $61,111 
Sales-type Leases—The following table presents the revenue, expenses, and gross margin recognized at the commencement date of sales-type leases for the periods indicated:
Year Ended December 31,
(Amounts in thousands)20222021
Cash offer program revenue$216,408 $30,557 
Cash offer program expenses217,609 30,720 
Gross Margin$(1,201)$(163)
The future maturity of the Company’s customer lease payments of $0.9 million and $11.1 million occurs within the next 180 days as of December 31, 2022 and 2021.
LEASES
7. LEASES
The below table presents the lease related assets and liabilities recorded on the accompanying balance sheet:
As of December 31,
(Amounts in thousands)Balance Sheet Caption20222021
Assets:
Operating lease right-of-use assetsRight-of-use asset$41,979 $56,970 
Finance lease right-of-use assetsProperty and equipment, net2,162 2,683 
Total leased assets$44,141 $59,653 
Liabilities:
Operating lease liabilitiesLease liabilities$60,049 $73,657 
Finance lease liabilitiesOther liabilities1,062 2,184 
Total lease liabilities$61,111 $75,841 
The components of operating lease costs were as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Operating lease cost$18,245 $16,539 
Short-term lease cost544 406 
Variable lease cost2,713 3,209 
Total operating lease cost$21,502 $20,154 
Operating lease costs are reported in the following line items within the consolidated statements of operations and comprehensive loss:
Year Ended December 31,
(Amounts in thousands)20222021
Mortgage platform expenses$14,450 $13,363 
General and administrative expenses1,900 2,485 
Marketing and advertising expenses253 159 
Technology and product development expenses2,711 2,053 
Other platform expenses2,188 2,094 
Total operating lease costs$21,502 $20,154 
The components of finance lease costs were as follows:
Year Ended Year Ended December 31, 2022
(Amounts in thousands)Depreciation and AmortizationInterest ExpenseTotal
Total finance lease cost$520 $273 $793 
The components of finance lease costs were as follows:
Year Ended Year Ended December 31, 2021
(Amounts in thousands)Depreciation and AmortizationInterest ExpenseTotal
Total finance lease cost$520 $439 $959 
Supplemental cash flow and non-cash information related to leases were as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Cash paid for amounts included in measurement of operating lease liabilities$18,836 $15,177 
Right-of-use assets obtained in exchange for lease liabilities:
Upon adoption of ASC 842$— $65,889 
New leases entered into during the year$4,520 $15,834 
Supplemental balance sheet information related to leases was as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Operating leases
Weighted average remaining lease term (in years)6.66.1
Weighted average discount rate5.4 %5.1 %
Finance leases
Weighted average remaining lease term (in years)0.31.3
Weighted average discount rate16.2 %16.2 %
As of December 31, 2022, the maturity analysis of finance and operating lease liabilities are as follows:
(Amounts in thousands)Finance LeasesOperating LeasesTotal
2023$1,101 $16,772 $17,872 
2024— 13,979 13,979 
2025— 11,680 11,680 
2026— 9,073 9,073 
2027— 5,460 5,460 
2028 and beyond— 12,156 12,156 
Total lease payments1,101 69,119 70,220 
Less amount representing interest(39)(9,070)(9,109)
Total lease liabilities$1,062 $60,049 $61,111 
Sales-type Leases—The following table presents the revenue, expenses, and gross margin recognized at the commencement date of sales-type leases for the periods indicated:
Year Ended December 31,
(Amounts in thousands)20222021
Cash offer program revenue$216,408 $30,557 
Cash offer program expenses217,609 30,720 
Gross Margin$(1,201)$(163)
The future maturity of the Company’s customer lease payments of $0.9 million and $11.1 million occurs within the next 180 days as of December 31, 2022 and 2021.
v3.23.4
BETTER 10K - GOODWILL AND INTERNAL USE SOFTWARE AND OTHER INTANGIBLE ASSETS, NET
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTERNAL USE SOFTWARE AND OTHER INTANGIBLE ASSETS, NET
7. Goodwill and Internal Use Software and Other Intangible Assets, Net
In January 2023, the Company completed an acquisition of Goodholm Finance Ltd. (“Goodholm”), a regulated U.K. based mortgage lender and servicer, providing outsourced administration of mortgages, loans and collection portfolios. The Company paid a total cash consideration of $2.9 million for the acquisition. In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$283 
Property and equipment20 
Indefinite lived intangibles - Licenses1,186 
Goodwill1,741 
Other assets (1)
65 
Accounts payable and accrued expenses (1)
(161)
Other liabilities (1)
(193)
Net assets acquired$2,941 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
Intangible assets acquired consist of regulatory licenses. The acquisition was not material to the Company's condensed consolidated financial statements. Accordingly, pro forma results of this acquisition have not been presented.
In April 2023, the Company completed the acquisition of a U.K.-based banking entity after obtaining regulatory approval from the financial control authorities in the U.K. The Company acquired Birmingham Bank Ltd. (“Birmingham”), a regulated bank, offering a range of financial products and services to consumers and small businesses. The acquisition will allow the Company to grow and expand operations in the U.K. by enabling the Company to improve the mortgage process for U.K. mortgage borrowers. The Company acquired 100% of the equity of Birmingham for a total consideration of $19.3 million, which consists of $15.9 million in cash and $3.4 million in deferred consideration in the form of an earn out which is included within other liabilities on the condensed consolidated balance sheet at the acquisition date.
In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$2,907 
Accounts receivable (1)
60 
Short-term investments8,729 
Other assets7,530 
Property and equipment83 
Finite lived intangibles854 
Indefinite lived intangibles - Licenses31 
Goodwill12,300 
Accounts payable and accrued expenses (1)
(248)
Customer deposits(12,374)
Other liabilities (1)
(586)
Net assets acquired$19,286 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
Intangible assets acquired consist of trade name, core deposits intangibles, and regulatory licenses. The acquisition was not material to the Company's condensed consolidated financial statements. Accordingly, pro forma results of this acquisition have not been presented.
Changes in the carrying amount of goodwill, net consisted of the following:
Nine Months Ended September 30,
(Amounts in thousands)2023
Balance at beginning of period$18,525 
Goodwill acquired—Goodholm & Birmingham 14,041 
Effect of foreign currency exchange rate changes(74)
Balance at end of period$32,492 
No impairment of goodwill was recognized for the three and nine months ended September 30, 2023 and 2022.
Internal use software and other intangible assets, net consisted of the following:
As of September 30, 2023
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$136,092 $(94,835)$41,257 
Intellectual property and other6.24,322 (1,402)2,920 
Total Intangible assets with finite lives, net140,413 (96,237)44,176 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other2,410 — 2,410 
Total Internal use software and other intangible assets, net$144,643 $(96,237)$48,406 
As of December 31, 2022
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$123,734 $(67,319)$56,415 
Intellectual property and other7.53,449 (838)2,611 
Total Intangible assets with finite lives, net127,183 (68,157)59,026 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,150 — 1,150 
Total Internal use software and other intangible assets, net$130,153 $(68,157)$61,996 
The Company capitalized $5.0 million and $3.0 million in internal use software and website development costs during the three months ended September 30, 2023 and 2022, respectively. Included in capitalized internal use software and website development costs are $2.5 million and $0.8 million of stock-based compensation costs for the three months ended September 30, 2023 and 2022, respectively. Amortization expense totaled $9.3 million and $9.0 million during the three months ended September 30, 2023 and 2022, respectively. For the three months ended September 30, 2023 and 2022, no impairment was recognized relating to intangible assets. The Company capitalized $12.4 million and $22.8 million in internal use software and website development costs during the nine months ended September 30, 2023 and 2022, respectively. Included in capitalized internal use software and website development costs are $3.9 million and $3.0 million of stock-based compensation costs for the nine months ended September 30, 2023 and 2022, respectively. Amortization expense totaled $28.1 million and $26.1 million during the nine months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, no impairment was recognized relating to intangible assets.
8. GOODWILL AND INTERNAL USE SOFTWARE AND OTHER INTANGIBLE ASSETS, NET
In September 2021, the Company completed acquisitions of two U.K. based companies. The Company acquired Trussle Lab Ltd (“Trussle”), a digital mortgage broker that uses a technology platform to make the mortgage process easier, more transparent, and cheaper for the end consumer, and LHE Holdings Limited (“LHE”), a residential property trading platform that enables investors to buy and sell fractional shares of individual properties. The companies were acquired mainly for expansion efforts in international markets.
The Company paid a total cash consideration of $1.4 million for the acquisition of Trussle. In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$781 
Finite lived intangibles - Intellectual property and other3,943 
Indefinite lived intangibles - Licenses and other277 
Goodwill3,317 
Other assets (1)
2,088 
Accounts payable and accrued expenses (1)
(5,512)
Other liabilities (1)
(3,510)
Total recognized assets and liabilities$1,384 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
For the acquisition of LHE, the Company paid a total consideration of $10.1 million. Of the total consideration, $6.2 million was paid in cash at closing. As of December 31, 2021, $3.9 million of the deferred acquisition consideration was included within accounts payable and accrued expenses on the consolidated balance sheets. The amount of deferred acquisition consideration was subsequently paid in March 2022. In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$1,739 
Finite lived intangibles - Intellectual property and other2,601 
Indefinite lived intangibles - Licenses and other1,038 
Goodwill4,420 
Other assets (1)
1,478 
Accounts payable and accrued expenses (1)
(1,172)
Total recognized assets and liabilities$10,104 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
Intangible assets acquired from both companies include trade names, intellectual property, licenses, and in-process research and development (“IPR&D”). The goodwill is non-tax deductible and primarily attributable to expected synergies from the integration of the operations of the acquisitions and the Company.
The acquisitions were not material to the Company's consolidated financial statements, either individually or in the aggregate. Accordingly, pro forma results of these acquisitions have not been presented.
In June 2022, the Company entered into a Share Purchase Agreement to acquire a banking entity for a total consideration of approximately $15.2 million. The banking entity is a U.K. based entity offering a wide range of financial products and services to consumers and small businesses. The acquisition will allow the Company to grow and expand operations in the U.K. by enabling the Company to improve the mortgage process for U.K. mortgage borrowers. The acquisition had not closed as of December 31, 2022 as it is subject to the approval of the Prudential Regulation Authority in the U.K. During the fourth quarter of 2022, the Company made a $2.4 million equity investment into the banking entity as an advance of the total consideration to provide liquidity until regulatory approval is obtained. On December 31, 2022, the Company impaired the equity investment in the amount of $0.3 million which is included in restructuring and impairment expenses on the consolidated statements of operations and comprehensive loss. The acquisition is not expected to be material to the Company's operations as a whole. See Note 22 for further information relating to subsequent regulatory approval.
Changes in the carrying amount of goodwill, net consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year$19,811 $10,995 
Goodwill acquired (Trussle and LHE)— 7,737 
Measurement period adjustment(375)1,269 
Effect of foreign currency exchange rate changes(911)(190)
Balance at end of year$18,525 $19,811 
No impairment of goodwill was recognized for the years ended December 31, 2022 and 2021.
Internal use software and other intangible assets, net consisted of the following:
As of December 31, 2022
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$123,734 $(67,319)$56,416 
Intellectual property and other7.53,449 (838)2,611 
Total Intangible assets with finite lives, net127,184 (68,157)59,026 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,150 — 1,150 
Total Internal use software and other intangible assets, net$130,153 $(68,157)$61,996 
As of December 31, 2021
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$96,155 $(32,832)$63,323 
Intellectual property and other7.56,384 (320)6,064 
Total Intangible assets with finite lives, net102,539 (33,152)69,387 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,282 — 1,282 
Total Internal use software and other intangible assets, net$105,641 $(33,152)$72,489 
The Company capitalized $27.6 million and $61.9 million in internal use software and website development costs during the years ended December 31, 2022 and 2021, respectively. Included in capitalized internal use software and website development costs are $4.1 million and $9.0 million of stock-based compensation costs for the years ended December 31, 2022 and 2021, respectively. Amortization expense totaled $35.4 million and $19.6 million during the years ended December 31, 2022 and 2021, respectively. For the years ended December 31, 2022 and 2021, $2.0 million and none impairment was recognized relating to intangible assets (see Note 4).
Amortization expense related to intangible assets as of December 31, 2022 is expected to be as follows:
(Amounts in thousands)Total
2023$34,554 
202420,338 
20253,296 
2026574 
2027 and thereafter264 
Total$59,026 
v3.23.4
BETTER 10K - PREPAID EXPENSES AND OTHER ASSETS
 9 Months Ended
Sep. 30, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
PREPAID EXPENSES AND OTHER ASSETS
8. Prepaid Expenses and Other Assets
Prepaid expenses and other assets consisted of the following:
As of September 30,As of December 31,
(Amounts in thousands)20232022
Prepaid expenses$27,095 $26,366 
Tax receivables9,717 18,139 
Security Deposits15,233 14,369 
Loans held for investment4,163 — 
Prepaid compensation asset— 5,615 
Inventory—Homes— 1,139 
Net investment in lease$— $944 
Total prepaid expenses and other assets$56,208 $66,572 
Prepaid Compensation Asset—Prepaid compensation asset, which is related to prepaid expenses and other assets as shown in the table above, consists of a one-time retention bonus given to Kevin Ryan, Chief Financial Officer of the Company, in the form of a forgivable loan of $6.0 million, with an annual compounding interest rate of 3.5% on August 18, 2022. Subject to Mr. Ryan’s active employment by the Company and status of good standing on each of December 1, 2023, December 1, 2024, December 1, 2025 and December 1, 2026, 25% of the principal amount of, and accrued and unpaid interest on, the loan will be forgivable on each such dates. Further, the outstanding principal and interest will be forgivable upon Mr. Ryan’s death, termination as part of a reduction in force, the elimination or substantial reduction of Mr. Ryan’s role, a change in control of the Company, the Company’s insolvency or filing of bankruptcy or Mr. Ryan’s termination by the Company without cause. The loan will also be forgiven if it would violate applicable law, including Section 402 of the Sarbanes-Oxley Act as implemented in Section 13(k) of the Exchange Act. In the event of Mr. Ryan’s voluntary separation from the Company or termination by the Company for cause, any outstanding principal and interest will be due in full on the date that is twenty-four (24) months from the date of termination. The Company was recognizing the expense ratably over time until December 1, 2026 or until forgiveness based on the events discussed above.
In August 2023, in connection with and prior to the closing of the Merger, the Company has forgiven Mr. Ryan’s loan in the amount of $6.0 million plus accrued interest of $0.2 million and as such the Company is in compliance with Section 402 of the Sarbanes-Oxley Act as implemented in Section 13(k) of the Exchange Act.
As a result of the forgiveness, the Company has recognized $4.8 million and $0.1 million of compensation expense during the three months ended September 30, 2023 and 2022, respectively. The Company has recognized $5.5 million and $0.1 million of compensation expense during the nine months ended September 30, 2023 and 2022, respectively. In addition, the Company has agreed to reimburse and make whole Mr. Ryan with the withholding taxes incurred in connection with the forgiveness of the loan which resulted in additional compensation expense of $3.9 million for the three and nine months ended September 30, 2023.
Loans Held for Investment—The Company holds a small amount of loans held for investment, which were acquired as part of the Birmingham acquisition in April 2023. For these loans, management has the intent and ability to hold for the foreseeable future or until maturity or payoff and are reported at amortized cost, which is the principal amount outstanding, net of cumulative charge-offs, unamortized net deferred loan origination fees and costs and unamortized premiums or discounts on purchased loans.
The allowance for credit losses is a valuation account that is deducted from the loans held for investment amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged-off against the allowance when management believes the loan balance is deemed to be uncollectible. Management's estimation of expected credit losses is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts, including expected defaults and
prepayments. The Company recognized an immaterial current expected credit loss for loans held for investment as of September 30, 2023.
9. PREPAID EXPENSES AND OTHER ASSETS
Prepaid expenses and other assets consisted of the following:
As of December 31,
(Amounts in thousands)20222021
Other prepaid expenses$26,366 $22,931 
Net investment in lease944 11,058 
Tax receivables18,139 20,250 
Prefunded loans in escrow — 12,148 
Merger transaction costs— 14,263 
Security Deposits14,369 9,226 
Prepaid compensation asset5,615 — 
Inventory—Homes
1,139 1,122 
Total prepaid expenses and other assets$66,572 $90,998 
Prepaid compensation asset consists of a one-time retention bonus given to Kevin Ryan, Chief Financial Officer of the Company, in the form of a forgivable loan of $6,000,000, with an annual compounding interest rate of 3.5% on August 18, 2022. Subject to Mr. Ryan’s active employment by the Company and status of good standing on each of December 1, 2023, December 1, 2024, December 1, 2025 and December 1, 2026, the principal and compound interest of the loan will be forgivable on each such dates. Further, the outstanding principal and interest will be forgivable upon Mr. Ryan’s death, termination as part of a reduction in force, the elimination or substantial reduction of Mr. Ryan’s role, a change in control of the Company, the Company’s insolvency or filing of bankruptcy or Mr. Ryan’s termination by the Company without cause. In the event of Mr. Ryan’s voluntary separation from the Company or termination by the Company for cause, any outstanding principal and interest will be due in full on the date that is twenty-four (24) months from the date of termination.
v3.23.4
BETTER 10K - Other Liabilities
 9 Months Ended
Sep. 30, 2023
Other Liabilities Disclosure [Abstract]  
OTHER LIABILITIES
10. OTHER LIABILITIES
Other liabilities consisted of the following:
As of December 31,
(Amounts in thousands)20222021
Deferred Revenue30,205 50,010 
Loan Repurchase Reserve26,745 17,540 
Other Liabilities2,982 8,608 
Total other liabilities$59,933 $76,158 
Deferred Revenue—Deferred revenue primarily consists of advance payments for loan origination and servicing on behalf of an integrated relationship partner. The total advance was for $50.0 million which was received and included in deferred revenue as of December 31, 2021. The advance payments received were recognized in revenue starting in August 2022 through August 2023. The Company must repay the advance in three tranches, $20.0 million due December 2022, $15.0 million due April 2023, and $15.0 million due October 2023, each to be reduced by the amount of loan origination revenue earned between the tranches. In December 2022, the Company repaid $12.9 million of the first tranche after reductions for loan origination revenue earned within mortgage platform revenue during the period. As of December 31, 2022, the Company included deferred revenue of $30.0 million within other liabilities on the consolidated balance sheets.
v3.23.4
BETTER 10K - CORPORATE LINE OF CREDIT AND PRECLOSING BRIDGE NOTES
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
CORPORATE LINE OF CREDIT AND PRECLOSING BRIDGE NOTES
10. Corporate Line of Credit and Preclosing Bridge Notes
Corporate Line of Credit—As of September 30, 2023 and December 31, 2022, the Company had none and $144.4 million, respectively, of outstanding borrowings on the line of credit, which are recorded net of the unamortized portion of the warrant discount and debt issuance costs within corporate line of credit, net in the condensed consolidated balance sheets. The Company had none and $2.0 million of unamortized warrant issuance related discount and debt issuance costs as of September 30, 2023 and December 31, 2022, respectively.
In February 2023, the Company entered into a loan and security agreement (the “2023 Credit Facility”) with Clear Spring Life and Annuity Company, an entity affiliated with the previous agent and acting as an agent for such lenders (together, the “Lender”) to amend its previously existing loan and security agreement (the “2021 Credit Facility”). The terms of the 2023 Credit Facility granted relief from the acceleration of payments under minimum revenue triggers from the 2021 Credit Facility. The 2023 Credit Facility split the principal balance into two tranches, tranche “AB” in the amount of $96.7 million and Tranche “C” in the amount of $26.9 million. Tranche AB was backed by assets that the Company pledged, mainly loans held for sale that the Company fully owned while Tranche C was secured by other assets of the Company. Tranche AB had a fixed interest rate of 8.5% and Tranche C had a variable interest rate based on the SOFR reference rate for a one-month tenor plus 9.5%.
During the nine months ended September 30, 2023, the Company paid off $144.4 million owed in principal balance on the 2023 Credit Facility. The Company made the final principal payment to the Lender in August 2023 and as the Company repaid the 2023 Credit Facility in full earlier than what was contractually required, the Company paid a make-whole amount that represents minimum interest for the Lender in the amount of $4.5 million. The Company also amortized the remaining unamortized debt issuance costs in the amount of $5.1 million as part of interest and amortization on non-funding debt expense within the consolidated statements of operations and comprehensive loss.
For the three months ended September 30, 2023, the Company recorded a total of $11.3 million related to interest expense as follows: $6.1 million in interest expense related to the line of credit and $5.2 million in interest expense related to the amortization of deferred debt issuance costs and discount and other debt servicing fees which is included in interest and amortization on non-funding debt expense, net within the condensed consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2023, the Company recorded a total of $17.6 million related to interest expense as follows: $11.5 million in interest expense related to the line of credit and $6.0 million in interest expense related to the amortization of deferred debt issuance costs and discount and other debt servicing fees which is included in interest and amortization on non-funding debt expense, net within the condensed consolidated statements of operations and comprehensive loss.
For the three months ended September 30, 2022, the Company recorded a total of $2.8 million related to interest expense as follows: $2.4 million in interest expense related to the line of credit and $0.3 million in interest expense related to the amortization of deferred debt issuance costs and discount and other debt servicing fees which is included in interest and amortization on non-funding debt expense within the consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2022, the Company recorded a total of $9.6 million related to interest expense as follows: $8.5 million in interest expense related to the line of credit and $0.8 million in interest expense related to the amortization of deferred debt issuance costs and discount and other debt servicing fees which is included in interest and amortization on non-funding debt expense within the consolidated statements of operations and comprehensive loss.
Pre-Closing Bridge Notes—The carrying value of the Pre-Closing Bridge Notes as of December 31, 2022 is $750.0 million and is included in the condensed consolidated balance sheets. In connection with the Closing of the Business Combination, the Pre-Closing Bridge Notes held by SoftBank in an aggregate principal amount of $650.0 million automatically converted into Better Home & Finance Class C common stock at a conversion price of $10.00 per share (the “Bridge Note Conversion”). In connection with the Bridge Note Conversion, the Company issued an
aggregate 65.0 million shares of Better Home & Finance Class C common stock to a trust designated by SoftBank to distribute such shares to SoftBank upon satisfaction of certain conditions. In addition, pursuant to the letter agreement, dated as of February 7, 2023, by and among Aurora, the Company and the Sponsor (the “Second Novator Letter Agreement”) and the letter agreement, dated August 22, 2023, by and among Aurora, Better and the Sponsor (the “Novator Exchange Agreement”), the Pre-Closing Bridge Notes held by the Sponsor in an aggregate principal amount of $100.0 million were exchanged for 40.0 million shares of Better Home & Finance Class A common stock.
The Company recorded none and $80.1 million in interest expense on Pre-Closing Bridge Notes from the amortization of the discount during the three months ended September 30, 2023 and 2022, respectively, included within the condensed consolidated statements of operations and comprehensive loss. The Company recorded none and $213.5 million in interest expense on Pre-Closing Bridge Notes from the amortization of the discount during the nine months ended September 30, 2023 and 2022, respectively, included within the condensed consolidated statements of operations and comprehensive loss.
Issuance of Post-Closing Convertible Notes—In connection with the Closing of the Business Combination, the Company issued to SoftBank senior subordinated convertible notes in the aggregate principal amount of $528.6 million (the “Post-Closing Convertible Notes”), $550.0 million less approximately $21.4 million released to the Company at the Closing from Aurora’s trust account, pursuant to an Indenture, dated as of August 22, 2023 (the “Indenture”). The Post-Closing Convertible Notes bear 1% interest per annum and mature on August 22, 2028, unless earlier converted or redeemed. Per the Indenture, the Company may elect to pay all or any portion of interest in kind by issuing to the holder of such note an additional note or in cash. Upon issuing the Convertible Notes, the loan commitment asset on Better’s balance sheet as of December 31, 2022 in the amount of $16.1 million, associated with the right to draw the Post-Closing Convertible Notes, is reflected as a debt discount which will be amortized as part of interest expense over the term of the Post-Closing Convertible Notes. As of September 30, 2023, the carrying amount of the Post-Closing Convertible Notes was $513.0 million on the condensed consolidated balance sheets.
The Post-Closing Convertible Notes are convertible, at the option of SoftBank, into shares of the Company’s Class A common stock, with an initial conversion rate per $1,000 principal amount of Post-Closing Convertible Notes equal to (a) $1,000 divided by (b) a dollar amount equal to 115% of the First Anniversary VWAP (as defined in the Indenture), subject to adjustments as described therein. The Indenture provides that the First Anniversary VWAP may be no less than $8.00 and no greater than $12.00, subject to adjustments as described therein. The Post-Closing Convertible Notes may be redeemed at the option of the Company at a redemption price of 115% of par plus accrued interest in cash, at any time on or before the 30th trading day prior to the maturity date of the Post-Closing Convertible Notes if the last reported sale price of the Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during the 30 trading day period ending on, and including, the trading day immediately preceding the date of notice of optional redemption.
The Post-Closing Convertible Notes permit the Company to designate up to $150 million of indebtedness that is senior to the Post-Closing Convertible Notes, in addition to certain other customary exceptions. In addition, the Indenture requires that if a domestic subsidiary of the Company guarantees other senior indebtedness of the Company, such subsidiary would also be required to guarantee the notes, subject to certain exceptions for non-profit subsidiaries and regulated mortgage origination subsidiaries.
For the three and nine months ended September 30, 2023, the Company recorded a total of $0.5 million and $0.5 million respectively, of interest expense related to the Post-Closing Convertible Notes. Interest expense from the Post-Closing Convertible Notes is included in interest and amortization on non-funding debt expense, net within the condensed consolidated statements of operations and comprehensive loss.
11. CORPORATE LINE OF CREDIT AND PRECLOSING BRIDGE NOTES
Corporate Line of Credit—In November 2021, the Company entered into an agreement (“2021 Credit Facility”) with certain lenders, and Biscay GSTF III, LLC, an entity affiliated with the previous agent and acting as
an agent for such lenders (the “Lender”) to amend its existing 2020 Credit Facility. The 2021 Credit Facility does not change the terms of the existing borrowings under the 2020 Credit Facility and only adds a new revolving facility which was never drawn on and unavailable as of December 31, 2022 as the additional revolving facility never closed.
The 2021 Credit Facility provides for a $150.0 million loan facility and matures on March 25, 2027. The terms of the 2021 Credit Facility include 8.0% annual interest, if the Company elects to make interest payments in cash, or 9.5% annual interest in kind which is added to the outstanding principal amount of the loan, and 0.5% unused commitment fee. The terms of the 2021 Credit Facility also include the ability to prepay amounts borrowed, at the Company’s discretion, which would include all accrued and unpaid interest on amounts borrowed as well as a “make-whole” premium that is reduced by the interest incurred through prepayment. As of December 31, 2022 and 2021, the make-whole is $5.2 million and $17.2 million, respectively.
As of December 31, 2022 and 2021, the Company had $146.4 million and $151.4 million, respectively, of outstanding borrowings on the line of credit, which are recorded net of the unamortized portion of the warrant discount and debt issuance costs within corporate line of credit, net in the consolidated balance sheets. The outstanding borrowings as of both December 31, 2022 and 2021 include $1.4 million of interest in kind that was added to the principal balance which was incurred as interest in kind in previous years. The Company had $2.0 million and $2.4 million of unamortized warrant issuance related discount and debt issuance costs as of December 31, 2022 and 2021, respectively. Warrant issuance related discounts and debt issuance costs are recorded as a discount to the outstanding borrowings on the line of credit and are amortized into interest and amortization on non-funding debt within the statements of operations and comprehensive loss over the term of the 2021 Credit Facility using the effective interest method.
During the years ended December 31, 2022 and 2021, the Company borrowed none and $80.0 million, respectively under the credit facility. During the years ended December 31, 2022 and 2021, the Company made a principal repayments of $5.0 million and none, respectively.
For the year ended December 31, 2022, the Company recorded a total of $13.2 million related to interest expense as follows: $12.1 million in interest expense related to the line of credit and $1.1 million in interest expense related to the amortization of deferred debt issuance costs and discount and other debt servicing fees which is included in interest and amortization on non-funding debt expense within the consolidated statements of operations and comprehensive loss.
For the year ended December 31, 2021, the Company recorded a total of $11.4 million related to interest expense as follows: $10.2 million in interest expense related to the line of credit, $0.2 million in interest expense from the unused commitment fee, and $1.0 million in interest expense related to the amortization of deferred debt issuance costs and discount and other debt servicing fees which is included in interest and amortization on non-funding debt expense within the consolidated statements of operations and comprehensive loss.
Under the terms of the 2021 Credit Facility, the Company is required to comply with certain financial and nonfinancial covenants. The terms of the 2021 Credit Facility also limit the Company’s ability to pay dividends and engage in mergers and acquisitions amongst other limitations, without prior approval from the Lender. Any failure by the Company to comply with these covenants and any other obligations under the 2021 Credit Facility could result in an event of default, which allows the Lender to accelerate the repayments of the amounts owed.
The Company was in compliance with its financial covenants as of December 31, 2022. The 2021 Credit Facility includes minimum revenue triggers, which if not met will accelerate repayments of amounts owed. During the fourth quarter of 2022, the Company triggered the acceleration of amounts owed due to the minimum revenue triggers which accelerated repayments to 12 equal monthly installments starting in December 2022 through December 2023. The Company was in discussions with the Lender in anticipation of triggering the acceleration and obtained verbal relief from the accelerated repayment while both parties continued to work on an amendment to the 2021 Credit Facility. As of December 31, 2022, the Company has not made any repayments of amounts owed and has not finalized the amendment, see Note 22 Subsequent Events for further details.
Pre-Closing Bridge Notes—The Company recorded $272.7 million and $19.2 million in interest expense on Pre-Closing Bridge Notes from the amortization of the discount during the years ended December 31, 2022 and 2021, respectively, included within the consolidated statements of operations and comprehensive loss. The carrying value of the Pre-Closing Bridge Notes as of December 31, 2022 and 2021 is $750.0 million and $477.3 million, respectively, and is included in the consolidated balance sheets.
The Pre-Closing Bridge Notes were issued in December 2021, matured on December 2, 2022, and carry a zero percent coupon interest rate. The Pre-Closing Bridge Notes are not repayable in cash and include various conversion features. Under the terms of the Pre-Closing Bridge Note Purchase Agreement immediately prior to the closing of the Second Merger, as defined in Note 1, Aurora will be deemed to automatically assume each Pre-Closing Bridge Note and the outstanding principal amount under each Pre-Closing Bridge Note will automatically be converted into a number of shares of Class A Common Stock of Aurora, based on a conversion ratio of $10 of principal amount payable on the Pre-Closing Bridge Note at the time of conversion to one share of Aurora Class A Common Stock. In the event that the Merger Agreement has not been consummated by the maturity date of the Pre-Closing Bridge Notes or the Merger Agreement is withdrawn, then on the maturity date or upon withdrawal, the Pre-Closing Bridge Notes will convert into a new series of preferred stock with terms consistent with those of the Company’s Series D Preferred Stock. If the Merger Agreement is not consummated due to a breach by Aurora, the Sponsor or SoftBank, the Pre-Closing Bridge Notes will convert into the Company’s common stock.
Since the maturity date of the Pre-Closing Bridge Notes was December 2, 2022, the Pre-Closing Bridge Notes became, by their terms, automatically convertible into Better Home & Finance Class A common stock. However, in connection with the First Novator Letter Agreement, the Maturity Date of the Pre-Closing Bridge Notes held by the Sponsor was extended to March 8, 2023, subject to SoftBank consenting to extending the maturity of its Pre-Closing Bridge Notes accordingly. Since such consent was not received from SoftBank and the Company has not amended its certificate of incorporation to facilitate such conversion, the Pre-Closing Bridge Notes held by the Sponsor and SoftBank have not converted. The Company and the Sponsor ultimately entered into the Deferral Letter Agreement, pursuant to which the Maturity Date of the Pre-Closing Bridge Notes held by the Sponsor was deferred to September 30, 2023. As the Pre-Closing Bridge Notes have not converted per terms of the Pre-Closing Bridge Note Purchase Agreement, the Pre-Closing Bridge Notes are still considered legal form debt as of December 31, 2022 and as such are classified as debt in the consolidated balance sheets, with the Company continuing to amortize the discount on the Pre-Closing Bridge Notes using the original maturity date of December 2, 2022. Additionally, as described further below, both the First Novator Letter Agreement and the Second Novator Letter Agreement included additional exchange features that permit the Sponsor to exchange its Pre-Closing Bridge Notes at different price levels.
SoftBank continues to hold its Pre-Closing Bridge Note, which may be converted pursuant to its terms into a new series of preferred stock of the Company, which series will be identical to the Company’s Series D Preferred Stock, pursuant to the terms thereof. As of December 31, 2022, SoftBank’s Pre-Closing Bridge Note has not yet been converted or otherwise deferred due to ongoing negotiations.
The Pre-Closing Bridge Notes have matured on December 2, 2022, however as they have not converted per terms of the Pre-Closing Bridge Note Purchase Agreement, the Pre-Closing Bridge Notes are still considered legal form debt as of December 31, 2022 and as such are classified as debt in the consolidated balance sheets. The First Novator Letter Agreement, as discussed and defined below, extend the maturity to March 8, 2023 for the Pre-Closing Bridge Notes held by the Sponsor was subject to the consent of SoftBank which was not obtained and therefore not enforceable. As such the Company continued to amortize the discount on the Pre-Closing Bridge Notes using the original maturity date of December 2, 2022. The Second Novator Letter Agreement, as discussed and defined below, was entered into subsequent to December 31, 2022 and is not subject to SoftBank’s consent. In order to convert the Pre-Closing Bridge Notes into a new series of preferred stock, the Company would need to perform a series of legal steps including amending its certificate of incorporation, which it has not yet done. As such, the liability remains on the balance sheet as of December 31, 2022.
First Novator Letter Agreement—On August 26, 2022, Aurora, the Company and the Sponsor entered into a letter agreement (the “First Novator Letter Agreement”) to extend the maturity date of the Pre-Closing Bridge Notes held by Sponsor to March 8, 2023, subject to SoftBank consenting to extending the maturity of its bridge notes
accordingly. Furthermore, pursuant to the First Novator Letter Agreement, subject to the Company receiving requisite shareholder approval therefor (which the Company has agreed to use reasonable best efforts to obtain), the parties agreed that, if the Merger has not been consummated by the maturity date of the Pre-Closing Bridge Notes, Sponsor will have the option, without limiting its rights under the Pre-Closing Bridge Note Purchase Agreement, to alternatively exchange its Pre-Closing Bridge Notes as follows: (x) $75 million of its $100 million aggregate principal amount of Pre-Closing Bridge Notes would be exchanged for newly issued shares of the Company’s Class B common stock at a price per share reflecting a 75% discount to a $6.9 billion pre-money equity valuation of the Company and (y) the remaining $25 million of Sponsor’s bridge notes would be exchanged for the Company’s preferred stock at price per share reflecting a $6.9 billion pre-money equity valuation of the Company. As the extended maturity date has passed and the Merger has not been consummated, Sponsor will have the alternative exchange options described in the First Novator Letter Agreement. The conversion terms of the Pre-Closing Bridge Notes held by SoftBank are not modified by the terms of the First Novator Letter Agreement nor has SoftBank consented to the extension under the First Novator Letter Agreement.
Per the First Novator Letter Agreement, the Sponsor shall have the right, but not the obligation, to fund any portion or none of its Post-Closing Convertible Note. Additionally, the parties to the First Novator Letter Agreement agreed that if the Sponsor does not fund all or a portion of its Post-Closing Convertible Note, then SoftBank’s commitment to fund its Post-Closing Convertible Note shall be reduced on a dollar-for-dollar basis by the amount that is not funded by the Sponsor, such that if the Sponsor elects not to fund in full its Post-Closing Convertible Note, then SoftBank is only obligated to fund $550,000,000 of its Post-Closing Convertible Note. The conversion terms of the Pre-Closing Bridge Notes held by SoftBank are not modified by the terms of the First Novator Letter Agreement.
Deferral Letter Agreement—On February 7, 2023, the Company and the Sponsor entered into a letter agreement (the “Deferral Letter Agreement”) to defer the maturity date of the Pre-Closing Bridge Notes held by the Sponsor until September 30, 2023. Following the expiration of this deferral period, the Pre-Closing Bridge Notes held by the Sponsor may be exchanged or converted in accordance with the terms of the Pre-Closing Bridge Notes, the First Novator Letter Agreement or the Second Novator Letter Agreement, as applicable. The conversion terms of the Pre-Closing Bridge Notes held by SoftBank are not modified by the terms of the Deferral Letter Agreement.
Second Novator Letter Agreement—On February 7, 2023, Aurora, the Company and Sponsor entered into a letter agreement (the “Second Novator Letter Agreement”) pursuant to which, subject to the Company receiving requisite shareholder approval therefor (which the Company has agreed to use reasonable best efforts to obtain), the parties agreed that, if the Merger has not been consummated by the maturity date of the Pre-Closing Bridge Notes (as deferred by the Deferral Letter Agreement), the Sponsor will have the option, without limiting its rights under the Pre-Closing Bridge Note Purchase Agreement, to alternatively exchange its Pre-Closing Bridge Notes as follows: (x) for a number of shares of the Company’s preferred stock at a conversion price that represents a 50% discount to the $6.9 billion pre-money equity valuation of Better or (y) for a number of shares of the Company’s Class B common stock at a price per share that represents a 75% discount to the $6.9 billion pre-money equity valuation of the Company. The conversion terms of the Pre-Closing Bridge Notes held by SoftBank are not modified by the terms of the Second Novator Letter Agreement.
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BETTER 10K - RELATED PARTY TRANSACTIONS
 9 Months Ended
Sep. 30, 2023
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS
11. Related Party Transactions
The Company has entered into a number of commercial agreements with related parties, which management believes provide the Company with products or services that are beneficial to its commercial objectives. Often these products and services have been tailored to the Company’s specific needs or are part of new pilot programs, both for
the Company and the counterparty, for which there are not clear alternative vendors offering comparable services to compare pricing with. It is reasonable to assume that none of these related party commercial agreements were structured at arm’s length and therefore may be beneficial to the counterparty.
1/0 Capital—The Company is a party to an employee and expense allocation agreement with 1/0 Capital, LLC (“1/0 Capital”), an entity affiliated with 1/0 Real Estate, LLC (“1/0 Real Estate”) (an entity wholly owned by 1/0 Holdco, in which Vishal Garg, the Chief Executive Officer of the Company, and the Company’s executive officers each hold a more than five percent ownership interest). Under the employee and expense allocation agreement, 1/0 Capital provides the Company access to certain employees in exchange for reasonable consideration in the form of fees based on their time, as well as IT support services. Any intellectual property created under the agreement by 1/0 Capital employees working on behalf of the Company belongs to the Company. The term of the agreement will continue in perpetuity. The services provided by 1/0 Capital are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with this agreement, the Company reduced the accrued expense by $27.0 thousand and $187.3 thousand in the three months ended September 30, 2023 and 2022, respectively. As part of this agreement, the Company may provide access to certain of its employees for use by 1/0 Capital which reduced the amounts owed to 1/0 Capital by none and none for the three months ended September 30, 2023 and 2022, respectively. The Company recorded a reduction of expenses of $27.0 thousand and $187.3 thousand for the three months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss. The Company incurred gross expenses of $6.4 thousand and $386.8 thousand in the nine months ended September 30, 2023 and 2022, respectively. As part of this agreement, the Company may provide access to certain of its employees for use by 1/0 Capital which reduced the amounts owed to 1/0 Capital by none and $18.2 thousand for the nine months ended September 30, 2023 and 2022, respectively. The Company recorded net expenses of $6.4 thousand and $368.6 thousand for the nine months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss. The Company is invoiced on a net basis and recorded a $144.4 thousand and $177.0 thousand payable as of September 30, 2023 and December 31, 2022, respectively, included within other liabilities, respectively, on the condensed consolidated balance sheets.
TheNumber—The Company originally entered into a data analytics services agreement in August 2016 with TheNumber, LLC (“TheNumber”), an entity affiliated with both Vishal Garg, the Chief Executive Officer of the Company, and 1/0 Real Estate.
In September 2021, the Company and TheNumber entered into a technology integration and license agreement, which was amended in November 2021, to develop a consumer credit profile technology which is to be launched in three stages. The first stage involves testing TheNumber’s limited graph Application Programming Interface (“API”) in a testing environment with test data. The second stage involves data such as credit, income, and assets of staged borrowers meeting certain measures of speed and performance. The third stage requires TheNumber to run the product and serve all borrowers on the production side as well as provide data to the Company from its rich data set. The listed services provided by TheNumber are lead generation, market rate analysis, lead growth analysis, property listing analysis, automated valuation models, and financial risk analysis. Both parties agreed to jointly develop all aspects of this program, and the agreement provides for the utilization of TheNumber employees by the Company. In January 2023, the agreement was extended for an additional year. The services provided by TheNumber are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with these agreements, the Company paid expenses of $66.9 thousand and $617.7 thousand for the three months ended September 30, 2023 and 2022 respectively, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company paid expenses of $438.0 thousand and $1,123.0 thousand for the nine months ended September 30, 2023 and 2022 respectively, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss and had a payable of $204.3 thousand and $232.0 thousand as of September 30, 2023 and December 31, 2022, respectively, within other liabilities on the condensed consolidated balance sheets.
Holy Machine—In January 2018, the Company entered into a consulting agreement (the “2018 Holy Machine Consulting Agreement”) with Holy Machine LLC (“Holy Machine”) an entity controlled by Aaron Schildkrout, a former member of Better’s board of directors (the “Better Board”). Aaron Schildkrout resigned from the Better
Board on June 8, 2022 and as an advisor shortly thereafter. The 2018 Holy Machine Consulting Agreement provided for consulting services related to executive recruiting and such other services as mutually agreed upon, and grants Holy Machine 603,024 options with a 4-year vesting period and no cliff at two times the fair market value of the Company. Further, any inventions, discoveries, improvements or works of authorship made by Holy Machine and the results thereof that may be considered works made for hire shall be assigned to the Company and be the Company’s exclusive property to which the Company has the exclusive right to obtain and own all copyrights. In May 2020, the parties entered into an amendment to the 2018 Holy Machine Consulting Agreement to insert terms relating to compliance with applicable laws, contracts, and indemnification among the parties. No other terms of the 2018 Holy Machine Consulting Agreement were altered. The agreement ended in November 2022.
In July 2020, the Company and Holy Machine entered into a new consulting agreement (the “2020 Holy Machine Consulting Agreement”). The 2020 Holy Machine Consulting Agreement granted Holy Machine (i) the option to purchase 764,143 shares of Better’s common stock, with an accompanying stock option agreement having a term of 10 years, at the then fair market value at the time of the grant and (ii) the option to purchase 764,143 shares of Better’s common stock, with an accompanying stock option agreement having a term of 10 years, with an exercise price per share equal to (a) $5.14 minus (b) the then current fair market value at the time of grant. Both tranches of granted options vest each month on the same day of the month as the vesting commencement date of April 18, 2020, subject to Holy Machine continuing to provide consulting services through each such date, and both have change in control vesting provisions which would result in 100% of unvested options vesting should there be a change of control of the Company, as defined in such a stock option agreement. The services provided by Holy Machine were not integral to the Company’s technology platform and amounts incurred were not material to the Company. During the second quarter of 2022, Aaron Schildkrout resigned from the Better Board and resigned as an advisor to Better shortly thereafter. The Company recorded none and $37.5 thousand of expenses during the three months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss. The Company recorded none and $137.5 thousand of expenses during the nine months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss and a payable of none and none as of September 30, 2023 and December 31, 2022, respectively, within other liabilities on the condensed consolidated balance sheets.
Notable—In October 2021, the Company entered into a private label and consumer lending program agreement (the “2021 Notable Program Agreement”) to provide home improvement lines of credit to qualified borrowers of the Company with Notable Finance, LLC (“Notable”), an entity in which Vishal Garg, the Chief Executive Officer of the Company, and 1/0 Real Estate collectively hold a majority ownership interest. The program is intended to be used by qualified customers of the Company for home improvement purchases (the “Home Improvement Line of Credit”).
This program required Notable to originate and service the loan and in consideration, the Company pays Notable $600 for each loan originated pursuant to the agreement. In connection with the 2021 Notable Program Agreement, Notable provided an unsecured personal loan product with an initial 12-month “draw period” during which the customers can use the approved loan amount and only pay interest on the used loan fund. Following this initial 12-month draw period, the customers are no longer able to withdraw funds and there is a 3 or 5-year “fixed” period to pay back the loan in full in months installments.
For the three months ended September 30, 2023, the Company incurred $16.3 thousand of expenses under the agreement, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. For the three months ended September 30, 2022, the Company incurred $74.3 thousand of expenses under the agreement, $31.9 thousand of which are included within marketing expenses and $42.4 thousand of which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2023, the Company incurred $38.5 thousand of expenses under the agreement, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2022, the Company incurred $74.3 thousand of expenses under the agreement, $31.9 thousand of which are included within marketing expenses and $42.4 thousand of which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company recorded a payable of $10.0 thousand
and $15.0 thousand included within other liabilities on the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.
In January 2022, Better Trust I, a subsidiary of the Company entered into a master loan purchase agreement (the “Notable MLPA”) with Notable to purchase from Notable up to $20.0 million of unsecured home improvement loans underwritten and originated by Notable for the Company’s customers. Under the Notable MLPA, Notable originated home improvement loans, all of which Notable makes available for purchase by the Company. No additional cost outside the sale of the loan was contemplated by the Notable MLPA. The services provided by Notable are not integral to the Company’s technology platform and expenses incurred are not material to the Company. As of September 30, 2023 and December 31, 2022, the Company had $6.8 million and $8.3 million of unsecured home improvement loans from Notable, which are included within mortgage loans held for sale, at fair value on the condensed consolidated balance sheets.
Truework—The Company is a party to a data analytics services agreement with Zethos, Inc., (“Truework”), an entity in which Vishal Garg, the Chief Executive Officer of the Company, is an investor. Under the data analytics services agreement, Truework provides digital Verification of Employment (“VOE”) and Verification of Income (“VOI”) services to the Company during the mortgage loan origination process to confirm the employment and income of borrowers seeking a mortgage. This is data required for underwriting mortgages to the specifications of FNMA, FMCC, and private loan purchasers. These data services are standard product offerings of Truework, which they offer to a number of mortgage lenders. Truework is one of multiple vendors the Company uses for VOE and VOI services, the largest other one being The Work Number by Equifax. The Company uses the two vendors interchangeably based on estimated lowest cost and turnaround time. The Company originally entered into the data services agreement in September 2020, and amended the agreement in October 2021 to run until September 30, 2023. In connection with usage of the services, the Company reduced the accrued expense of $8.6 thousand for the three months ended September 30, 2023, which is included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company incurred expenses of $414.3 thousand for the three months ended September 30, 2022, which is included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive. The Company reduced the accrued expense of $7.4 thousand for the nine months ended September 30, 2023 and recorded the expense of $414.3 thousand nine months ended September 30, 2022, respectively, which is included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company recorded a payable of $101.2 thousand and $16.2 thousand included within other liabilities on the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.
Share Repurchases—During the first quarter of 2022, Better repurchased from former member of the Better Board, Gabrielle Toledano, a total of 33,995 shares of Better’s common stock for an aggregate purchase price of $254,154 to defray taxes associated with vesting of equity awards of such shares. Ms. Toledano subsequently resigned from the Better Board in April 2022.
During the third quarter of 2022, Better repurchased from General Counsel and Chief Compliance Officer Paula Tuffin a total of 82,527 shares of Better common stock for an aggregate purchase price of $399,600 to defray taxes associated with vesting of equity awards of such shares.
Notes Receivable from Stockholders—The Company, previously at times, entered into promissory note agreements with certain employees for the purpose of financing the exercise of the Company’s stock options. These employees may have the ability to use the promissory notes to exercise stock options that have not yet been vested by the respective employees. Interest is compounded and accrued based on any unpaid principal balance and is due upon the earliest of maturity, 120 days after an employee leaves the Company, the date the employee sells shares acquired through the promissory note agreement without prior written consent of the Company, or the day prior to the date that any change in the employee’s status would cause the loan to be a prohibited extension or maintenance of credit under Section 402 of the Sarbanes-Oxley Act. The Company no longer enters into promissory note agreements for the purpose of financing the exercise of the Company’s stock options and no longer allows for the early exercise of stock options
The Company included $10.4 million and $53.9 million of the notes, which include the outstanding principal amount and accrued interest, within notes receivable from stockholders in stockholders’ equity (deficit) on the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively. The balance as of September 30, 2023 does not include any promissory notes due from directors and officers of the Company. The balance as of December 31, 2022 includes $43.6 million of promissory notes due from directors and officers of the Company, of which $40.2 million was due from Vishal Garg. During the three months ended September 30, 2023, the Company reduced interest income from the promissory notes of $0.5 million, and during three months ended September 30, 2022, the Company recognized interest income from the promissory notes of $0.1 million which is included within interest income on the condensed consolidated statements of operations and comprehensive loss. During the nine months ended September 30, 2023, the Company reduced interest income from the promissory notes of $0.3 million, and nine months ended September 30, 2022, the company recognized interest income from the promissory notes of $0.3 million, which is included within interest income on the condensed consolidated statements of operations and comprehensive loss. The notes range in maturity from May 2025 to January 2026 and include interest rates ranging from 0.5% to 2.5% per annum. See Note 17 for further details on the accounting for notes receivable from stockholders.
In August 2023, Better derecognized $46.4 million related to the partial forgiveness by Better to executive officers Vishal Garg, Kevin Ryan, and Paula Tuffin for their outstanding notes and cancellation of the shares collateralizing the notes to satisfy the remaining principal which was forgiven and cancelled upon the Closing. Additionally, for the nine months ended September 30, 2023, the Company recognized additional compensation expense of $0.4 million to certain of the Company's executives in connection with taxes due for capital gains on the sale of shares for settlement of the notes outstanding.
12. RELATED PARTY TRANSACTIONS
The Company has entered into a number of commercial agreements with related parties, which management believes provide the Company with products or services that are beneficial to its commercial objectives. Often these products and services have been tailored to the Company’s specific needs or are part of new pilot programs, both for the Company and the counterparty, for which there are not clear alternative vendors offering comparable services to compare pricing with. It is reasonable to assume that none of these related party commercial agreements were structured at arm’s length and therefore may be beneficial to the counterparty.
1/0 Capital—The Company is a party to an employee and expense allocation agreement with 1/0 Capital, LLC (“1/0 Capital”), an entity affiliated with 1/0 Real Estate, LLC (“1/10 Real Estate”) (an entity wholly owned by 1/0 Holdco, in which Vishal Garg, the Chief Executive Officer of the Company, and the Company’s executive officers each hold a more than five percent ownership interest). Under the employee and expense allocation agreement, 1/0 Capital provides the Company access to certain employees in exchange for reasonable consideration in the form of
fees based on their time, as well as IT support services. Any intellectual property created under the agreement by 1/0 Capital employees working on behalf of the Company belongs to the Company. The term of the agreement will continue in perpetuity. The services provided by 1/0 Capital are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with this agreement, the Company incurred gross expenses of $0.5 million and $1.5 million during the years ended December 31, 2022 and 2021, respectively. As part of this agreement, the Company may provide access to certain of its employees for use by 1/0 Capital which reduced the amounts owed to 1/0 Capital by $18.2 thousand and $0.2 million for the years ended December 31, 2022 and 2021, respectively. The Company recorded net expenses of $0.4 million and $1.3 million for the years ended December 31, 2022 and 2021, respectively, and are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss. The Company is invoiced on a net basis and recorded a $177.0 thousand payable and a $6.1 thousand receivable as of December 31, 2022 and 2021, respectively, included within other liabilities and other receivables, net, respectively, on the consolidated balance sheets.
TheNumber—The Company originally entered into a data analytics services agreement in August 2016 with TheNumber, LLC (“TheNumber”), an entity affiliated with both Vishal Garg, the Chief Executive Officer, and 1/0 Real Estate.
In September 2021, the Company and TheNumber entered into a technology integration and license agreement, which was amended in November 2021, to develop a consumer credit profile technology which is to be launched in three stages. The first stage involves testing TheNumber’s limited graph Application Programming Interface (“API”) in a testing environment with test data. The second stage involves data such as credit, income, and assets of staged borrowers meeting certain measures of speed and performance. The third stage requires TheNumber to run the product and serve all borrowers on the production side as well as provide data to the Company from its rich data set. The listed services provided by TheNumber are lead generation, market rate analysis, lead growth analysis, property listing analysis, automated valuation models, and financial risk analysis. Both parties agreed to jointly develop all aspects of this program, and the agreement provides for the utilization of TheNumber employees by the Company. Subsequent to December 31, 2022, the agreement was extended into 2023. The services provided by TheNumber are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with these agreements, the Company paid expenses of $1.4 million and $0.1 million for the years ended December 31, 2022 and 2021 respectively, which are included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss and a payable of $0.2 million and none as of December 31, 2022 and 2021, respectively, within other liabilities on the consolidated balance sheets.
Holy Machine—In January 2018, the Company entered into a consulting agreement (the “2018 Holy Machine Consulting Agreement”) with Holy Machine LLC (“Holy Machine”) an entity controlled by Aaron Schildkrout, a member of the Company’s board of directors (the “Board of Directors”) at such time. During the year ended December 31, 2022, Aaron Schildkrout resigned from the Board of Directors on June 8, 2022 and as an advisor shortly thereafter. The 2018 Holy Machine Consulting Agreement provided for consulting services related to executive recruiting and such other services as mutually agreed upon, and grants Holy Machine 603,024 options with a 4-year vesting period and no cliff at two times the then fair market value of the Company. Further, any inventions, discoveries, improvements or works of authorship made by Holy Machine and the results thereof that may be considered works for made for hire shall be assigned to the Company and be the Company’s exclusive property to which the Company has the exclusive right to obtain and own all copyrights. The term of the agreement ended in November 2022, although any party may terminate the agreement at any time. In May 2020, the parties entered into an amendment to the 2018 Holy Machine Consulting Agreement to insert terms relating to compliance with applicable laws, contracts, and indemnification among the parties. No other terms of the 2018 Holy Machine Consulting Agreement were altered.
In July 2020, the Company and Holy Machine entered into a new consulting agreement (the “2020 Holy Machine Consulting Agreement”). The 2020 Holy Machine Consulting Agreement grants Holy Machine (i) the option to purchase 250,000 shares of the Company’s common stock, with an accompanying stock option agreement having a term of 10 years, at the then fair market value at the time of the grant and (ii) the option to purchase 250,000 shares of the Company’s common stock, with an accompanying stock option agreement having a term of 10 years, with an exercise price per share equal to (a) $15.71 minus (b) the then current fair market value at the time of grant. Both tranches of granted options vest each month on the same day of the month as the vesting commencement
date of April 18, 2020, subject to Holy Machine continuing to provide consulting services through each such date, and both have change in control vesting provisions which would result in 100% of unvested options vesting should there be a change of control of the Company, as defined in such a stock option agreement. The term will continue until the services are completed or terminated. The services provided by Holy Machine are not integral to the Company’s technology platform and amounts incurred are not material to the Company. The Company recorded $0.1 million and $0.3 million of expenses during the years ended December 31, 2022 and 2021, respectively, which are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss and a payable of none and $50.0 thousand as of December 31, 2022 and 2021, respectively, within other liabilities on the consolidated balance sheets.
Embark—In November 2020, the Company entered into a license agreement with Embark Corp (“Embark”), a company for which Vishal Garg served as a director and Vishal Garg’s spouse serves as chief executive officer, and in which Vishal Garg and his spouse collectively hold a 25.8% ownership interest. Vishal Garg resigned from the board of directors effective October 1, 2021. The agreement provides the Company the use of one floor of office space in midtown Manhattan, New York City, for a period of 15 months. In connection with the agreement, the Company is obligated to pay Embark $127.0 thousand annually plus applicable taxes and utilities. For the year ended December 31, 2021, the Company incurred $80.7 thousand of expenses under the agreement which are included within general and administrative expenses on the statements of operations and comprehensive loss. The agreement was terminated in June 2021.
Notable—In October 2021, the Company entered into a private label and consumer lending program agreement (the “2021 Notable Program Agreement”) to provide home improvement lines of credit to qualified borrowers of the Company with Notable Finance, LLC (“Notable”), an entity in which Vishal Garg and 1/0 Real Estate collectively hold a majority ownership interest. The program is intended to be used by qualified customers of the Company for home improvement purchases (the “Home Improvement Line of Credit”).
This program required Notable to originate and service the loan and in consideration, the Company pays Notable $600 for each loan originated pursuant to the agreement. In connection with the 2021 Notable Program Agreement, Notable provided a branded prepaid card, similar to a gift card, which converts into an unsecured line of credit in certain circumstances.
For the years ended December 31, 2022 and 2021, the Company incurred $0.1 million and $0.6 million, respectively, of expenses under the agreement, of which $42.9 thousand and none are included within mortgage platform expenses, and $55.3 thousand and $0.6 million are included within marketing and advertising expenses on the consolidated statements of operations and comprehensive loss. The Company recorded a payable of $15.0 thousand and $0.3 million included within other liabilities on the consolidated balance sheets as of December 31, 2022 and 2021, respectively.
In January 2022, Better Trust I, a subsidiary of the Company entered into a master loan purchase agreement (the “Notable MLPA”) with Notable to purchase from Notable up to $20.0 million of unsecured home improvement loans underwritten and originated by Notable for the Company’s customers. Under the Notable MLPA, Notable originated home improvement loans, all of which Notable makes available for purchase by the Company. No additional cost outside the sale of the loan was contemplated by the Notable MLPA. The services provided by Notable are not integral to the Company’s technology platform and expenses incurred are not material to the Company. As of December 31, 2022, the Company had $8.3 million of unsecured home improvement loans from Notable, which are included within mortgage loans held for sale, at fair value on the consolidated balance sheets.
Truework—The Company is a party to a data analytics services agreement with Zethos, Inc., (“Truework”), an entity in which Vishal Garg, the Chief Executive Officer, is an investor. Under the data analytics services agreement, Truework provides digital Verification of Employment (VOE) and Verification of Income (VOI) services to the Company during the mortgage loan origination process to confirm the employment and income of borrowers seeking a mortgage. This is data required for underwriting mortgages to the specifications of Fannie Mae, Freddie Mac, and private loan purchasers. These data services are standard product offerings of Truework, which they offer to a number of mortgage lenders. Truework is one of multiple vendors the Company uses for VOE and VOI services, the largest other one being The Work Number by Equifax. The Company uses the two vendors
interchangeably based on estimated lowest cost and turnaround time. The Company originally entered into the data services agreement in June 2020, and amended the agreement in October 2021 to run until September 30, 2023. In connection with usage of the services, the Company incurred expenses of $0.5 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively, which is included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss and a payable of $16.2 thousand and $19.2 thousand included within other liabilities on the consolidated balance sheets as of December 31, 2022 and 2021, respectively.
Share Repurchases—During the first quarter of 2022, the Company repurchased from former director Gabrielle Toledano a total of 11,122 shares of common stock for an aggregate purchase price of $254,154 to defray taxes associated with vesting of equity awards of such shares. Ms. Toledano subsequently resigned from the Company’s Board in April 2022.
During the second quarter of 2022, the Company repurchased from General Counsel and Chief Compliance Officer Paula Tuffin a total of 27,000 shares of common stock for an aggregate purchase price of $399,600 to defray taxes associated with vesting of equity awards of such shares.
Notes Receivable from Stockholders—The Company, at times, enters into promissory note agreements with certain employees for the purpose of financing the exercise of the Company’s stock options. These employees may have the ability to use the promissory notes to exercise stock options that have not yet been vested by the respective employees. Interest is compounded and accrued based on any unpaid principal balance and is due upon the earliest of maturity, 120 days after an employee leaves the Company, the date the employee sells shares acquired through the promissory note agreement without prior written consent of the Company, or the day prior to the date that any change in the employee’s status would cause the loan to be a prohibited extension or maintenance of credit under Section 402 of the Sarbanes Oxley Act of 2002. The Company included $53.9 million and $38.6 million of the notes, which include the outstanding principal amount and accrued interest, within notes receivable from stockholders in stockholders’ equity (deficit) on the consolidated balance sheets as of December 31, 2022 and 2021, respectively. The balance as of December 31, 2022 includes $43.6 million of promissory notes due from directors and officers of the Company, of which $40.2 million is due from Vishal Garg. The balance as of December 31, 2021 includes $33.9 million of promissory notes due from directors and officers of the Company, of which $29.9 million was due from Vishal Garg. During the years ended December 31, 2022 and 2021, the Company recognized interest income from the promissory notes of $0.7 million and $0.3 million, respectively, which is included within interest income on the consolidated statements of operations and comprehensive loss. The notes range in maturity from May 2025 to January 2026 and include interest rates ranging from 0.5% to 2.5% per annum.
v3.23.4
BETTER 10K - COMMITMENTS AND CONTINGENCIES
 9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES
12. Commitments and Contingencies
Litigation—The Company, among other things, engages in mortgage lending, title and settlement services, and other financial technology services. The Company operates in a highly regulated industry and may be subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies. While the ultimate outcome of these matters cannot be predicted with certainty due to inherent uncertainties in litigation, management is of the opinion that these matters will not have a material impact on the condensed consolidated financial statements of the Company. The Company accrues for losses when they are probable to occur and such losses are reasonably estimable, and discloses pending litigation if the Company believes a possibility exists that the litigation will have a material effect on its financial results. Legal costs expected to be incurred are accounted for as they are incurred.
The Company is currently a party to pending legal claims and proceedings regarding an employee related labor dispute brought forth during the third quarter of 2020. The dispute alleges that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California and the State of Florida. The case is still in its early stages and has not yet reached the class certification stage and as such the ultimate outcome cannot be predicted with certainty due to inherent uncertainties in the legal claims. As part of the dispute, the Company included an estimated liability of $8.4 million as of both September 30, 2023 and December 31, 2022, which is included in accounts payable and accrued expenses on the condensed consolidated balance sheets. No additional expense was accrued for the nine months ended September 30, 2023. During the first quarter of 2023, the Company settled its employee related labor dispute in the State of Florida for an immaterial amount.
In September 2022, the former Head of Sales and Operations of the Company, Sarah Pierce, filed litigation against the Company, the Company’s founder and CEO Vishal Garg, and the Company’s Chief Administrative Officer and Senior Counsel Nicholas Calamari. The complaint alleges several causes of action including: violation of certain state labor laws, breach of fiduciary duty and defamation against Mr. Garg, aiding and abetting breach of fiduciary duty against Mr. Calamari, and intentional infliction of emotional distress against Mr. Garg and Mr. Calamari.
On September 29, 2023, the Court filed an Order granting the Company's motions to dismiss in part and denying the Company’s motions to dismiss in part. The following motions were granted: (i) the Company’s motion to dismiss Ms. Pierce’s Sarbanes-Oxley claim was granted; (ii) the Company’s motion to dismiss Ms. Pierce’s Dodd-Frank claim was granted; (iii) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for breach of fiduciary duty was granted; (iv) the Company's motion to dismiss Ms. Pierce’s defamation claim was granted; (v) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for intentional infliction of emotional distress was granted; (vi) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for tortious interference with contract was granted; and (vii) the Company’s motion to dismiss Ms. Pierce’s breach of contract claim was granted. The Company’s motion to dismiss Ms. Pierce's claim of retaliation was dismissed. Mr. Garg’s motion to dismiss Ms. Pierce’s defamation claim was denied, and the Company’s motion to dismiss Ms. Pierce’s defamation claim under the theory of respondeat superior was denied. The Company intends to vigorously defend this action.
Regulatory Matters—In the third quarter of 2021, following third-party audits of samples of loans produced during the fiscal years 2018, 2019, and 2021, the Company became aware of certain TILA-RESPA Integrated Disclosure (“TRID”) defects in the loan production process that resulted in the final closing costs disclosed in the closing disclosure, in some instances, being greater than those disclosed in the loan estimate. Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers. As of September 30, 2023 and December 31, 2022, the Company included an estimated liability of $9.3 million and $11.9 million, respectively, within accounts payable and accrued expenses on the condensed consolidated balance sheets. For the three months ended September 30, 2023, the Company reduced the accrual for these potential TRID defects by $3.0 million and is included within mortgage platform expenses in the condensed consolidated statement of operations and comprehensive loss. For the nine months ended September 30, 2023, the Company reduced the accrual for these potential TRID defects by $2.7 million and is included within mortgage platform expenses in the condensed consolidated statement of operations and comprehensive loss. This accrual is the Company’s best estimate of potential exposure on the larger population of loans based on the results obtained by the audited sample. The accrued amounts are for estimated refunds potentially due to consumers for TRID tolerance errors for loans produced from 2018 through 2022. The Company completed a TRID audit of 2022 files and is continuing to remediate TRID tolerance defects as necessary.
In the second quarter of 2022, Better and Aurora received a voluntary request for documents from the Division of Enforcement of the Securities and Exchange Commission (the “SEC”) and subsequently received several subpoenas, indicating that it is conducting an investigation relating to Aurora and Better to determine if violations of the federal securities laws had occurred. The SEC requested that Aurora and Better provide the SEC with certain information and documents. The voluntary and subpoena requests covered, among other things, certain aspects of Better’s business and operations, certain matters relating to certain actions and circumstances of the Company’s founder and Chief Executive Officer, Vishal Garg, and his other business activities, related party transactions, public statements made about the Company’s proprietary mortgage platform, Better’s financial condition, and allegations made in litigation filed by Sarah Pierce, Better’s former Head of Sales and Operations. On August 3, 2023, the SEC Division of Enforcement informed Aurora and Better that it has concluded its previously announced investigation and that the SEC does not intend to recommend an enforcement action against Aurora or Better.
Loan Commitments—The Company enters into IRLCs to fund mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. As of September 30, 2023 and December 31, 2022, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $211.9 million and $225.4 million, respectively. The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of September 30, 2023 and December 31, 2022, respectively, on the condensed consolidated balance sheets. See Note 15.
Forward Sale Commitments—In the ordinary course of business, the Company enters into contracts to sell existing LHFS or loans committed but yet to be funded into the secondary market at specified future dates. As of September 30, 2023 and December 31, 2022, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $294.0 million and $422.0 million, respectively. The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of
September 30, 2023 and December 31, 2022, respectively, on the condensed consolidated balance sheets. See Note 15.
Concentrations—See below for areas considered to be concentrations of credit risk for the Company:
Significant loan purchasers are those which represent more than 10% of the Company’s loan volume. During the three months ended September 30, 2023, the Company had three loan purchasers that accounted for 56%, 22% and 11% of loans sold by the Company. During the three months ended September 30, 2022, the Company had one loan purchaser that accounted for 59% of loans sold by the Company. During the nine months ended September 30, 2023 and 2022, the Company had one loan purchaser that accounted for 68% and 65% of loans sold by the Company.
Concentrations of credit risk associated with the LHFS carried at fair value are limited due to the large number of borrowers and their dispersion across many geographic areas throughout the United States. As of September 30, 2023, the Company originated 12% and 11% of its LHFS secured by properties in Texas and Florida, respectively. As of December 31, 2022, the company originated 11% of its LHFS secured by properties in each of California and Texas and 10% of its LHFS secured by properties in Florida.
The Company maintains cash and cash equivalent balances at various financial institutions. Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million. As of September 30, 2023 and December 31, 2022, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.
Advanced Loan Origination Fees (Deferred Revenue)—Deferred revenue primarily consists of advance payments for loan origination and servicing on behalf of an integrated relationship partner. The total advance was for $50.0 million and were recognized in revenue starting in August 2022 through August 2023. The Company must repay the advance in three tranches, $20.0 million due December 2022, $15.0 million due April 2023, and $15.0 million due October 2023, each to be reduced by the amount of loan origination revenue earned between the tranches. The Company repaid $12.9 million of the first tranche after reductions for loan origination revenue earned within mortgage platform revenue from August 2022 through December 31, 2022. In April 2023, the Company repaid $12.7 million of the second tranche after reductions for loan origination revenue earned within mortgage platform revenue from January 2023 through March 2023. As of September 30, 2023 and December 31, 2022, the Company included deferred revenue of $12.9 million and $30.0 million, respectively within other liabilities on the condensed consolidated balance sheets after reductions for loan origination revenue earned within mortgage platform revenue. Subsequent to September 30, 2023, in October 2023, the Company paid off $12.9 million of the third tranche.
Escrow Funds—In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement. The Company administers escrow deposits representing undisbursed amounts received for payment of property taxes, insurance and principal, and interest on mortgage loans held for sale. The Company also administers customer deposits in relation to other non-mortgage products and services that the Company offers. These funds are shown as restricted cash and there is a corresponding escrow payable on the consolidated balance sheet, as they are being held on behalf of the borrower or customer. The balance in these accounts as of September 30, 2023 and December 31, 2022 was $3.2 million and $8.0 million, respectively. In some instances the Company may administer funds that are legally owned by a third-party which are excluded from the condensed consolidated balance sheets which amounted to none and $0.3 million as of September 30, 2023 and December 31, 2022, respectively.
Customer Deposits—In relation to the Company’s banking activities tied to the Birmingham acquisition in the U.K., the Company offers individual savings accounts and other depository products with differing maturities and interest rates to its customers. The balance of customer deposits as of September 30, 2023 and December 31, 2022 was $9.9 million and none, respectively on the condensed consolidated balance sheets.
13. Risks and Uncertainties
In the normal course of business, companies in the mortgage lending industry encounter certain economic and regulatory risks. Economic risks include credit risk and interest rate risk, in either a rising or declining interest rate environment. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which loans are being held for sale by the Company.
Interest Rate Risk—The Company is subject to interest rate risk in a rising interest rate environment, as the Company may experience a decrease in loan production, as well as decreases in the fair value of LHFS, loan applications in process with locked-in rates, and commitments to originate loans, which may negatively impact the Company’s operations. To preserve the value of such fixed-rate loans or loan applications in process with locked-in rates, agreements are executed for best effort or mandatory loan sales to be settled at future dates with fixed prices. These loan sales take the form of short-term forward sales of mortgage-backed securities and commitments to sell loans to loan purchasers.
Alternatively, in a declining interest rate environment, customers may withdraw their loan applications that include locked-in rates with the Company. Additionally, when interest rates decline, interest income received from LHFS will decrease. The Company uses an interest rate hedging program to manage these risks. Through this program, mortgage-backed securities are purchased and sold forward.
For all counterparties with open positions as of September 30, 2023, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis. Net settlements entail paying or receiving cash based upon the change in market value of the existing instrument.
The Company currently uses forward sales of mortgage-backed securities, interest rate commitments from borrowers, and mandatory and/or best-efforts forward commitments to sell loans to loan purchasers to protect the Company from interest rate fluctuations. These short-term instruments, which do not require any payments to be paid to the counterparty in connection with the execution of the commitments, are generally executed simultaneously.
Credit Risk—The Company’s hedging program is not designated as formal hedging from an accounting standpoint, contains an element of risk because the counterparties to its mortgage securities transactions may be unable to meet their obligations. While the Company does not anticipate nonperformance by any counterparty, it is exposed to potential credit losses in the event the counterparty fails to perform. The Company’s exposure to credit risk in the event of default by the counterparty is the difference between the contract and the current market price. The Company minimizes its credit risk exposure by limiting the counterparties to well-established banks and securities dealers who meet established credit and capital guidelines.
Loan Repurchase Reserve—The Company sells loans to loan purchasers without recourse. As such, the loan purchasers have assumed the risk of loss or default by the borrower. However, the Company is usually required by these loan purchasers to make certain standard representations and warranties relating to the loan for up to three years post sale. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these loan purchasers for losses. In addition, if loans pay-off within a specified time frame the Company may be required to refund a portion of the sales proceeds to the loan purchasers. The Company repurchased $3.6 million (11 loans) and $37.9 million (82 loans) in unpaid principal balance of loans during the three months ended September 30, 2023 and 2022, respectively, related to its loan repurchase obligations. The Company repurchased $20.8 million (52 loans) and $97.0 million (221 loans) in unpaid principal balance of loans during the nine months ended September 30, 2023 and 2022, respectively, related to its loan repurchase obligations. The Company’s loan repurchase reserve as of September 30, 2023 and December 31, 2022 was $21.8 million and $26.7 million, respectively, and is included within other liabilities on the condensed consolidated balance sheets. The provision for the loan repurchase reserve
is included within mortgage platform expenses on the condensed consolidated statement of operations and comprehensive loss. The following presents the activity of the Company’s loan repurchase reserve:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Loan repurchase reserve at beginning of period$21,832 $21,070 $26,745 $17,540 
Provision866 11,683 178 25,125 
Charge-offs(945)(9,754)(5,170)(19,667)
Loan repurchase reserve at end of period$21,753 $22,999 $21,753 $22,999 
Borrowing Capacity—The Company funds the majority of mortgage loans on a short-term basis through committed and uncommitted warehouse lines as well as from operations for any amounts not advanced by warehouse lenders. As a result, the Company’s ability to fund current operations depends on its ability to secure these types of short-term financings. If the Company’s principal lenders decided to terminate or not to renew any of the warehouse lines with the Company, the loss of borrowing capacity could be detrimental to the Company’s condensed consolidated financial statements unless the Company found a suitable alternative source.
13. COMMITMENTS AND CONTINGENCIES
Litigation—The Company, among other things, engages in mortgage lending, title and settlement services, and other financial technology services. The Company operates in a highly regulated industry and may be subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies. While the ultimate outcome of these matters cannot be predicted with certainty due to inherent uncertainties in litigation, management is of the opinion that these matters will not have a material impact on the consolidated financial statements of the Company. The Company accrues for losses when they are probable to occur and such losses are reasonably estimable, and discloses pending litigation if the Company believes a possibility exists that the litigation will have a material effect on its financial results. Legal costs expected to be incurred are accounted for as they are incurred.
The Company is currently a party to pending legal claims and proceedings regarding an employee related labor dispute brought forth during the third quarter of 2020. The dispute alleges that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California and the State of Florida. The dispute is still in its infancy and the ultimate outcome cannot be predicted with certainty due to inherent uncertainties in the legal claims. As part of the dispute, the Company recorded an estimated liability of $8.4 million and $5.9 million, which is included in accounts payable and accrued expenses on the consolidated balance sheets as of December 31, 2022 and 2021, respectively. Subsequent to December 31, 2022, the Company settled its employee related labor dispute in the State of Florida for an immaterial amount.
In June 2022, the former Head of Sales and Operations of the Company, Sarah Pierce, filed litigation against the Company, the Company’s founder and CEO Vishal Garg, and the Company’s Chief Administrative Officer and Senior Counsel Nicholas Calamari. The complaint alleges several causes of action including: violation of certain state labor laws, breach of fiduciary duty and defamation against Mr. Garg, aiding and abetting breach of fiduciary duty against Mr. Calamari, and intentional infliction of emotional distress against Mr. Garg and Mr. Calamari. In addition, Ms. Pierce claims that she has filed a notice of claim with the Occupational Safety and Health Administration (“OSHA”) against the Company for retaliation in violation of the Sarbanes-Oxley Act which has been denied. The litigation is still in its early stages and as such no amounts have been estimated or accrued for by the Company related to this matter.
Investor Legal Matter—In July 2021, Pine Brook, a current investor in the Company, commenced litigation against the Company among other parties, seeking declaratory judgement in relation to a side letter which was entered into as part of the Series C Preferred Stock issuance by the Company in 2019. The dispute is whether the Company, in connection with the Merger Agreement described in Note 1, would be entitled to trigger a side letter provision allowing the Company to repurchase approximately 1.9 million shares of Series A Preferred Stock for a total price of $1.
On November 1, 2021, the Company and Pine Brook reached a settlement agreement pursuant to which (1) the Company is entitled to exercise its purchase right for half of the 1.9 million shares of Series A Preferred Stock subject to the side letter provision, (2) the Company and Aurora agreed to amend the Merger Agreement (see Note 1) to waive or remove the lock up for holders of 1% or more of the Company’s capital stock, and (3) Mr. Howard Newman immediately resigned from the Company’s board of directors. As a result of the settlement, each party granted one another customary releases.
Regulatory Matters—In September of 2021, the Company received a “Notice of Charges” from a state regulatory agency making several claims against the Company, alleging certain violations of state disclosure, advertising, licensable activity rules, and certain federal disclosure rules. In November 2021, the Company and the state regulatory agency reached a settlement agreement whereby the Company has agreed to pay an immaterial fine and provide additional training to management directly overseeing the origination of mortgage loans for property located in the state. The settlement does not impact the Company’s ability to do business in the state.
In the third quarter of 2021, following third-party audits of samples of loans produced during the fiscal years 2018, 2019, and 2021, the Company became aware of certain TILA-RESPA Integrated Disclosure (“TRID”) defects in the loan production process that resulted in the final closing costs disclosed in the closing disclosure, in some instances, being greater than those disclosed in the loan estimate. Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers. As of December 31, 2022 and 2021, the Company included an estimated liability of $11.9 million and $13.2 million, respectively, within accounts payable and accrued expenses on the consolidated balance sheets. For the year ended December 31, 2022, the Company reduced the estimated liability for these potential TRID defects in the amount of $1.3 million. The reduction of expense for the year ended December 31, 2022 of $1.3 million and the expense for the year ended December 31, 2021 of $13.2 million is included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss. This accrual is the Company’s best estimate of potential exposure on the larger population of loans based on the results obtained by the audited sample. The accrued amounts are for estimated refunds potentially due to consumers for TRID tolerance errors for loans produced from 2018 through 2022. The Company completed a TRID audit of 2022 files and is continuing to remediate TRID tolerance defects as necessary.
In the second quarter of 2022, the Company received a voluntary request for documents from the Division of Enforcement of the Securities and Exchange Commission (“SEC”) and subsequently received several subpoenas, indicating that it is conducting an investigation relating to Aurora and the Company to determine if violations of the federal securities laws have occurred. The SEC has requested that Aurora and the Company provide the SEC with certain information and documents. The voluntary and subpoena requests cover, among other things, certain aspects of the Company’s business and operations, certain matters relating to certain actions and circumstances of the Company’s Founder and CEO and his other business activities, related party transactions, public statements made about the Company’s proprietary mortgage platform, the Company’s financial condition, and allegations made in
litigation filed by Sarah Pierce, the Company’s former Head of Sales and Operations. The Company is cooperating with the SEC. As the investigation is ongoing, it is uncertain how long the investigation will continue or whether, at its conclusion, the SEC will bring an enforcement action against either Aurora or the Company or any of their personnel and, if it does, what remedies it may seek.
Loan Commitments—The Company enters into IRLCs to fund mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. As of December 31, 2022, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $225.4 million. The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of December 31, 2022 and 2021, respectively, on the consolidated balance sheets. See Note 16.
Forward Sale Commitments—In the ordinary course of business, the Company enters into contracts to sell existing LHFS or loans committed but yet to be funded into the secondary market at specified future dates. As of December 31, 2022, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $422.0 million. The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of December 31, 2022 and 2021, respectively, on the consolidated balance sheets. See Note 16.
Concentrations—See below for areas considered to be concentrations of credit risk for the Company:
Significant loan purchasers are those which represent more than 10% of the Company’s loan volume. During the years ended December 31, 2022 and 2021, the Company had one loan purchaser that accounted for 65% and 60% of loans sold by the Company, respectively.
Concentrations of credit risk associated with the LHFS carried at fair value are limited due to the large number of borrowers and their dispersion across many geographic areas throughout the United States. As of December 31, 2022, the Company originated 11% of its LHFS secured by properties in each of Texas and California and 10% of its LHFS secured by properties in Florida. As of December 31, 2021, the Company originated 15% of its LHFS secured by properties in California.
The Company maintains cash and cash equivalent balances at various financial institutions. Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million. As of December 31, 2022 and 2021, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.
As of December 31, 2022, the Company held a cash balance of $0.9 million at Silicon Valley Bank (“SVB”). On March 10, 2023, the California Department of Financial Protection and Innovation declared SVB insolvent and appointed the FDIC as receiver. On March 13, 2023, the FDIC announced that all deposits and substantially all assets of SVB were transferred to a bridge bank, and that all depositors will be made whole. Subsequent to December 31, 2022, the Company transferred cash held at SVB to other financial institutions and does not have any remaining material banking relationship with SVB outside of a standby letter of credit in place with SVB of approximately $6.5 million securing obligations under certain of the Company’s office lease agreements which is classified on the Company’s consolidated balance sheet within prepaid expenses and other assets. The Company does not expect this matter to materially impact its operations or ability to meet its cash obligations.
Escrow Funds—In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement. The Company administers escrow deposits representing undisbursed amounts received for payment of property taxes, insurance and principal, and interest on mortgage loans held for sale. These funds are shown as restricted cash and there is a corresponding escrow payable on the consolidated balance sheet, as they are being held on behalf of the borrower. The balance in these accounts as of December 31, 2022 and 2021 was $8.0 million and $11.6 million, respectively. In some instances the Company may administer funds that are legally owned by a third-party which are excluded from the consolidated balance sheets which amounted to $0.3 million and $2.0 million as of December 31, 2022 and 2021, respectively.
14. RISKS AND UNCERTAINTIES
In the normal course of business, companies in the mortgage lending industry encounter certain economic and regulatory risks. Economic risks include credit risk and interest rate risk, in either a rising or declining interest rate environment. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which loans are being held for sale by the Company.
Interest Rate Risk—The Company is subject to interest rate risk in a rising interest rate environment, as the Company may experience a decrease in loan production, as well as decreases in the fair value of LHFS, loan applications in process with locked-in rates, and commitments to originate loans, which may negatively impact the Company’s operations. To preserve the value of such fixed-rate loans or loan applications in process with locked-in rates, agreements are executed for best effort or mandatory loan sales to be settled at future dates with fixed prices. These loan sales take the form of short-term forward sales of mortgage-backed securities and commitments to sell loans to loan purchasers.
Alternatively, in a declining interest rate environment, customers may withdraw their loan applications that include locked-in rates with the Company. Additionally, when interest rates decline, interest income received from LHFS will decrease. The Company uses an interest rate hedging program to manage these risks. Through this program, mortgage-backed securities are purchased and sold forward.
For all counterparties with open positions as of December 31, 2022, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis. Net settlements entail paying or receiving cash based upon the change in market value of the existing instrument.
The Company currently uses forward sales of mortgage-backed securities, interest rate commitments from borrowers, and mandatory and/or best-efforts forward commitments to sell loans to loan purchasers to protect the Company from interest rate fluctuations. These short-term instruments, which do not require any payments to be paid to the counterparty in connection with the execution of the commitments, are generally executed simultaneously.
Credit Risk—The Company’s hedging program is not designated as formal hedging from an accounting standpoint, contains an element of risk because the counterparties to its mortgage securities transactions may be unable to meet their obligations. While the Company does not anticipate nonperformance by any counterparty, it is exposed to potential credit losses in the event the counterparty fails to perform. The Company’s exposure to credit risk in the event of default by the counterparty is the difference between the contract and the current market price. The Company minimizes its credit risk exposure by limiting the counterparties to well-established banks and securities dealers who meet established credit and capital guidelines.
Loan Repurchase Reserve—The Company sells loans to loan purchasers without recourse. As such, the loan purchasers have assumed the risk of loss or default by the borrower. However, the Company is usually required by these loan purchasers to make certain standard representations and warranties relating to the loan. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these loan purchasers for losses. In addition, if loans pay-off within a specified time frame the Company may be required to refund a portion of the sales proceeds to the loan purchasers. The Company repurchased $110.6 million (262 loans) and $29.1 million (95 loans) in unpaid principal balance of loans during the years ended December 31, 2022 and 2021, respectively related to its loan repurchase obligations. The Company’s loan repurchase reserve is included within other liabilities on the consolidated balance sheets. The provision for the loan repurchase reserve is included within mortgage platform expenses on the consolidated
statements of operations and comprehensive loss. The following presents the activity of the Company’s loan repurchase reserve:
Year Ended December 31,
(Amounts in thousands)20222021
Loan repurchase reserve at beginning of year$17,540 $7,438 
Provision33,518 13,780 
Charge-offs(24,313)(3,678)
Loan repurchase reserve at end of year$26,745 $17,540 
Borrowing Capacity—The Company funds the majority of mortgage loans on a short-term basis through committed and uncommitted warehouse lines as well as from operations for any amounts not advanced by warehouse lenders. As a result, the Company’s ability to fund current operations depends on its ability to secure these types of short-term financings. If the Company’s principal lenders decided to terminate or not to renew any of the warehouse lines with the Company, the loss of borrowing capacity could be detrimental to the Company’s consolidated financial statements unless the Company found a suitable alternative source.
v3.23.4
BETTER 10K - RISKS AND UNCERTAINTIES
 9 Months Ended
Sep. 30, 2023
Risks and Uncertainties [Abstract]  
RISKS AND UNCERTAINTIES
12. Commitments and Contingencies
Litigation—The Company, among other things, engages in mortgage lending, title and settlement services, and other financial technology services. The Company operates in a highly regulated industry and may be subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies. While the ultimate outcome of these matters cannot be predicted with certainty due to inherent uncertainties in litigation, management is of the opinion that these matters will not have a material impact on the condensed consolidated financial statements of the Company. The Company accrues for losses when they are probable to occur and such losses are reasonably estimable, and discloses pending litigation if the Company believes a possibility exists that the litigation will have a material effect on its financial results. Legal costs expected to be incurred are accounted for as they are incurred.
The Company is currently a party to pending legal claims and proceedings regarding an employee related labor dispute brought forth during the third quarter of 2020. The dispute alleges that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California and the State of Florida. The case is still in its early stages and has not yet reached the class certification stage and as such the ultimate outcome cannot be predicted with certainty due to inherent uncertainties in the legal claims. As part of the dispute, the Company included an estimated liability of $8.4 million as of both September 30, 2023 and December 31, 2022, which is included in accounts payable and accrued expenses on the condensed consolidated balance sheets. No additional expense was accrued for the nine months ended September 30, 2023. During the first quarter of 2023, the Company settled its employee related labor dispute in the State of Florida for an immaterial amount.
In September 2022, the former Head of Sales and Operations of the Company, Sarah Pierce, filed litigation against the Company, the Company’s founder and CEO Vishal Garg, and the Company’s Chief Administrative Officer and Senior Counsel Nicholas Calamari. The complaint alleges several causes of action including: violation of certain state labor laws, breach of fiduciary duty and defamation against Mr. Garg, aiding and abetting breach of fiduciary duty against Mr. Calamari, and intentional infliction of emotional distress against Mr. Garg and Mr. Calamari.
On September 29, 2023, the Court filed an Order granting the Company's motions to dismiss in part and denying the Company’s motions to dismiss in part. The following motions were granted: (i) the Company’s motion to dismiss Ms. Pierce’s Sarbanes-Oxley claim was granted; (ii) the Company’s motion to dismiss Ms. Pierce’s Dodd-Frank claim was granted; (iii) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for breach of fiduciary duty was granted; (iv) the Company's motion to dismiss Ms. Pierce’s defamation claim was granted; (v) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for intentional infliction of emotional distress was granted; (vi) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for tortious interference with contract was granted; and (vii) the Company’s motion to dismiss Ms. Pierce’s breach of contract claim was granted. The Company’s motion to dismiss Ms. Pierce's claim of retaliation was dismissed. Mr. Garg’s motion to dismiss Ms. Pierce’s defamation claim was denied, and the Company’s motion to dismiss Ms. Pierce’s defamation claim under the theory of respondeat superior was denied. The Company intends to vigorously defend this action.
Regulatory Matters—In the third quarter of 2021, following third-party audits of samples of loans produced during the fiscal years 2018, 2019, and 2021, the Company became aware of certain TILA-RESPA Integrated Disclosure (“TRID”) defects in the loan production process that resulted in the final closing costs disclosed in the closing disclosure, in some instances, being greater than those disclosed in the loan estimate. Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers. As of September 30, 2023 and December 31, 2022, the Company included an estimated liability of $9.3 million and $11.9 million, respectively, within accounts payable and accrued expenses on the condensed consolidated balance sheets. For the three months ended September 30, 2023, the Company reduced the accrual for these potential TRID defects by $3.0 million and is included within mortgage platform expenses in the condensed consolidated statement of operations and comprehensive loss. For the nine months ended September 30, 2023, the Company reduced the accrual for these potential TRID defects by $2.7 million and is included within mortgage platform expenses in the condensed consolidated statement of operations and comprehensive loss. This accrual is the Company’s best estimate of potential exposure on the larger population of loans based on the results obtained by the audited sample. The accrued amounts are for estimated refunds potentially due to consumers for TRID tolerance errors for loans produced from 2018 through 2022. The Company completed a TRID audit of 2022 files and is continuing to remediate TRID tolerance defects as necessary.
In the second quarter of 2022, Better and Aurora received a voluntary request for documents from the Division of Enforcement of the Securities and Exchange Commission (the “SEC”) and subsequently received several subpoenas, indicating that it is conducting an investigation relating to Aurora and Better to determine if violations of the federal securities laws had occurred. The SEC requested that Aurora and Better provide the SEC with certain information and documents. The voluntary and subpoena requests covered, among other things, certain aspects of Better’s business and operations, certain matters relating to certain actions and circumstances of the Company’s founder and Chief Executive Officer, Vishal Garg, and his other business activities, related party transactions, public statements made about the Company’s proprietary mortgage platform, Better’s financial condition, and allegations made in litigation filed by Sarah Pierce, Better’s former Head of Sales and Operations. On August 3, 2023, the SEC Division of Enforcement informed Aurora and Better that it has concluded its previously announced investigation and that the SEC does not intend to recommend an enforcement action against Aurora or Better.
Loan Commitments—The Company enters into IRLCs to fund mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. As of September 30, 2023 and December 31, 2022, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $211.9 million and $225.4 million, respectively. The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of September 30, 2023 and December 31, 2022, respectively, on the condensed consolidated balance sheets. See Note 15.
Forward Sale Commitments—In the ordinary course of business, the Company enters into contracts to sell existing LHFS or loans committed but yet to be funded into the secondary market at specified future dates. As of September 30, 2023 and December 31, 2022, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $294.0 million and $422.0 million, respectively. The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of
September 30, 2023 and December 31, 2022, respectively, on the condensed consolidated balance sheets. See Note 15.
Concentrations—See below for areas considered to be concentrations of credit risk for the Company:
Significant loan purchasers are those which represent more than 10% of the Company’s loan volume. During the three months ended September 30, 2023, the Company had three loan purchasers that accounted for 56%, 22% and 11% of loans sold by the Company. During the three months ended September 30, 2022, the Company had one loan purchaser that accounted for 59% of loans sold by the Company. During the nine months ended September 30, 2023 and 2022, the Company had one loan purchaser that accounted for 68% and 65% of loans sold by the Company.
Concentrations of credit risk associated with the LHFS carried at fair value are limited due to the large number of borrowers and their dispersion across many geographic areas throughout the United States. As of September 30, 2023, the Company originated 12% and 11% of its LHFS secured by properties in Texas and Florida, respectively. As of December 31, 2022, the company originated 11% of its LHFS secured by properties in each of California and Texas and 10% of its LHFS secured by properties in Florida.
The Company maintains cash and cash equivalent balances at various financial institutions. Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million. As of September 30, 2023 and December 31, 2022, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.
Advanced Loan Origination Fees (Deferred Revenue)—Deferred revenue primarily consists of advance payments for loan origination and servicing on behalf of an integrated relationship partner. The total advance was for $50.0 million and were recognized in revenue starting in August 2022 through August 2023. The Company must repay the advance in three tranches, $20.0 million due December 2022, $15.0 million due April 2023, and $15.0 million due October 2023, each to be reduced by the amount of loan origination revenue earned between the tranches. The Company repaid $12.9 million of the first tranche after reductions for loan origination revenue earned within mortgage platform revenue from August 2022 through December 31, 2022. In April 2023, the Company repaid $12.7 million of the second tranche after reductions for loan origination revenue earned within mortgage platform revenue from January 2023 through March 2023. As of September 30, 2023 and December 31, 2022, the Company included deferred revenue of $12.9 million and $30.0 million, respectively within other liabilities on the condensed consolidated balance sheets after reductions for loan origination revenue earned within mortgage platform revenue. Subsequent to September 30, 2023, in October 2023, the Company paid off $12.9 million of the third tranche.
Escrow Funds—In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement. The Company administers escrow deposits representing undisbursed amounts received for payment of property taxes, insurance and principal, and interest on mortgage loans held for sale. The Company also administers customer deposits in relation to other non-mortgage products and services that the Company offers. These funds are shown as restricted cash and there is a corresponding escrow payable on the consolidated balance sheet, as they are being held on behalf of the borrower or customer. The balance in these accounts as of September 30, 2023 and December 31, 2022 was $3.2 million and $8.0 million, respectively. In some instances the Company may administer funds that are legally owned by a third-party which are excluded from the condensed consolidated balance sheets which amounted to none and $0.3 million as of September 30, 2023 and December 31, 2022, respectively.
Customer Deposits—In relation to the Company’s banking activities tied to the Birmingham acquisition in the U.K., the Company offers individual savings accounts and other depository products with differing maturities and interest rates to its customers. The balance of customer deposits as of September 30, 2023 and December 31, 2022 was $9.9 million and none, respectively on the condensed consolidated balance sheets.
13. Risks and Uncertainties
In the normal course of business, companies in the mortgage lending industry encounter certain economic and regulatory risks. Economic risks include credit risk and interest rate risk, in either a rising or declining interest rate environment. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which loans are being held for sale by the Company.
Interest Rate Risk—The Company is subject to interest rate risk in a rising interest rate environment, as the Company may experience a decrease in loan production, as well as decreases in the fair value of LHFS, loan applications in process with locked-in rates, and commitments to originate loans, which may negatively impact the Company’s operations. To preserve the value of such fixed-rate loans or loan applications in process with locked-in rates, agreements are executed for best effort or mandatory loan sales to be settled at future dates with fixed prices. These loan sales take the form of short-term forward sales of mortgage-backed securities and commitments to sell loans to loan purchasers.
Alternatively, in a declining interest rate environment, customers may withdraw their loan applications that include locked-in rates with the Company. Additionally, when interest rates decline, interest income received from LHFS will decrease. The Company uses an interest rate hedging program to manage these risks. Through this program, mortgage-backed securities are purchased and sold forward.
For all counterparties with open positions as of September 30, 2023, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis. Net settlements entail paying or receiving cash based upon the change in market value of the existing instrument.
The Company currently uses forward sales of mortgage-backed securities, interest rate commitments from borrowers, and mandatory and/or best-efforts forward commitments to sell loans to loan purchasers to protect the Company from interest rate fluctuations. These short-term instruments, which do not require any payments to be paid to the counterparty in connection with the execution of the commitments, are generally executed simultaneously.
Credit Risk—The Company’s hedging program is not designated as formal hedging from an accounting standpoint, contains an element of risk because the counterparties to its mortgage securities transactions may be unable to meet their obligations. While the Company does not anticipate nonperformance by any counterparty, it is exposed to potential credit losses in the event the counterparty fails to perform. The Company’s exposure to credit risk in the event of default by the counterparty is the difference between the contract and the current market price. The Company minimizes its credit risk exposure by limiting the counterparties to well-established banks and securities dealers who meet established credit and capital guidelines.
Loan Repurchase Reserve—The Company sells loans to loan purchasers without recourse. As such, the loan purchasers have assumed the risk of loss or default by the borrower. However, the Company is usually required by these loan purchasers to make certain standard representations and warranties relating to the loan for up to three years post sale. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these loan purchasers for losses. In addition, if loans pay-off within a specified time frame the Company may be required to refund a portion of the sales proceeds to the loan purchasers. The Company repurchased $3.6 million (11 loans) and $37.9 million (82 loans) in unpaid principal balance of loans during the three months ended September 30, 2023 and 2022, respectively, related to its loan repurchase obligations. The Company repurchased $20.8 million (52 loans) and $97.0 million (221 loans) in unpaid principal balance of loans during the nine months ended September 30, 2023 and 2022, respectively, related to its loan repurchase obligations. The Company’s loan repurchase reserve as of September 30, 2023 and December 31, 2022 was $21.8 million and $26.7 million, respectively, and is included within other liabilities on the condensed consolidated balance sheets. The provision for the loan repurchase reserve
is included within mortgage platform expenses on the condensed consolidated statement of operations and comprehensive loss. The following presents the activity of the Company’s loan repurchase reserve:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Loan repurchase reserve at beginning of period$21,832 $21,070 $26,745 $17,540 
Provision866 11,683 178 25,125 
Charge-offs(945)(9,754)(5,170)(19,667)
Loan repurchase reserve at end of period$21,753 $22,999 $21,753 $22,999 
Borrowing Capacity—The Company funds the majority of mortgage loans on a short-term basis through committed and uncommitted warehouse lines as well as from operations for any amounts not advanced by warehouse lenders. As a result, the Company’s ability to fund current operations depends on its ability to secure these types of short-term financings. If the Company’s principal lenders decided to terminate or not to renew any of the warehouse lines with the Company, the loss of borrowing capacity could be detrimental to the Company’s condensed consolidated financial statements unless the Company found a suitable alternative source.
13. COMMITMENTS AND CONTINGENCIES
Litigation—The Company, among other things, engages in mortgage lending, title and settlement services, and other financial technology services. The Company operates in a highly regulated industry and may be subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies. While the ultimate outcome of these matters cannot be predicted with certainty due to inherent uncertainties in litigation, management is of the opinion that these matters will not have a material impact on the consolidated financial statements of the Company. The Company accrues for losses when they are probable to occur and such losses are reasonably estimable, and discloses pending litigation if the Company believes a possibility exists that the litigation will have a material effect on its financial results. Legal costs expected to be incurred are accounted for as they are incurred.
The Company is currently a party to pending legal claims and proceedings regarding an employee related labor dispute brought forth during the third quarter of 2020. The dispute alleges that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California and the State of Florida. The dispute is still in its infancy and the ultimate outcome cannot be predicted with certainty due to inherent uncertainties in the legal claims. As part of the dispute, the Company recorded an estimated liability of $8.4 million and $5.9 million, which is included in accounts payable and accrued expenses on the consolidated balance sheets as of December 31, 2022 and 2021, respectively. Subsequent to December 31, 2022, the Company settled its employee related labor dispute in the State of Florida for an immaterial amount.
In June 2022, the former Head of Sales and Operations of the Company, Sarah Pierce, filed litigation against the Company, the Company’s founder and CEO Vishal Garg, and the Company’s Chief Administrative Officer and Senior Counsel Nicholas Calamari. The complaint alleges several causes of action including: violation of certain state labor laws, breach of fiduciary duty and defamation against Mr. Garg, aiding and abetting breach of fiduciary duty against Mr. Calamari, and intentional infliction of emotional distress against Mr. Garg and Mr. Calamari. In addition, Ms. Pierce claims that she has filed a notice of claim with the Occupational Safety and Health Administration (“OSHA”) against the Company for retaliation in violation of the Sarbanes-Oxley Act which has been denied. The litigation is still in its early stages and as such no amounts have been estimated or accrued for by the Company related to this matter.
Investor Legal Matter—In July 2021, Pine Brook, a current investor in the Company, commenced litigation against the Company among other parties, seeking declaratory judgement in relation to a side letter which was entered into as part of the Series C Preferred Stock issuance by the Company in 2019. The dispute is whether the Company, in connection with the Merger Agreement described in Note 1, would be entitled to trigger a side letter provision allowing the Company to repurchase approximately 1.9 million shares of Series A Preferred Stock for a total price of $1.
On November 1, 2021, the Company and Pine Brook reached a settlement agreement pursuant to which (1) the Company is entitled to exercise its purchase right for half of the 1.9 million shares of Series A Preferred Stock subject to the side letter provision, (2) the Company and Aurora agreed to amend the Merger Agreement (see Note 1) to waive or remove the lock up for holders of 1% or more of the Company’s capital stock, and (3) Mr. Howard Newman immediately resigned from the Company’s board of directors. As a result of the settlement, each party granted one another customary releases.
Regulatory Matters—In September of 2021, the Company received a “Notice of Charges” from a state regulatory agency making several claims against the Company, alleging certain violations of state disclosure, advertising, licensable activity rules, and certain federal disclosure rules. In November 2021, the Company and the state regulatory agency reached a settlement agreement whereby the Company has agreed to pay an immaterial fine and provide additional training to management directly overseeing the origination of mortgage loans for property located in the state. The settlement does not impact the Company’s ability to do business in the state.
In the third quarter of 2021, following third-party audits of samples of loans produced during the fiscal years 2018, 2019, and 2021, the Company became aware of certain TILA-RESPA Integrated Disclosure (“TRID”) defects in the loan production process that resulted in the final closing costs disclosed in the closing disclosure, in some instances, being greater than those disclosed in the loan estimate. Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers. As of December 31, 2022 and 2021, the Company included an estimated liability of $11.9 million and $13.2 million, respectively, within accounts payable and accrued expenses on the consolidated balance sheets. For the year ended December 31, 2022, the Company reduced the estimated liability for these potential TRID defects in the amount of $1.3 million. The reduction of expense for the year ended December 31, 2022 of $1.3 million and the expense for the year ended December 31, 2021 of $13.2 million is included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss. This accrual is the Company’s best estimate of potential exposure on the larger population of loans based on the results obtained by the audited sample. The accrued amounts are for estimated refunds potentially due to consumers for TRID tolerance errors for loans produced from 2018 through 2022. The Company completed a TRID audit of 2022 files and is continuing to remediate TRID tolerance defects as necessary.
In the second quarter of 2022, the Company received a voluntary request for documents from the Division of Enforcement of the Securities and Exchange Commission (“SEC”) and subsequently received several subpoenas, indicating that it is conducting an investigation relating to Aurora and the Company to determine if violations of the federal securities laws have occurred. The SEC has requested that Aurora and the Company provide the SEC with certain information and documents. The voluntary and subpoena requests cover, among other things, certain aspects of the Company’s business and operations, certain matters relating to certain actions and circumstances of the Company’s Founder and CEO and his other business activities, related party transactions, public statements made about the Company’s proprietary mortgage platform, the Company’s financial condition, and allegations made in
litigation filed by Sarah Pierce, the Company’s former Head of Sales and Operations. The Company is cooperating with the SEC. As the investigation is ongoing, it is uncertain how long the investigation will continue or whether, at its conclusion, the SEC will bring an enforcement action against either Aurora or the Company or any of their personnel and, if it does, what remedies it may seek.
Loan Commitments—The Company enters into IRLCs to fund mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. As of December 31, 2022, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $225.4 million. The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of December 31, 2022 and 2021, respectively, on the consolidated balance sheets. See Note 16.
Forward Sale Commitments—In the ordinary course of business, the Company enters into contracts to sell existing LHFS or loans committed but yet to be funded into the secondary market at specified future dates. As of December 31, 2022, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $422.0 million. The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of December 31, 2022 and 2021, respectively, on the consolidated balance sheets. See Note 16.
Concentrations—See below for areas considered to be concentrations of credit risk for the Company:
Significant loan purchasers are those which represent more than 10% of the Company’s loan volume. During the years ended December 31, 2022 and 2021, the Company had one loan purchaser that accounted for 65% and 60% of loans sold by the Company, respectively.
Concentrations of credit risk associated with the LHFS carried at fair value are limited due to the large number of borrowers and their dispersion across many geographic areas throughout the United States. As of December 31, 2022, the Company originated 11% of its LHFS secured by properties in each of Texas and California and 10% of its LHFS secured by properties in Florida. As of December 31, 2021, the Company originated 15% of its LHFS secured by properties in California.
The Company maintains cash and cash equivalent balances at various financial institutions. Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million. As of December 31, 2022 and 2021, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.
As of December 31, 2022, the Company held a cash balance of $0.9 million at Silicon Valley Bank (“SVB”). On March 10, 2023, the California Department of Financial Protection and Innovation declared SVB insolvent and appointed the FDIC as receiver. On March 13, 2023, the FDIC announced that all deposits and substantially all assets of SVB were transferred to a bridge bank, and that all depositors will be made whole. Subsequent to December 31, 2022, the Company transferred cash held at SVB to other financial institutions and does not have any remaining material banking relationship with SVB outside of a standby letter of credit in place with SVB of approximately $6.5 million securing obligations under certain of the Company’s office lease agreements which is classified on the Company’s consolidated balance sheet within prepaid expenses and other assets. The Company does not expect this matter to materially impact its operations or ability to meet its cash obligations.
Escrow Funds—In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement. The Company administers escrow deposits representing undisbursed amounts received for payment of property taxes, insurance and principal, and interest on mortgage loans held for sale. These funds are shown as restricted cash and there is a corresponding escrow payable on the consolidated balance sheet, as they are being held on behalf of the borrower. The balance in these accounts as of December 31, 2022 and 2021 was $8.0 million and $11.6 million, respectively. In some instances the Company may administer funds that are legally owned by a third-party which are excluded from the consolidated balance sheets which amounted to $0.3 million and $2.0 million as of December 31, 2022 and 2021, respectively.
14. RISKS AND UNCERTAINTIES
In the normal course of business, companies in the mortgage lending industry encounter certain economic and regulatory risks. Economic risks include credit risk and interest rate risk, in either a rising or declining interest rate environment. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which loans are being held for sale by the Company.
Interest Rate Risk—The Company is subject to interest rate risk in a rising interest rate environment, as the Company may experience a decrease in loan production, as well as decreases in the fair value of LHFS, loan applications in process with locked-in rates, and commitments to originate loans, which may negatively impact the Company’s operations. To preserve the value of such fixed-rate loans or loan applications in process with locked-in rates, agreements are executed for best effort or mandatory loan sales to be settled at future dates with fixed prices. These loan sales take the form of short-term forward sales of mortgage-backed securities and commitments to sell loans to loan purchasers.
Alternatively, in a declining interest rate environment, customers may withdraw their loan applications that include locked-in rates with the Company. Additionally, when interest rates decline, interest income received from LHFS will decrease. The Company uses an interest rate hedging program to manage these risks. Through this program, mortgage-backed securities are purchased and sold forward.
For all counterparties with open positions as of December 31, 2022, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis. Net settlements entail paying or receiving cash based upon the change in market value of the existing instrument.
The Company currently uses forward sales of mortgage-backed securities, interest rate commitments from borrowers, and mandatory and/or best-efforts forward commitments to sell loans to loan purchasers to protect the Company from interest rate fluctuations. These short-term instruments, which do not require any payments to be paid to the counterparty in connection with the execution of the commitments, are generally executed simultaneously.
Credit Risk—The Company’s hedging program is not designated as formal hedging from an accounting standpoint, contains an element of risk because the counterparties to its mortgage securities transactions may be unable to meet their obligations. While the Company does not anticipate nonperformance by any counterparty, it is exposed to potential credit losses in the event the counterparty fails to perform. The Company’s exposure to credit risk in the event of default by the counterparty is the difference between the contract and the current market price. The Company minimizes its credit risk exposure by limiting the counterparties to well-established banks and securities dealers who meet established credit and capital guidelines.
Loan Repurchase Reserve—The Company sells loans to loan purchasers without recourse. As such, the loan purchasers have assumed the risk of loss or default by the borrower. However, the Company is usually required by these loan purchasers to make certain standard representations and warranties relating to the loan. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these loan purchasers for losses. In addition, if loans pay-off within a specified time frame the Company may be required to refund a portion of the sales proceeds to the loan purchasers. The Company repurchased $110.6 million (262 loans) and $29.1 million (95 loans) in unpaid principal balance of loans during the years ended December 31, 2022 and 2021, respectively related to its loan repurchase obligations. The Company’s loan repurchase reserve is included within other liabilities on the consolidated balance sheets. The provision for the loan repurchase reserve is included within mortgage platform expenses on the consolidated
statements of operations and comprehensive loss. The following presents the activity of the Company’s loan repurchase reserve:
Year Ended December 31,
(Amounts in thousands)20222021
Loan repurchase reserve at beginning of year$17,540 $7,438 
Provision33,518 13,780 
Charge-offs(24,313)(3,678)
Loan repurchase reserve at end of year$26,745 $17,540 
Borrowing Capacity—The Company funds the majority of mortgage loans on a short-term basis through committed and uncommitted warehouse lines as well as from operations for any amounts not advanced by warehouse lenders. As a result, the Company’s ability to fund current operations depends on its ability to secure these types of short-term financings. If the Company’s principal lenders decided to terminate or not to renew any of the warehouse lines with the Company, the loss of borrowing capacity could be detrimental to the Company’s consolidated financial statements unless the Company found a suitable alternative source.
v3.23.4
BETTER 10K - NET INCOME (LOSS) PER SHARE
 9 Months Ended
Sep. 30, 2023
Earnings Per Share [Abstract]  
NET INCOME (LOSS) PER SHARE
14. Net Loss Per Share
The computation of net loss per share and weighted average shares of the Company's common stock outstanding during the periods presented is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands, except for share and per share amounts)2023202220232022
Basic net loss per share:
Net loss$(340,033)$(226,612)$(475,441)$(625,864)
Income allocated to participating securities— — — — 
Net loss attributable to common stockholders - Basic$(340,033)$(226,612)$(475,441)$(625,864)
Diluted net loss per share:
Net loss attributable to common stockholders - Basic$(340,033)$(226,612)$(475,441)$(625,864)
Interest expense and change in fair value of bifurcated derivatives on convertible notes— — — — 
Income allocated to participating securities— — — — 
Net loss income attributable to common stockholders - Diluted$(340,033)$(226,612)$(475,441)$(625,864)
Shares used in computation:
Weighted average common shares outstanding496,577,751292,660,334364,817,445289,934,149
Weighted-average effect of dilutive securities:——
Assumed exercise of stock options————
Assumed exercise of warrants————
Assumed conversion of convertible preferred stock————
Diluted weighted-average common shares outstanding496,577,751292,660,334364,817,445289,934,149
Earnings (loss) per share attributable to common stockholders:
Basic$(0.68)$(0.77)$(1.30)$(2.16)
Diluted$(0.68)$(0.77)$(1.30)$(2.16)
Basic and diluted earnings (loss) per share are the same for each class of common stock because they are entitled to the same dividend rights. Basic and diluted earnings (loss) per share are presented together as the amounts for basic and diluted earnings (loss) per share are the same for each class of common stock. There were no preferred dividends declared or accumulated during the three months ended September 30, 2023 and 2022. There were no preferred dividends declared or accumulated during the nine months ended September 30, 2023 and 2022. The Company applies the two-class method which requires earnings available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all earnings for the period had been distributed. The Company’s outstanding convertible preferred stock is a participating security as the holders of such shares participate in earnings but do not contractually participate in the Company’s losses. The Company's potentially dilutive securities, which include stock options, convertible preferred stock that would have been issued under the if-converted method, warrants to purchase shares of common stock, warrants to purchase shares of preferred stock, and stock options exercised, not vested, have been excluded from the computation of diluted net loss per share, as the effect would be to reduce the net loss per share. The Company excluded the following securities, presented based on amounts outstanding at each period end, from
the computation of diluted net loss per share attributable to common stockholders for the periods indicated as including them would have had an anti-dilutive effect:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Options to purchase common stock (1)
48,389 44,857 48,389 44,857 
Convertible preferred stock (2)
— 108,721 — 108,721 
Pre-Closing Bridge Notes
— 247,777 — 247,777 
Warrants to purchase convertible preferred stock (1)
— 6,649 — 6,649 
Total48,389 408,004 48,389 408,004 
__________________
(1)Securities have an antidilutive effect under the treasury stock method.
(2)Securities have an antidilutive effect under the if-converted method.
15. Net Income (Loss) per share
The computation of net loss per share and weighted average shares of the Company's common stock outstanding during the periods presented is as follows:
Year Ended December 31,
(Amounts in thousands, except for share and per share amounts)20222021
Basic net loss per share:
Net loss$(888,802)$(301,128)
Income allocated to participating securities— — 
Net loss attributable to common stockholders - Basic$(888,802)$(301,128)
Diluted net loss per share:
Net loss attributable to common stockholders - Basic$(888,802)$(301,128)
Interest expense and change in fair value of bifurcated derivatives on convertible notes— — 
Income allocated to participating securities— — 
Net loss income attributable to common stockholders - Diluted$(888,802)$(301,128)
Shares used in computation:
Weighted average common shares outstanding95,303,684 86,984,646 
Weighted-average effect of dilutive securities:
Assumed exercise of stock options— — 
Assumed exercise of warrants— — 
Assumed conversion of convertible preferred stock— — 
Diluted weighted-average common shares outstanding95,303,684 86,984,646 
Earnings (loss) per share attributable to common stockholders:
Basic$(9.33)$(3.46)
Diluted$(9.33)$(3.46)
Basic and diluted earnings (loss) per share are the same for each class of common stock because they are entitled to the same dividend rights. Basic and diluted earnings (loss) per share are presented together as the amounts for basic and diluted earnings (loss) per share are the same for each class of common stock. There were no preferred dividends declared or accumulated during the years ended December 31, 2022 and 2021. The Company applies the
two-class method which requires earnings available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all earnings for the period had been distributed. The Company’s outstanding convertible preferred stock is a participating security as the holders of such shares participate in earnings but do not contractually participate in the Company’s losses. The Company's potentially dilutive securities, which include stock options, convertible preferred stock that would have been issued under the if-converted method, warrants to purchase shares of common stock, warrants to purchase shares of preferred stock, and stock options exercised, not vested, have been excluded from the computation of diluted net loss per share, as the effect would be to reduce the net loss per share or increase net income(loss) per share. The Company excluded the following securities, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated as including them would have had an anti-dilutive effect:
Year Ended December 31,
(Amounts in thousands)20222021
Convertible preferred stock (2)
108,721 108,721 
Pre-Closing Bridge Notes
248,197 214,787 
Options to purchase common stock (1)
43,159 34,217 
Warrants to purchase convertible preferred stock (1)
4,774 3,948 
Warrants to purchase common stock(1)
1,875 1,875 
Total406,726 363,548 
__________________
(1)Securities have an antidilutive effect under the treasury stock method.
(2)Not applicable under the treasury stock method and therefore antidilutive.
v3.23.4
BETTER 10K - FAIR VALUE MEASUREMENTS
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
15. Fair Value Measurements
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
September 30, 2023
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $160,025 $— $160,025 
Derivative assets, at fair value (1)
— 3,506 211 3,717 
Total Assets$— $163,531 $211 $163,742 
Derivative liabilities, at fair value (1)
$— $— $1,678 $1,678 
Warrants and equity related liabilities, at fair value
$577 $950 $— $1,527 
Total Liabilities$577 $950 $1,678 $3,205 
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative, at fair value— — 236,603 236,603 
Total Assets$— $251,558 $236,919 $488,477 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities$— $— $4,924 $4,924 
__________________
(1)As of September 30, 2023 and December 31, 2022, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
Specific valuation techniques and inputs used in determining the fair value of each significant class of assets and liabilities are as follows:
Mortgage Loans Held for Sale—The Company originates certain LHFS to be sold to loan purchasers and elected to carry these loans at fair value in accordance with ASC 825. The fair value is primarily based on the price obtained for other mortgage loans with similar characteristics. The changes in fair value of these assets are largely driven by changes in interest rates subsequent to loan funding and receipt of principal payments associated with the relevant LHFS.
Derivative Assets and Liabilities—The Company uses derivatives to manage various financial risks. The fair values of derivative instruments are determined based on quoted prices for similar assets and liabilities, dealer quotes, and internal pricing models that are primarily sensitive to market observable data. The Company utilizes IRLCs and forward sale commitments. The fair value of IRLCs, which are related to mortgage loan commitments, is based on quoted market prices, adjusted by the pull-through factor, and includes the value attributable to the net servicing fee. The Company evaluated the significance and unobservable nature of the pull-through factor and determined that the classification of IRLCs should be Level 3 as of September 30, 2023 and December 31, 2022. Significant changes in the pull-through factor of the IRLCs, in isolation, could result in significant changes in the IRLCs’ fair value measurement. The value of IRLCs also rises and falls with changes in interest rates; for example, entering into interest rate lock commitments at low interest rates followed by an increase in interest rates in the market, will decrease the value of IRLC. The Company had purchases/issuances of approximately $0.1 million and $2.4 million of IRLCs during the three months ended September 30, 2023 and 2022, respectively. The Company had purchases/issuances of approximately $0.6 million and $5.0 million of IRLCs during the nine months ended September 30, 2023 and 2022, respectively.
The number of days from the date of the IRLC to expiration of the rate lock commitment outstanding as of September 30, 2023 was approximately 60 days on average. The Company attempts to match the maturity date of the IRLCs with the forward commitments. Derivatives are presented in the condensed consolidated balance sheets under derivative assets, at fair value and derivative liabilities, at fair value. During the three months ended September 30, 2023, the Company recognized $0.9 million of loss and $5.0 million of gains related to changes in fair value of IRLCs and forward sale commitments, respectively. During the nine months ended September 30, 2023, the Company recognized $0.1 million and $8.4 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. During the three months ended September 30, 2022, the Company recognized $7.0 million of losses and $26.2 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. During the nine months ended September 30, 2022, the Company recognized $14.3 million of losses and $188.6 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. Gains and losses related to changes in the fair value of IRLCs and forward sale commitments are included in mortgage platform revenue, net within the condensed consolidated statements of operations and comprehensive loss. Unrealized activity related to changes in the fair value of forward sale commitments were $1.5 million of gains and $13.2 million of gains, included in the $5.0 million of gains and $26.2 million of gains, during the three months ended September 30, 2023 and 2022, respectively. Unrealized activity related to changes in the fair value of forward sale commitments were $0.8 million of gains and $14.1 million of gains, included in the $8.4 million of gains and $188.6 million of gains, during the nine months ended September 30, 2023 and 2022, respectively. The notional and fair value of derivative financial instruments not designated as hedging instruments were as follows:
(Amounts in thousands)Notional ValueDerivative AssetDerivative Liability
Balance as of September 30, 2023
IRLCs$211,897 $211 $1,678 
Forward commitments$294,000 3,506 — 
Total$3,717 $1,678 
Balance as of December 31, 2022
IRLCs$225,372 $316 $1,828 
Forward commitments$422,000 2,732 — 
Total$3,048 $1,828 
Warrant and equity related liabilities—The warrant liability consists of Warrants and the Sponsor-Locked up Shares. The Warrants consist of Public Warrants and Private Warrants. The Public Warrants trade on the Nasdaq Capital Market under the ticker symbol “BETRW” and as such is considered a Level 1 input from an active market to derive the value. The Private Warrants and Sponsor-Locked up Shares, although not publicly traded on an active market, use inputs from the publicly traded Public Warrants and the Company’s publicly traded common stock,
respectively, and are further calibrated using unobservable inputs representing Level 2 measurements within the fair value hierarchy.
Convertible Preferred Stock Warrants—The Company issued Former Preferred Stock Warrants to certain investors and to the Lender under its corporate line of credit (see Note 10). The Company obtained a fair value analysis from a third party to assist in determination of the fair value of warrants. The Company used the Black-Scholes-Merton option-pricing model to estimate the fair value of the warrants at the issuance date and as of December 31, 2022, which is based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Significant changes in the unobservable inputs could result in significant changes in the fair value of the convertible preferred stock warrants. The warrant valuation was based on the intrinsic value of the Company’s underlying stock price and included certain assumptions such as risk free rate, volatility rate, and expected term.
Bifurcated Derivative—The Company’s Pre-Closing Bridge Notes included embedded features that were separately accounted for and were marked to fair value at each reporting period with changes included in change in fair value of bifurcated derivative on the consolidated statements of operations and comprehensive loss. The Company obtained a fair value analysis from a third party to assist in determination of the fair value of the bifurcated derivative. In estimating the fair value of the bifurcated derivative, management considered factors management believed were material to the valuation process, including, but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As there was no active market for the Company’s equity, the fair value of the bifurcated derivative was based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Management believed the combination of these factors provided an appropriate estimate of the expected fair value and reflected the best estimate of the fair value of the bifurcated derivative.
As of September 30, 2023 and December 31, 2022, Level 3 instruments include IRLCs, bifurcated derivative and convertible preferred stock warrants. The following table presents the rollforward of Level 3 IRLCs:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$(514)$197 $(1,513)$7,568 
Change in fair value of IRLCs(953)(6,976)46 (14,347)
Balance at end of period$(1,467)$(6,779)$(1,467)$(6,779)
The following table presents the rollforward of Level 3 bifurcated derivative:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$237,667 $277,777 $236,603 $— 
Change in fair value of bifurcated derivative(237,667)29,089 (236,603)306,866 
Balance at end of period$— $306,866 $— $306,866 
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$2,830 $11,586 $3,096 $31,997 
Exercises(2,830)— (2,830)— 
Change in fair value of convertible preferred stock warrants— (4,202)(266)(24,613)
Balance at end of period$— $7,384 $— $7,384 
Counterparty agreements for forward sale commitments contain master netting agreements, which contain a legal right to offset amounts due to and from the same counterparty and can be settled on a net basis. The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized Liabilities
Net Amounts Presented in the Condensed Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
September 30, 2023:$3,525 $(19)$3,506 
December 31, 2022$3,263 $(531)$2,732 
Offsetting of Forward Commitments - Liabilities
Balance as of:
September 30, 2023:$— $— $— 
December 31, 2022$— $— $— 
Significant Unobservable Inputs—The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
September 30, 2023
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
10.27% - 97.49%
85.1 %
December 31, 2022
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% - 96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94% - 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24 - 5.74
4.8
Fair value of common stock
$0.00 - $6.60
$1.60 
U.S. GAAP requires disclosure of fair value information about financial instruments, whether recognized or not recognized in the condensed consolidated financial statements, for which it is practical to estimate the fair value. In cases where quoted market prices are not available, fair values are based upon the estimation of discount rates to estimated future cash flows using market yields or other valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimates of fair value in both inactive and orderly markets. Accordingly, fair values are not necessarily indicative of the amount the Company could realize on disposition of the
financial instruments in a current market exchange. The use of market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.
The estimated fair value of the Company’s cash and cash equivalents, restricted cash, warehouse lines of credit, and escrow funds and customer deposits approximates their carrying values as these financial instruments are highly liquid or short-term in nature. The following table presents the carrying amounts and estimated fair value of financial instruments that are not recorded at fair value on a recurring or non-recurring basis:
September 30, 2023December 31, 2022
(Amounts in thousands)Fair Value LevelCarrying AmountFair ValueCarrying AmountFair Value
Short-term investmentsLevel 1$29,831 $29,884 $— $— 
Loans held for investmentLevel 3$4,163 $4,649 $— $— 
Post-Closing Convertible NotesLevel 3$513,001 $252,796 $— $— 
Loan commitment assetLevel 3$— $— $16,119 $54,654 
Pre-Closing Bridge NotesLevel 3$— $— $750,000 $269,067 
Corporate line of creditLevel 3$— $— $144,403 $145,323 
In determining the fair value of the Short term investments, management used observable inputs such as quoted prices in active markets for identical assets. The fair value of loans held for investment is determined by management estimates of the specific credit risk attributes of each pool of loans, in addition to the quoted secondary-market prices which account for the interest rate characteristics of each loan. The corporate line of credit was valued using a Black Derman Toy model which incorporates the option to prepay given the make-whole premium as well as other inputs such as risk-free rates and credit spreads. In determining the fair value of the loan commitment asset and the Pre-Closing Bridge Notes, management used factors that are material to the valuation process, including but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As a number of assumptions and estimates were involved that are largely unobservable, loans held for investment, loan commitment asset and Corporate line of credit were classified as Level 3 inputs within the fair value hierarchy.
16. FAIR VALUE MEASUREMENTS
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative— — 236,603 236,603 
Total Assets
$— $251,558 $236,919 $488,478 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities
$— $— $4,924 $4,924 
December 31, 2021
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $1,854,435 $— $1,854,435 
Derivative assets, at fair value (1)
— 812 8,484 9,296 
Bifurcated derivative— — — — 
Total Assets
$— $1,855,247 $8,484 $1,863,731 
Derivative liabilities, at fair value (1)
$— $1,466 $916 $2,382 
Convertible preferred stock warrants (2)
— — 31,997 31,997 
Total Liabilities
$— $1,466 $32,913 $34,379 
__________________
(1)As of December 31, 2022 and 2021, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
Specific valuation techniques and inputs used in determining the fair value of each significant class of assets and liabilities are as follows:
Mortgage Loans Held for Sale—The Company originates certain LHFS to be sold to loan purchasers and elected to carry these loans at fair value in accordance with ASC 825. The fair value is primarily based on the price obtained for other mortgage loans with similar characteristics. The changes in fair value of these assets are largely driven by changes in interest rates subsequent to loan funding and receipt of principal payments associated with the relevant LHFS.
Derivative Assets and Liabilities—The Company uses derivatives to manage various financial risks. The fair values of derivative instruments are determined based on quoted prices for similar assets and liabilities, dealer quotes, and internal pricing models that are primarily sensitive to market observable data. The Company utilizes IRLCs and forward sale commitments. The fair value of IRLCs, which are related to mortgage loan commitments, is based on quoted market prices, adjusted by the pull-through factor, and includes the value attributable to the net servicing fee. The Company evaluated the significance and unobservable nature of the pull-through factor and determined that the classification of IRLCs should be Level 3 as of December 31, 2022 and 2021. Significant changes in the pull-through factor of the IRLCs, in isolation, could result in significant changes in the IRLCs’ fair value measurement. The value of IRLCs also rises and falls with changes in interest rates; for example, entering into interest rate lock commitments at low interest rates followed by an increase in interest rates in the market, will decrease the value of IRLC. The Company had purchases/issuances of approximately $4.3 million and $50.7 million of IRLCs during the years ended December 31, 2022 and 2021, respectively.
The number of days from the date of the IRLC to expiration of the rate lock commitment outstanding as of December 31, 2022 and 2021 was approximately 60 days on average. The Company attempts to match the maturity date of the IRLCs with the forward commitments. Derivatives are presented in the consolidated balance sheets under derivative assets, at fair value and derivative liabilities, at fair value. During the year ended December 31, 2022, the Company recognized $9.1 million of losses and $187.3 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. During the year ended December 31, 2021, the Company recognized $32.4 million of losses and $95.4 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. Gains and losses related to changes in the fair value of IRLCs and forward sale commitments are included in mortgage platform revenue, net within the consolidated statements of operations and comprehensive loss. Unrealized activity related to changes in the fair value of forward sale commitments were $3.4 million of gains and $24.7 million of gains, included in the $187.3 million of gains and $95.4 million of gains,
during the years ended December 31, 2022 and 2021, respectively. The notional and fair value of derivative financial instruments not designated as hedging instruments were as follows:
(Amounts in thousands)Notional ValueDerivative AssetDerivative Liability    
Balance as of December 31, 2022
IRLCs$225,372 $316 $1,828 
Forward commitments$422,000 2,732 — 
Total$3,048 $1,828 
Balance as of December 31, 2021
IRLCs$2,560,577 $8,484 $916 
Forward commitments$2,818,700 812 1,466 
Total$9,296 $2,382 
Convertible Preferred Stock Warrants—The Company issued warrants to certain investors and to the Lender under its corporate line of credit (see Note 11). The Company obtains a fair value analysis from a third party to assist in determination of the fair value of warrants. The Company used the Black-Scholes option-pricing model to estimate the fair value of the warrants at the issuance date and as of December 31, 2022 and 2021, which is based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Significant changes in the unobservable inputs could result in significant changes in the fair value of the convertible preferred stock warrants. The warrant valuation was based on the intrinsic value of the Company’s underlying stock price and includes certain assumptions such as risk free rate, volatility rate, and expected term.
Bifurcated Derivative—The Company’s Pre-Closing Bridge Notes included embedded features that are separately accounted for and are marked to fair value at each reporting period with changes included in change in fair value of bifurcated derivative on the consolidated statements of operations and comprehensive loss. The Company obtains a fair value analysis from a third party to assist in determination of the fair value of the bifurcated derivative. In estimating the fair value of the bifurcated derivative, management considers factors management believes are material to the valuation process, including, but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As there is no active market for the Company’s equity, the fair value of the bifurcated derivative is based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Management believes the combination of these factors provides an appropriate estimate of the expected fair value and reflects the best estimate of the fair value of the bifurcated derivative.
As of December 31, 2022 and 2021, Level 3 instruments include IRLCs, bifurcated derivative, and convertible preferred stock warrants. The following table presents the rollforward of Level 3 IRLCs:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$7,568 $39,972 
Change in fair value of IRLCs(9,081)(32,404)
Balance at end of year
$(1,513)$7,568 
The following table presents the rollforward of Level 3 bifurcated derivative:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$— $— 
Change in fair value of bifurcated derivative236,603 — 
Balance at end of year
$236,603 $— 
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$31,997 $25,799 
Issuances— — 
Exercises— (26,592)
Change in fair value of convertible preferred stock warrants(28,901)32,790 
Balance at end of year
$3,096 $31,997 
Counterparty agreements for forward sale commitments contain master netting agreements, which contain a legal right to offset amounts due to and from the same counterparty and can be settled on a net basis. The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized LiabilitiesNet Amounts Presented in the Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
December 31, 2022:
$3,263 $(531)$2,732 
December 31, 2021
$2,598 $(1,786)$812 
Offsetting of Forward Commitments - Liabilities
Balance as of:
December 31, 2022:
$— $— $— 
December 31, 2021
$282 $(1,748)$(1,466)
Significant Unobservable Inputs—The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
December 31, 2022
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% -96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94%- 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24- 5.74
4.8 
Fair value of common stock
$0.00 - $6.60
$1.60 
December 31, 2021
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
5.01% - 99.43%
83.5 %
Convertible preferred stock warrants
Risk free rate
0.19% - 0.73%
0.27 %
Volatility rate
32.8% - 120.3%
65.0 %
Expected term (years)
0.5 - 2.0
0.7 
Fair value of common stock
$6.80 - $29.42
$14.91 
U.S. GAAP requires disclosure of fair value information about financial instruments, whether recognized or not recognized in the consolidated financial statements, for which it is practical to estimate the fair value. In cases where quoted market prices are not available, fair values are based upon the estimation of discount rates to estimated future cash flows using market yields or other valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimates of fair value in both inactive and orderly markets. Accordingly, fair values are not necessarily indicative of the amount the Company could realize on disposition of the financial instruments in a current market exchange. The use of market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.
The estimated fair value of the Company’s cash and cash equivalents, restricted cash, warehouse lines of credit, and escrow funds approximates their carrying values as these financial instruments are highly liquid or short-term in
nature. The following table presents the carrying amounts and estimated fair value of financial instruments that are not recorded at fair value on a recurring or non-recurring basis:
As of December 31,
20222021
(Amounts in thousands)Fair Value LevelCarrying AmountFair ValueCarrying AmountFair Value
Loan commitment assetLevel 3$16,119 $54,654 $121,723 $121,723 
Pre-Closing Bridge Notes
Level 3$750,000 $269,067 $477,333 $458,122 
Corporate line of creditLevel 3$144,403 $145,323 $149,022 $161,417 
The corporate line of credit was valued using a Black Derman Toy model which incorporates the option to prepay given the make-whole premium as well as other inputs such as risk-free rates and credit spreads. In determining the fair value of the loan commitment asset and the Pre-Closing Bridge Notes, management uses factors that are material to the valuation process, including but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As a number of assumptions and estimates were involved that are largely unobservable, loan commitment asset and Pre-Closing Bridge Notes are classified as Level 3 inputs within the fair value hierarchy.
v3.23.4
BETTER 10K - INCOME TAXES
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES
16. Income Taxes
On a consolidated basis, the Company recorded total income tax expense (benefit) of $0.7 million and $(0.1) million for the three months ended September 30, 2023 and 2022, respectively. The Company recorded total income tax expense of $2.5 million and $1.5 million for the nine months ended September 30, 2023 and 2022, respectively. The Company’s quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including the ability to accurately project the Company’s pre-tax income or loss for the year and the mix of earnings among various tax jurisdictions. The year-to-date effective tax rate, after discrete items, of (0.19)% for the three months ended September 30, 2023, changed from 0.02% for the three months ended September 30, 2022, as the Company is forecasting reduction in losses for 2023. The year-to-date effective tax rate, after discrete items, of (0.53)% for the nine months ended September 30, 2023, changed from (0.23)% for the nine months ended September 30, 2022, as the Company was subject to withholding taxes and is forecasting reduction in losses for 2023. The income tax expense for the three months ended September 30, 2023 primarily relates to the pre-tax income projections and dividend income withholding tax paid in certain foreign jurisdictions where the Company files standalone returns. The income tax expense for the nine months ended September 30, 2023 relates to the pre-tax income projections and dividend income withholding tax paid in certain foreign jurisdictions where the Company files standalone returns.
As of each reporting date, the Company considers existing evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred income tax assets. The Company is in a three year cumulative loss position as of September 30, 2023. Further, due to losses being estimated in the future, management continues to believe it is more likely than not that the benefit of the deferred income tax assets will not
be realized. In recognition of this risk, the Company continues to provide a full valuation allowance on deferred income tax assets.
17. INCOME TAXES
The Company is subject to US (federal, state and local) and foreign income taxes. The components of income (loss) before income tax expense (benefit) are as follows:
Year Ended December 31,
(Amounts in thousands)20222021
U.S.$(863,807)$(301,081)
Foreign(23,895)(2,430)
Income (loss) before income tax expense$(887,702)$(303,511)
The following table displays the components of the Company’s federal, state and local, and foreign income taxes.
Year Ended December 31,
(Amounts in thousands)20222021
Current Income Tax Expense (Benefit):
Federal$(658)$(6,145)
Foreign1,815 2,888 
State and local(130)1,118 
Total Current Income Tax Expense (Benefit)1,027 (2,139)
Deferred Income Tax Expense (Benefit):
Federal(140,025)(43,545)
Foreign(7,287)(2,556)
State and local(32,345)(15,613)
Valuation Allowance179,730 61,470 
Total Deferred Income Tax Expense (Benefit)73 (244)
Income Tax Expense (Benefit)$1,100 $(2,383)
The following table displays the difference between the U.S. federal statutory corporate tax rate and the effective tax rate.
Year Ended December 31,
20222021
US federal statutory corporate tax rate21.00 %21.00 %
State and local tax2.87 %4.74 %
Stock-based compensation-0.67 %-2.38 %
Fair value of warrants6.30 %-2.25 %
Others0.03 %-0.41 %
Foreign tax rate differential0.10 %— %
R&D tax credit0.13 %2.25 %
Unrecognized tax benefits0.07 %-0.77 %
Interest - Pre-Closing Bridge Notes-6.47 %-1.32 %
Restructuring costs-3.15 %— %
Change in valuation allowance-20.33 %-20.08 %
Effective Tax Rate-0.12 %0.78 %
The difference between the U.S. Federal statutory tax rate and the effective tax rate relates to permanent differences between book and taxable income with respect to reporting for income tax purposes. These differences will not be reversed in the future. These amounts were predominantly comprised of stock option expense, convertible notes, and change in fair value of warrants.
Deferred Income Tax Assets and Liabilities
The Company evaluates the deferred income tax assets for the recoverability using a consistent approach which considers the relative impact of negative and positive evidence, including the Company’s historical profitability and losses and projections of future taxable income (loss).
As of December 31, 2022, the Company continued to conclude that the negative evidence with respect to the recoverability of its deferred income tax assets outweighed the positive evidence. It is more likely than not that the deferred income tax assets will not be realized. As of December 31, 2022 and 2021 the Company had a 100% valuation allowance on its deferred tax assets. The Company’s framework for assessing the recoverability of deferred income tax assets requires it to weigh all available evidence, to the extent it exists, including:
•the sustainability of future profitability required to realize the deferred income tax assets,
•the cumulative net income or losses in the consolidated statements of operations and comprehensive income in recent years
The following table displays deferred income tax assets and deferred income tax liabilities:
As of December 31,
(Amounts in thousands)20222021
Deferred Income Tax Assets
Net operating loss$244,081 $86,009 
Non-qualified stock options3,624 4,341 
Reserves5,092 4,866 
Loan repurchase reserve12,991 4,656 
Restructuring reserve757 — 
Accruals112 3,447 
Deferred revenue7,688 5,311 
Other3,908 3,326 
Total Deferred Income Tax Assets278,253 111,956 
Deferred Income Tax Liabilities
Internal use software(3,167)(14,128)
Intangible assets(547)(1,259)
Depreciation(1,775)(3,193)
Other— (251)
Total Deferred Income Tax Liabilities(5,489)(18,831)
Net Deferred Tax Asset before Valuation Allowance272,764 93,125 
Less: Valuation Allowance(272,477)(92,766)
Deferred Income Tax Assets, Net$287 $359 
As of December 31, 2022 and 2021 the Company had federal net operating loss (“NOL”) carryforwards of approximately $843.4 million and $228.8 million, respectively, and state NOL carryforwards of $741.5 million and $357.4 million, respectively, which are available to offset future taxable income. As of December 31, 2022 and 2021 the Company had also foreign (U.K.) NOL carryforwards of approximately $96.2 million and $70.0 million, respectively, which are available to offset future taxable income. Certain U.S. federal and state NOLs as of December 31, 2022 will begin to expire in 2035.
Utilization of the NOL carryforwards for purposes of federal income tax is subject to an annual limitation pursuant to Internal Revenue Code Section 382 (“Section 382”) due to ownership changes that have occurred. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three-year period. The Company has assessed and concluded there have been multiple changes of control as defined by Section 382 since inception. As of December 31, 2022, the Company's deferred income tax asset relating to the Company's NOL carryforwards will be subject to an annual limitation pursuant to Section 382, thereby limiting the amount of NOL utilization each year.
A reconciliation of the beginning and ending balances of gross unrecognized tax benefits is as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Unrecognized tax benefits - January 1
$4,070 $1,710 
Gross increases - tax positions in prior period— — 
Gross decreases - tax positions in prior period(2,717)(1,080)
Gross increases - tax positions in current period— 3,440 
Settlement— — 
Lapse of statute of limitations— — 
Unrecognized tax benefits - December 31
$1,353 $4,070 
During 2022, the gross amount of the increases and decreases in unrecognized tax benefits as a result of tax positions taken during the current period were none and $2.7 million, respectively. Included in the balance of unrecognized tax benefits of $1.4 million as of December 31, 2022, are tax benefits that if recognized, will affect the effective tax rate. There is no interest or penalty provided for any uncertain tax positions. The Company does not expect a material change in uncertain tax positions in the next 12 months.
The Company files a consolidated federal income tax return, foreign income tax returns and various state consolidated or combined income tax returns. The Company’s major tax jurisdictions are U.S. federal, New York State, New York City, California, and India. The Company generally remains subject to examination for Federal income tax returns for the years 2019 and forward, state income tax returns for the years 2018 and forward, and foreign income tax return for the years 2018 and forward.
v3.23.4
BETTER 10K - CONVERTIBLE PREFERRED STOCK
 9 Months Ended
Sep. 30, 2023
Temporary Equity Disclosure [Abstract]  
CONVERTIBLE PREFERRED STOCK
17. Convertible Preferred Stock
In connection with the Business Combination, as described in Note 3, all series of Better convertible preferred stock were converted into Better common stock and subsequently converted to the Company’s common stock at the Exchange Ratio of approximately 3.06. All share amounts in periods prior to the Business Combination have been retroactively adjusted using the Exchange Ratio for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization.
As of December 31, 2022, the Company had outstanding the following series of convertible preferred stock:
As of
December 31, 2022
(Amounts in thousands, except share amounts)Shares
Authorized		Shares Issued and
outstanding
Series D Preferred Stock26,178,57423,786,379
Series D-1 Preferred Stock26,178,574—
Series D-2 Preferred Stock21,305,75820,390,896
Series D-3 Preferred Stock914,862914,862
Series D-4 Preferred Stock1,062,0091,062,009
Series D-5 Preferred Stock1,062,009—
Series C Preferred Stock132,946,826100,138,544
Series C-1 Preferred Stock132,946,8268,939,693
Series C-2 Preferred Stock18,624,35414,018,524
Series C-3 Preferred Stock19,741,8188,367,368
Series C-4 Preferred Stock2,171,0642,171,064
Series C-5 Preferred Stock18,624,3544,605,830
Series C-6 Preferred Stock19,741,81811,374,450
Series C-7 Preferred Stock9,833,6604,469,846
Series B Preferred Stock39,753,02428,583,364
Series B-1 Preferred Stock12,531,94011,169,660
Series A Preferred Stock93,850,53369,267,349
Series A-1 Preferred Stock24,937,83823,054,899
Total convertible preferred stock602,405,839332,314,737
Convertible Preferred Stock Warrants—Immediately prior to the Closing of the Business Combination, certain convertible preferred stock warrant holders exercised their warrants on a cash basis and the remaining convertible preferred stock warrant holders exercised their warrants on a net basis at the Closing. In August 2023, the Company received $1.5 million from preferred stock warrant holders that exercised their warrants on a cash basis with an offset to additional paid-in-capital and as the remaining convertible preferred stock warrants were exercise the entire convertible preferred stock liability of $2.8 million was reclassified to additional paid-in-capital.
As of December 31, 2022, the Company had outstanding the following convertible preferred stock warrants:
No. Warrants
(Amounts in thousands, except no. warrants and strike prices)December 31, 2022StrikeValuation at Issuance
September 2018Series C Preferred9/28/20189/28/20282,312,296$0.59 $170 
February 2019Series C Preferred2/6/20199/28/2028153,807$0.59 $12 
March 2019Series C Preferred3/29/20193/29/20261,146,214$1.12 $87 
April 2019Series C Preferred4/17/20194/17/20293,575,879$1.12 $313 
March 2020Series C Preferred3/25/20203/25/2027410,228$1.64 $201 
Total7,598,424
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes-Merton option-pricing model and their respective terms, as can be seen below:
(Amounts in thousands, except per share amounts)December 31, 2022
IssuanceFair value per shareFair Value
September 2018$0.54 $1,256 
February 2019$0.54 84 
March 2019$0.35 397 
April 2019$0.35 1,240 
March 2020$0.29 119 
Total$3,096 
Warrants for Series C Preferred Stock, related to the above issuances, were recorded as liabilities at fair value, resulting in a liability of $3.1 million as of December 31, 2022.
The change in fair value of warrants for the three months ended September 30, 2023 and 2022 was a gain of none and a gain of $4.2 million, respectively, and was recorded in change in fair value of convertible preferred stock within the condensed consolidated statements of operations and comprehensive loss. The change in fair value of warrants for the nine months ended September 30, 2023 and 2022 was a gain of $0.3 million and a gain of $24.6 million, respectively, and was recorded in change in fair value of convertible preferred stock warrants within the condensed consolidated statements of operations and comprehensive loss.
18. CONVERTIBLE PREFERRED STOCK
The Company had outstanding the following series of convertible preferred stock:
As of December 31,
20222021
(Amounts in thousands, except share amounts)Shares
Authorized		Shares Issued and
outstanding		Shares
Authorized		Shares Issued and
outstanding
Series D Preferred Stock8,564,688 7,782,048 8,564,688 7,782,048 
Series D-1 Preferred Stock8,564,688 — 8,564,688 — 
Series D-2 Preferred Stock6,970,478 6,671,168 6,970,478 6,671,168 
Series D-3 Preferred Stock299,310 299,310 299,310 299,310 
Series D-4 Preferred Stock347,451 347,451 347,451 347,451 
Series D-5 Preferred Stock347,451 — 347,451 — 
Series C Preferred Stock43,495,421 32,761,731 43,495,421 32,761,731 
Series C-1 Preferred Stock43,495,421 2,924,746 43,495,421 2,924,746 
Series C-2 Preferred Stock6,093,219 4,586,357 6,093,219 4,586,357 
Series C-3 Preferred Stock6,458,813 2,737,502 6,458,813 2,737,502 
Series C-4 Preferred Stock710,294 710,294 710,294 710,294 
Series C-5 Preferred Stock6,093,219 1,506,862 6,093,219 1,506,862 
Series C-6 Preferred Stock6,458,813 3,721,311 6,458,813 3,721,311 
Series C-7 Preferred Stock3,217,220 1,462,373 3,217,220 1,462,373 
Series B Preferred Stock13,005,760 9,351,449 13,005,760 9,351,449 
Series B-1 Preferred Stock4,100,000 3,654,311 4,100,000 3,654,311 
Series A Preferred Stock30,704,520 22,661,786 30,704,520 22,661,786 
Series A-1 Preferred Stock8,158,764 7,542,734 8,158,764 7,542,734 
Total convertible preferred stock197,085,530 108,721,433 197,085,530 108,721,433 
Voting Rights—The holders of outstanding shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series C-2 Preferred Stock, Series C-3 Preferred Stock, Series C-4 Preferred Stock, Series D Preferred Stock, Series D-2 Preferred Stock, and Series D-4 Preferred Stock are entitled to votes equal to the number of shares of Common B Stock into which the applicable series of preferred stock are convertible to as of the record date. The holders of Series A-1 Preferred Stock, Series B-1 Preferred Stock, Series C-1 Preferred Stock, Series C-5 Preferred Stock, Series C-6 Preferred Stock, Series C-7 Preferred Stock, Series D-1 Preferred Stock, Series D-3 Preferred Stock, and Series D-5 Preferred Stock have no voting rights.
Conversion Rights—Each share of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series C-2 Preferred Stock, Series C-3 Preferred Stock, Series C-4 Preferred Stock, Series D Preferred Stock, Series D-2 Preferred Stock, and Series D-4 Preferred Stock is convertible, at the option of the holder, at any time, and without payment of additional consideration into Common B Stock at the "Adjusted Conversion Ratio" as defined below.
Additionally, each share of Series A-1 Preferred Stock, Series B-1 Preferred Stock, Series C-1 Preferred Stock, Series C-5 Preferred Stock, Series C-6 Preferred Stock, Series D-1 Preferred Stock, and Series D-5 Preferred Stock are convertible, at the option of the holder, at any time, and without payment of additional consideration into Common B-1 Stock at the "Adjusted Conversion Ratio" as defined below.
The Adjusted Conversion Ratio is defined in the Company's Tenth Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) as equal to the applicable Preferred Stock Original Issue Price for the applicable share of preferred stock divided by the applicable Preferred Stock Conversion Price. The Preferred Stock
Conversion Price is equal to $1.00 for the Series A Preferred Stock and the Series A-1 Preferred Stock; $2.00 for the Series B Preferred Stock and the Series B-1 Preferred Stock; $3.42 for the Series C Preferred Stock C, Series C-1 Preferred Stock, and Series C-7 Preferred Stock; $2.46 for the Series C-2 Preferred Stock and Series C-5 Preferred Stock; $2.74 for the Series C-3 Preferred Stock and Series C-6 Preferred Stock; $2.39 for the Series C-4 Preferred Stock; $16.93 for the Series D Preferred Stock and Series D-1 Preferred Stock; $8.72 for the Series D-2 Preferred Stock; and $14.39 for the Series D-4 Preferred Stock and Series D-5 Preferred Stock.
The Series D Preferred Stock shall be automatically converted into Common B Stock upon the consummation of an underwritten public offering of shares of common stock to the public with a price per share to the public of not less than (i) 1.25 times $16.93 (the “Series D Original Issue Price”) if the underwritten public offering is completed by December 31, 2021, or (ii) 1.5 times the Series D Original Issue Price if the underwritten public offering is completed on or after January 1, 2022. If the Company consummates an underwritten public offering at an initial public offering price that is less than 1.25 times the Series D Original Issue Price by December 31, 2021 or less than 1.5 times the Series D Original Issue Price thereafter, the Company will force the conversion of the Series D Preferred Stock by issuing the holders the number of shares of Common B Stock resulting in a total aggregate value at the initial public offering price that would have been equal to 1.25 times the Series D Original Issue Price or 1.5 times the Series D Original Issue Price, respectively.
Upon a qualified transfer of any shares of Series A-1 Preferred Stock, Series B-1 Preferred Stock, Series C-1 Preferred Stock, Series C-5 Preferred Stock, Series C-6 Preferred Stock, Series D-1 Preferred Stock, or Series D-5 Preferred Stock, such shares have the right to convert all shares into an equivalent number of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series C-2 Preferred Stock, Series C-3 Preferred Stock, Series D Preferred Stock, or Series D-4 Preferred Stock, respectively, without the payment of additional consideration by the holder.
Certain holders (as specified in the Company's Certificate of Incorporation) of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock have the right to convert, under limited permitted transfers, to an equivalent number of shares of Series A-1 Preferred Stock, Series B-1 Preferred Stock, Series C-1 Preferred Stock, and Series D-1 Preferred Stock, respectively. Certain holders of Series C-2 Preferred Stock, Series C-3 Preferred Stock, Series D-4 Preferred Stock, and Common B Stock have the right to convert to an equivalent number of shares of Series C-5 Preferred Stock, Series C-6 Preferred Stock, Series D-5 Preferred Stock, and Common B-1 Stock, respectively.
Dividends—The convertible preferred stock shall first receive, or simultaneously receive, dividends declared on common stock, if any, on the basis as if the convertible preferred stock was converted to common stock. The Company has not declared any dividends on common stock to date.
Liquidation—In the event of any liquidation, dissolution or winding up of the Company, the holders of shares of each series of Series C Preferred Stock, Series C-1 Preferred Stock, Series C-2 Preferred Stock, Series C-3 Preferred Stock, Series C-4 Preferred Stock, Series C-5 Preferred Stock, Series C-6 Preferred Stock, Series C-7 Preferred Stock, Series D Preferred Stock, Series D-1 Preferred Stock, Series D-2 Preferred Stock, Series D-3 Preferred Stock, Series D-4 Preferred Stock, and Series D-5 Preferred Stock shall be entitled to receive, prior to any distributions to the holders of Series B Preferred Stock, Series B-1 Preferred Stock, Series A Preferred Stock, Series A-1 Preferred Stock and common stock, an amount per share equal to one time the applicable Preferred Stock Original Issue Price plus all declared but unpaid dividends on such shares (“Series C and Series D Preferred Stock Preference Amount”).
After the payment of the full above mentioned amount, the holders of shares of each of Series B Preferred Stock, Series B-1 Preferred Stock, Series A Preferred Stock, and Series A-1 Preferred Stock then outstanding shall be entitled to receive a pro-rata distribution before any payment shall be made to the holders of common stock an amount per share equal to, (a) in the case of the Series A Preferred Stock and Series A-1 Preferred Stock, one times the Preferred Stock Original Issue Price, plus any dividends declared and unpaid (“Series A Preferred Stock Preference Amount”), and (b) in the case of the Series B Preferred Stock and Series B-1 Preferred Stock, the greater of one times the applicable Preferred Stock Original Issue Price and the Alternative Series B Liquidation Preference
Amount, as subsequently defined, plus all declared but unpaid dividends (“Series B Preferred Stock Preference Amount”).
The Alternative Series B Liquidation Preference Amount is the quotient obtained by dividing (x) the value of the assets of the Company available for distribution to its stockholders in connect with a liquidation, dissolution or winding up of the Company or deemed liquidation event by (y) the fully-diluted share number. The Series C and Series D Preferred Stock Preference Amount, the Series A Preferred Stock Preference Amount, and the Series B Preferred Stock Preference Amount are together referred to as the Preferred Stock Preference Amount.
After the payment of the full Preferred Stock Preference Amount, the remaining assets of the Company shall be distributed on a pro rata basis among the holders of Common A Stock, Common B Stock, Common O stock, and then to Common B-1 Stock. The remaining assets of the Company shall be distributed among the holders of Series A Preferred Stock and Series A-1 Preferred Stock and the holders of common stock, with the Series A Preferred Stock and the Series A-1 Preferred Stock receiving sixty percent of the remainder until each holder of Series A Preferred Stock and Series A-1 Preferred Stock has received an additional amount per share equal to three times the applicable Preferred Stock Original Issue Price. The remaining assets of the Company shall be distributed among the holders of Series A Preferred Stock and Series A-1 Preferred Stock and common stock, with the Series A Preferred Stock and the A-1 Preferred Stock receiving five percent of the remainder until the amount paid to the common stock equals the amount paid to the Series A Preferred Stock and Series A-1 Preferred Stock. Following that distribution, the remaining assets of the Company shall be distributed on a pro rata basis among the holders of Series A Preferred Stock, Series A-1 Preferred Stock and common stock.
Redemption and Classification—The preferred stock is generally not redeemable at the option of any holder thereof except in limited circumstances as set forth in the Company’s Certificate of Incorporation. The Company has classified its convertible preferred stock as mezzanine equity on the consolidated balance sheets as the occurrence of certain deemed liquidation events that are outside the Company’s control may cause redemption with the holders of the convertible preferred stock. Convertible preferred stock is not remeasured at redemption value within mezzanine equity on the consolidated balance sheets as the convertible preferred stock is not currently redeemable and redemption is not expected.
Secondary Sale—In April and May 2021, certain of the Company’s investors sold various classes of shares through multiple tranches to SVF II Beaver LLC (“SoftBank II”), pursuant to a series of stock transfer agreements (collectively, the “SoftBank Transaction”), for a total consideration of $496.9 million. The total shares purchased by SoftBank II included 0.6 million shares of Series A Preferred Stock, 7.5 million shares of Series A-1 Preferred Stock, 0.4 million shares of Series B Preferred Stock, 2.0 million shares of Series B-1 Preferred Stock, 1.1 million shares of Series C Preferred Stock, 1.8 million shares of Series C-1 Preferred Stock, 0.7 million shares of Series C-2 Preferred Stock, 5.6 million shares of Common B Stock and 0.5 million of Common O Stock each at $24.47 per share.
In connection with the SoftBank Transaction, the Company entered into a contribution agreement with SoftBank II, pursuant to which upon the occurrence of certain “Realization Events,” SoftBank II agrees to make certain capital contributions to the Company. The consummation of the business combination with Aurora (as defined in Note 1) will constitute a Realization Event pursuant to the terms of the contribution agreement. Accordingly, SoftBank II will make a capital contribution to the Company in an amount equal to 25% of its aggregate return on its investment in the Company’s shares based on the value of the consideration received by the Company’s equity holders in the closing of the Merger Agreement (see Note 1).
Convertible Preferred Stock Warrants—The Company had outstanding the following convertible preferred stock warrants:
No. Warrants
(Amounts in thousands, except no. warrants and strike prices)As of December 31,
IssuanceShare ClassIssue DateExpiration Date20222021StrikeValuation at Issuance
September 2018Series C Preferred9/28/20189/28/2028756,500 756,500 $1.81 $170 
February 2019Series C Preferred2/6/20199/28/202850,320 50,320 $1.81 $12 
March 2019Series C Preferred3/29/20193/29/2026375,000 375,000 $3.42 $87 
April 2019Series C Preferred4/17/20194/17/20291,169,899 1,169,899 $3.42 $313 
March 2020Series C Preferred3/25/20203/25/2027134,212 134,212 $5.00 $201 
Total2,485,931 2,485,931 
In April and May 2021, one of the Company’s investors exercised 1.4 million warrants. The exercise was a cashless exercise, resulting in an issuance of 1.1 million shares of Series C Preferred Stock.
In connection with the Amended Merger Agreement, several of the Company’s holders of convertible preferred stock warrants expects to exercise their warrants contingent upon the consummation of the Merger as described in Note 1. The contingent exercise includes 1.2 million shares of Series C Preferred Stock at an exercise price per share of $3.42, 0.8 million shares of Series C Preferred Stock at an exercise of price per share of $1.81, and 1.5 million shares of Series C-7 Preferred Stock at an exercise of price per share of $3.42.
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes option-pricing model and their respective terms, as can be seen below:
December 31,
(Amounts in thousands, except per share amounts)20222021
IssuanceFair value per shareFair ValueFair value per shareFair Value
September 2018$1.66 $1,256 $13.70 $10,364 
February 2019$1.66 84 $13.70 689 
March 2019$1.06 397 $12.54 4,703 
April 2019$1.06 1,240 $12.54 14,671 
March 2020$0.89 119 $11.70 1,570 
Total$3,096 $31,997 
Warrants for Series C Preferred Stock, related to the above issuances, are recorded as liabilities at fair value, resulting in a liability of $3.1 million and $32.0 million as of December 31, 2022 and 2021, respectively. The change in fair value of warrants for the years ended December 31, 2022 and 2021 was a gain of $28.9 million and a loss of $32.8 million, respectively, and was recorded in change in fair value of warrants within the consolidated statements of operations and comprehensive loss.
v3.23.4
BETTER 10K - STOCKHOLDERS' EQUITY
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
STOCKHOLDERS' EQUITY
18. Stockholders' Equity
On the Closing Date, the Company consummated the Business Combination pursuant to the terms of the Merger Agreement and on August 24, 2023, Better Home & Finance Class A common stock began trading and Public Warrants continued trading on the Nasdaq Global Market and the Nasdaq Capital Market, respectively, under the ticker symbols “BETR” and “BETRW”, respectively. Each outstanding share of Legacy Better common stock was exchanged for approximately 3.06 shares of the Company’s Class B common stock.
The Company’s authorized capital stock consists of 1.8 billion shares of Class A common stock, 700.0 million shares of Class B common stock, and 800.0 million shares of Class C common stock, each with a par value per share of $0.0001. Each holder of Class A common stock has the right to one vote per share and each holder of Class B common stock has the right to three votes per share. Except as described below or otherwise provided by the Company’s certificate of incorporation or required by applicable law, shares of Class C common stock are non-voting and will not entitle the holder thereof to any voting power. Shares of Class A common stock, Class B common stock and Class C common stock are treated equally, identically and ratably, on a per share basis, with respect to any dividends or distributions as may be declared and paid from time to time. Upon the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holders of Class A common stock, Class B common stock and Class C common stock will be entitled to receive ratably all assets of the Company
available for distribution to its stockholders unless disparate or different treatment of the shares of each such class with respect to distributions upon any such liquidation, dissolution or winding up is approved in advance by the affirmative vote of the holders of a majority of the then-outstanding shares of Class A common stock, Class B common stock and Class C common stock, each voting separately as a class.
Further, each share of Class B common stock is convertible into one fully paid and nonassessable share of Class A common stock or Class C common stock at the option of the holder thereof at any time upon written notice to the Company. Each share of Class C common stock is convertible into one fully paid and nonassessable share of Class A common stock at the option of the holder thereof at any time upon written notice to the Company.
All share amounts in periods prior to the Business Combination have been retroactively adjusted using the Exchange Ratio for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization. The Company's equity structure prior to the Closing consisted of different classes of common stock which is presented in the order of liquidation preference below:
As of December 31, 2022
(Amounts in thousands, except share amounts)Shares AuthorizedShares Issued and outstandingPar Value
Common A Stock24,452,56524,452,565$1 
Common B Stock588,261,164171,441,7805 
Common B-1 Stock236,938,220—— 
Common O Stock236,375,239103,889,0764 
Total common stock1,086,027,188299,783,421$10 
Pre-Closing Common Stock Warrants—Immediately prior to the Closing of the Business Combination, all common stock warrant holders exercised their warrants on a net basis. The Company had outstanding the following common stock warrants as of December 31, 2022:
(Amounts in thousands, except warrants, price, and per share amounts)
IssuanceShare
Class		Issue
Date		Expiration
Date		No.
Warrants		StrikeValuation at Issuance
March 2019Common B3/29/20193/29/20261,146,214$0.23 $179 
March 2020Common B3/25/20203/25/20274,584,856$1.12 $271 
Total equity warrants5,731,070
Private and Public Warrants—As of September 30, 2023 and December 31, 2022, the Company had a total of $1.1 million and none, respectively, of Warrants included as warrant liabilities within the condensed consolidated balance sheets. The change in fair value of Warrants for the three and nine months ended September 30, 2023 was a gain of $0.21 million and $0.21 million, respectively, and is included in change in fair value of warrant liabilities within the condensed consolidated statements of operations and comprehensive loss.
Sponsor locked-up Shares—As of September 30, 2023 and December 31, 2022, the Company had a total of $0.5 million and none, respectively, of Sponsor locked-up Share liabilities which are included within warrant liabilities in the condensed consolidated balance sheets. The change in fair value of Sponsor locked-up Shares for the three and nine months ended September 30, 2023was a gain of $0.65 million and $0.65 million, respectively, and was recorded in change in fair value of warrant liabilities within the condensed consolidated statements of operations and comprehensive loss.
Notes Receivable from Stockholders—The Company, in previous years, issued notes to stockholders to fund the payment of the exercise price of the stock options granted to such stockholders. The Company previously allowed stock option holders to early exercise stock options prior to the vesting date but no longer allows for the early exercise of stock options. The notes issued to stockholders to fund the exercises may include the exercise of stock options that have been vested by the holder as well as stock options that have not yet been vested by the
holder. As of September 30, 2023 and December 31, 2022, the Company had a total of $19.1 million and $65.2 million, respectively, of outstanding promissory notes.
Of the notes outstanding as of September 30, 2023 and December 31, 2022, $10.5 million and $53.9 million, respectively, were issued for the exercise of stock options vested and are recorded as a component of stockholders’ equity within the condensed consolidated balance sheets.
Of the notes outstanding as of September 30, 2023 and December 31, 2022, $8.5 million and $12.3 million, respectively, were issued for the early exercise of stock options not yet vested. Notes issued for the early exercise of stock options not yet vested are not reflected within stockholders’ equity on the condensed consolidated balance sheets as they relate to unvested share awards and therefore are considered non-substantive exercises. As the unvested share awards, exercised in conjunction with the notes, vest, they are recognized in the statement of equity within vesting of common stock issued via notes receivable from stockholders. The notes bear annual interest payable upon maturity of the respective note (see Note 11).
19. STOCKHOLDERS' EQUITY
The Company's equity structure consists of different classes of common stock which is presented in the order of liquidation preference below:
As of December 31,
20222021
(Amounts in thousands, except share amounts)
Shares
Authorized
Shares Issued and
outstanding
Par
Value
Shares
Authorized
Shares Issued and
outstanding
Par
Value
Common A Stock8,000,000 8,000,000 $1 8,000,000 8,000,000 $1 
Common B Stock192,457,901 56,089,586 5 192,457,901 56,089,586 5 
Common B-1 Stock77,517,666 — — 77,517,666 — — 
Common O Stock77,333,479 33,988,770 4 77,333,479 34,977,573 4 
Total common stock355,309,046 98,078,356 $10 355,309,046 99,067,159 $10 
Common Stock—The holders of Common A Stock, Common B Stock, and Common O Stock (collectively, “Voting Common Stock”) are entitled to one vote for each share. Shares of Common B-1 Stock do not have voting rights. Additionally, upon a qualified transfer, the holder can convert any shares of Common B-1 Stock into an equivalent number of shares of Common B Stock without the payment of additional consideration.
Common Stock Warrants—The Company had outstanding the following common stock warrants as of both December 31, 2022 and 2021, respectively:
(Amounts in thousands, except warrants, price, and per share amounts)
IssuanceShare
Class		Issue
Date		Expiration
Date		No.
Warrants		StrikeValuation at Issuance
March 2019Common B3/29/20193/29/2026375,000 $0.71 $179 
March 2020Common B3/25/20203/25/20271,500,000 $3.42 $271 
Total equity warrants1,875,000 
Notes Receivable from Stockholders—The Company issued notes to stockholders to fund the payment of the exercise price of the stock options granted to such stockholders. The Company also generally allows stock option holders to early exercise stock options prior to the vesting date. The notes issued to stockholders to fund the exercises may include the exercise of stock options that have been vested by the holder as well as stock options that have not yet been vested by the holder. As of December 31, 2022 and 2021, the Company had a total of $65.2 million and $67.8 million, respectively, of outstanding promissory notes.
Of the notes outstanding as of December 31, 2022 and 2021, $53.9 million and $38.6 million, respectively, were issued for the exercise of stock options vested and are recorded as a component of stockholders’ equity within the consolidated balance sheets.
Of the notes outstanding as of December 31, 2022 and 2021, $11.3 million and $29.2 million, respectively, were issued for the early exercise of stock options not yet vested. Notes issued for the early exercise of stock options not yet vested are not reflected within stockholders’ equity or on the consolidated balance sheets as they relate to unvested share awards and therefore are considered non-substantive exercises. The notes bear annual interest payable upon maturity of the respective note (see Note 12).
v3.23.4
BETTER 10K - STOCK-BASED COMPENSATION
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION
19. Stock-Based Compensation
Equity Incentive Plans—On November 3, 2016, Better’s board of directors and stockholders adopted the Better 2016 Equity Incentive Plan (the “2016 Plan”), which provides for the grant of non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”) and deferred stock to eligible employees, directors and consultants of the Company. As of September 30, 2023, awards with respect to 1,212,059 shares of Class A common stock issuable upon the conversion of shares of Class B common stock into which such awards can be exercised have been granted under the 2016 Plan.
Stock options granted under the 2016 Plan are generally subject to a one-year cliff vesting period with respect to 25% of the award, and then 1/48th of the award vests each month thereafter so that the entire award is vested on the fourth anniversary of the vesting start date.
On May 15, 2017, Better’s board of directors and stockholders adopted the Better 2017 Equity Incentive Plan (the “2017 Plan”), which provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards and RSUs to eligible employees, directors and consultants of the Company. The 2017 Plan was most recently amended and approved by the stockholders of Better in August 2020. As of September 30, 2023, awards with respect to 77,053,345 shares of Class A Common Stock issuable upon the conversion of shares of Class B common stock into which such awards can be exercised have been granted under the 2017 Plan.
Stock options and RSUs granted under the 2017 Plan are generally subject to a one-year cliff vesting period with respect to 25% of the award, and then 1/48th of the award vests each month thereafter so that the entire award is vested on the fourth anniversary of the vesting start date. Certain RSUs were also subject to a liquidity vesting condition that was satisfied in connection with the Business Combination.
In connection with the Business Combination, the Better Home & Finance’s 2023 Incentive Equity Plan (the “2023 Plan”) became effective on August 22, 2023. The 2023 Plan allows for the issuance of stock options, stock appreciation rights, restricted stock awards, RSUs and other equity and equity-based awards for issuance to Better Home & Finance’s service providers. A total of 88,626,665 shares of Class A common stock were initially reserved for issuance pursuant to the 2023 Plan (the “Initial Share Reserve”). Shares subject to awards granted under the 2017 Plan that become available for issuance will again become available for issuance pursuant to the terms of the 2023 Plan, subject to certain adjustments as set forth in the 2023 Plan. The Initial Share Reserve will automatically increase on January 1 of each year beginning January 1, 2024 and ending in 2033, in an amount equal to the lesser of (i) five percent (5%) of the shares of Class A common stock outstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares of Class A common stock as is determined by the Board or committee of the Board; provided, however, that no more than 614,343,928 shares of Class A common stock may be issued upon the exercise of incentive stock options. As of September 30, 2023, no awards have been granted under the 2023 Plan.
In connection with the Business Combination, the Better Home & Finance 2023 Employee Stock Purchase Plan (the “ESPP”) became effective on August 22, 2023, pursuant to which eligible employees may purchase shares of Class A common stock at a discounted rate. A total of 16,113,939 shares of Class A common stock were initially reserved for issuance pursuant to the ESPP (the “ESPP Share Reserve”). The ESPP Share Reserve will automatically increase on January 1 of each year beginning January 1, 2024 and ending in 2033, in an amount equal to the lesser of (i) one percent (1%) of the shares of Class A common stock outstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares of Class A common stock as is determined by the Board; provided, however, that no more than 120,854,543 shares of Class A common stock may be issued under the ESPP. As of September 30, 2023, no shares have been issued under the ESPP.
The Company no longer allows for the early exercise of awards under the 2016 Plan or the 2017 Plan.
Stock-Based Compensation Expense—The total of all stock-based compensation expense related to employees are reported in the following line items within the condensed consolidated statements of operations and comprehensive loss:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Mortgage platform expenses4,176 1,491 5,905 4,941 
Other platform expenses1,493 426 1,837 675 
General and administrative expenses16,828 6,862 25,123 20,479 
Marketing expenses146 369 216 709 
Technology and product development expenses(1)
2,401 1,825 4,317 4,217 
Total stock-based compensation expense25,044 10,973 37,398 31,021 
__________________
(1)Technology and product development expense excludes $2.5 million and $0.8 million for the three months ended September 30, 2023 and 2022, respectively.Technology and product development expense excludes $3.9 million and $3.0 million of stock-based compensation expense for the nine months ended September 30, 2023 and 2022, which was capitalized (see Note 7).
20. STOCK-BASED COMPENSATION
Equity Incentive Plans—In November 2016, the Company adopted the Better Holdco Inc. 2016 Equity Incentive Plan (the “2016 Plan”) pursuant to which the Board of Directors may grant non-statutory stock options, stock appreciation rights, restricted stock awards, and restricted stock units to eligible employees, directors, and certain non-employees. In May 2017 the Company adopted the Better Holdco Inc. 2017 Equity Incentive Plan (the
“2017 Plan”) with the same terms as the 2016 Plan. At the date of the adoption of the 2017 Plan, 1,859,781 stock options granted from the 2016 plan were carried over. The 2017 Plan authorizes the Board of Directors to grant up to 31,871,248 shares of Common O Stock. Stock options must be granted with an exercise price equal to the Common O Stock’s fair market value at the date of grant. Stock options generally have 10-year terms and vest over a four-year period starting from the date specified in each agreement.
Stock Options—The following is a summary of stock option activity during the year ended December 31, 2022:
(Amounts in thousands, except options, prices, and averages)
Number of
Options
Weighted
Average
Exercise
Price
Intrinsic
Value
Weighted
Average
Remaining
Term
Outstanding—January 1, 202226,635,326 $8.23 
Options granted1,583,680 $13.63 
Options exercised(998,529)$1.76 
Options cancelled (forfeited)(8,322,168)$11.12 
Options cancelled (expired)(4,469,530)$5.99 
Outstanding—December 31, 202214,428,779 $8.47 $6,701 7.0
Vested and exercisable—December 31, 20227,399,689 $9.90 $6,021 6.3
Options expected to vest2,711,958 $5.20 $874 8.4
Options vested and expected to vest—December 31, 202210,111,647 $8.60 $6,895 6.9
As of December 31, 2022, total stock-based compensation cost not yet recognized related to unvested stock options was $19.4 million, which is expected to be recognized over a weighted-average period of 2.24 years.
Intrinsic value is calculated by subtracting the exercise price of the stock option from the fair value of the Company’s Common O Stock on December 31, 2022 for in-the-money stock options, multiplied by the number of shares of Common O Stock per each stock option. The total intrinsic value of stock options exercised during the years ended December 31, 2022, and 2021 was $8.6 million, and $157.9 million, respectively.
The weighted average grant-date fair value per share of stock options granted during the years ended December 31, 2022 and 2021 was $8.37 and $10.20, respectively.
The total grant date fair value of options vested for the years ended December 31, 2022 and 2021 was $26.7 million and $40.0 million, respectively.
The Company generally allows stock option holders to early exercise in exchange for cash prior to the vesting date. Shares of Common O Stock issued upon early exercise are considered shares restricted until the completion of the original vesting period of the options and are therefore classified to stock options exercised, not vested on the consolidated balance sheets within other liabilities based upon the respective exercise price of the stock option and are not remeasured. Upon the completion of the vesting period, the Company reclassifies the liability to additional paid in capital on the consolidated balance sheets. Included within other liabilities on the consolidated balance sheets as of December 31, 2022 and 2021 was $1.7 million and $6.1 million, respectively, of stock options exercised, not vested, which represents 1,944,049 and 3,872,691, respectively, of restricted shares.
Fair Value of Awards Granted—Since the Company’s common O stock is not publicly traded, the fair value of the shares of Common O Stock was approved by the Company’s Board of Directors as there was no public market for the Company’s common stock as of the date of the awards were granted.
In estimating the fair value of the Company’s Common O Stock, management uses the assistance of third-party valuation specialist and consider factors management believes are material to the valuation process, including, but
not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. Management believes the combination of these factors provides an appropriate estimate of the expected fair value and reflects the best estimate of the fair value of the Company’s Common O Stock at each grant date.
The expected volatility is based on the historical and implied volatility of similar companies whose stock or option prices are publicly available, after considering the industry, stage of life cycle, size, market capitalization, and financial leverage of the other companies. The risk-free interest rate assumption is based on observed U.S. Treasury yield curve interest rates in effect at the time of grant appropriate for the expected term of the stock options granted. As permitted under authoritative guidance, due to the limited amount of stock option exercises, the Company used the simplified method to compute the expected term for stock options granted to employees in the years ended December 31, 2022 , and 2021 respectively.
The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which affect the fair value of each stock option. The assumptions used to estimate the fair value of stock options granted are as follows:
Year Ended December 31,
20222021
(Amounts in dollars, except percentages)RangeWeighted AverageRangeWeighted Average
Fair value of Common O Stock
$3.41 - $14.8
$4.43 
$10.66 - $26.46
$15.46 
Expected volatility
72.58% - 76.74%
76.4 %
63.42 - 73.69%
65.8 %
Expected term (years)
5 - 6.02
6.0
5.0 - 6.3
6.0
Risk-free interest rate
1.96% - 4.22%
3.75 %
0.43% - 1.19%
0.73 %
Restricted Stock Units—During the year ended December 31, 2021, the Company began granting RSUs to employees. RSUs vest upon satisfaction of service-based condition, which is generally over four years. The following is a summary of RSU activity during the year ended December 31, 2022:
(Amounts in thousands, except shares and averages)
Number of
Shares
Weighted Average Grant Date Fair Value
Unvested—December 31, 20217,754,620 $25.35 
RSUs granted8,520,321 $8.69 
RSUs settled(4,464)$26.46 
RSUs vested(835,714)$0.01 
RSUs cancelled (expired)(8,234,474)$21.62 
RSUs cancelled (forfeited)(331,068)$26.46 
Unvested—December 31, 20226,869,221 $12.19 
As of December 31, 2022, total stock-based compensation cost not yet recognized related to unvested RSUs was $33.5 million, which is expected to be recognized over a weighted-average period of 2.72 years.
Stock-Based Compensation Expense—The total of all stock-based compensation expense related to employees are reported in the following line items within the consolidated statements of operations and comprehensive loss:
Year Ended December 31,
(Amounts in thousands)20222021
Mortgage platform expenses$5,256 $13,671 
Other platform expenses908 1,654 
General and administrative expenses26,681 27,559 
Marketing expenses486 1,159 
Technology and product development expenses(1)
5,226 11,172 
Total stock-based compensation expense$38,557 $55,215 
__________________
(1)Technology and product development expense excludes $4.1 million and $9.0 million of stock-based compensation expense, which was capitalized (see Note 8) for the years ended December 31, 2022 and 2021, respectively
v3.23.4
BETTER 10K - REGULATORY REQUIREMENTS
 9 Months Ended
Sep. 30, 2023
Mortgage Banking [Abstract]  
REGULATORY REQUIREMENTS
20. Regulatory Requirements
The Company is subject to various local, state, and federal regulations related to its loan production by the various states it operates in, as well as federal agencies such as the Consumer Financial Protection Bureau (“CFPB”), HUD, and the FHA and is subject to the requirements of the agencies to which it sells loans, such as FNMA and FMCC. As a result, the Company may become involved in requests for information, periodic reviews, investigations, and proceedings by such various federal, state, and local regulatory bodies and agencies.
The Company is required to meet certain minimum net worth, minimum capital ratio and minimum liquidity requirements, including those established by HUD, FMCC and FNMA. As of September 30, 2023, the Company was in compliance with all necessary requirements.
Additionally, the Company is subject to other financial requirements established by FNMA, which include a limit for a decline in net worth and quarterly profitability requirements. On March 12, 2023 and subsequently on May 19, 2023, FNMA provided notification to the Company that the Company had failed to meet FNMA’s financial requirements due to the Company’s decline in profitability and material decline in net worth. The material decline in net worth and decline in profitability permit FNMA to declare a breach of the Company’s contract with FNMA. The Company, following certain forbearance agreements from FNMA that instituted additional financial requirements on the Company that are pending FNMA’s administrative process for completion, remains in compliance with these requirements as of the date hereof. FNMA and other regulators and GSEs are not required to grant any forbearances, amendments, extensions or waivers and may determine not to do so.
As a result of failing to meet FNMA’s financial requirements, the Company has entered into a Pledge and Security Agreement with FNMA on July 24, 2023, to post additional cash collateral starting with $5.0 million which will be held through December 31, 2023. Each quarterly period after December 31, 2023, the required cash
collateral will be calculated based on an amount equal to the greater of: (i) FNMA’s origination representation and warranty exposure to the Company, multiplied by the average repurchase success rate for FNMA single-family responsible parties or (ii) $5.0 million.
21. REGULATORY REQUIREMENTS
The Company is subject to various local, state, and federal regulations related to its loan production by the various states it operates in, as well as federal agencies such as the Consumer Financial Protection Bureau (“CFPB”), U.S. Department of Housing and Urban Development (“HUD”), and The Federal Housing Administration (“FHA”) and is subject to the requirements of the agencies to which it sells loans, such as FNMA and FMCC. As a result, the Company may become involved in requests for information, periodic reviews, investigations, and proceedings by such various federal, state, and local regulatory bodies and agencies.
The Company is required to meet certain minimum net worth, minimum capital ratio and minimum liquidity requirements, including those established by HUD, FMCC and FNMA. As of December 31, 2022, the most restrictive of these requirements require the Company to maintain a minimum net worth of $1.0 million, liquidity of $0.2 million, and a minimum capital ratio of 6%. As of December 31, 2022, the Company was in compliance with these requirements.
Additionally, the Company is subject to other financial requirements established by FNMA, which include a limit for a decline in net worth and quarterly profitability requirements. On March 12, 2023 FNMA provided notification to the Company that the Company had failed to meet FNMA’s financial requirements due to the Company’s decline in profitability and material decline in net worth. The material decline in net worth and decline in profitability permit FNMA to declare a breach of the Company’s contract with FNMA. The Company, following certain forbearance agreements from FNMA that instituted additional financial requirements on the Company, remains in compliance with these requirements as of the date hereof. FNMA and other regulators and GSEs are not required to grant any forbearances, amendments, extensions or waivers and may determine not to do so.
v3.23.4
BETTER 10K - SUBSEQUENT EVENTS
 9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS
21. Subsequent Events
The Company evaluated subsequent events from the date of the condensed consolidated balance sheets of September 30, 2023 through the date of the release of financial statements, and has determined that, there have been no subsequent events that require recognition or disclosure in the condensed consolidated financial statements, except as described in Note 1, Note 6, Note 10, Note 12 and as follows:
Nasdaq Delisting Notice—On October 12, 2023, the Company received a letter from the listing qualifications staff (the “Staff”) of Nasdaq notifying the Company that it is not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Rule”) for continued listing. The Bid Price Rule requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) (the “Compliance Period Rule”) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. The Notice has no immediate effect on the listing of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”), which continues to trade on The Nasdaq Global Market under the symbol “BETR.”
In accordance with the Compliance Period Rule, the Company has 180 calendar days to regain compliance. If the Company does not regain compliance during this 180-day period, then the Company may be eligible to transfer to The Nasdaq Capital Market and the Staff may grant the Company a second 180 calendar day period to regain compliance pursuant to the Compliance Period Rule, provided the Company meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement. In addition, the Company would be required to notify Nasdaq of its intent to cure the minimum bid price deficiency during the second compliance period by effecting a reverse stock split if necessary.
The Company will continue to monitor the closing bid price of its Common Stock and seek to regain compliance with all applicable Nasdaq requirements within the allotted compliance periods.
22. SUBSEQUENT EVENTS
The Company evaluated subsequent events from the date of the consolidated balance sheets of December 31, 2022 through May 11, 2023, the date the consolidated financial statements were issued, and has determined that, there have been no subsequent events that require recognition or disclosure in the consolidated financial statements, except as described in Note 1, Note 5, Note 11, Note 12, Note 13, and as follows:
Amended Corporate Line of Credit—In February 2023, the Company entered into a loan and security agreement (the “2023 Credit Facility”) with Clear Spring Life and Annuity Company, an entity affiliated with the previous agent and acting as an agent for such lenders (together the “Lender”) to amend the existing 2021 Credit Facility. Subsequent to year end, the Company paid down $20.0 million leaving $126.4 million owed in principal balance on the facility. The terms of the 2023 Credit Facility grant relief from the acceleration of payments under minimum revenue triggers from the 2021 Credit Facility. The 2023 Credit Facility splits the principal balance into two tranches, tranche “AB” in the amount of $99.9 million and tranche “C” in the amount of $26.5 million. Tranche
AB is backed by assets that the Company has pledged, mainly loans held for sale that the Company fully owns while tranche C is unsecured debt. Tranche AB has a fixed interest rate of 8.5% and tranche C has a variable interest rate based on the SOFR reference rate for a one-month tenor plus 9.5%. Tranche AB will be repaid with proceeds from sales of pledged assets. Tranche C will be repaid starting in June 2023, $5.0 million per month if the Company obtains commitments to raise $250.0 million in equity or debt by that same date or $200.0 million by June 2024. If the Company does not obtain commitments to raise equity or debt at such dates, the repayment amount will be $12.5 million per month for tranche C. The maturity date of the 2023 Credit Facility will be the earlier of 45 days after the Merger is consummated or in the event that the Merger is not consummated shall be March 25, 2027.
Lease Amendment and Reassignment—In February 2023, the Company entered into a lease amendment with a landlord to surrender an office floor and reassign the lease to a third party. The Company had a lease liability of $13.0 million related to the office space and as part of the amendment the Company paid $4.7 million in cash to the third party. The amendment relieves the Company of the primary obligation under the original lease and as such is considered a termination of the original lease.
Acquisition regulatory approval—In March 2023, the Company obtained regulatory approval from the financial control authorities in the U.K. to close on its acquisition of a banking entity in the U.K. The acquisition is for a total consideration of approximately $15.2 million. The Company subsequently closed on the acquisition on April 1, 2023.
v3.23.4
AURORA 10Q - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
 9 Months Ended
Sep. 30, 2023
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS  
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
1. Organization and Nature of the Business
Better Home & Finance Holding Company, formerly known as Aurora Acquisition Corp. (“Aurora”), together with its subsidiaries (collectively, the “Company”), provides a comprehensive set of homeownership offerings in the United States while expanding in the United Kingdom. The Company’s offerings include mortgage loans, real estate agent services, title and homeowner’s insurance, and other homeownership offerings, such as the Company’s cash offer program. The Company leverages Tinman, its proprietary technology platform, to optimize the mortgage process from the initial application, to the integration of a suite of additional homeownership offerings, to the sale of loans to a network of loan purchasers.
Mortgage loans originated within the United States are through the Company’s wholly-owned subsidiary Better Mortgage Corporation (“BMC”). BMC is an approved Title II Single Family Program Lender with the Department of Housing and Urban Development’s (“HUD”) Federal Housing Administration (“FHA”), and is an approved seller and servicer with the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FMCC”). The Company has expanded into the U.K. and offers a multitude of financial products and services to consumers via regulated entities obtained through acquisitions.
On August 22, 2023 (the “Closing Date”), the Company consummated the previously announced Business Combination (the “Business Combination”), pursuant to the terms of the Agreement and Plan of Merger, dated as of May 10, 2021, as amended as of October 27, 2021, November 9, 2021, November 30, 2021, August 26, 2022, February 24, 2023 and June 23, 2023 (as amended, the “Merger Agreement”), by and among Aurora, Better Holdco, Inc. (“Better”), and Aurora Merger Sub I, Inc., formerly a wholly owned subsidiary of Aurora (“Merger Sub”). On the Closing Date, Merger Sub merged with and into Better, with Better surviving the merger (the “First Merger”) and Better merged with and into Aurora, with Aurora surviving the merger and changing its name to “Better Home & Finance Holding Company” (referred to as “Better Home & Finance” or the “Company”) (such merger, the “Second Merger,” and together with the First Merger, the “Business Combination” and the completion thereof, the “Closing”).
Better Home & Finance Class A common stock and warrants are listed on the Nasdaq Global Market and the Nasdaq Capital Market, respectively, under the ticker symbols “BETR” and “BETRW.” 
1. ORGANIZATION AND NATURE OF THE BUSINESS
Better Holdco, Inc. and its subsidiaries (together, the “Company”) provide a comprehensive set of homeownership offerings. The Company’s offerings include mortgage loans, real estate agent services, title and homeowner’s insurance, and other homeownership offerings, such as the Company’s cash offer program. The Company leverages Tinman, its proprietary technology platform, to optimize the mortgage process from the initial application, to the integration of a suite of additional homeownership offerings, to the sale of loans to a network of loan purchasers.
The Company originates mortgage loans throughout the United States through its wholly-owned subsidiary Better Mortgage Corporation (“BMC”). BMC is an approved Title II Single Family Program Lender with the Department of Housing and Urban Development’s (“HUD”) Federal Housing Administration (“FHA”), and is an approved seller and servicer with the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FMCC”).
The Company commenced operations in 2015 and is headquartered in New York. The Company’s fiscal year ends on December 31.
In May 2021, the Company entered into a definitive merger agreement (“Merger Agreement” or the “Merger”) with Aurora Acquisition Corp (“Aurora”), a special purpose acquisition company (“SPAC”) traded on the NASDAQ under “AURC”, which will transform the Company into a publicly listed company. The transaction will be accounted for as a reverse recapitalization and the Company has been determined to be the accounting acquirer. Pursuant to the Merger Agreement, the Company will merge with Aurora Merger Sub I, Inc. (“Merger Sub”), a wholly owned subsidiary of Aurora, with the Company surviving as a wholly owned subsidiary of Aurora (the “First Merger”). Immediately following the First Merger, the Company will merge with and into its parent, Aurora, with Aurora surviving and changing its corporate name from “Aurora Acquisition Corp.” to “Better Home & Finance Holding Company” (the “Second Merger”). The Second Merger together with the First Merger will be referred to as “the Merger”.
The stock consideration will consist of a number of shares of Better Home & Finance Holding Company (“Better Home & Finance”) Class A common stock, Better Home & Finance Class B common stock or Better Home & Finance Class C common stock equal to (A) 690,000,000 shares, minus (B) the aggregate amount of Better Home & Finance Class B common stock that would be issuable upon the net exercise or conversion, as applicable, of the Better Awards (the “Stock Consideration”). Better Awards include all (i) options to purchase shares of the Company’s common stock, (ii) restricted stock units based on shares of the Company’s common stock, and (iii) restricted shares of the Company’s common stock outstanding as of immediately prior to the First Merger. As a result of and upon the closing of the Merger Agreement, among other things, (i) all outstanding shares of the Company’s common stock as of immediately prior to the effective time of the First Merger, will be cancelled in exchange for the right to receive the Stock Consideration; (ii) all Better Awards outstanding as of immediately prior to the effective time of the First Merger will be converted, based on the Exchange Ratio, into awards based on shares of Better Home & Finance Class B common stock; and (iii) all of the Company’s warrants outstanding as of immediately prior to the effective time of the First Merger will, in accordance with the warrant holders’ agreements, be conditionally exercised and eligible to receive their portion of the Stock Consideration or be converted, based on the Exchange Ratio, into warrants to purchase shares of Better Home & Finance Class A common stock. The Exchange Ratio is the quotient obtained by dividing (a) 690,000,000 by (b) the number of aggregate fully diluted common shares of the Company. Amounts remaining in Aurora’s trust account as of immediately following the effective time of the Merger will be retained by Better Home & Finance following the closing of the Merger.
In November 2021, in connection with the Merger Agreement, the Company entered into Amendment No.3 (“Amendment No. 3”) to the Merger. In order to provide the Company with immediate liquidity, the structure of the Merger Agreement was amended to replace the $1.5 billion private investment into public equity (“PIPE”), including the use of such proceeds for a $950.0 million secondary purchase of shares of existing stockholders of the Company, with $750.0 million of bridge notes (the “Pre-Closing Bridge Notes”) and $750.0 million of post-closing convertible notes (“Post-Closing Convertible Notes”). Amendment No. 3 also extended the end date of the Merger Agreement from February 12, 2022 to September 30, 2022, among other amendments.
The Pre-Closing Bridge Notes were issued in December 2021 in the amount of $750.0 million as part of a convertible bridge note purchase agreement (“Pre-Closing Bridge Note Purchase Agreement”) and Amendment No. 3. The Pre-Closing Bridge Notes were funded by Novator Capital Ltd. (the “Sponsor” or “Novator”) and SB Northstar LP (“Softbank”) in an aggregate principal amount of $100.0 million and $650.0 million, respectively. Under the terms of the Pre-Closing Bridge Note Purchase Agreement immediately prior to the closing of the Second Merger, Aurora will be deemed to automatically assume each Pre-Closing Bridge Note and the outstanding principal amount under each Pre-Closing Bridge Note will automatically be converted into a number of shares of Class A Common Stock of Aurora, based on a conversion ratio of $10 of principal amount payable on a Pre-Closing Bridge Note at the time of conversion to one share of Aurora Class A Common Stock. In the event that the Merger Agreement has not been consummated by the maturity date of the Pre-Closing Bridge Notes which was December 2, 2022, and has since been extended, or the Merger Agreement is withdrawn, then on the maturity date or upon withdrawal, the Pre-Closing Bridge Notes will convert into a new series of preferred stock with terms consistent with those of the Company’s Series D Preferred Stock. If the Merger Agreement is not consummated due to a breach by Aurora, the Sponsor or SoftBank, the Pre-Closing Bridge Notes will convert into the Company’s common stock. See Note 11 for further details on the Pre-Closing Bridge Notes.
The Post-Closing Convertible Notes are in an amount equal to $750.0 million and is reduced dollar for dollar by any remaining cash in Aurora’s trust account released to Better Home & Finance. As further discussed in Note 11, the First Novator Letter Agreement gives the Sponsor the right, but not the obligation, to fund any portion or none of its Post-Closing Convertible Notes. SoftBank’s commitment shall be reduced on a dollar-for-dollar basis by the amount that is not funded by the Sponsor. In the event that the Sponsor elects not to fund in full its Post-Closing Convertible Note, then SoftBank is only obligated to fund $550.0 million of its Post-Closing Convertible Note. See Note 11 for further details on the First Novator Letter Agreement, Second Novator Letter Agreement, and Deferral Letter Agreement.
On August 26, 2022, in connection with the Merger Agreement, the Company entered into Amendment No.4 (the “Amendment No. 4”) to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) to March 8, 2023.
In consideration of extending the Agreement End Date, the Company will reimburse Aurora for certain reasonable and documented expenses in an aggregate sum not to exceed $15.0 million. The reimbursement payments will be structured in three tranches, in each case subject to receipt by the Company of reasonable documentation related to the expenses: (i) the first payment of up to $7.5 million will be made within 5 business days after the date of Amendment No. 4; (ii) the second payment of up to $3.8 million will be made on January 2, 2023; and (iii) the third payment of up to $3.8 million will become due upon termination of the Merger Agreement by mutual consent of the parties thereto, and shall be payable on March 8, 2023 (or any earlier termination date, as applicable). For the year ended December 31, 2022, the Company has paid Aurora $7.5 million in reimbursements. Subsequent to December 31, 2022, the Company has made the second and third payment, each $3.8 million, totaling $7.5 million. The parties have also agreed to amend the Merger Agreement to provide a waiver from the exclusivity provisions thereof to allow the Company to discuss alternative financing structures with SoftBank.
On February 24, 2023, the parties entered into Amendment No.5 to the Merger Agreement, which amended the Merger Agreement to extend the Agreement End Date (as defined in the Merger Agreement) from March 8, 2023 to September 30, 2023.
Going concern consideration—In connection with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205-40, “Basis of Presentation - Going Concern,” the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
For the year ended December 31, 2022, the Company incurred a net loss of $888.8 million and used $632.8 million in cash. As a result the Company has an accumulated deficit of $1.2 billion as of December 31, 2022. The Company’s cash and cash equivalents as of December 31, 2022 was $318.0 million. Management expects losses and negative cash flows to continue in the near term, primarily due to a difficult interest rate environment that has had a
significant impact on the Company’s business which is dependent on mortgage applications for new home purchases and applications to refinance existing mortgage loans.
In response to the difficult interest rate environment and impact on the business, the Company commenced an operational restructuring plan late in 2021, which primarily consisted of reductions in headcount, reassessment of vendor relationships, reductions in the Company’s real estate footprint, and other cost reductions. The Company will continue its cost reduction initiatives through the near term. There is no assurance that reductions in costs will offset the reduction in revenues experienced as a result of the difficult interest rate environment.
The Company’s primary sources of funding have been raises of preferred stock, issuance of convertible debt, warehouse and corporate lines of credit, and cash generated from operations.
In order for the Company to continue as a going concern, the Company must obtain additional sources of funding, refinance existing lines of credit, and increase revenues while decreasing expenses to a point where the Company can better fund its operations. Upon consummation of the Merger, the Company will become a publicly listed company, which will give it the ability to draw on additional funding, including the Post-Closing Convertible Notes, which will provide the Company with increased financial flexibility to execute its strategic objectives. The Merger had not been completed as of December 31, 2022, and has still not been completed as of May 11, 2023, the date the consolidated financial statements were issued. Subsequent to December 31, 2022, Better Holdco amended the Merger Agreement to extend the maturity from March 8, 2023, to September 30, 2023.
Management has determined that the expected future losses and negative cash flows paired with the possibility of being unable to raise additional funding, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the consolidated financial statements are issued.
Immaterial restatement corrections and reclassifications to previously issued consolidated financial statements
Immaterial restatement corrections—Subsequent to the issuance of the Company's consolidated financial statements as of and for the year ended December 31, 2021, the Company identified immaterial errors which required correction of the Company's previously issued consolidated financial statements for the year ended December 31, 2021. The impact of these errors in the prior year are not material to the consolidated financial statements in that year and are primarily related to the timing and classification of certain revenue and expense line items and the related balance sheet impacts on the Company’s consolidated financial statements. Additionally, the Company corrected the presentation of deferred tax liabilities from accounts payable and accrued expenses to properly present it with net deferred tax assets within prepaid expenses and other assets as of December 31, 2021. Consequently, the Company has corrected these immaterial errors in the year to which they relate.
Reclassifications—The Company also made certain reclassifications to prior years' consolidated statement of operations and comprehensive loss to conform to the current year presentation as follows: (1) the Company reclassified revenue and expense amounts related to its cash offer program from other platform revenue and other platform expenses to separately present as cash offer program revenue and cash offer program expenses, respectively, and (2) the Company has also reclassified expenses related to its restructuring program, specifically employee termination benefits, which were previously recorded as compensation and benefits within mortgage platform, other platform, general and administrative, marketing and advertising, and technology and product development expenses to separately present restructuring and impairment expenses.
The corrections to our consolidated balance sheet as of December 31, 2021 were as follows:
December 31, 2021
(Amounts in thousands)As Previously ReportedCorrectionsAs Corrected
Assets
Mortgage loans held for sale, at fair value
$1,851,161 $3,274 $1,854,435 
Other receivables, net
51,246 2,916 54,162 
Prepaid expenses and other assets110,075 (19,077)90,998 
Total Assets
$3,312,604 $(12,887)$3,299,717 
Liabilities, Convertible Preferred Stock, and Stockholders’ Equity (Deficit)
Liabilities
Accounts payable and accrued expenses$148,767 $(15,511)$133,256 
Total Liabilities
2,638,788 (15,511)2,623,277 
Accumulated deficit(295,237)2,624 (292,613)
Total Stockholders’ Equity 237,536 2,624 240,160 
Total Liabilities, Convertible Preferred Stock, and Stockholders’ Equity
$3,312,604 $(12,887)$3,299,717 
The reclassifications and corrections to our consolidated statement of operations and comprehensive loss for the year ended December 31, 2021 were as follows:
Year Ended December 31, 2021
(Amounts in thousands, except per share amounts)As Previously ReportedReclassificationsCorrectionsAs Reclassified and Corrected
Revenues:
Mortgage platform revenue, net$1,081,421 $— $6,802 $1,088,223 
Cash offer program revenue— 39,361 39,361 
Other platform revenue133,749 (39,361)94,388 
Net interest income (expense)
Interest income88,965 — 662 89,627 
Net interest income19,036 — 662 19,698 
Total net revenues1,234,206 — 7,464 1,241,670 
Expenses:
Mortgage platform expenses 710,132 (11,636)1,617 700,113 
Cash offer program expenses— 39,505 39,505 
Other platform expenses140,479 (40,404)100,075 
General and administrative expenses 232,669 (2,517)1,068 231,220 
Marketing and advertising expenses249,275 (380)248,895 
Technology and product development expenses143,951 (1,616)2,155 144,490 
Restructuring and impairment expenses— 17,048 17,048 
Total expenses1,476,506 — 4,840 1,481,346 
Loss from operations(242,300)— 2,624 (239,676)
Loss before income tax expense (benefit)(306,135)— 2,624 (303,511)
Net loss$(303,752)$— $2,624 $(301,128)
Other comprehensive loss:
Comprehensive loss$(303,717)$— $2,624 $(301,093)
Per share data:
Basic$(3.49)$— $0.03 $(3.46)
Diluted$(3.49)$— $0.03 $(3.46)
The reclassifications and corrections to the consolidated statement of changes in convertible preferred stock and stockholders’ equity (deficit) include the change to net loss as noted above for the year ended December 31, 2021.
The reclassifications and corrections had no impact on net cash flows from operating activities, cash flows from investing activities, or cash flows from financing activities for the year ended December 31, 2021.
Aurora Acquisition Corp  
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS  
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Aurora Acquisition Corp. (the “Company” or “Aurora”) is a blank check company incorporated as a Cayman Islands exempted company on October 7, 2020. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”).
Although the Company is not limited to a particular industry or geographic region for purposes of completing a Business Combination, the Company is an early stage and emerging growth company, and as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of May 10, 2021, the Company entered into an Agreement and Plan of Merger (as subsequently amended, the “Merger Agreement”) with Aurora Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub”), and Better HoldCo, Inc., a Delaware corporation (“Better”). All activity for the period from October 7, 2020 (inception) through June 30, 2023 relates to the Company’s formation, the initial public offering (“Initial Public Offering” or “IPO”), which is described below, and activities in connection with entering into the Merger Agreement. Since our Initial Public Offering, our only costs have been identifying a target for our initial Business Combination, negotiating the transaction with Better, and maintaining our Company and SEC reporting. We do not expect to generate any operating revenues until after completion of our initial Business Combination. We generate non-operating income in the form of interest income on cash and cash equivalents. The Company incurs expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses incurred by conducting due diligence on prospective Business Combination candidates, including Better.
The Company has selected December 31 as its fiscal year end.
The registration statement for the Company’s Initial Public Offering was declared effective on March 3, 2021. On March 8, 2021, the Company consummated the Initial Public Offering of 22,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $220,000,000.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 3,500,000 private placement units (the “Novator Private Placement Units”), consisting of one Class A ordinary shares (the “Novator Private Placement Shares”) and one-quarter of one redeemable warrant (each whole warrant exercisable for one Class A ordinary share) (the “Novator Private Placement Warrants”), at a price of $10.00 per Novator Private Placement Unit in a private placement to Novator Capital Sponsor Ltd. (the “Sponsor”), an affiliate of Novator Capital Ltd., directors, and executive officers of the Company, generating gross proceeds of $35,000,000. In addition, the Company consummated the sale of 4,266,667 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor and certain of the Company’s directors and executive officers, generating gross proceeds of $6,400,000, which is described in Note 3.
Transaction costs amounted to $13,946,641 consisting of $4,860,057 of underwriting fees, $8,505,100 of deferred underwriting fees (see Note 5) and $581,484 of other offering costs.
Following the closing of Aurora’s Initial Public Offering on March 8, 2021, an amount equal to $255,000,000 ($10.00 per unit) (see Note 6) from the proceeds from Aurora’s Initial Public Offering and the sale of the Private Placement Warrants was placed in the trust account (the “Trust Account”). Additionally, the cash held in the Trust Account is comprised of the gross proceeds from the Initial Public Offering of $220,000,000, $23,002,870 from the
gross proceeds of the partial exercise of the Underwriters over-allotment option, $35,000,000 from 3,500,000 units at a price $10.00 per unit and interest income earned on the trust account funds since its establishement, including interest income of $2,156,230 for the six months ended June 30, 2023. As of June 30, 2023, funds in the Trust Account totaled approximately $21,317,257 and, since on or about February 24, 2023 are held in a cash and cash equivalents account that will likely receive minimal, if any, interest, until the earlier of: (i) the completion of an initial business combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.
On March 10, 2021, the underwriters partially exercised their over-allotment option, resulting in an additional 2,300,287 Units issued for an aggregate amount of $23,002,870 in gross proceeds ($22,542,813 of net proceeds). In connection with the underwriters’ partial exercise of their over-allotment option, the Company also consummated the sale of an additional 306,705 Private Placement Warrants at $1.50 per Private Placement Warrant, generating total proceeds of $460,057.
The funds held in the Trust Account were, since our IPO until on or about February 24, 2023, held only invested in U.S. “government securities” within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), having a maturity of 185 days or less, or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. To mitigate the risk of us being deemed to have been operating as an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act), in connection with the extraordinary general meeting held to approve the Extension, we instructed Continental, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and now hold all funds in the Trust Account in cash (i.e., in one or more bank accounts) until the earlier of the completion of a business combination or our liquidation.
The Company’s management has broad discretion with respect to the specific uses of the funds in the Trust Account, although substantially all of the funds are intended to be applied generally toward completing a Business Combination and to pay the deferred portion of the underwriters’ discount associated with the Initial Public Offering and partial exercise of the underwriters’ over-allotment option. The Company must complete its initial Business Combination with one or more target businesses that together have a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.
Following the February 2023 liquidation of the assets in the Trust Account, we have and will continue to receive minimal interest, if any, on the funds held in the Trust Account, which would reduce the dollar amount our public shareholders would have otherwise received upon any redemption or liquidation of the Company if the assets in the Trust Account had remained in U.S. government treasury obligations or money market funds. The Company will provide its shareholders with the opportunity to redeem all or a portion of their Public Shares, with the exception of the Founder Shares (as defined below) and Novator Private Placement Shares, upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The shareholders will be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account (initially $10.00 per share), calculated as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Class A ordinary shares will be recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
If the Company seeks shareholder approval in connection with a Business Combination, it will need to receive an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who vote at a general meeting of the Company (assuming a quorum is present). If a shareholder vote is not required under applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor and the Company’s officers and directors have agreed to vote their Class B ordinary shares (the “Founder Shares”), Novator Private Placement Shares and any Public Shares purchased in or after the Initial Public Offering in favor of approving a Business Combination and to waive their redemption rights with respect to any such shares in connection with a shareholder vote to approve a Business Combination (although they have not waived rights to liquidating distributions from the trust account with respect to any Class A ordinary shares it or they hold if Aurora fails to consummate a Business Combination within the required period). However, in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. Additionally, each public shareholder may elect to redeem its Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 20% of the Public Shares without the Company’s prior written consent.
The Sponsor and the Company’s directors and officers have agreed (a) to waive their redemption rights with respect to any Founder Shares, Novator Private Placement Shares and Public Shares held by them in connection with the completion of a Business Combination (although they have not waived rights to liquidating distributions from the trust account with respect to any Class A ordinary shares it or they hold if Aurora fails to consummate a Business Combination within the required period) and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the public shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The Company had until 24 months from the closing of the Initial Public Offering to complete a Business Combination. On February 24, 2023, the Company obtained shareholder approval to extend the date by which the Company must complete the Initial Business Combination to September 30, 2023 (the “Combination Period”). In the event that the Company does not consummate a Business Combination within this timeline, the Company can seek a further extension, provided it has shareholder approval. If the Company is unable to complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than 10 business days thereafter, redeem 100% of the outstanding Public Shares and Novator Private Placement Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding Public Shares and Novator Private Placement Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
The Sponsor and the Company’s directors and officers have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, any Public Shares acquired by the Sponsor or the Company’s directors and officers and Novator Private Placement Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval). The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval) and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares and Novator Private Placement Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
The Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a third party for services rendered or products sold to the Company, or by a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent public accountants), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
As a condition to the consummation of the Business Combination, the board of directors of the Company has unanimously approved a change of the Company’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware. In connection with the consummation of the Business Combination, the Company will change its name to “Better Home & Finance Holding Company.”
Recent Developments
On August 26, 2022, Aurora, Better and the Sponsor entered into a letter agreement (the “First Novator Letter Agreement”) to, among other things, defer the maturity date of the Pre-Closing Bridge Notes (as defined below) held by the Sponsor to March 8, 2023, subject to SoftBank consenting to extending the maturity of its Pre-Closing Bridge Notes accordingly. On February 7, 2023, Aurora, Better and the Sponsor entered into a letter agreement (the “Second Novator Letter Agreement”) to defer the maturity date of the Pre-Closing Bridge Notes held by the Sponsor until September 30, 2023. Furthermore, pursuant to the Second Novator Letter Agreement, subject to Better receiving requisite approval therefor (which Better has agreed to use reasonable best efforts to obtain), the parties agreed that, if the proposed Business Combination has not been consummated by the maturity date of the Pre-Closing Bridge Note, the Sponsor will have the option, without limiting its rights under the Pre-Closing Bridge Note Purchase Agreement (as defined below) to alternatively exchange its Pre-Closing Bridge Notes on or before the maturity date as follows: (x) for a number of shares of Better preferred stock at a conversion price that represents a 50% discount to the $6.9 billion pre-money equity valuation of Better or (y) for a number of shares of the Company’s Class B common stock at a price per share that represents a 75% discount to the $6.9 billion pre-money equity valuation of Better. In addition, under the Second Novator Letter Agreement, Better agreed to reimburse Aurora for one-half of its reasonable and documented fees and expenses in connection with regulatory matters arising out of or relating to the transactions contemplated by the Merger Agreement on or after the date thereof, in an aggregate amount not to exceed $2,500,000, structured in two tranches to be paid on each of June 1, 2023 and September 1, 2023. As of June 30, 2023, Better has not yet reimbursed the first payment due on June 1, 2023 in the amount of $1,250,000, so Aurora has a receivable of $1,250,000.
On January 9, 2023, the Company received a notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) stating that the Company failed to hold an annual meeting of shareholders within 12 months after its fiscal year ended December 31, 2021, as required by Nasdaq Listing Rule 5620(a). In accordance with Nasdaq Listing Rule 5810(c)(2)(G), Aurora submitted a plan to regain compliance on February 17, 2023. We believe the combined annual and extraordinary general meeting the Company held on February 24, 2023 satisfied this requirement under Nasdaq Listing Rules.
On February 8, 2023, the Company repaid an aggregate principal amount of $2.4 million under the unsecured promissory note (as amended and restated on February 23, 2022, the “Note”) issued to the Sponsor (“Payee”) on May 10, 2021 and as amended and restated on February 23, 2022. After giving effect to this repayment, the amount outstanding under the Note is $412,395. As of June 30, 2023, the amount outstanding under the Note was $412,395.
On February 24, 2023, we held a combined annual and extraordinary general meeting pursuant to which the Company’s shareholders approved extending the date by which Aurora had to complete a business combination from March 8, 2023 to September 30, 2023 (the “Extension”). In connection with the approval of the Extension, public shareholders elected to redeem an aggregate of 24,087,689 Class A ordinary shares and the Sponsor elected to redeem an aggregate of 1,663,760 Class A ordinary shares. As a result, an aggregate of $263,123,592 (or approximately $10.2178 per share) was released from the Trust Account to pay such shareholders and the Sponsor and 2,048,838 Class A ordinary shares were issued and outstanding as of June 30, 2023.
Also on February 24, 2023, Aurora, Merger Sub and Better entered into Amendment No. 5 to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) from March 8, 2023 to September 30, 2023.
On April 24, 2023, the Company received a further letter (the “Public Float Notice”) from the Listing Qualifications department of Nasdaq notifying us that Aurora no longer meets the minimum 500,000 publicly held shares required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(4) (the “Public Float Standard”). The Public Float Notice required that the Company provide Nasdaq with a specific plan to achieve and sustain compliance with all Nasdaq listing requirements, including the time frame for completion of this plan, by June 8, 2023. The Public Float Notice is only a notification of deficiency, not of imminent delisting, and has no immediate effect on the listing or trading of Aurora’s securities on the Nasdaq. On June 8, 2023, the Company provided to Nasdaq our plan to meet the Public Float Standard, including actions to be taken with respect to the Business Combination, and will continue to evaluate available options to regain compliance with the Nasdaq continued listing standards. On June 20, 2023, the Company received a response from Nasdaq confirming that the Company had been granted an extension to regain compliance with the Public Float Standard. The Company must now file with the SEC and Nasdaq, on or before October 3, 2023, a public document containing the Company’s then current total shares outstanding and a beneficial ownership table in accordance with SEC proxy rules. In the event that the Company does not satisfy such terms, Nasdaq may provide written notification that the Company’s securities will be delisted and we will have the opportunity to appeal the decision in front of a Nasdaq Hearings Panel.
On June 21, 2023, the Company received an additional letter (the “MVLS Notice”) from the Listing Qualifications department of Nasdaq notifying the Company that, for the prior 30 consecutive business days, Aurora’s Market Value of Listed Securities (“MVLS”) with respect to Aurora Class A ordinary shares was below the minimum of $35 million required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(b)(2) (the “Market Value Standard”). The Company has 180 calendar days from the date of the MVLS Notice (the “Compliance Period”), or until December 18, 2023, to regain compliance with the Market Value Standard. The MVLS Notice states that if, at any time during the Compliance Period, the market value of Aurora’s Class A ordinary shares closes at a value of at least $35 million for a minimum of ten consecutive business days, Nasdaq will provide written confirmation of compliance and the matter will be closed. The MVLS Notice is only a notification of deficiency, not of imminent delisting, and has no immediate effect on the listing or trading of Aurora’s securities on The Nasdaq Capital Market. The Company intends to monitor the Company’s MVLS and may, if appropriate, consider implementing available options to regain compliance with the Market Value Standard.
On June 23, 2023, the Company, Merger Sub and Better entered into Amendment No. 6 (“Amendment No. 6”) to the Merger Agreement, which amended the Proposed Form of Certificate of Incorporation upon Domestication at Exhibit A to the Merger Agreement to implement a corrective change to the authorized share capital of the combined company. Specifically, the Form of Certificate of Incorporation was amended in order to: (i) increase the total number of shares of all classes of stock that the combined company will have authority to issue from 3,250,000,000 to 3,400,000,000; (ii) increase the number of shares of Class A common stock that the combined company will have authority to issue from 1,750,000,000 to 1,800,000,000; and (iii) increase the number of shares of Class B common stock that the combined company will have authority to issue from 600,000,000 to 700,000,000.
On or around July 11, 2023, a vendor and legal advisor to the Company agreed to reduce total fees then due from the Company by approximately $560,000 to $350,000. The Company had previously paid the advisor an aggregate of approximately $2 million for services provided, and immediately prior to the adjustment the Company had a balance outstanding of approximately $910,000, therefore reducing the fees by approximately $560,000. The services were provided during current and prior periods, including the quarter ended June 30, 2023. The vendor has neither received financial nor non-financial benefits in exchange for the reduction in fees. The Company recorded debt extinguishment of the liability as well as recognized a gain in the current period related to the debt extinguishment in the amount of approximately $560,000.
Risks and Uncertainties
Management has evaluated the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Going Concern
In connection with the Company’s going concern considerations in accordance with guidance in the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements – Going Concern, the Company has until September 30, 2023 to consummate a Business Combination. The Company’s mandatory liquidation date, if a Business Combination is not consummated, raises substantial doubt about the Company’s ability to continue as a going concern. These unaudited condensed financial statements do not include any adjustments related to the recovery of the recorded assets or the classification of the liabilities should the Company be unable to continue as a going concern. In the event of a mandatory liquidation, within ten business days, the Company will redeem the Public Shares, at a per-share price, payable in cash, equal to the allocated amount towards the Public Shares (in this case, not including the existing Novator Private Placement Shares) then on deposit in the Trust Account including the allocated interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares.
Liquidity and Management’s Plan
As of June 30, 2023, the Company had $1,228,847 in its operating bank account, and a working capital deficit of $17,712,429.
On August 26, 2022, Aurora entered into Amendment No. 4 (“Amendment No. 4”) to the Merger Agreement, by and among, Aurora, Merger Sub and Better. Pursuant to Amendment No. 4, the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) to March 8, 2023. Pursuant to Amendment No. 4, Better agreed to reimburse the Company, for reasonable transaction expenses as defined in the Merger Agreement, up to an aggregate amount not to exceed $15,000,000. As of June 30, 2023, $11,250,000 had been received in two tranches from Better, and, on April 4, 2023, Better transferred the third tranche of $3,750,000 (net of the accounts payable amount that was owed to a third party provider on behalf of Aurora), each as part of Better’s agreement to reimburse Aurora for transaction expenses as defined in the Merger Agreement.
In addition, under the Second Novator Letter Agreement, Better agreed to reimburse Aurora for one-half of its reasonable and documented fees and expenses in connection with regulatory matters arising out of or relating to the transactions contemplated by the Merger Agreement on or after the date thereof, in an aggregate amount not to exceed $2,500,000, structured in two tranches to be paid on each of June 1, 2023 and September 1, 2023. As of June 30, 2023, Better has not yet reimbursed the first payment due on June 1, 2023 in the amount of $1,250,000, so Aurora has a receivable of $1,250,000.
In addition, the Company issued the Note to the Sponsor (“Payee”) pursuant to which the Company could borrow up to an aggregate principal amount of $4,000,000. Should the Company’s operating costs, in relation to its proposed Business Combination, exceed the amounts still available and not currently drawn under the promissory note, the Sponsor shall increase the amount available under the Note to cover such costs, subject to an aggregate cap of $12,000,000. This amount was reflective of estimated total costs of the Company through August 15, 2024. As of June 30, 2023, the amount outstanding under the Note was $412,395.
In addition, as consideration for the Limited Waiver, the Sponsor agreed to reimburse the Company for reasonable and documented expenses incurred by the Company in connection with the proposed Business Combination, up to the actual aggregate amount of Novator Private Placement Shares redeemed by the Sponsor in connection with the Limited Waiver (the “Sponsor Redeemed Amount”), to the extent such expenses are not otherwise subject to reimbursement by Better pursuant to the Merger Agreement.
In the event that the Company does not consummate a Business Combination by September 30, 2023, the Company can seek a further extension, provided we have our shareholder approval.
Accordingly, management has evaluated the Company’s liquidity and financial condition and determined that sufficient capital exists to sustain operations through the earlier of a Business Combination or one year from the date of this filing.
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Aurora Acquisition Corp. (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on October 7, 2020. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Transaction”).
Although the Company is not limited to a particular industry or geographic region for purposes of completing a Transaction. The Company is an early stage and emerging growth company, and as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
On May 10, 2021, Aurora Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Better HoldCo, Inc., a Delaware corporation (“Better”). The Company will present their financial statements on a consolidated basis, which includes the Merger Sub, as the Company its sole shareholder. The consolidated activity of the Merger Sub includes only transactions related to governance and Director fees under the Director Services Agreement, which is described in Note 5. All activity for the period from October 7, 2020 (inception) through December 31, 2022 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and activities in connection with entering into the Merger Agreement. Since our Initial Public Offering, our only costs have been identifying a target for our initial Transaction, negotiating the transaction with Better, and maintaining our Company and SEC reporting. We do not expect to generate any operating revenues until after completion of our initial Business Combination (“Business Combination”). We generate non-operating income in the form of interest income on cash and cash equivalents. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses as we conduct due diligence on prospective Transaction candidates.
The Company has selected December 31 as its fiscal year end.
The registration statement for the Company’s Initial Public Offering was declared effective on March 3, 2021. On March 8, 2021, the Company consummated the Initial Public Offering of 22,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $220,000,000 which is described in Note 3.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 3,500,000 private placement units (the “Novator Private Placement Units”), consisting of one Class A ordinary shares (the “Novator Private Placement Shares”) and one-quarter of one redeemable warrant (each whole warrant exercisable for one Class A ordinary share) (the “Novator Private Placement Warrants”), at a price of $10.00 per Novator Private Placement Unit in a private placement to Novator Capital Sponsor Ltd., or Novator, an affiliate of Novator Capital Ltd. (the “Sponsor”), directors, and executive officers of the Company, generating gross proceeds of $35,000,000 . In addition, the Company consummated the sale of 4,266,667 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor and certain of the Company’s directors and executive officers, generating gross proceeds of $6,400,000, which is described in Note 4.
Transaction costs amounted to $13,946,641 consisting of $4,860,057 of underwriting fees, $8,505,100 of deferred underwriting fees (see Note 6) and $581,484 of other offering costs.
Following the closing of Aurora’s Initial Public Offering on March 8, 2021, an amount equal to $255,000,000 ($10.00 per unit) (see Note 7) from the net proceeds from Aurora’s Initial Public Offering and the sale of the Private Placement Warrants was placed in the trust account (the “Trust Account”). Additionally, the cash held in the Trust Account comprises of gross proceeds from the Initial Public Offering of $220,000,000, $23,002,870 from the proceeds of the Underwriters over-allotment, $35,000,000 from 3,500,000 units at a price $10.00 per unit and interest income of $4,262,222 for the year ended December 31, 2022. As of December 31, 2022, funds in the Trust Account totaled $282,284,619 and will be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 of the Investment Company Act,
as determined by the Company, until the earlier of: (i) the completion of a Transaction and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.
On March 10, 2021, the underwriters partially exercised their over-allotment option, resulting in an additional 2,300,287 Units issued for an aggregate amount of $23,002,870 in gross proceeds ($22,542,813 of net proceeds). In connection with the underwriters’ partial exercise of their over-allotment option, the Company also consummated the sale of an additional 306,705 Private Placement Warrants at $1.50 per Private Placement Warrant, generating total proceeds of $460,057.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering, the sale of the Novator Private Placement Units, the sale of the Private Placement Warrants and the partial exercise of the underwriters’ over-allotment option, although substantially all of the net proceeds are intended to be applied generally toward completing a Business Combination and to pay the deferred portion of the underwriters’ discounts associated with the Initial Public Offering and partial exercise of the underwriters’ over-allotment options. The Company must complete its initial Business Combination with one or more target businesses that together have a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.
The Company will provide its shareholders with the opportunity to redeem all or a portion of their Public Shares, with the exception of the founder shares and Novator Private Placement Shares, upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The shareholders will be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account (initially $10.00 per share), calculated as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Class A ordinary shares are recorded at redemption value and classified as temporary equity, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
If the Company seeks shareholder approval in connection with a Business Combination, it will need to receive an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who vote at a general meeting of the Company (assuming a quorum is present). If a shareholder vote is not required under applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor and the Company’s officers and directors have agreed to vote their Founder Shares (as defined in Note 5), Novator Private Placement Shares and any Public Shares purchased in or after the Initial Public Offering in favor of approving a Business Combination and to waive their redemption rights with respect to any such shares in connection with a shareholder vote to approve a Business Combination. However, in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. Additionally, each public shareholder may elect to redeem its Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated
Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 20% of the Public Shares without the Company’s prior written consent.
The Sponsor and the Company’s directors and officers have agreed (a) to waive their redemption rights with respect to any Founder Shares, Novator Private Placement Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the public shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The Company had until 24 months from the closing of the Initial Public Offering to complete a Business Combination. On February 24, 2023, the Company obtained shareholder approval to extend the date by which the Company must complete the Initial Business Combination to September 30, 2023. In the event that the Company does not consummate a Business Combination within this timeline, the Company can seek an extension (with no limit to such extension) provided it has shareholder approval. If the Company is unable to complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than 10 business days thereafter, redeem 100% of the outstanding Public Shares and Novator Private Placement Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding Public Shares and Novator Private Placement Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
The Sponsor and the Company’s directors and officers have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval). However, any Public Shares acquired by the Sponsor or the Company’s directors and officers and Novator Private Placement Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval). The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval) and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares and Novator Private Placement Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
The Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a third party for services rendered or products sold to the Company, or by a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the
extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent public accountants), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
As a condition to the consummation of the Business Combination, the board of directors of the Company has unanimously approved a change of the Company’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware. In connection with the consummation of the Business Combination, the Company will change its name to “Better Home & Finance Holding Company.”
Risks and Uncertainties
Management has evaluated the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Liquidity and Management’s Plan
As of December 31, 2022, the Company had $285,307 in its operating bank account, and a working capital deficit of $14,605,202.
The Company issued an unsecured promissory note (the “Note”) to the Sponsor (“Payee”) pursuant to which the Company could borrow up to an aggregate principal amount of $4,000,000. Should the Company’s operating costs, in relation to its proposed business combination, exceed the amounts still available and not currently drawn under the promissory note, the Sponsor shall increase the amount available under the promissory note to cover such costs, subject to an aggregate cap of $12,000,000. This amount was reflective of estimated total costs of the Company through November 15, 2023 in relation to the business combination, in the event the business combination is unsuccessful. Aurora, Merger Sub and Better entered into Amendment No. 4 whereby Better has also agreed to reimburse the Company, for reasonable transaction expenses as defined in the Merger Agreement, an aggregate amount not to exceed $15,000,000. In the event that the Company does not consummate a Business Combination by September 30, 2023, the Company can seek an extension (with no limit to such extension) provided we have our shareholder approval. The Note is non-interest bearing and payable by check or wire transfer of immediately available funds or as otherwise determined by the Company to such account as the Payee may from time to time designate by written notice in accordance with the provision of the Note. Within five business days of the day of Amendment No.4, Better paid Aurora a sum of $7,500,000 and, on February 6, 2023, Better paid Aurora an additional sum of $3,750,000, each as part of Better’s agreement to reimburse Aurora for transaction expenses as defined in the Merger Agreement. Accordingly, management has evaluated the Company’s liquidity and financial condition and determined that sufficient capital exists to sustain operations through the earlier of a Business Combination or one year from the date of this filing.
Going Concern
In connection with the Company’s going concern considerations in accordance with guidance in the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements – Going Concern, the Company has until September 30, 2023 to consummate a Business Combination. The Company’s mandatory liquidation date, if a Business Combination is not consummated, raises substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments related to the recovery of the recorded assets or the classification of the liabilities should the Company be unable to continue as a going concern. As discussed in Note 1, in the event of a mandatory liquidation, within ten business days, the Company will redeem the Public Shares, at a per-share price, payable in cash, equal to the allocated amount towards the Public Shares (in this case, not including the existing Novator Private Placement Shares) then on deposit in the Trust Account including the allocated interest earned on
the funds held in the Trust Account and not previously released to the Company to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares.
v3.23.4
AURORA 10Q - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 9 Months Ended
Sep. 30, 2023
Aurora Acquisition Corp  
Summary of Significant Accounting Policies [Line Items]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying financial statements are presented in conformity in U.S. dollars with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging growth company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, a significant accounting estimate included in these financial statements is the valuation of the warrant liability. Such estimates may be subject to change as more current information becomes available.
Cash and cash equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2023 and December 31, 2022.
Investments Held in the Trust Account
On or around February 24, 2023, the Company liquidated its funds in the Trust Account and moved them to a cash and cash equivalent account that will likely receive minimal, if any, interest. Prior to this date and as of December 31, 2022, all assets in the Trust Account were money market funds which were invested primarily in U.S. Treasury Securities.
Deferred offering costs
Deferred offering costs consist of legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Initial Public Offering and were charged to shareholders’ equity upon the completion of the Initial Public Offering.
On June 22, 2022, Barclays Capital Inc. (“Barclays”), resigned from its role as underwriter and financial advisor to Aurora. In connection with such resignation, Barclays waived their entitlement to certain fees which would be owed upon completion of the proposed Business Combination, which was comprised of approximately $8.5 million as a deferred underwriting fee and financial advisory fee. Accordingly, the Company derecognized the liability for the deferred underwriting and financial advisory fee in the quarter ending June 30, 2022 that was accrued as of December 31, 2021. As of June 30, 2023, there is no liability for the deferred underwriting or financial advisory fee.
Class A ordinary shares subject to possible redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption would be classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.
Accordingly, at June 30, 2023 and December 31, 2022, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
Class A ordinary shares subject to possible redemption
Class A ordinary shares subject to redemption – December 31, 2022
$246,628,487 
Plus:
Reclass of permanent equity to temporary equity16,999,995 
Interest adjustment to redemption value1,676,767 
Less: 
Shares redeemed by public(246,123,596)
Shares redeemed by Sponsor(16,999,995)
Class A ordinary shares subject to redemption – March 31, 2023
$2,181,658 
Adjustment to redemption value19,954 
Class A ordinary shares subject to redemption – June 30, 2023
$2,201,612 
Warrant Liability
At June 30, 2023 and December 31, 2022, there were 6,075,049 and 6,075,050 Public Warrants outstanding, respectively, and 5,448,372 Private Placement Warrants outstanding (including warrants included in the Novator Private Placement Units). The Company accounts for the Public Warrants and Private Placement Warrants (including warrants included in the Novator Private Placement Units) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.
The accounting treatment of derivative financial instruments required that the Company record the warrants as derivative liabilities at fair value upon the closing of the Initial Public Offering. The Public Warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. The warrant liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liabilities are adjusted to current fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
Income taxes
The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Net income (loss) per share
Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. The Company has not considered the effect of the Warrants sold in the Public Offering and Private Placement Warrants to purchase an aggregate of 11,523,421 shares in the calculation of diluted loss per share in connection with the Novator Private Placement Units, since the exercise of the Warrants are contingent upon the occurrence of future events and the inclusion of such Warrants would be anti-dilutive.
The Company’s statement of operations includes a presentation of income (loss) per share for Common Stock subject to possible redemption in a manner similar to the two-class method of income per common stock. According to SEC guidance, common stock that is redeemable based on a specified formula is considered to be redeemable at fair value if the formula is designed to equal or reasonably approximate fair value. When deemed to be redeemable at fair value, the weighted average redeemable shares would be included with the non-redeemable shares in the denominator of the calculation and initially calculated as if they were a single class of common stock.
The following table reflects the calculation of basic and diluted net earnings (loss) per common share (in dollars, except per share amounts):
Three Months Ended
June 30, 2023June 30, 2022
Class A Common Stock subject to possible redemption
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption$(19,635)$1,248,851 
Net earnings (losses) attributable to Class A Common Stock subject to possible redemption$(19,635)$1,248,851 
Denominator: Weighted average Class A Common Stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption212,59824,300,287
Basic and diluted net income (loss) per share, Class A Common Stock subject to possible redemption$(0.09)$0.05 
Non-Redeemable Class A and Class B Common Stock
Numerator: Net income (loss) minus net earnings
Net income (loss)$(811,496)$537,055 
Less: Net earnings (losses) attributable to Class A Common Stock subject to possible redemption— — 
Non-redeemable net income (loss)$(811,496)$537,055 
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock8,786,31210,450,072
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B Common Stock$(0.09)$0.05 
Six Months Ended
June 30, 2023June 30, 2022
Class A Common Stock subject to possible redemption
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption$(429,904)$1,955,153 
Net earnings (losses) attributable to Class A Common Stock subject to possible redemption$(429,904)$1,955,153 
Denominator: Weighted average Class A Common Stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption7,541,25424,300,287
Basic and diluted net income (loss) per share, Class A Common Stock subject to possible redemption$(0.06)$0.08 
Non-Redeemable Class A and Class B Common Stock
Numerator: Net income (loss) minus net earnings
Net income (loss)$(529,182)$840,793 
Less: Net earnings (losses) attributable to Class A Common Stock subject to possible redemption— — 
Non-redeemable net income (loss)$(529,182)$840,793 
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock9,282,72410,450,072
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B Common Stock$(0.06)$0.08 
Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000 and up to £85,000 by the Financial Services Compensation Scheme per financial institution in the United Kingdom. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Recent issued accounting standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying consolidated financial statements are presented in conformity in U.S. dollars with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging growth company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, a significant accounting estimate included in these financial statements is the valuation of the warrant liability and valuation of Class B ordinary shares. Such estimates may be subject to change as more current information becomes available.
Cash and cash equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2022 and 2021.
Investments held in Trust Account
At December 31, 2022 and 2021, substantially all of the assets held in the Trust Account are money market funds which are invested primarily in U.S. Treasury Securities.
Deferred offering costs
Deferred offering costs consist of legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Initial Public Offering and were charged to shareholders’ equity upon the completion of the Initial Public Offering.
On June 22, 2022, Barclays resigned from its role as underwriter and financial advisor to Aurora. In connection with such resignation, Barclays waived its entitlement to a deferred underwriting fee of approximately $8.5 million that would be payable at the close of the Business Combination. Accordingly, the Company derecognized the liability for the deferred underwriting fee in the quarter ending June 30, 2022 that was accrued as of December 31, 2021. As of December 31, 2022, there is no liability for the deferred underwriting fee.
Class A ordinary shares subject to possible redemption
The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. Accordingly, at December 31, 2022 and 2021, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
At December 31, 2022 and 2021, the Class A ordinary shares reflected in the condensed balance sheets are reconciled in the following table:
Class A ordinary shares subject to possible redemption
Gross proceeds$243,002,870 
Less: 
Proceeds allocated to Public Warrants(299,536)
Class A ordinary shares issuance costs(13,647,105)
Plus: 
Accretion of carrying value to redemption value12,681,484 
Accretion of carrying value to redemption value – Over-Allotment1,265,157 
Class A ordinary shares subject to redemption – December 31, 2021
243,002,870 
Remeasurement of Class A ordinary shares subject to redemption:3,625,617 
Class A ordinary shares subject to redemption – December 31, 2022
$246,628,487 
Warrant Liability
At December 31, 2022 and 2021, there were 6,075,052 Public Warrants and 5,448,372 Private Placement Warrants outstanding (including warrants included in the Novator Private Placement Units). The Company accounts for the Public Warrants and Private Placement Warrants (including warrants included in the Novator Private
Placement Units) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.
The accounting treatment of derivative financial instruments required that the Company record the warrants as derivative liabilities at fair value upon the closing of the Initial Public Offering. The Public Warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. The warrant liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liabilities are adjusted to current fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
Offering Costs Associated with the Initial Public Offering
The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $13,946,641 as a result of the Initial Public Offering (consisting of a $4,860,057 underwriting fee, $8,505,100 of deferred underwriting fees and $581,484 of other offering costs). The Company recorded $13,647,118 of offering costs as a reduction of equity in connection with the Class A ordinary shares included in the Units. The Company immediately expensed $299,523 of offering costs in connection with the Public Warrants included in the Units that were classified as liabilities within the nine months ended September, 2021. For the years ended December 31, 2022 and 2021, the Company recorded a gain of $182,658 and $0, respectively, relating to offering costs allocated to the warrant liability due to Barclays waiving its entitlement to a deferred underwriting fee of $8,505,100 that would be payable at the close of the Business Combination. There was no gain due to the waiver of underwriting fees for the year ended December 31, 2021.
Income taxes
The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2022 or December 31,2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.
Net income (loss) per share
Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. Weighted average shares are reduced for the effect of an aggregate of 249,928 Class B ordinary shares that were forfeited when the over-allotment option was partially exercised by the underwriters within the 45-day window (see Note 5). The
Company has not considered the effect of the Warrants sold in the Public Offering and Private Placement Warrants to purchase an aggregate of 11,523,444 shares in the calculation of diluted loss per share in connection with the Novator Private Placement Units, since the exercise of the Warrants are contingent upon the occurrence of future events.
The Company’s statement of operations includes a presentation of income (loss) per share subject to possible redemption in a manner similar to the two-class method of income per share. According to SEC guidance, shares that are redeemable based on a specified formula are considered to be redeemable at fair value if the formula is designed to equal or reasonably approximate fair value. When deemed to be redeemable at fair value, the weighted average redeemable shares would be included with the non-redeemable shares in the denominator of the calculation and initially calculated as if they were a single class of ordinary shares.
The following table reflects the calculation of basic and diluted net earnings (loss) per ordinary share (in dollars, except per share amounts):
Year Ended
December 31, 2022December 31, 2021
Class A ordinary shares subject to possible redemption
Numerator: Earnings (losses) attributable to Class A ordinary shares subject to possible redemption$6,108,604 $(4,399,283)
Net earnings (losses) attributable to Class A ordinary shares subject to possible redemption$6,108,604 $(4,399,283)
Denominator: Weighted average Class A ordinary shares subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption24,300,287 19,827,082 
Basic and diluted net income (loss) per share, Class A ordinary shares subject to possible redemption$0.25 $(0.22)
Non-Redeemable Class A and Class B ordinary shares
Numerator: Net income (loss) minus net earnings
Net income (loss)$2,626,938 $(2,127,892)
Less: Net earnings (losses) attributable to Class A ordinary shares subject to possible redemption$— $— 
Non-redeemable net income (loss)$2,626,938 $(2,127,892)
Denominator: Weighted average Non-Redeemable Class A and Class B ordinary shares
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B ordinary shares10,450,072 9,590,182 
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B ordinary shares$0.25 $(0.22)
Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000 and up to £85,000 by the Financial Services Compensation Scheme per financial institution in the United Kingdom. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on these accounts.
Recent issued accounting standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
v3.23.4
AURORA 10Q - PRIVATE PLACEMENTS
 9 Months Ended
Sep. 30, 2023
Aurora Acquisition Corp  
PRIVATE PLACEMENTS  
PRIVATE PLACEMENTS PRIVATE PLACEMENTS
Simultaneously with the closing of the Initial Public Offering, the Sponsor, and certain of the Company’s directors and officers purchased an aggregate of 4,266,667 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $6,400,000 from the Company. The Sponsor and certain of the Company’s directors and officers agreed to purchase up to an additional 440,000 Private Placement Warrants, for an aggregate purchase price of an additional $660,000, if the over-allotment option is exercised in full or in part by the underwriters. On March 10, the Sponsor and certain of the Company’s directors and officers purchased 306,705 Private Placement Warrants for an additional aggregate purchase price of $460,057 in connection with the partial exercise of the underwriter’s over-allotment option. Each Private Placement Warrant is exercisable
for one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 6). If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares and the shares included in the Novator Private Placement Units (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
In connection with the execution of the Merger Agreement, the Sponsor entered into a letter agreement (the “Sponsor Agreement”) with Aurora on November 9, 2021, pursuant to which the Sponsor will forfeit upon closing 50% of its Aurora private placement warrants and 20% of the Better Home & Finance Class A common stock retained by the Sponsor as of the Closing will become subject to transfer restrictions, contingent upon the price of Better Home & Finance Class A common stock exceeding certain thresholds (“Sponsor Locked-Up Shares”).
The Sponsor and certain of the Company’s directors and officers also purchased 3,500,000 Novator Private Placement Units at a price of $10.00 per Private Placement Unit for an aggregate purchase price of $35,000,000. Each Private Placement Unit consists of 1 Novator Private Placement Share and one-quarter of one warrant (“Private Placement Warrant”). Each whole Private Placement Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 6). If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor and the Company’s directors and officers have agreed to vote their Founder Shares, Novator Private Placement Shares and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination.
On February 24, 2023, we held a combined annual and extraordinary general meeting pursuant to which the Company’s shareholders approved the Extension. In connection with the approval of the Extension, public shareholders elected to redeem an aggregate of 24,087,689 Class A ordinary shares and the Sponsor elected to redeem an aggregate of 1,663,760 Class A ordinary shares. As a result, an aggregate of $263,123,592 (or approximately $10.2178 per share) was released from the Trust Account to pay such shareholders and the Sponsor and 2,048,838 Class A ordinary shares were issued and outstanding at June 30, 2023.
PRIVATE PLACEMENTS
Simultaneously with the closing of the Initial Public Offering, the Sponsor, and certain of the Company’s directors and officers purchased an aggregate of 4,266,667 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $6,400,000 from the Company. The Sponsor and certain of the Company’s directors and officers also agreed to purchase up to an additional 440,000 Private Placement Warrants, for an aggregate purchase price of an additional $660,000, if the over-allotment option is exercised in full or in part by the underwriters. On March 10, the Sponsor and certain of the Company’s directors and officers purchased 306,705 Private Placement Warrants for an additional aggregate purchase price of $460,057 in connection with the partial exercise of the underwriter’s over-allotment option. Each Private Placement Warrant is exercisable for one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7). A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval), the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares and the shares included in the Novator Private Placement Units (subject to the requirements of applicable law) and the Private Placement Warrants will expire, and no amount will be due to holders.
In connection with the execution of the Merger Agreement, the Sponsor entered into a letter agreement (the “Sponsor Agreement”) with Aurora on November 9, 2021, pursuant to which the Sponsor will forfeit upon Closing 50% of the Aurora private warrants and 20% of the Better Home & Finance Class A common stock retained by the Sponsor as of the Closing will become subject to transfer restrictions, contingent upon the price of Better Home & Finance Class A common stock exceeding certain thresholds (“Sponsor Locked-Up Shares”).
The Sponsor and certain of the Company’s directors and officers also purchased 3,500,000 Novator Private Placement Units at a price of $10.00 per Private Placement Unit for an aggregate purchase price of $35,000,000. Each Private Placement Unit consists of one Novator Private Placement Share and one-quarter of one warrant (“Private Placement Warrant”). Each whole Private Placement Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7). If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor and the Company’s directors and officers have agreed to vote their Founder Shares, Novator Private Placement Shares and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination
v3.23.4
AURORA 10Q - RELATED PARTY TRANSACTIONS
 9 Months Ended
Sep. 30, 2023
RELATED PARTY TRANSACTIONS  
RELATED PARTY TRANSACTIONS
11. Related Party Transactions
The Company has entered into a number of commercial agreements with related parties, which management believes provide the Company with products or services that are beneficial to its commercial objectives. Often these products and services have been tailored to the Company’s specific needs or are part of new pilot programs, both for
the Company and the counterparty, for which there are not clear alternative vendors offering comparable services to compare pricing with. It is reasonable to assume that none of these related party commercial agreements were structured at arm’s length and therefore may be beneficial to the counterparty.
1/0 Capital—The Company is a party to an employee and expense allocation agreement with 1/0 Capital, LLC (“1/0 Capital”), an entity affiliated with 1/0 Real Estate, LLC (“1/0 Real Estate”) (an entity wholly owned by 1/0 Holdco, in which Vishal Garg, the Chief Executive Officer of the Company, and the Company’s executive officers each hold a more than five percent ownership interest). Under the employee and expense allocation agreement, 1/0 Capital provides the Company access to certain employees in exchange for reasonable consideration in the form of fees based on their time, as well as IT support services. Any intellectual property created under the agreement by 1/0 Capital employees working on behalf of the Company belongs to the Company. The term of the agreement will continue in perpetuity. The services provided by 1/0 Capital are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with this agreement, the Company reduced the accrued expense by $27.0 thousand and $187.3 thousand in the three months ended September 30, 2023 and 2022, respectively. As part of this agreement, the Company may provide access to certain of its employees for use by 1/0 Capital which reduced the amounts owed to 1/0 Capital by none and none for the three months ended September 30, 2023 and 2022, respectively. The Company recorded a reduction of expenses of $27.0 thousand and $187.3 thousand for the three months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss. The Company incurred gross expenses of $6.4 thousand and $386.8 thousand in the nine months ended September 30, 2023 and 2022, respectively. As part of this agreement, the Company may provide access to certain of its employees for use by 1/0 Capital which reduced the amounts owed to 1/0 Capital by none and $18.2 thousand for the nine months ended September 30, 2023 and 2022, respectively. The Company recorded net expenses of $6.4 thousand and $368.6 thousand for the nine months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss. The Company is invoiced on a net basis and recorded a $144.4 thousand and $177.0 thousand payable as of September 30, 2023 and December 31, 2022, respectively, included within other liabilities, respectively, on the condensed consolidated balance sheets.
TheNumber—The Company originally entered into a data analytics services agreement in August 2016 with TheNumber, LLC (“TheNumber”), an entity affiliated with both Vishal Garg, the Chief Executive Officer of the Company, and 1/0 Real Estate.
In September 2021, the Company and TheNumber entered into a technology integration and license agreement, which was amended in November 2021, to develop a consumer credit profile technology which is to be launched in three stages. The first stage involves testing TheNumber’s limited graph Application Programming Interface (“API”) in a testing environment with test data. The second stage involves data such as credit, income, and assets of staged borrowers meeting certain measures of speed and performance. The third stage requires TheNumber to run the product and serve all borrowers on the production side as well as provide data to the Company from its rich data set. The listed services provided by TheNumber are lead generation, market rate analysis, lead growth analysis, property listing analysis, automated valuation models, and financial risk analysis. Both parties agreed to jointly develop all aspects of this program, and the agreement provides for the utilization of TheNumber employees by the Company. In January 2023, the agreement was extended for an additional year. The services provided by TheNumber are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with these agreements, the Company paid expenses of $66.9 thousand and $617.7 thousand for the three months ended September 30, 2023 and 2022 respectively, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company paid expenses of $438.0 thousand and $1,123.0 thousand for the nine months ended September 30, 2023 and 2022 respectively, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss and had a payable of $204.3 thousand and $232.0 thousand as of September 30, 2023 and December 31, 2022, respectively, within other liabilities on the condensed consolidated balance sheets.
Holy Machine—In January 2018, the Company entered into a consulting agreement (the “2018 Holy Machine Consulting Agreement”) with Holy Machine LLC (“Holy Machine”) an entity controlled by Aaron Schildkrout, a former member of Better’s board of directors (the “Better Board”). Aaron Schildkrout resigned from the Better
Board on June 8, 2022 and as an advisor shortly thereafter. The 2018 Holy Machine Consulting Agreement provided for consulting services related to executive recruiting and such other services as mutually agreed upon, and grants Holy Machine 603,024 options with a 4-year vesting period and no cliff at two times the fair market value of the Company. Further, any inventions, discoveries, improvements or works of authorship made by Holy Machine and the results thereof that may be considered works made for hire shall be assigned to the Company and be the Company’s exclusive property to which the Company has the exclusive right to obtain and own all copyrights. In May 2020, the parties entered into an amendment to the 2018 Holy Machine Consulting Agreement to insert terms relating to compliance with applicable laws, contracts, and indemnification among the parties. No other terms of the 2018 Holy Machine Consulting Agreement were altered. The agreement ended in November 2022.
In July 2020, the Company and Holy Machine entered into a new consulting agreement (the “2020 Holy Machine Consulting Agreement”). The 2020 Holy Machine Consulting Agreement granted Holy Machine (i) the option to purchase 764,143 shares of Better’s common stock, with an accompanying stock option agreement having a term of 10 years, at the then fair market value at the time of the grant and (ii) the option to purchase 764,143 shares of Better’s common stock, with an accompanying stock option agreement having a term of 10 years, with an exercise price per share equal to (a) $5.14 minus (b) the then current fair market value at the time of grant. Both tranches of granted options vest each month on the same day of the month as the vesting commencement date of April 18, 2020, subject to Holy Machine continuing to provide consulting services through each such date, and both have change in control vesting provisions which would result in 100% of unvested options vesting should there be a change of control of the Company, as defined in such a stock option agreement. The services provided by Holy Machine were not integral to the Company’s technology platform and amounts incurred were not material to the Company. During the second quarter of 2022, Aaron Schildkrout resigned from the Better Board and resigned as an advisor to Better shortly thereafter. The Company recorded none and $37.5 thousand of expenses during the three months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss. The Company recorded none and $137.5 thousand of expenses during the nine months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss and a payable of none and none as of September 30, 2023 and December 31, 2022, respectively, within other liabilities on the condensed consolidated balance sheets.
Notable—In October 2021, the Company entered into a private label and consumer lending program agreement (the “2021 Notable Program Agreement”) to provide home improvement lines of credit to qualified borrowers of the Company with Notable Finance, LLC (“Notable”), an entity in which Vishal Garg, the Chief Executive Officer of the Company, and 1/0 Real Estate collectively hold a majority ownership interest. The program is intended to be used by qualified customers of the Company for home improvement purchases (the “Home Improvement Line of Credit”).
This program required Notable to originate and service the loan and in consideration, the Company pays Notable $600 for each loan originated pursuant to the agreement. In connection with the 2021 Notable Program Agreement, Notable provided an unsecured personal loan product with an initial 12-month “draw period” during which the customers can use the approved loan amount and only pay interest on the used loan fund. Following this initial 12-month draw period, the customers are no longer able to withdraw funds and there is a 3 or 5-year “fixed” period to pay back the loan in full in months installments.
For the three months ended September 30, 2023, the Company incurred $16.3 thousand of expenses under the agreement, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. For the three months ended September 30, 2022, the Company incurred $74.3 thousand of expenses under the agreement, $31.9 thousand of which are included within marketing expenses and $42.4 thousand of which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2023, the Company incurred $38.5 thousand of expenses under the agreement, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2022, the Company incurred $74.3 thousand of expenses under the agreement, $31.9 thousand of which are included within marketing expenses and $42.4 thousand of which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company recorded a payable of $10.0 thousand
and $15.0 thousand included within other liabilities on the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.
In January 2022, Better Trust I, a subsidiary of the Company entered into a master loan purchase agreement (the “Notable MLPA”) with Notable to purchase from Notable up to $20.0 million of unsecured home improvement loans underwritten and originated by Notable for the Company’s customers. Under the Notable MLPA, Notable originated home improvement loans, all of which Notable makes available for purchase by the Company. No additional cost outside the sale of the loan was contemplated by the Notable MLPA. The services provided by Notable are not integral to the Company’s technology platform and expenses incurred are not material to the Company. As of September 30, 2023 and December 31, 2022, the Company had $6.8 million and $8.3 million of unsecured home improvement loans from Notable, which are included within mortgage loans held for sale, at fair value on the condensed consolidated balance sheets.
Truework—The Company is a party to a data analytics services agreement with Zethos, Inc., (“Truework”), an entity in which Vishal Garg, the Chief Executive Officer of the Company, is an investor. Under the data analytics services agreement, Truework provides digital Verification of Employment (“VOE”) and Verification of Income (“VOI”) services to the Company during the mortgage loan origination process to confirm the employment and income of borrowers seeking a mortgage. This is data required for underwriting mortgages to the specifications of FNMA, FMCC, and private loan purchasers. These data services are standard product offerings of Truework, which they offer to a number of mortgage lenders. Truework is one of multiple vendors the Company uses for VOE and VOI services, the largest other one being The Work Number by Equifax. The Company uses the two vendors interchangeably based on estimated lowest cost and turnaround time. The Company originally entered into the data services agreement in September 2020, and amended the agreement in October 2021 to run until September 30, 2023. In connection with usage of the services, the Company reduced the accrued expense of $8.6 thousand for the three months ended September 30, 2023, which is included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company incurred expenses of $414.3 thousand for the three months ended September 30, 2022, which is included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive. The Company reduced the accrued expense of $7.4 thousand for the nine months ended September 30, 2023 and recorded the expense of $414.3 thousand nine months ended September 30, 2022, respectively, which is included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company recorded a payable of $101.2 thousand and $16.2 thousand included within other liabilities on the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.
Share Repurchases—During the first quarter of 2022, Better repurchased from former member of the Better Board, Gabrielle Toledano, a total of 33,995 shares of Better’s common stock for an aggregate purchase price of $254,154 to defray taxes associated with vesting of equity awards of such shares. Ms. Toledano subsequently resigned from the Better Board in April 2022.
During the third quarter of 2022, Better repurchased from General Counsel and Chief Compliance Officer Paula Tuffin a total of 82,527 shares of Better common stock for an aggregate purchase price of $399,600 to defray taxes associated with vesting of equity awards of such shares.
Notes Receivable from Stockholders—The Company, previously at times, entered into promissory note agreements with certain employees for the purpose of financing the exercise of the Company’s stock options. These employees may have the ability to use the promissory notes to exercise stock options that have not yet been vested by the respective employees. Interest is compounded and accrued based on any unpaid principal balance and is due upon the earliest of maturity, 120 days after an employee leaves the Company, the date the employee sells shares acquired through the promissory note agreement without prior written consent of the Company, or the day prior to the date that any change in the employee’s status would cause the loan to be a prohibited extension or maintenance of credit under Section 402 of the Sarbanes-Oxley Act. The Company no longer enters into promissory note agreements for the purpose of financing the exercise of the Company’s stock options and no longer allows for the early exercise of stock options
The Company included $10.4 million and $53.9 million of the notes, which include the outstanding principal amount and accrued interest, within notes receivable from stockholders in stockholders’ equity (deficit) on the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively. The balance as of September 30, 2023 does not include any promissory notes due from directors and officers of the Company. The balance as of December 31, 2022 includes $43.6 million of promissory notes due from directors and officers of the Company, of which $40.2 million was due from Vishal Garg. During the three months ended September 30, 2023, the Company reduced interest income from the promissory notes of $0.5 million, and during three months ended September 30, 2022, the Company recognized interest income from the promissory notes of $0.1 million which is included within interest income on the condensed consolidated statements of operations and comprehensive loss. During the nine months ended September 30, 2023, the Company reduced interest income from the promissory notes of $0.3 million, and nine months ended September 30, 2022, the company recognized interest income from the promissory notes of $0.3 million, which is included within interest income on the condensed consolidated statements of operations and comprehensive loss. The notes range in maturity from May 2025 to January 2026 and include interest rates ranging from 0.5% to 2.5% per annum. See Note 17 for further details on the accounting for notes receivable from stockholders.
In August 2023, Better derecognized $46.4 million related to the partial forgiveness by Better to executive officers Vishal Garg, Kevin Ryan, and Paula Tuffin for their outstanding notes and cancellation of the shares collateralizing the notes to satisfy the remaining principal which was forgiven and cancelled upon the Closing. Additionally, for the nine months ended September 30, 2023, the Company recognized additional compensation expense of $0.4 million to certain of the Company's executives in connection with taxes due for capital gains on the sale of shares for settlement of the notes outstanding.
12. RELATED PARTY TRANSACTIONS
The Company has entered into a number of commercial agreements with related parties, which management believes provide the Company with products or services that are beneficial to its commercial objectives. Often these products and services have been tailored to the Company’s specific needs or are part of new pilot programs, both for the Company and the counterparty, for which there are not clear alternative vendors offering comparable services to compare pricing with. It is reasonable to assume that none of these related party commercial agreements were structured at arm’s length and therefore may be beneficial to the counterparty.
1/0 Capital—The Company is a party to an employee and expense allocation agreement with 1/0 Capital, LLC (“1/0 Capital”), an entity affiliated with 1/0 Real Estate, LLC (“1/10 Real Estate”) (an entity wholly owned by 1/0 Holdco, in which Vishal Garg, the Chief Executive Officer of the Company, and the Company’s executive officers each hold a more than five percent ownership interest). Under the employee and expense allocation agreement, 1/0 Capital provides the Company access to certain employees in exchange for reasonable consideration in the form of
fees based on their time, as well as IT support services. Any intellectual property created under the agreement by 1/0 Capital employees working on behalf of the Company belongs to the Company. The term of the agreement will continue in perpetuity. The services provided by 1/0 Capital are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with this agreement, the Company incurred gross expenses of $0.5 million and $1.5 million during the years ended December 31, 2022 and 2021, respectively. As part of this agreement, the Company may provide access to certain of its employees for use by 1/0 Capital which reduced the amounts owed to 1/0 Capital by $18.2 thousand and $0.2 million for the years ended December 31, 2022 and 2021, respectively. The Company recorded net expenses of $0.4 million and $1.3 million for the years ended December 31, 2022 and 2021, respectively, and are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss. The Company is invoiced on a net basis and recorded a $177.0 thousand payable and a $6.1 thousand receivable as of December 31, 2022 and 2021, respectively, included within other liabilities and other receivables, net, respectively, on the consolidated balance sheets.
TheNumber—The Company originally entered into a data analytics services agreement in August 2016 with TheNumber, LLC (“TheNumber”), an entity affiliated with both Vishal Garg, the Chief Executive Officer, and 1/0 Real Estate.
In September 2021, the Company and TheNumber entered into a technology integration and license agreement, which was amended in November 2021, to develop a consumer credit profile technology which is to be launched in three stages. The first stage involves testing TheNumber’s limited graph Application Programming Interface (“API”) in a testing environment with test data. The second stage involves data such as credit, income, and assets of staged borrowers meeting certain measures of speed and performance. The third stage requires TheNumber to run the product and serve all borrowers on the production side as well as provide data to the Company from its rich data set. The listed services provided by TheNumber are lead generation, market rate analysis, lead growth analysis, property listing analysis, automated valuation models, and financial risk analysis. Both parties agreed to jointly develop all aspects of this program, and the agreement provides for the utilization of TheNumber employees by the Company. Subsequent to December 31, 2022, the agreement was extended into 2023. The services provided by TheNumber are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with these agreements, the Company paid expenses of $1.4 million and $0.1 million for the years ended December 31, 2022 and 2021 respectively, which are included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss and a payable of $0.2 million and none as of December 31, 2022 and 2021, respectively, within other liabilities on the consolidated balance sheets.
Holy Machine—In January 2018, the Company entered into a consulting agreement (the “2018 Holy Machine Consulting Agreement”) with Holy Machine LLC (“Holy Machine”) an entity controlled by Aaron Schildkrout, a member of the Company’s board of directors (the “Board of Directors”) at such time. During the year ended December 31, 2022, Aaron Schildkrout resigned from the Board of Directors on June 8, 2022 and as an advisor shortly thereafter. The 2018 Holy Machine Consulting Agreement provided for consulting services related to executive recruiting and such other services as mutually agreed upon, and grants Holy Machine 603,024 options with a 4-year vesting period and no cliff at two times the then fair market value of the Company. Further, any inventions, discoveries, improvements or works of authorship made by Holy Machine and the results thereof that may be considered works for made for hire shall be assigned to the Company and be the Company’s exclusive property to which the Company has the exclusive right to obtain and own all copyrights. The term of the agreement ended in November 2022, although any party may terminate the agreement at any time. In May 2020, the parties entered into an amendment to the 2018 Holy Machine Consulting Agreement to insert terms relating to compliance with applicable laws, contracts, and indemnification among the parties. No other terms of the 2018 Holy Machine Consulting Agreement were altered.
In July 2020, the Company and Holy Machine entered into a new consulting agreement (the “2020 Holy Machine Consulting Agreement”). The 2020 Holy Machine Consulting Agreement grants Holy Machine (i) the option to purchase 250,000 shares of the Company’s common stock, with an accompanying stock option agreement having a term of 10 years, at the then fair market value at the time of the grant and (ii) the option to purchase 250,000 shares of the Company’s common stock, with an accompanying stock option agreement having a term of 10 years, with an exercise price per share equal to (a) $15.71 minus (b) the then current fair market value at the time of grant. Both tranches of granted options vest each month on the same day of the month as the vesting commencement
date of April 18, 2020, subject to Holy Machine continuing to provide consulting services through each such date, and both have change in control vesting provisions which would result in 100% of unvested options vesting should there be a change of control of the Company, as defined in such a stock option agreement. The term will continue until the services are completed or terminated. The services provided by Holy Machine are not integral to the Company’s technology platform and amounts incurred are not material to the Company. The Company recorded $0.1 million and $0.3 million of expenses during the years ended December 31, 2022 and 2021, respectively, which are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss and a payable of none and $50.0 thousand as of December 31, 2022 and 2021, respectively, within other liabilities on the consolidated balance sheets.
Embark—In November 2020, the Company entered into a license agreement with Embark Corp (“Embark”), a company for which Vishal Garg served as a director and Vishal Garg’s spouse serves as chief executive officer, and in which Vishal Garg and his spouse collectively hold a 25.8% ownership interest. Vishal Garg resigned from the board of directors effective October 1, 2021. The agreement provides the Company the use of one floor of office space in midtown Manhattan, New York City, for a period of 15 months. In connection with the agreement, the Company is obligated to pay Embark $127.0 thousand annually plus applicable taxes and utilities. For the year ended December 31, 2021, the Company incurred $80.7 thousand of expenses under the agreement which are included within general and administrative expenses on the statements of operations and comprehensive loss. The agreement was terminated in June 2021.
Notable—In October 2021, the Company entered into a private label and consumer lending program agreement (the “2021 Notable Program Agreement”) to provide home improvement lines of credit to qualified borrowers of the Company with Notable Finance, LLC (“Notable”), an entity in which Vishal Garg and 1/0 Real Estate collectively hold a majority ownership interest. The program is intended to be used by qualified customers of the Company for home improvement purchases (the “Home Improvement Line of Credit”).
This program required Notable to originate and service the loan and in consideration, the Company pays Notable $600 for each loan originated pursuant to the agreement. In connection with the 2021 Notable Program Agreement, Notable provided a branded prepaid card, similar to a gift card, which converts into an unsecured line of credit in certain circumstances.
For the years ended December 31, 2022 and 2021, the Company incurred $0.1 million and $0.6 million, respectively, of expenses under the agreement, of which $42.9 thousand and none are included within mortgage platform expenses, and $55.3 thousand and $0.6 million are included within marketing and advertising expenses on the consolidated statements of operations and comprehensive loss. The Company recorded a payable of $15.0 thousand and $0.3 million included within other liabilities on the consolidated balance sheets as of December 31, 2022 and 2021, respectively.
In January 2022, Better Trust I, a subsidiary of the Company entered into a master loan purchase agreement (the “Notable MLPA”) with Notable to purchase from Notable up to $20.0 million of unsecured home improvement loans underwritten and originated by Notable for the Company’s customers. Under the Notable MLPA, Notable originated home improvement loans, all of which Notable makes available for purchase by the Company. No additional cost outside the sale of the loan was contemplated by the Notable MLPA. The services provided by Notable are not integral to the Company’s technology platform and expenses incurred are not material to the Company. As of December 31, 2022, the Company had $8.3 million of unsecured home improvement loans from Notable, which are included within mortgage loans held for sale, at fair value on the consolidated balance sheets.
Truework—The Company is a party to a data analytics services agreement with Zethos, Inc., (“Truework”), an entity in which Vishal Garg, the Chief Executive Officer, is an investor. Under the data analytics services agreement, Truework provides digital Verification of Employment (VOE) and Verification of Income (VOI) services to the Company during the mortgage loan origination process to confirm the employment and income of borrowers seeking a mortgage. This is data required for underwriting mortgages to the specifications of Fannie Mae, Freddie Mac, and private loan purchasers. These data services are standard product offerings of Truework, which they offer to a number of mortgage lenders. Truework is one of multiple vendors the Company uses for VOE and VOI services, the largest other one being The Work Number by Equifax. The Company uses the two vendors
interchangeably based on estimated lowest cost and turnaround time. The Company originally entered into the data services agreement in June 2020, and amended the agreement in October 2021 to run until September 30, 2023. In connection with usage of the services, the Company incurred expenses of $0.5 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively, which is included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss and a payable of $16.2 thousand and $19.2 thousand included within other liabilities on the consolidated balance sheets as of December 31, 2022 and 2021, respectively.
Share Repurchases—During the first quarter of 2022, the Company repurchased from former director Gabrielle Toledano a total of 11,122 shares of common stock for an aggregate purchase price of $254,154 to defray taxes associated with vesting of equity awards of such shares. Ms. Toledano subsequently resigned from the Company’s Board in April 2022.
During the second quarter of 2022, the Company repurchased from General Counsel and Chief Compliance Officer Paula Tuffin a total of 27,000 shares of common stock for an aggregate purchase price of $399,600 to defray taxes associated with vesting of equity awards of such shares.
Notes Receivable from Stockholders—The Company, at times, enters into promissory note agreements with certain employees for the purpose of financing the exercise of the Company’s stock options. These employees may have the ability to use the promissory notes to exercise stock options that have not yet been vested by the respective employees. Interest is compounded and accrued based on any unpaid principal balance and is due upon the earliest of maturity, 120 days after an employee leaves the Company, the date the employee sells shares acquired through the promissory note agreement without prior written consent of the Company, or the day prior to the date that any change in the employee’s status would cause the loan to be a prohibited extension or maintenance of credit under Section 402 of the Sarbanes Oxley Act of 2002. The Company included $53.9 million and $38.6 million of the notes, which include the outstanding principal amount and accrued interest, within notes receivable from stockholders in stockholders’ equity (deficit) on the consolidated balance sheets as of December 31, 2022 and 2021, respectively. The balance as of December 31, 2022 includes $43.6 million of promissory notes due from directors and officers of the Company, of which $40.2 million is due from Vishal Garg. The balance as of December 31, 2021 includes $33.9 million of promissory notes due from directors and officers of the Company, of which $29.9 million was due from Vishal Garg. During the years ended December 31, 2022 and 2021, the Company recognized interest income from the promissory notes of $0.7 million and $0.3 million, respectively, which is included within interest income on the consolidated statements of operations and comprehensive loss. The notes range in maturity from May 2025 to January 2026 and include interest rates ranging from 0.5% to 2.5% per annum.
Aurora Acquisition Corp  
RELATED PARTY TRANSACTIONS  
RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS
Founder Shares
The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares (or Novator Private Placement Shares) until the earlier to occur of: (A) one year after the completion of a Business Combination; and (B) subsequent to a Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 3,500,000 Novator Private Placement Units at a price of $10.00 per Novator Private Placement Unit in a private placement to the Sponsor, directors, and executive officers of the Company, generating gross proceeds of $35,000,000. In addition, the Company consummated the sale of 4,266,667 Private Placement Warrants at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor and certain of the Company’s directors and executive officers, generating gross proceeds of $6,400,000, which is described in Note 3.
Prior to the closing of Aurora’s Initial Public Offering, the Sponsor sold an aggregate of 1,407,813 Class B ordinary shares (Founder Shares) to certain independent directors. All Founder Shares are subject to transfer restrictions which limit the ability of the independent directors to transfer or otherwise deal with such shares, except in certain limited circumstances such as transfers to affiliates and the gifting to immediate family members. The Founder Shares were effectively sold to the independent directors subject to a performance condition - i.e., the consummation of a business combination, which is subject to certain conditions to closing, such as, for example, approval by the Company’s shareholders.
The fair value of the shares on the date they were transferred to the independent directors was estimated to be approximately $6,955,000, however if the performance condition is not satisfied the fair value of the shares transferred is zero.
Compensation expense related to the Founder Shares is recognized only when the performance condition is probable of achievement under the applicable accounting literature, hence recognition of compensation cost is deferred until consummation of the business combination. This position is based on the principle established in the guidance on business combinations in ASC 805-20-55-50 and 55-51. The Company believes a similar approach should be applied under ASC 718 and that a contingent event for realization of the compensation expense is the business combination.
Pre-Closing Bridge Notes
On November 2, 2021, Aurora entered into a convertible bridge note purchase agreement (the “Pre-Closing Bridge Note Purchase Agreement”), dated as of November 30, 2021, with Better, SB Northstar LP and the Sponsor (SB Northstar LP and the Sponsor, together, the “Purchasers”). Under the Pre-Closing Bridge Note Purchase Agreement, Better issued $750,000,000 of bridge notes (the “Pre-Closing Bridge Notes”) that convert to shares of Class A common stock of Aurora (post-proposed Business Combination and domestication) in connection with the closing of the proposed Business Combination, with SB Northstar LP and the Sponsor, as Purchasers, purchasing $650 million and $100 million, respectively, of such Pre-Closing Bridge Notes.
The Pre-Closing Bridge Note Purchase Agreement will result in the issuance of either Better Class A common stock, a new series of preferred stock of Better (as described below), or Better common stock (together, the “Pre-Closing Bridge Conversion Shares”, as applicable) as follows: (i) upon closing of the proposed Business Combination, the Pre-Closing Bridge Notes will convert into shares of Better Class A common stock at a conversion rate of one share per $10 of consideration; (ii) if the closing of the proposed Business Combination does not occur by the September 30, 2023, or in the event of a Corporate Transaction or Merger Withdrawal (each as defined in the Pre-Closing Bridge Note Purchase Agreement) prior to September 30, 2023 or prior to the time when a Pre-Closing Bridge Note may otherwise be converted pursuant to the Pre-Closing Bridge Note Purchase Agreement, the Pre-Closing Bridge Notes will convert into a new series of preferred stock of Better, which series will be identical to Better’s Series D Preferred Stock, provided that the ratchet adjustment provisions relating to Better’s Series D Preferred Stock will not apply, and such series will vote together with Better’s Series D Preferred Stock as a single class on all matters; or (iii) in the event of a termination of the Merger Agreement (a) by Better, arising out of or resulting from breaches on the part of Aurora or the Sponsor, (b) by Better, arising out of or resulting from breaches on the part of Aurora or any Subscriber in connection with any Subscription Agreement or (c) arising out of or resulting from breaches on the part of Aurora, SB Northstar LP or the Sponsor in connection with the Pre-Closing Bridge Note Purchase Agreement or any ancillary agreement, the bridge notes will convert into shares of Better common stock.
On August 26, 2022, Aurora, Better and Novator entered into the First Novator Letter Agreement to, among other things, extend the maturity date of the Pre-Closing Bridge Notes held by the Sponsor to March 8, 2023, subject to SB Northstar LP consenting to extending the maturity of its Pre-Closing Bridge Notes accordingly. On February 7, 2023, Aurora, Better and the Sponsor entered into the Second Novator Letter Agreement, pursuant to which, subject to Better receiving requisite approval therefor (which Better has agreed to use reasonable best efforts to obtain), the parties agreed that, if the proposed Business Combination has not been consummated by the maturity date of the Pre-Closing Bridge Notes, the Sponsor will have the option, without limiting its rights under the Pre-Closing Bridge Note Purchase Agreement to alternatively exchange its Pre-Closing Bridge Notes on or before the maturity date as follows: (x) for a number of shares of Better preferred stock at a conversion price that represents a 50% discount to the $6.9 billion pre-money equity valuation of Better or (y) for a number of shares of the Company’s Class B common stock at a price per share that represents a 75% discount to the $6.9 billion pre-money equity valuation of Better. On the same date, the Sponsor and Better agreed to defer the maturity date of the Pre-Closing Bridge Notes until September 30, 2023.
Director Services Agreement and Director Compensation
On October 15, 2021, Merger Sub entered into a Director’s Services Agreement (the “DSA”) by and among Merger Sub, Caroline Jane Harding, and the Company, effective as of May 10, 2021. On October 29, 2021, the DSA was amended, and the amended DSA was ratified by the Compensation Committee on November 3, 2021. Under the terms of the DSA, Ms. Harding is to provide services to Merger Sub, which include acting as a non-executive director and president and secretary of Merger Sub. Ms. Harding will receive $50,000 in annual payments (and in certain circumstances an incremental hourly fee of $500). In addition, the Company remunerates Ms. Harding $10,000 per month for professional services rendered to our Company in her role as chief financial officer and $15,000 per year and an incremental hourly fee of $500 in certain circumstances for her service on our board of directors. Additionally, in contemplation of her services to Aurora, Ms. Harding received a $50,000 payment on March 21, 2021, and was entitled to receive a $75,000 payment on March 21, 2023, which was paid on April 11, 2023. As of June 30, 2023 and December 31, 2022, $300,000 and $87,875 was accrued, respectively, and as of June 30, 2023 and 2022, $492,500 and $117,500 was expensed for above services, respectively. If we do not have sufficient funds to make the payments due to Ms. Harding as set forth herein professional services provided by her, we may borrow funds from our sponsor or an affiliate of the initial shareholders or certain of our directors and officers to enable us to make such payments.
Related Party Merger Agreement
On May 10, 2021, the Company entered into the Merger Agreement, by and among the Company, Merger Sub, and Better, relating to, among other things, (i) each of the mergers of (x) Merger Sub, with and into Better, with Better surviving the merger as a wholly owned subsidiary of Aurora (the “First Merger”), and (y) Better with and into Aurora, with Aurora surviving the merger (together with the First Merger, the “Mergers”), and (ii) as a condition to the effectiveness of the Mergers, the proposal of the Company to change its jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and domesticating as a Delaware corporation pursuant to Section 388 of the General Corporation Law of the State of Delaware (the “Domestication”), subject to the approval thereof by the shareholders of the Company.
On October 27, 2021, Aurora entered into Amendment No. 1 (“Amendment No. 1”) to the Merger Agreement, by and among Aurora, Merger Sub and Better. Pursuant to Amendment No. 1, the parties agreed to, among other things, (i) eliminate the reference to a letter of transmittal in the exchange procedures provisions of the Merger Agreement and (ii) amend the proposed form of Certificate of Incorporation of Better Home & Finance Holding Company to include the lock-up provision applicable to stockholders that beneficially owned greater than 1% of Better capital stock as of the execution date of the Merger Agreement that was previously contemplated to be included in a letter of transmittal.
On November 9, 2021, Aurora entered into Amendment No. 2 (“Amendment No. 2”) to the Merger Agreement, by and among, Aurora, Merger Sub and Better. Amendment No. 2 includes a further amendment to the proposed form of Certificate of Incorporation of Better Home & Finance Holding Company to eliminate the lock-up provision that was applicable to stockholders that beneficially owned greater than 1% of Better capital stock as of the execution date of the Merger Agreement that have not already signed the Better Holder Support Agreement (as defined in the Merger Agreement).
On November 30, 2021, Aurora entered into Amendment No. 3 (“Amendment No. 3”) to the Merger Agreement, by and among, Aurora, Merger Sub and Better. Pursuant to Amendment No. 3, among other things, the parties (i) adjusted the mix of consideration to be received by stockholders of Better, (ii) extended the outside date pursuant to which the parties may elect to terminate the Merger Agreement in accordance with its terms from February 12, 2022 to September 30, 2022 (subject to extensions relating to specified regulatory approvals), and (iii) provided for certain additional amendments consistent with the foregoing changes and changes contemplated by certain other documents previously described and filed by Aurora in its Current Report on Form 8-K on December 2, 2021, including a bridge note purchase agreement, amendments to certain existing subscription agreements, and termination of the redemption subscription agreement, all as described therein.
On August 26, 2022, Aurora entered into Amendment No. 4 by and among, Aurora, Merger Sub and Better. Pursuant to Amendment No. 4, the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) to March 8, 2023.
In consideration of extending the Agreement End Date, Better will reimburse Aurora for certain reasonable and documented expenses in an aggregate sum not to exceed $15,000,000. The reimbursement payments are structured in three tranches. The first payment of $7,500,000 was made within 5 business days after the execution of Amendment No. 4, the second payment of $3,750,000 was made on February 6, 2023 and, on April 4, 2023, Better transferred the third tranche of $3,750,000 (net of the accounts payable amount that was owed to a third party provider on behalf of Aurora). Aurora, Merger Sub and Better also agreed to amend the Merger Agreement to provide a waiver from the exclusivity provisions thereof to allow Better to discuss alternative financing structures with SB Northstar LP.
The Company has treated the inflow of cash with an offsetting liability that is considered the Deferred Credit Liability within the financial statements, in the way relevant fees are repaid by the Company before the IPO as this cash was not a capital contribution from the Sponsor, but merely a reimbursement from Better for expenses paid by the Company. As the merger has not yet occurred as of June 30, 2023, Better will be responsible for handling the equity effect once the merger occurs and reduce the liability of the combined entity. In the event of the merger or liquidation, the liability will be extinguished on Company’s financial statements.
In addition, on February 7, 2023, Aurora, the Sponsor and Better entered into the Second Novator Letter Agreement, whereby Better agreed to reimburse Aurora for one-half of its reasonable and documented fees and expenses in connection with regulatory matters arising out of or relating to the transactions contemplated by the Merger Agreement on or after the date thereof, in an aggregate amount not to exceed $2,500,000, structured in two tranches to be paid on each of June 1, 2023 and September 1, 2023. As of June 30, 2023, Better has not yet reimbursed the first payment due on June 1, 2023 in the amount of $1,250,000, so Aurora has a receivable of $1,250,000.
On February 24, 2023, Aurora, Merger Sub and Better entered into Amendment No. 5 to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) from March 8, 2023 to September 30, 2023.
On June 23, 2023, Aurora, Merger Sub and Better entered into Amendment No. 6, which amended the Proposed Form of Certificate of Incorporation upon Domestication at Exhibit A to the Merger Agreement to implement a corrective change to the authorized share capital of the combined company. Specifically, the Form of Certificate of Incorporation was amended in order to: (i) increase the total number of shares of all classes of stock that the combined company will have authority to issue from 3,250,000,000 to 3,400,000,000; (ii) increase the number of shares of Class A common stock that the combined company will have authority to issue from 1,750,000,000 to 1,800,000,000; and (iii) increase the number of shares of Class B common stock that the combined company will have authority to issue from 600,000,000 to 700,000,000.
Promissory Note from Related Party
On May 10, 2021, the Company issued the Note to the Sponsor (“Payee”), pursuant to which the Company could borrow up to an aggregate principal amount of $2,000,000. The Note was non-interest bearing and payable by check or wire transfer of immediately available funds or as otherwise determined by the Company to such account as the Payee may from time to time designate by written notice in accordance with the provision of the Note. Effective as of the date hereof, this Note amended and restated in its entirety that certain promissory note dated as of December 9, 2020 (the “Prior Note”) issued by the Company to the Payee in the principal amount of $300,000.
On February 23, 2022, the Note was again amended and restated pursuant to which Aurora could borrow an aggregate principal amount of to $4,000,000. Should the Company’s operating costs, in relation to its proposed Business Combination, exceed the amounts still available and not currently drawn under the Note, the Sponsor shall increase the amount available under the Note to cover such costs, subject to an aggregate cap of $12,000,000. This amount was reflective of estimated total costs of the Company through August 15, 2024 in relation to the Business Combination, in the event the Business Combination is unsuccessful. In the event that the Company does not
consummate a Business Combination by September 30, 2023, we can seek a further extension, provided we have our shareholder approval.
On February 8, 2023, we repaid an aggregate principal amount of $2.4 million under the Note. After giving effect to this repayment, the amount outstanding under the Note is $412,395. As of June 30, 2023 and December 31, 2022 the amount outstanding under the Note was $412,395 and $2,812,395, respectively.
RELATED PARTY TRANSACTIONS
Founder Shares
On December 9, 2020, the Sponsor paid $25,000 to cover certain offering and formation costs of the Company in consideration for 5,750,000 shares of Class B ordinary shares (the “Founder Shares”). During February 2021, the Company effectuated a share dividend of 1,006,250 Class B ordinary shares and subsequently issued a cancellation
for 131,250 Class B ordinary shares, resulting in an aggregate of 6,625,000 founder shares issued and outstanding. In March 2021, the Company effectuated a share dividend of 575,000 shares. On May 10, 2021, as a result of the underwriters’ election to partially exercise their over-allotment option, a total of 249,928 Founder Shares were irrevocably surrendered for cancellation and no consideration, so that the number of Founder Shares collectively represented 20% of the Company’s issued and outstanding shares upon the completion of the Initial Public Offering and Novator Private Placement. All share and per-share amounts have been retroactively restated to reflect the share dividend and related cancellation. A portion of the founder shares issued and outstanding were transferred to certain directors of the Company but remain subject to the same conditions and restrictions as apply to those founder shares as held by the Sponsor which are set out in greater detail below.
The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares (or Novator Private Placement Shares) until the earlier to occur of: (A) one year after the completion of a Business Combination; and (B) subsequent to a Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations, or other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 3,500,000 Novator Private Placement Units at a price of $10.00 per Novator Private Placement Unit in a private placement to the Sponsor, directors, and executive officers of the Company, generating gross proceeds of $35,000,000. In addition, the Company consummated the sale of 4,266,667 Private Placement Warrants at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor and certain of the Company’s directors and executive officers, generating gross proceeds of $6,400,000, which is described in Note 4.
On March 2, 2021, the Sponsor transferred 1,407,813 Class B ordinary shares to the executive officers and directors. The agreement with the Sponsor provides that membership interests only be transferred to the executive officers or directors or other persons affiliated with the Sponsor, or in connection with estate planning transfers. The fair value of the shares on the date they were transferred to the independent directors was estimated to be approximately $6,955,000, recognition of compensation cost is deferred until consummation of the business combination. This position is based on the principle established in the guidance on business combinations in ASC 805-20-55-50 and 55-51. The Company believes a similar approach should be applied under ASC 718 and that a contingent event for realization of the compensation expense is the business combination.
Pre-Closing Bridge Notes
On November 2, 2021, Aurora entered into a convertible bridge note purchase agreement (the “Bridge Note Purchase Agreement”), dated as of November 30, 2021, with Better, SB Northstar LP and the Sponsor (SB Northstar LP and the Sponsor, together, the “Purchasers”). Under the Bridge Note Purchase Agreement, Better issued $750,000,000 of bridge notes that convert to shares of Class A common stock of Aurora (post-Proposed Busness Combination and domestication) in connection with the closing of the Proposed Business Combination, with SB Northstar LP and the Sponsor, as Purchasers, purchasing $650 million and $100 million, respectively, of such bridge notes.
The Bridge Note Purchase Agreement will result in the issuance of either Better Class A common stock, a new series of preferred stock of Better (as described below), or Better common stock (together, the “Bridge Conversion Shares”, as applicable) as follows: (i) upon closing of the Proposed Business Combination, the bridge notes will convert into shares of Better Class A common stock at a conversion rate of one share per $10 of consideration; (ii) if the closing of the Proposed Business Combination does not occur by the September 30, 2023, or in the event of a Corporate Transaction or Merger Withdrawal (each as defined in the Bridge Note Purchase Agreement) prior to September 30, 2023 or prior to the time when a bridge note may otherwise be converted pursuant to the Bridge Note Purchase Agreement, the bridge notes will convert into a new series of preferred stock of Better, which series will be identical to Better’s Series D Preferred Stock, provided that the ratchet adjustment provisions relating to Better’s Series D Preferred Stock will not apply, and such series will vote together with Better’s Series D Preferred Stock as
a single class on all matters; or (iii) in the event of a termination of the Merger Agreement (a) by Better, arising out of or resulting from breaches on the part of Aurora or the Sponsor, (b) by Better, arising out of or resulting from breaches on the part of Aurora or any Subscriber in connection with any Subscription Agreement or (c) arising out of or resulting from breaches on the part of Aurora, SB Northstar LP or the Sponsor in connection with the Bridge Note Purchase Agreement or any ancillary agreement, the bridge notes will convert into shares of Better common stock.
On August 26, 2022, Aurora, Better and Novator entered into a letter agreement to, among other things, extend the maturity date of the bridge notes held by the Sponsor to March 8, 2023, subject to SB Northstar LP consenting to extending the maturity of its bridge notes accordingly. On February 7, 2023, Aurora, Better and the Sponsor entered into a further letter agreement, pursuant to which, subject to Better receiving requisite approval therefor (which Better has agreed to use reasonable best efforts to obtain), the parties agreed that, if the Proposed Business Combination has not been consummated by the maturity date of the bridge notes, the Sponsor will have the option, without limiting its rights under the Bridge Note Purchase Agreement to alternatively exchange its bridge notes on or before the maturity date as follows: (x) for a number of shares of Better preferred stock at a conversion price that represents a 50% discount to the $6.9 billion pre-money equity valuation of Better or (y) for a number of shares of the Company’s Class B common stock at a price per share that represents a 75% discount to the $6.9 billion pre-money equity valuation of Better. On the same date, the Sponsor and Better agreed to defer the maturity date of the bridge notes until September 30, 2023.
Director Services Agreement
On October 15, 2021, Merger Sub entered into a Director’s Services Agreement (the “DSA”) by and among Merger Sub, Caroline Jane Harding (the “Director”), and the Company, effective as of May 10, 2021. On October 29, 2021, the DSA was amended, and the amended DSA was ratified by the Compensation Committee on November 3, 2021. Under the terms of the DSA, the Director is to provide services to Merger Sub, which include acting as a non-executive director and president and secretary of Merger Sub. The Director will receive $50,000 in annual payments (and in certain circumstances an incremental hourly fee of $500). For the years ended December 31, 2022 and 2021, the Company recognized $50,000 of expense related to the amended DSA. As of December 31, 2022 and 2021, there were no unpaid amounts related to the amended DSA.
In addition, our Company remunerates the Director $10,000 per month for professional services rendered to our Company in her role as chief financial officer and $15,000 per year and an incremental hourly fee of $500 in certain circumstances for her service on our board of directors. Additionally, Ms. Harding received a $50,000 payment on March 21, 2021 in contemplation of her services to Aurora and will receive a $75,000 payment on the earlier of March 21, 2023 or the date on which Aurora is liquidated. As of December 31, 2022 and 2021, $87,875 and $100,000 was accrued and for the years ended December 31, 2022 and 2021, $222,875 and $390,000 was expensed for these services. If we do not have sufficient funds to make the payments due to Ms. Harding as set forth herein professional services provided by her, we may borrow funds from our sponsor or an affiliate of the initial shareholders or certain of our directors and officers to enable us to make such payments.
Related Party Merger Agreement and Promissory Note
On August 26, 2022, Aurora, Merger Sub and Better entered into Amendment No.4 to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date from September 30, 2022 (as defined in the Merger Agreement) to March 8, 2023. On February 24, 2023, Aurora, Merger Sub and Better entered into Amendment No. 5 to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) from March 8, 2023 to September 30, 2023.
In consideration of extending the Agreement End Date, Better will reimburse Aurora for certain reasonable and documented expenses in an aggregate sum not to exceed $15,000,000. The reimbursement payments are structured in three tranches. The first payment of $7,500,000 was made within 5 business days after the execution of Amendment No. 4, the second payment of $3,750,000 was made on February 6, 2023 and the third payment of up to $3,750,000 will be paid on April 1, 2023. Aurora, Merger Sub and Better also agreed to amend the Merger
Agreement to provide a waiver from the exclusivity provisions thereof to allow Better to discuss alternative financing structures with SB Northstar LP.
On May 10, 2021, the Company issued an unsecured promissory note (the “Note”) to the Sponsor (“Payee”), pursuant to which the Company could borrow up to an aggregate principal amount of $2,000,000. The Note is non-interest bearing and payable by check or wire transfer of immediately available funds or as otherwise determined by the Company to such account as the Payee may from time to time designate by written notice in accordance with the provision of the Note. This Note amended and restated in its entirety that certain Promissory Note dated as of December 9, 2020 (the “Prior Note”) issued by the Company to the Payee in the principal amount of $300,000. On February 23, 2022 this note was again amended and restated pursuant to which the Company could borrow up to an aggregate principal amount of $4,000,000.
Should the Company’s operating costs, in relation to its proposed business combination, exceed the amounts still available and not currently drawn under the promissory note, the Sponsor shall increase the amount available under the promissory note to cover such costs, subject to an aggregate cap of $12,000,000. This amount was reflective of estimated total costs of the Company through November 15, 2023 in relation to the business combination, in the event the business combination is unsuccessful. In the event that the Company does not consummate a Business Combination by September 30, 2023, we can seek a further extension (with no limit to such extension) provided we have our shareholder approval. As of December 31, 2022 and 2021 the amount outstanding under the Note was $2,812,395 and $1,412,295.
Capital Contribution from Sponsor
In July of 2021, the Sponsor paid an SEC filing fee of approximately $669,000 on behalf of the Company. The Company accounted for the filing fee as an expense incurred for the period, as well as a capital contribution from the Sponsor
v3.23.4
AURORA 10Q - COMMITMENTS AND CONTINGENCIES
 9 Months Ended
Sep. 30, 2023
COMMITMENTS AND CONTINGENCIES  
COMMITMENTS AND CONTINGENCIES
12. Commitments and Contingencies
Litigation—The Company, among other things, engages in mortgage lending, title and settlement services, and other financial technology services. The Company operates in a highly regulated industry and may be subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies. While the ultimate outcome of these matters cannot be predicted with certainty due to inherent uncertainties in litigation, management is of the opinion that these matters will not have a material impact on the condensed consolidated financial statements of the Company. The Company accrues for losses when they are probable to occur and such losses are reasonably estimable, and discloses pending litigation if the Company believes a possibility exists that the litigation will have a material effect on its financial results. Legal costs expected to be incurred are accounted for as they are incurred.
The Company is currently a party to pending legal claims and proceedings regarding an employee related labor dispute brought forth during the third quarter of 2020. The dispute alleges that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California and the State of Florida. The case is still in its early stages and has not yet reached the class certification stage and as such the ultimate outcome cannot be predicted with certainty due to inherent uncertainties in the legal claims. As part of the dispute, the Company included an estimated liability of $8.4 million as of both September 30, 2023 and December 31, 2022, which is included in accounts payable and accrued expenses on the condensed consolidated balance sheets. No additional expense was accrued for the nine months ended September 30, 2023. During the first quarter of 2023, the Company settled its employee related labor dispute in the State of Florida for an immaterial amount.
In September 2022, the former Head of Sales and Operations of the Company, Sarah Pierce, filed litigation against the Company, the Company’s founder and CEO Vishal Garg, and the Company’s Chief Administrative Officer and Senior Counsel Nicholas Calamari. The complaint alleges several causes of action including: violation of certain state labor laws, breach of fiduciary duty and defamation against Mr. Garg, aiding and abetting breach of fiduciary duty against Mr. Calamari, and intentional infliction of emotional distress against Mr. Garg and Mr. Calamari.
On September 29, 2023, the Court filed an Order granting the Company's motions to dismiss in part and denying the Company’s motions to dismiss in part. The following motions were granted: (i) the Company’s motion to dismiss Ms. Pierce’s Sarbanes-Oxley claim was granted; (ii) the Company’s motion to dismiss Ms. Pierce’s Dodd-Frank claim was granted; (iii) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for breach of fiduciary duty was granted; (iv) the Company's motion to dismiss Ms. Pierce’s defamation claim was granted; (v) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for intentional infliction of emotional distress was granted; (vi) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for tortious interference with contract was granted; and (vii) the Company’s motion to dismiss Ms. Pierce’s breach of contract claim was granted. The Company’s motion to dismiss Ms. Pierce's claim of retaliation was dismissed. Mr. Garg’s motion to dismiss Ms. Pierce’s defamation claim was denied, and the Company’s motion to dismiss Ms. Pierce’s defamation claim under the theory of respondeat superior was denied. The Company intends to vigorously defend this action.
Regulatory Matters—In the third quarter of 2021, following third-party audits of samples of loans produced during the fiscal years 2018, 2019, and 2021, the Company became aware of certain TILA-RESPA Integrated Disclosure (“TRID”) defects in the loan production process that resulted in the final closing costs disclosed in the closing disclosure, in some instances, being greater than those disclosed in the loan estimate. Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers. As of September 30, 2023 and December 31, 2022, the Company included an estimated liability of $9.3 million and $11.9 million, respectively, within accounts payable and accrued expenses on the condensed consolidated balance sheets. For the three months ended September 30, 2023, the Company reduced the accrual for these potential TRID defects by $3.0 million and is included within mortgage platform expenses in the condensed consolidated statement of operations and comprehensive loss. For the nine months ended September 30, 2023, the Company reduced the accrual for these potential TRID defects by $2.7 million and is included within mortgage platform expenses in the condensed consolidated statement of operations and comprehensive loss. This accrual is the Company’s best estimate of potential exposure on the larger population of loans based on the results obtained by the audited sample. The accrued amounts are for estimated refunds potentially due to consumers for TRID tolerance errors for loans produced from 2018 through 2022. The Company completed a TRID audit of 2022 files and is continuing to remediate TRID tolerance defects as necessary.
In the second quarter of 2022, Better and Aurora received a voluntary request for documents from the Division of Enforcement of the Securities and Exchange Commission (the “SEC”) and subsequently received several subpoenas, indicating that it is conducting an investigation relating to Aurora and Better to determine if violations of the federal securities laws had occurred. The SEC requested that Aurora and Better provide the SEC with certain information and documents. The voluntary and subpoena requests covered, among other things, certain aspects of Better’s business and operations, certain matters relating to certain actions and circumstances of the Company’s founder and Chief Executive Officer, Vishal Garg, and his other business activities, related party transactions, public statements made about the Company’s proprietary mortgage platform, Better’s financial condition, and allegations made in litigation filed by Sarah Pierce, Better’s former Head of Sales and Operations. On August 3, 2023, the SEC Division of Enforcement informed Aurora and Better that it has concluded its previously announced investigation and that the SEC does not intend to recommend an enforcement action against Aurora or Better.
Loan Commitments—The Company enters into IRLCs to fund mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. As of September 30, 2023 and December 31, 2022, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $211.9 million and $225.4 million, respectively. The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of September 30, 2023 and December 31, 2022, respectively, on the condensed consolidated balance sheets. See Note 15.
Forward Sale Commitments—In the ordinary course of business, the Company enters into contracts to sell existing LHFS or loans committed but yet to be funded into the secondary market at specified future dates. As of September 30, 2023 and December 31, 2022, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $294.0 million and $422.0 million, respectively. The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of
September 30, 2023 and December 31, 2022, respectively, on the condensed consolidated balance sheets. See Note 15.
Concentrations—See below for areas considered to be concentrations of credit risk for the Company:
Significant loan purchasers are those which represent more than 10% of the Company’s loan volume. During the three months ended September 30, 2023, the Company had three loan purchasers that accounted for 56%, 22% and 11% of loans sold by the Company. During the three months ended September 30, 2022, the Company had one loan purchaser that accounted for 59% of loans sold by the Company. During the nine months ended September 30, 2023 and 2022, the Company had one loan purchaser that accounted for 68% and 65% of loans sold by the Company.
Concentrations of credit risk associated with the LHFS carried at fair value are limited due to the large number of borrowers and their dispersion across many geographic areas throughout the United States. As of September 30, 2023, the Company originated 12% and 11% of its LHFS secured by properties in Texas and Florida, respectively. As of December 31, 2022, the company originated 11% of its LHFS secured by properties in each of California and Texas and 10% of its LHFS secured by properties in Florida.
The Company maintains cash and cash equivalent balances at various financial institutions. Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million. As of September 30, 2023 and December 31, 2022, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.
Advanced Loan Origination Fees (Deferred Revenue)—Deferred revenue primarily consists of advance payments for loan origination and servicing on behalf of an integrated relationship partner. The total advance was for $50.0 million and were recognized in revenue starting in August 2022 through August 2023. The Company must repay the advance in three tranches, $20.0 million due December 2022, $15.0 million due April 2023, and $15.0 million due October 2023, each to be reduced by the amount of loan origination revenue earned between the tranches. The Company repaid $12.9 million of the first tranche after reductions for loan origination revenue earned within mortgage platform revenue from August 2022 through December 31, 2022. In April 2023, the Company repaid $12.7 million of the second tranche after reductions for loan origination revenue earned within mortgage platform revenue from January 2023 through March 2023. As of September 30, 2023 and December 31, 2022, the Company included deferred revenue of $12.9 million and $30.0 million, respectively within other liabilities on the condensed consolidated balance sheets after reductions for loan origination revenue earned within mortgage platform revenue. Subsequent to September 30, 2023, in October 2023, the Company paid off $12.9 million of the third tranche.
Escrow Funds—In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement. The Company administers escrow deposits representing undisbursed amounts received for payment of property taxes, insurance and principal, and interest on mortgage loans held for sale. The Company also administers customer deposits in relation to other non-mortgage products and services that the Company offers. These funds are shown as restricted cash and there is a corresponding escrow payable on the consolidated balance sheet, as they are being held on behalf of the borrower or customer. The balance in these accounts as of September 30, 2023 and December 31, 2022 was $3.2 million and $8.0 million, respectively. In some instances the Company may administer funds that are legally owned by a third-party which are excluded from the condensed consolidated balance sheets which amounted to none and $0.3 million as of September 30, 2023 and December 31, 2022, respectively.
Customer Deposits—In relation to the Company’s banking activities tied to the Birmingham acquisition in the U.K., the Company offers individual savings accounts and other depository products with differing maturities and interest rates to its customers. The balance of customer deposits as of September 30, 2023 and December 31, 2022 was $9.9 million and none, respectively on the condensed consolidated balance sheets.
13. Risks and Uncertainties
In the normal course of business, companies in the mortgage lending industry encounter certain economic and regulatory risks. Economic risks include credit risk and interest rate risk, in either a rising or declining interest rate environment. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which loans are being held for sale by the Company.
Interest Rate Risk—The Company is subject to interest rate risk in a rising interest rate environment, as the Company may experience a decrease in loan production, as well as decreases in the fair value of LHFS, loan applications in process with locked-in rates, and commitments to originate loans, which may negatively impact the Company’s operations. To preserve the value of such fixed-rate loans or loan applications in process with locked-in rates, agreements are executed for best effort or mandatory loan sales to be settled at future dates with fixed prices. These loan sales take the form of short-term forward sales of mortgage-backed securities and commitments to sell loans to loan purchasers.
Alternatively, in a declining interest rate environment, customers may withdraw their loan applications that include locked-in rates with the Company. Additionally, when interest rates decline, interest income received from LHFS will decrease. The Company uses an interest rate hedging program to manage these risks. Through this program, mortgage-backed securities are purchased and sold forward.
For all counterparties with open positions as of September 30, 2023, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis. Net settlements entail paying or receiving cash based upon the change in market value of the existing instrument.
The Company currently uses forward sales of mortgage-backed securities, interest rate commitments from borrowers, and mandatory and/or best-efforts forward commitments to sell loans to loan purchasers to protect the Company from interest rate fluctuations. These short-term instruments, which do not require any payments to be paid to the counterparty in connection with the execution of the commitments, are generally executed simultaneously.
Credit Risk—The Company’s hedging program is not designated as formal hedging from an accounting standpoint, contains an element of risk because the counterparties to its mortgage securities transactions may be unable to meet their obligations. While the Company does not anticipate nonperformance by any counterparty, it is exposed to potential credit losses in the event the counterparty fails to perform. The Company’s exposure to credit risk in the event of default by the counterparty is the difference between the contract and the current market price. The Company minimizes its credit risk exposure by limiting the counterparties to well-established banks and securities dealers who meet established credit and capital guidelines.
Loan Repurchase Reserve—The Company sells loans to loan purchasers without recourse. As such, the loan purchasers have assumed the risk of loss or default by the borrower. However, the Company is usually required by these loan purchasers to make certain standard representations and warranties relating to the loan for up to three years post sale. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these loan purchasers for losses. In addition, if loans pay-off within a specified time frame the Company may be required to refund a portion of the sales proceeds to the loan purchasers. The Company repurchased $3.6 million (11 loans) and $37.9 million (82 loans) in unpaid principal balance of loans during the three months ended September 30, 2023 and 2022, respectively, related to its loan repurchase obligations. The Company repurchased $20.8 million (52 loans) and $97.0 million (221 loans) in unpaid principal balance of loans during the nine months ended September 30, 2023 and 2022, respectively, related to its loan repurchase obligations. The Company’s loan repurchase reserve as of September 30, 2023 and December 31, 2022 was $21.8 million and $26.7 million, respectively, and is included within other liabilities on the condensed consolidated balance sheets. The provision for the loan repurchase reserve
is included within mortgage platform expenses on the condensed consolidated statement of operations and comprehensive loss. The following presents the activity of the Company’s loan repurchase reserve:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Loan repurchase reserve at beginning of period$21,832 $21,070 $26,745 $17,540 
Provision866 11,683 178 25,125 
Charge-offs(945)(9,754)(5,170)(19,667)
Loan repurchase reserve at end of period$21,753 $22,999 $21,753 $22,999 
Borrowing Capacity—The Company funds the majority of mortgage loans on a short-term basis through committed and uncommitted warehouse lines as well as from operations for any amounts not advanced by warehouse lenders. As a result, the Company’s ability to fund current operations depends on its ability to secure these types of short-term financings. If the Company’s principal lenders decided to terminate or not to renew any of the warehouse lines with the Company, the loss of borrowing capacity could be detrimental to the Company’s condensed consolidated financial statements unless the Company found a suitable alternative source.
13. COMMITMENTS AND CONTINGENCIES
Litigation—The Company, among other things, engages in mortgage lending, title and settlement services, and other financial technology services. The Company operates in a highly regulated industry and may be subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies. While the ultimate outcome of these matters cannot be predicted with certainty due to inherent uncertainties in litigation, management is of the opinion that these matters will not have a material impact on the consolidated financial statements of the Company. The Company accrues for losses when they are probable to occur and such losses are reasonably estimable, and discloses pending litigation if the Company believes a possibility exists that the litigation will have a material effect on its financial results. Legal costs expected to be incurred are accounted for as they are incurred.
The Company is currently a party to pending legal claims and proceedings regarding an employee related labor dispute brought forth during the third quarter of 2020. The dispute alleges that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California and the State of Florida. The dispute is still in its infancy and the ultimate outcome cannot be predicted with certainty due to inherent uncertainties in the legal claims. As part of the dispute, the Company recorded an estimated liability of $8.4 million and $5.9 million, which is included in accounts payable and accrued expenses on the consolidated balance sheets as of December 31, 2022 and 2021, respectively. Subsequent to December 31, 2022, the Company settled its employee related labor dispute in the State of Florida for an immaterial amount.
In June 2022, the former Head of Sales and Operations of the Company, Sarah Pierce, filed litigation against the Company, the Company’s founder and CEO Vishal Garg, and the Company’s Chief Administrative Officer and Senior Counsel Nicholas Calamari. The complaint alleges several causes of action including: violation of certain state labor laws, breach of fiduciary duty and defamation against Mr. Garg, aiding and abetting breach of fiduciary duty against Mr. Calamari, and intentional infliction of emotional distress against Mr. Garg and Mr. Calamari. In addition, Ms. Pierce claims that she has filed a notice of claim with the Occupational Safety and Health Administration (“OSHA”) against the Company for retaliation in violation of the Sarbanes-Oxley Act which has been denied. The litigation is still in its early stages and as such no amounts have been estimated or accrued for by the Company related to this matter.
Investor Legal Matter—In July 2021, Pine Brook, a current investor in the Company, commenced litigation against the Company among other parties, seeking declaratory judgement in relation to a side letter which was entered into as part of the Series C Preferred Stock issuance by the Company in 2019. The dispute is whether the Company, in connection with the Merger Agreement described in Note 1, would be entitled to trigger a side letter provision allowing the Company to repurchase approximately 1.9 million shares of Series A Preferred Stock for a total price of $1.
On November 1, 2021, the Company and Pine Brook reached a settlement agreement pursuant to which (1) the Company is entitled to exercise its purchase right for half of the 1.9 million shares of Series A Preferred Stock subject to the side letter provision, (2) the Company and Aurora agreed to amend the Merger Agreement (see Note 1) to waive or remove the lock up for holders of 1% or more of the Company’s capital stock, and (3) Mr. Howard Newman immediately resigned from the Company’s board of directors. As a result of the settlement, each party granted one another customary releases.
Regulatory Matters—In September of 2021, the Company received a “Notice of Charges” from a state regulatory agency making several claims against the Company, alleging certain violations of state disclosure, advertising, licensable activity rules, and certain federal disclosure rules. In November 2021, the Company and the state regulatory agency reached a settlement agreement whereby the Company has agreed to pay an immaterial fine and provide additional training to management directly overseeing the origination of mortgage loans for property located in the state. The settlement does not impact the Company’s ability to do business in the state.
In the third quarter of 2021, following third-party audits of samples of loans produced during the fiscal years 2018, 2019, and 2021, the Company became aware of certain TILA-RESPA Integrated Disclosure (“TRID”) defects in the loan production process that resulted in the final closing costs disclosed in the closing disclosure, in some instances, being greater than those disclosed in the loan estimate. Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers. As of December 31, 2022 and 2021, the Company included an estimated liability of $11.9 million and $13.2 million, respectively, within accounts payable and accrued expenses on the consolidated balance sheets. For the year ended December 31, 2022, the Company reduced the estimated liability for these potential TRID defects in the amount of $1.3 million. The reduction of expense for the year ended December 31, 2022 of $1.3 million and the expense for the year ended December 31, 2021 of $13.2 million is included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss. This accrual is the Company’s best estimate of potential exposure on the larger population of loans based on the results obtained by the audited sample. The accrued amounts are for estimated refunds potentially due to consumers for TRID tolerance errors for loans produced from 2018 through 2022. The Company completed a TRID audit of 2022 files and is continuing to remediate TRID tolerance defects as necessary.
In the second quarter of 2022, the Company received a voluntary request for documents from the Division of Enforcement of the Securities and Exchange Commission (“SEC”) and subsequently received several subpoenas, indicating that it is conducting an investigation relating to Aurora and the Company to determine if violations of the federal securities laws have occurred. The SEC has requested that Aurora and the Company provide the SEC with certain information and documents. The voluntary and subpoena requests cover, among other things, certain aspects of the Company’s business and operations, certain matters relating to certain actions and circumstances of the Company’s Founder and CEO and his other business activities, related party transactions, public statements made about the Company’s proprietary mortgage platform, the Company’s financial condition, and allegations made in
litigation filed by Sarah Pierce, the Company’s former Head of Sales and Operations. The Company is cooperating with the SEC. As the investigation is ongoing, it is uncertain how long the investigation will continue or whether, at its conclusion, the SEC will bring an enforcement action against either Aurora or the Company or any of their personnel and, if it does, what remedies it may seek.
Loan Commitments—The Company enters into IRLCs to fund mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. As of December 31, 2022, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $225.4 million. The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of December 31, 2022 and 2021, respectively, on the consolidated balance sheets. See Note 16.
Forward Sale Commitments—In the ordinary course of business, the Company enters into contracts to sell existing LHFS or loans committed but yet to be funded into the secondary market at specified future dates. As of December 31, 2022, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $422.0 million. The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of December 31, 2022 and 2021, respectively, on the consolidated balance sheets. See Note 16.
Concentrations—See below for areas considered to be concentrations of credit risk for the Company:
Significant loan purchasers are those which represent more than 10% of the Company’s loan volume. During the years ended December 31, 2022 and 2021, the Company had one loan purchaser that accounted for 65% and 60% of loans sold by the Company, respectively.
Concentrations of credit risk associated with the LHFS carried at fair value are limited due to the large number of borrowers and their dispersion across many geographic areas throughout the United States. As of December 31, 2022, the Company originated 11% of its LHFS secured by properties in each of Texas and California and 10% of its LHFS secured by properties in Florida. As of December 31, 2021, the Company originated 15% of its LHFS secured by properties in California.
The Company maintains cash and cash equivalent balances at various financial institutions. Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million. As of December 31, 2022 and 2021, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.
As of December 31, 2022, the Company held a cash balance of $0.9 million at Silicon Valley Bank (“SVB”). On March 10, 2023, the California Department of Financial Protection and Innovation declared SVB insolvent and appointed the FDIC as receiver. On March 13, 2023, the FDIC announced that all deposits and substantially all assets of SVB were transferred to a bridge bank, and that all depositors will be made whole. Subsequent to December 31, 2022, the Company transferred cash held at SVB to other financial institutions and does not have any remaining material banking relationship with SVB outside of a standby letter of credit in place with SVB of approximately $6.5 million securing obligations under certain of the Company’s office lease agreements which is classified on the Company’s consolidated balance sheet within prepaid expenses and other assets. The Company does not expect this matter to materially impact its operations or ability to meet its cash obligations.
Escrow Funds—In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement. The Company administers escrow deposits representing undisbursed amounts received for payment of property taxes, insurance and principal, and interest on mortgage loans held for sale. These funds are shown as restricted cash and there is a corresponding escrow payable on the consolidated balance sheet, as they are being held on behalf of the borrower. The balance in these accounts as of December 31, 2022 and 2021 was $8.0 million and $11.6 million, respectively. In some instances the Company may administer funds that are legally owned by a third-party which are excluded from the consolidated balance sheets which amounted to $0.3 million and $2.0 million as of December 31, 2022 and 2021, respectively.
14. RISKS AND UNCERTAINTIES
In the normal course of business, companies in the mortgage lending industry encounter certain economic and regulatory risks. Economic risks include credit risk and interest rate risk, in either a rising or declining interest rate environment. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which loans are being held for sale by the Company.
Interest Rate Risk—The Company is subject to interest rate risk in a rising interest rate environment, as the Company may experience a decrease in loan production, as well as decreases in the fair value of LHFS, loan applications in process with locked-in rates, and commitments to originate loans, which may negatively impact the Company’s operations. To preserve the value of such fixed-rate loans or loan applications in process with locked-in rates, agreements are executed for best effort or mandatory loan sales to be settled at future dates with fixed prices. These loan sales take the form of short-term forward sales of mortgage-backed securities and commitments to sell loans to loan purchasers.
Alternatively, in a declining interest rate environment, customers may withdraw their loan applications that include locked-in rates with the Company. Additionally, when interest rates decline, interest income received from LHFS will decrease. The Company uses an interest rate hedging program to manage these risks. Through this program, mortgage-backed securities are purchased and sold forward.
For all counterparties with open positions as of December 31, 2022, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis. Net settlements entail paying or receiving cash based upon the change in market value of the existing instrument.
The Company currently uses forward sales of mortgage-backed securities, interest rate commitments from borrowers, and mandatory and/or best-efforts forward commitments to sell loans to loan purchasers to protect the Company from interest rate fluctuations. These short-term instruments, which do not require any payments to be paid to the counterparty in connection with the execution of the commitments, are generally executed simultaneously.
Credit Risk—The Company’s hedging program is not designated as formal hedging from an accounting standpoint, contains an element of risk because the counterparties to its mortgage securities transactions may be unable to meet their obligations. While the Company does not anticipate nonperformance by any counterparty, it is exposed to potential credit losses in the event the counterparty fails to perform. The Company’s exposure to credit risk in the event of default by the counterparty is the difference between the contract and the current market price. The Company minimizes its credit risk exposure by limiting the counterparties to well-established banks and securities dealers who meet established credit and capital guidelines.
Loan Repurchase Reserve—The Company sells loans to loan purchasers without recourse. As such, the loan purchasers have assumed the risk of loss or default by the borrower. However, the Company is usually required by these loan purchasers to make certain standard representations and warranties relating to the loan. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these loan purchasers for losses. In addition, if loans pay-off within a specified time frame the Company may be required to refund a portion of the sales proceeds to the loan purchasers. The Company repurchased $110.6 million (262 loans) and $29.1 million (95 loans) in unpaid principal balance of loans during the years ended December 31, 2022 and 2021, respectively related to its loan repurchase obligations. The Company’s loan repurchase reserve is included within other liabilities on the consolidated balance sheets. The provision for the loan repurchase reserve is included within mortgage platform expenses on the consolidated
statements of operations and comprehensive loss. The following presents the activity of the Company’s loan repurchase reserve:
Year Ended December 31,
(Amounts in thousands)20222021
Loan repurchase reserve at beginning of year$17,540 $7,438 
Provision33,518 13,780 
Charge-offs(24,313)(3,678)
Loan repurchase reserve at end of year$26,745 $17,540 
Borrowing Capacity—The Company funds the majority of mortgage loans on a short-term basis through committed and uncommitted warehouse lines as well as from operations for any amounts not advanced by warehouse lenders. As a result, the Company’s ability to fund current operations depends on its ability to secure these types of short-term financings. If the Company’s principal lenders decided to terminate or not to renew any of the warehouse lines with the Company, the loss of borrowing capacity could be detrimental to the Company’s consolidated financial statements unless the Company found a suitable alternative source.
Aurora Acquisition Corp  
COMMITMENTS AND CONTINGENCIES  
COMMITMENTS AND CONTINGENCIES
NOTE 5. COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Registration Rights
Pursuant to a registration and shareholder rights agreement entered into on March 3, 2021, the Sponsor and the Company’s directors and executive officers have rights to require the Company to register any of its securities held by them for resale under the Securities Act. These holders will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities for sale under the Securities Act. In addition, the holders of the Founder Shares, Private Placement Warrants, Novator Private Placement Shares, and warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants, Novator Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
In connection with the IPO, the Company granted the underwriters a 45-day option to purchase up to 3,300,000 additional Units to cover over-allotments, if any, and on March 10, 2021, the Company issued 2,300,287 Units to the underwriters pursuant to such option, at the Initial Public Offering price, less the underwriting discounts and commissions. The Units sold pursuant to the underwriters’ partial exercise of such option were sold at a price of $10.00 per Unit, generating gross proceeds of $23,002,870 to the Company and net proceeds equal to $22,542,813 after the deduction of the 2% underwriting fee.
In addition, the underwriters were entitled to a deferred fee of $0.35 per Unit (including the Units sold in connection with the underwriters’ partial exercise of their over-allotment option) from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
On June 22, 2022, Barclays, resigned from its role as underwriter and financial advisor to Aurora In connection with such resignation, Barclays waived their entitlement to certain fees which would be owed upon completion of the proposed Business Combination, which was comprised of approximately $8.5 million as a deferred underwriting fee and financial advisory fee. Accordingly, the Company derecognized the liability for the deferred underwriting and financial advisory fees in the quarter ending June 30, 2022 that was accrued as of December 31, 2021. As of June 30, 2023, there is no liability for the deferred underwriting or financial advisory fee.
Pre-Closing Bridge Notes
On November 2, 2021, Aurora entered into the Pre-Closing Bridge Note Purchase Agreement, dated as of November 30, 2021, with Better and the Purchasers. Under the Pre-Closing Bridge Note Purchase Agreement,
Better issued $750,000,000 of Pre-Closing Bridge Notes that convert to shares of Class A common stock of Aurora (post-proposed Business Combination and domestication) in connection with the closing of the proposed Business Combination, with SB Northstar LP and the Sponsor, as Purchasers, purchasing $650 million and $100 million, respectively, of such Pre-Closing Bridge Notes.
The Pre-Closing Bridge Note Purchase Agreement will result in the issuance of Pre-Closing Bridge Conversion Shares as follows: (i) upon closing of the proposed Business Combination, the Pre-Closing Bridge Notes will convert into shares of Better Class A common stock at a conversion rate of one share per $10 of consideration; (ii) if the closing of the proposed Business Combination does not occur by the September 30, 2023, or in the event of a Corporate Transaction or Merger Withdrawal (each as defined in the Pre-Closing Bridge Note Purchase Agreement) prior to September 30, 2023 or prior to the time when a Pre-Closing Bridge Note may otherwise be converted pursuant to the Pre-Closing Bridge Note Purchase Agreement, the Pre-Closing Bridge Notes will convert into a new series of preferred stock of Better, which series will be identical to Better’s Series D Preferred Stock, provided that the ratchet adjustment provisions relating to Better’s Series D Preferred Stock will not apply, and such series will vote together with Better’s Series D Preferred Stock as a single class on all matters; or (iii) in the event of a termination of the Merger Agreement (a) by Better, arising out of or resulting from breaches on the part of Aurora or the Sponsor, (b) by Better, arising out of or resulting from breaches on the part of Aurora or any Subscriber in connection with any Subscription Agreement or (c) arising out of or resulting from breaches on the part of Aurora, SB Northstar LP or the Sponsor in connection with the Pre-Closing Bridge Note Purchase Agreement or any ancillary agreement, the bridge notes will convert into shares of Better common stock.
On August 26, 2022, Aurora, Better and Novator entered into the First Novator Letter Agreement to, among other things, extend the maturity date of the Pre-Closing Bridge Notes held by the Sponsor to March 8, 2023, subject to SB Northstar LP consenting to extending the maturity of its Pre-Closing Bridge Notes accordingly. On February 7, 2023, Aurora, Better and the Sponsor entered into the Second Novator Letter Agreement, pursuant to which, subject to Better receiving requisite approval therefor (which Better has agreed to use reasonable best efforts to obtain), the parties agreed that, if the proposed Business Combination has not been consummated by the maturity date of the Pre-Closing Bridge Notes, the Sponsor will have the option, without limiting its rights under the Pre-Closing Bridge Note Purchase Agreement to alternatively exchange its Pre-Closing Bridge Notes on or before the maturity date as follows: (x) for a number of shares of Better preferred stock at a conversion price that represents a 50% discount to the $6.9 billion pre-money equity valuation of Better or (y) for a number of shares of the Company’s Class B common stock at a price per share that represents a 75% discount to the $6.9 billion pre-money equity valuation of Better. On the same date, the Sponsor and Better agreed to defer the maturity date of the Pre-Closing Bridge Notes until September 30, 2023.
Litigation Matters
Aurora and its affiliate, Merger Sub (together, “Aurora”), were named as co-defendants with Better in a lawsuit initially filed in July 2021 by Pine Brook. Pine Brook sought, among other things, declaratory judgments and damages in relation to a side letter agreement that had been entered into with Better in 2019, as well as a lockup provision restricting the transfer of stock after the merger with Better for any holders of 1% or more of Better’s pre-merger shares for a period of 6 months post-merger. Aurora was named as a defendant only with respect to the lockup claims. On November 1, 2021, the parties to the lawsuit entered into a confidential settlement agreement, resolving all claims in the above action, and the action was dismissed with prejudice pursuant to the court’s November 3, 2021 order.
Aurora has also received two demand letters from stockholders of the Company regarding the Company’s registration statement filed with the United States Securities and Exchange Commission in connection with the Business Combination. The stockholders allege that the registration statement omits material information with respect to the Business Combination, and demand that the Company provides corrective disclosures to address the alleged omissions. No lawsuits have been filed in relation to the stockholder demand letters.
In the second quarter of 2022, Aurora received a voluntary request for documents from the Division of Enforcement of the SEC indicating that it is conducting an investigation relating to Aurora and Better to determine if violations of the federal securities laws have occurred. The SEC requested that Better and Aurora provide the SEC
with certain information and documents.On August 3, 2023, SEC staff informed Aurora and Better that they have concluded the investigation and that they do not intend to recommend an enforcement action against Aurora or Better. This notice from the SEC staff was provided under the guidelines set forth in the final paragraph of Securities Act Release No. 5310.
COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Registration Rights
Pursuant to a registration and shareholder rights agreement entered into on March 3, 2021, the Sponsor and the Company’s directors and executive officers have rights to require the Company to register any of its securities held by them for resale under the Securities Act. These holders will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities for sale under the Securities Act. In addition, the holders of the Founder Shares, Private Placement Warrants, Novator Private Placement Shares, and warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants, Novator Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
In connection with the IPO, the Company granted the underwriters a 45-day option to purchase up to 3,300,000 additional Units to cover over-allotments, if any, and on March 10, 2021, the Company issued 2,300,287 Units to the
underwriters pursuant to such option, at the Initial Public Offering price, less the underwriting discounts and commissions. The Units sold pursuant to the underwriters’ exercise of such option were sold at a price of $10.00 per Unit, generating gross proceeds of $23,002,870 to the Company and net proceeds equal to $22,542,813 after the deduction of the 2% underwriting fee.
In addition, the underwriters will be entitled to a deferred fee of $0.35 per Unit (including the Units sold in connection with the underwriters’ partial exercise of their over-allotment option). The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
On June 22, 2022, Barclays resigned from its role as underwriter and financial advisor to the Company. In connection with such resignation, Barclays waived its entitlement to a deferred underwriting fee of $8,505,100 that would be payable at the close of the Business Combination. Accordingly, the Company did not recognize the liability for the deferred underwriting fee as of June 30, 2022. As of December 31, 2022, there is no liability for the deferred underwriting fee.
Pre-Closing Bridge Notes
On November 2, 2021, Aurora entered into a convertible bridge note purchase agreement (the “Bridge Note Purchase Agreement”), dated as of November 30, 2021, with Better, SB Northstar LP and the Sponsor (SB Northstar LP and the Sponsor, together, the “Purchasers”). Under the Bridge Note Purchase Agreement, Better issued $750,000,000 of bridge notes that convert to shares of Class A common stock of Aurora (post-Proposed Busness Combination and domestication) in connection with the closing of the Proposed Business Combination, with SB Northstar LP and the Sponsor, as Purchasers, purchasing $650 million and $100 million, respectively, of such bridge notes.
The Bridge Note Purchase Agreement will result in the issuance of either Better Class A common stock, a new series of preferred stock of Better (as described below), or Better common stock (together, the “Bridge Conversion Shares”, as applicable) as follows: (i) upon closing of the Proposed Business Combination, the bridge notes will convert into shares of Better Class A common stock at a conversion rate of one share per $10 of consideration; (ii) if the closing of the Proposed Business Combination does not occur by the September 30, 2023, or in the event of a Corporate Transaction or Merger Withdrawal (each as defined in the Bridge Note Purchase Agreement) prior to September 30, 2023 or prior to the time when a bridge note may otherwise be converted pursuant to the Bridge Note Purchase Agreement, the bridge notes will convert into a new series of preferred stock of Better, which series will be identical to Better’s Series D Preferred Stock, provided that the ratchet adjustment provisions relating to Better’s Series D Preferred Stock will not apply, and such series will vote together with Better’s Series D Preferred Stock as a single class on all matters; or (iii) in the event of a termination of the Merger Agreement (a) by Better, arising out of or resulting from breaches on the part of Aurora or the Sponsor, (b) by Better, arising out of or resulting from breaches on the part of Aurora or any Subscriber in connection with any Subscription Agreement or (c) arising out of or resulting from breaches on the part of Aurora, SB Northstar LP or the Sponsor in connection with the Bridge Note Purchase Agreement or any ancillary agreement, the bridge notes will convert into shares of Better common stock.
On August 26, 2022, Aurora, Better and Novator entered into a letter agreement to, among other things, extend the maturity date of the bridge notes held by the Sponsor to March 8, 2023, subject to SB Northstar LP consenting to extending the maturity of its bridge notes accordingly. On February 7, 2023, Aurora, Better and the Sponsor entered into a further letter agreement, pursuant to which, subject to Better receiving requisite approval therefor (which Better has agreed to use reasonable best efforts to obtain), the parties agreed that, if the Proposed Business Combination has not been consummated by the maturity date of the bridge notes, the Sponsor will have the option, without limiting its rights under the Bridge Note Purchase Agreement to alternatively exchange its bridge notes on or before the maturity date as follows: (x) for a number of shares of Better preferred stock at a conversion price that represents a 50% discount to the $6.9 billion pre-money equity valuation of Better or (y) for a number of shares of the Company’s Class B common stock at a price per share that represents a 75% discount to the $6.9 billion pre-money equity valuation of Better. On the same date, the Sponsor and Better agreed to defer the maturity date of the bridge notes until September 30, 2023.
Litigation Matters
Aurora and its affiliate, Merger Sub (together, “Aurora”), were named as co-defendants with Better in a lawsuit initially filed in July 2021 by Pine Brook. Pine Brook sought, among other things, declaratory judgments and damages in relation to a side letter agreement that had been entered into with Better in 2019, as well as a lockup provision restricting the transfer of stock after the merger with Better for any holders of 1% or more of Better’s pre-merger shares for a period of 6 months post-merger. Aurora was named as a defendant only with respect to the lockup claims. On November 1, 2021, the parties to the lawsuit entered into a confidential settlement agreement, resolving all claims in the above action, and the action was dismissed with prejudice pursuant to the court’s November 3, 2021 order.
In addition, Aurora has also received two demand letters from stockholders of the Company regarding the Company’s registration statement filed with the United States Securities and Exchange Commission in connection with the Business Combination. The stockholders allege that the registration statement omits material information with respect to the Business Combination, and demand that the Company provides corrective disclosures to address the alleged omissions. No lawsuits have been filed in relation to the stockholder demand letters.
In the second quarter of 2022, Aurora received a voluntary request for documents from the Division of Enforcement of the SEC indicating that it is conducting an investigation relating to Aurora and Better to determine if violations of the federal securities laws have occurred. The SEC has requested that Better and Aurora provide the SEC with certain information and documents.
v3.23.4
AURORA 10Q - SHAREHOLDERS' EQUITY
 9 Months Ended
Sep. 30, 2023
Class of Stock [Line Items]  
SHAREHOLDERS' EQUITY
18. Stockholders' Equity
On the Closing Date, the Company consummated the Business Combination pursuant to the terms of the Merger Agreement and on August 24, 2023, Better Home & Finance Class A common stock began trading and Public Warrants continued trading on the Nasdaq Global Market and the Nasdaq Capital Market, respectively, under the ticker symbols “BETR” and “BETRW”, respectively. Each outstanding share of Legacy Better common stock was exchanged for approximately 3.06 shares of the Company’s Class B common stock.
The Company’s authorized capital stock consists of 1.8 billion shares of Class A common stock, 700.0 million shares of Class B common stock, and 800.0 million shares of Class C common stock, each with a par value per share of $0.0001. Each holder of Class A common stock has the right to one vote per share and each holder of Class B common stock has the right to three votes per share. Except as described below or otherwise provided by the Company’s certificate of incorporation or required by applicable law, shares of Class C common stock are non-voting and will not entitle the holder thereof to any voting power. Shares of Class A common stock, Class B common stock and Class C common stock are treated equally, identically and ratably, on a per share basis, with respect to any dividends or distributions as may be declared and paid from time to time. Upon the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holders of Class A common stock, Class B common stock and Class C common stock will be entitled to receive ratably all assets of the Company
available for distribution to its stockholders unless disparate or different treatment of the shares of each such class with respect to distributions upon any such liquidation, dissolution or winding up is approved in advance by the affirmative vote of the holders of a majority of the then-outstanding shares of Class A common stock, Class B common stock and Class C common stock, each voting separately as a class.
Further, each share of Class B common stock is convertible into one fully paid and nonassessable share of Class A common stock or Class C common stock at the option of the holder thereof at any time upon written notice to the Company. Each share of Class C common stock is convertible into one fully paid and nonassessable share of Class A common stock at the option of the holder thereof at any time upon written notice to the Company.
All share amounts in periods prior to the Business Combination have been retroactively adjusted using the Exchange Ratio for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization. The Company's equity structure prior to the Closing consisted of different classes of common stock which is presented in the order of liquidation preference below:
As of December 31, 2022
(Amounts in thousands, except share amounts)Shares AuthorizedShares Issued and outstandingPar Value
Common A Stock24,452,56524,452,565$1 
Common B Stock588,261,164171,441,7805 
Common B-1 Stock236,938,220—— 
Common O Stock236,375,239103,889,0764 
Total common stock1,086,027,188299,783,421$10 
Pre-Closing Common Stock Warrants—Immediately prior to the Closing of the Business Combination, all common stock warrant holders exercised their warrants on a net basis. The Company had outstanding the following common stock warrants as of December 31, 2022:
(Amounts in thousands, except warrants, price, and per share amounts)
IssuanceShare
Class		Issue
Date		Expiration
Date		No.
Warrants		StrikeValuation at Issuance
March 2019Common B3/29/20193/29/20261,146,214$0.23 $179 
March 2020Common B3/25/20203/25/20274,584,856$1.12 $271 
Total equity warrants5,731,070
Private and Public Warrants—As of September 30, 2023 and December 31, 2022, the Company had a total of $1.1 million and none, respectively, of Warrants included as warrant liabilities within the condensed consolidated balance sheets. The change in fair value of Warrants for the three and nine months ended September 30, 2023 was a gain of $0.21 million and $0.21 million, respectively, and is included in change in fair value of warrant liabilities within the condensed consolidated statements of operations and comprehensive loss.
Sponsor locked-up Shares—As of September 30, 2023 and December 31, 2022, the Company had a total of $0.5 million and none, respectively, of Sponsor locked-up Share liabilities which are included within warrant liabilities in the condensed consolidated balance sheets. The change in fair value of Sponsor locked-up Shares for the three and nine months ended September 30, 2023was a gain of $0.65 million and $0.65 million, respectively, and was recorded in change in fair value of warrant liabilities within the condensed consolidated statements of operations and comprehensive loss.
Notes Receivable from Stockholders—The Company, in previous years, issued notes to stockholders to fund the payment of the exercise price of the stock options granted to such stockholders. The Company previously allowed stock option holders to early exercise stock options prior to the vesting date but no longer allows for the early exercise of stock options. The notes issued to stockholders to fund the exercises may include the exercise of stock options that have been vested by the holder as well as stock options that have not yet been vested by the
holder. As of September 30, 2023 and December 31, 2022, the Company had a total of $19.1 million and $65.2 million, respectively, of outstanding promissory notes.
Of the notes outstanding as of September 30, 2023 and December 31, 2022, $10.5 million and $53.9 million, respectively, were issued for the exercise of stock options vested and are recorded as a component of stockholders’ equity within the condensed consolidated balance sheets.
Of the notes outstanding as of September 30, 2023 and December 31, 2022, $8.5 million and $12.3 million, respectively, were issued for the early exercise of stock options not yet vested. Notes issued for the early exercise of stock options not yet vested are not reflected within stockholders’ equity on the condensed consolidated balance sheets as they relate to unvested share awards and therefore are considered non-substantive exercises. As the unvested share awards, exercised in conjunction with the notes, vest, they are recognized in the statement of equity within vesting of common stock issued via notes receivable from stockholders. The notes bear annual interest payable upon maturity of the respective note (see Note 11).
19. STOCKHOLDERS' EQUITY
The Company's equity structure consists of different classes of common stock which is presented in the order of liquidation preference below:
As of December 31,
20222021
(Amounts in thousands, except share amounts)
Shares
Authorized
Shares Issued and
outstanding
Par
Value
Shares
Authorized
Shares Issued and
outstanding
Par
Value
Common A Stock8,000,000 8,000,000 $1 8,000,000 8,000,000 $1 
Common B Stock192,457,901 56,089,586 5 192,457,901 56,089,586 5 
Common B-1 Stock77,517,666 — — 77,517,666 — — 
Common O Stock77,333,479 33,988,770 4 77,333,479 34,977,573 4 
Total common stock355,309,046 98,078,356 $10 355,309,046 99,067,159 $10 
Common Stock—The holders of Common A Stock, Common B Stock, and Common O Stock (collectively, “Voting Common Stock”) are entitled to one vote for each share. Shares of Common B-1 Stock do not have voting rights. Additionally, upon a qualified transfer, the holder can convert any shares of Common B-1 Stock into an equivalent number of shares of Common B Stock without the payment of additional consideration.
Common Stock Warrants—The Company had outstanding the following common stock warrants as of both December 31, 2022 and 2021, respectively:
(Amounts in thousands, except warrants, price, and per share amounts)
IssuanceShare
Class		Issue
Date		Expiration
Date		No.
Warrants		StrikeValuation at Issuance
March 2019Common B3/29/20193/29/2026375,000 $0.71 $179 
March 2020Common B3/25/20203/25/20271,500,000 $3.42 $271 
Total equity warrants1,875,000 
Notes Receivable from Stockholders—The Company issued notes to stockholders to fund the payment of the exercise price of the stock options granted to such stockholders. The Company also generally allows stock option holders to early exercise stock options prior to the vesting date. The notes issued to stockholders to fund the exercises may include the exercise of stock options that have been vested by the holder as well as stock options that have not yet been vested by the holder. As of December 31, 2022 and 2021, the Company had a total of $65.2 million and $67.8 million, respectively, of outstanding promissory notes.
Of the notes outstanding as of December 31, 2022 and 2021, $53.9 million and $38.6 million, respectively, were issued for the exercise of stock options vested and are recorded as a component of stockholders’ equity within the consolidated balance sheets.
Of the notes outstanding as of December 31, 2022 and 2021, $11.3 million and $29.2 million, respectively, were issued for the early exercise of stock options not yet vested. Notes issued for the early exercise of stock options not yet vested are not reflected within stockholders’ equity or on the consolidated balance sheets as they relate to unvested share awards and therefore are considered non-substantive exercises. The notes bear annual interest payable upon maturity of the respective note (see Note 12).
Aurora Acquisition Corp  
Class of Stock [Line Items]  
SHAREHOLDERS' EQUITY SHAREHOLDERS’ EQUITY
Preference Shares — The Company is authorized to issue 5,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of June 30,2023 and December 31, 2022, there were no preference shares issued or outstanding.
Class A Ordinary Shares — The Company is authorized to issue 500,000,000 Class A ordinary shares, with a par value of $0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share.
On February 23, 2023, Aurora, the Sponsor, certain individuals, each of whom is a member of our board of directors and/or management team (the “Insiders”), and Better entered into a limited waiver (the “Limited Waiver”) to the Amended and Restated Letter Agreement (the “A&R Letter Agreement”) dated as of May 10, 2021, by and among us, the Sponsor and the Insiders. In the A&R Letter Agreement, the Sponsor and each Insider waived, with respect to any shares of Capital Stock (as defined in the A&R Letter Agreement) held by it, him or her, if any, any redemption rights it, he or she may have in connection with (i) a shareholder vote to approve the Business Combination (as defined in the A&R Letter Agreement), or (ii) a shareholder vote to approve certain amendments to the Company’s amended and restated articles of association (the “Redemption Restriction”).
Pursuant to the Limited Waiver, the Company and the Insiders agreed to waive the Redemption Restriction as it applies to the Sponsor to the limited extent required to allow the redemption of up to an aggregate of $17 million worth of Novator Private Placement Shares held by it in connection with the shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association held on February 24, 2023. The Limited Waiver resulted in 1,663,760 Class A ordinary shares being reclassed from permanent to temporary equity. This resulted in an increase of temporary equity by $16,999,995 and a corresponding reduction of Class A Ordinary Share, Additional Paid in Capital, and Accumulated Deficit of $166, $16,637,434, and 362,395 respectively. These shares were subsequently redeemed as described below.
As consideration for the Limited Waiver, the Sponsor agreed: (a) if the proposed Business Combination is completed on or before September 30, 2023, to subscribe for and purchase common stock of Better Home & Finance (the “Better Common Stock”), for aggregate cash proceeds to Better equal to the actual aggregate amount of Novator Private Placement Shares redeemed by it in connection with the Limited Waiver (the “Sponsor Redeemed Amount”) at a purchase price of $10.00 per share of Better Common Stock on the closing date of the proposed Business Combination; or (b) if the proposed Business Combination is not completed on or before September 30, 2023, to subscribe for and purchase for $35 million aggregate cash proceeds to Better, at the Sponsor’s election, (x) a number of newly issued shares of Better’s Company Series D Equivalent Preferred Stock (as defined in the Pre-Closing Bridge Note Purchase Agreement (as defined in Note 3)) at a price per share that represents a 50% discount to the Pre-Money Valuation (as defined below) or (y) for a number of shares of Better’s Class B common stock at a price per share that represents a 75% discount to the Pre-Money Valuation. “Pre-Money Valuation” means the $6.9 billion pre-money equity valuation of Better based on the aggregate amount of fully diluted shares of Better’s common stock on an as-converted basis.
As further consideration for the Limited Waiver, the Sponsor agreed to reimburse the Company for reasonable and documented expenses incurred by the Company in connection with the proposed Business Combination, up to the Sponsor Redeemed Amount, to the extent such expenses are not otherwise subject to reimbursement by Better pursuant to the Merger Agreement.
The Company held a combined annual and extraordinary general meeting on February 24, 2023, pursuant to which the Company’s shareholders approved the Extension. In connection with approval of the Extension, public shareholders redeemed an aggregate of 24,087,689 Class A ordinary shares and the Sponsor redeemed an aggregate of 1,663,760 Class A ordinary shares for an aggregate cash balance of approximately $263,123,592. At June 30,
2023 and December 31, 2022, there were 1,836,240 and 3,500,000 Class A ordinary shares issued and outstanding, respectively, excluding 212,598 and 24,300,287 Class A ordinary shares subject to possible redemption.
On February 24, 2023, Aurora, Merger Sub and Better entered into Amendment No. 5 to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) from March 8, 2023 to September 30, 2023.
Class B Ordinary Shares — The Company is authorized to issue 50,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class B ordinary shares are entitled to one vote for each share. At June 30, 2023 and December 31, 2022, there were 6,950,072 Class B ordinary shares issued and outstanding of which an aggregate of 249,928 Class B ordinary shares were forfeited in connection with the underwriters’ election to partially exercise their over-allotment option so that the number of Founder Shares will equal 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering.
Only holders of the Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of the Company’s shareholders except as otherwise required by law. The Founder Shares will automatically convert into Class A ordinary shares on the day of the closing of an initial Business Combination, or earlier at the option of the holders thereof, at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Initial Public Offering and the Novator Private Placement, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor, members of the Company’s management team or any of the Company’s affiliates upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one. On the first business day following the consummation of the Business Combination at a ratio such that the total number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of Class A ordinary shares (including any such shares issued following the exercise of the over-allotment option), plus (ii) the sum of (a) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the Business Combination and any warrants issued in a private placement to the Sponsor or an affiliate of the Sponsor upon conversion of Working Capital Loans, minus (b) the number of Public Shares redeemed by public shareholders in connection with the Business Combination. In no event will any Founder Shares convert into Class A ordinary shares at a ratio that is less than one-for-one.
Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that as soon as practicable, but in no event later than 30 business days, after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of Warrants for Cash When the Price per Class A Ordinary Share Equals or Exceeds $18.00—Once the warrants become exercisable, the Company may redeem the outstanding Public Warrants:
•in whole and not in part;
•at a price of $0.01 per Public Warrant;
•upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
•if, and only if, the reported last sales price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending on third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of Warrants for Class A Ordinary Shares When the Price per Class A Ordinary Share Equals or Exceeds $10.00—Commencing 90 days after the warrants become exercisable, the Company may redeem the outstanding warrants:
•in whole and not in part;
•at $0.10 per warrant
•upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A ordinary shares;
•if, and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per Public Share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.
•There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial shareholders, directors and officers have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their Founder Shares, Novator Private Placement Shares and any Public Shares they may acquire during or after this offering in connection with the completion of our initial business combination.
The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will
the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 10 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants and Novator Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Novator Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants and Novator Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, so long as they are held by the initial purchasers, directors and officers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers, directors and officers or their permitted transferees, the Private Placement Warrants and the Novator Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
SHAREHOLDERS’ EQUITY
Preference Shares — The Company is authorized to issue 5,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At December 31, 2022 and 2021, there were no preference shares issued or outstanding.
Class A Ordinary Shares — The Company is authorized to issue 500,000,000 Class A ordinary shares, with a par value of $0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share. At December 31, 2022 and 2021, there were 3,500,000 Class A ordinary shares issued and outstanding, excluding 24,300,287 Class A ordinary shares subject to possible redemption.
Class B Ordinary Shares — The Company is authorized to issue 50,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class B ordinary shares are entitled to one vote for each share. At December 31, 2022 and 2021, there were 6,950,072 Class B ordinary shares issued and outstanding of which an aggregate of 249,928 Class B ordinary shares were forfeited in connection with the underwriters’ election to partially exercise their over-allotment option so that the number of Founder Shares will equal 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering.
Only holders of the Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of the Company’s shareholders except as otherwise required by law.
The Founder Shares will automatically convert into Class A ordinary shares on the day of the closing of an initial Business Combination, or earlier at the option of the holders thereof, at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Initial Public Offering and the Novator Private Placement, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into
Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor, members of the Company’s management team or any of the Company’s affiliates upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one. On the first business day following the consummation of the Business Combination at a ratio such that the total number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of Class A ordinary shares (including any such shares issued following the exercise of the over-allotment option), plus (ii) the sum of (a) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the Business Combination and any warrants issued in a private placement to the Sponsor or an affiliate of the Sponsor upon conversion of Working Capital Loans, minus (b) the number of Public Shares redeemed by public shareholders in connection with the Business Combination. In no event will any Founder Shares convert into Class A ordinary shares at a ratio that is less than one-for-one.
Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that as soon as practicable, but in no event later than 30 business days, after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of Warrants for Cash When the Price per Class A Ordinary Share Equals or Exceeds $18.00—Once the warrants become exercisable, the Company may redeem the outstanding Public Warrants:
•in whole and not in part;
•at a price of $0.01 per Public Warrant;
•upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
•if, and only if, the reported last sales price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending on third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of Warrants for Class A Ordinary Shares When the Price per Class A Ordinary Share Equals or Exceeds $10.00—Commencing 90 days after the warrants become exercisable, the Company may redeem the outstanding warrants:
•in whole and not in part;
•at $0.10 per warrant
•upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A ordinary shares;
•if, and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.
•There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial shareholders, directors and officers have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, Novator Private Placement Shares and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination.
The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval) and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 10 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants and Novator Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Novator Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Warrants will not be
transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants and Novator Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, so long as they are held by the initial purchasers, directors and officers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers, directors and officers or their permitted transferees, the Private Placement Warrants and the Novator Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants
v3.23.4
AURORA 10Q - FAIR VALUE MEASUREMENTS
 9 Months Ended
Sep. 30, 2023
Fair Value, Option, Quantitative Disclosures [Line Items]  
FAIR VALUE MEASUREMENTS
15. Fair Value Measurements
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
September 30, 2023
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $160,025 $— $160,025 
Derivative assets, at fair value (1)
— 3,506 211 3,717 
Total Assets$— $163,531 $211 $163,742 
Derivative liabilities, at fair value (1)
$— $— $1,678 $1,678 
Warrants and equity related liabilities, at fair value
$577 $950 $— $1,527 
Total Liabilities$577 $950 $1,678 $3,205 
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative, at fair value— — 236,603 236,603 
Total Assets$— $251,558 $236,919 $488,477 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities$— $— $4,924 $4,924 
__________________
(1)As of September 30, 2023 and December 31, 2022, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
Specific valuation techniques and inputs used in determining the fair value of each significant class of assets and liabilities are as follows:
Mortgage Loans Held for Sale—The Company originates certain LHFS to be sold to loan purchasers and elected to carry these loans at fair value in accordance with ASC 825. The fair value is primarily based on the price obtained for other mortgage loans with similar characteristics. The changes in fair value of these assets are largely driven by changes in interest rates subsequent to loan funding and receipt of principal payments associated with the relevant LHFS.
Derivative Assets and Liabilities—The Company uses derivatives to manage various financial risks. The fair values of derivative instruments are determined based on quoted prices for similar assets and liabilities, dealer quotes, and internal pricing models that are primarily sensitive to market observable data. The Company utilizes IRLCs and forward sale commitments. The fair value of IRLCs, which are related to mortgage loan commitments, is based on quoted market prices, adjusted by the pull-through factor, and includes the value attributable to the net servicing fee. The Company evaluated the significance and unobservable nature of the pull-through factor and determined that the classification of IRLCs should be Level 3 as of September 30, 2023 and December 31, 2022. Significant changes in the pull-through factor of the IRLCs, in isolation, could result in significant changes in the IRLCs’ fair value measurement. The value of IRLCs also rises and falls with changes in interest rates; for example, entering into interest rate lock commitments at low interest rates followed by an increase in interest rates in the market, will decrease the value of IRLC. The Company had purchases/issuances of approximately $0.1 million and $2.4 million of IRLCs during the three months ended September 30, 2023 and 2022, respectively. The Company had purchases/issuances of approximately $0.6 million and $5.0 million of IRLCs during the nine months ended September 30, 2023 and 2022, respectively.
The number of days from the date of the IRLC to expiration of the rate lock commitment outstanding as of September 30, 2023 was approximately 60 days on average. The Company attempts to match the maturity date of the IRLCs with the forward commitments. Derivatives are presented in the condensed consolidated balance sheets under derivative assets, at fair value and derivative liabilities, at fair value. During the three months ended September 30, 2023, the Company recognized $0.9 million of loss and $5.0 million of gains related to changes in fair value of IRLCs and forward sale commitments, respectively. During the nine months ended September 30, 2023, the Company recognized $0.1 million and $8.4 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. During the three months ended September 30, 2022, the Company recognized $7.0 million of losses and $26.2 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. During the nine months ended September 30, 2022, the Company recognized $14.3 million of losses and $188.6 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. Gains and losses related to changes in the fair value of IRLCs and forward sale commitments are included in mortgage platform revenue, net within the condensed consolidated statements of operations and comprehensive loss. Unrealized activity related to changes in the fair value of forward sale commitments were $1.5 million of gains and $13.2 million of gains, included in the $5.0 million of gains and $26.2 million of gains, during the three months ended September 30, 2023 and 2022, respectively. Unrealized activity related to changes in the fair value of forward sale commitments were $0.8 million of gains and $14.1 million of gains, included in the $8.4 million of gains and $188.6 million of gains, during the nine months ended September 30, 2023 and 2022, respectively. The notional and fair value of derivative financial instruments not designated as hedging instruments were as follows:
(Amounts in thousands)Notional ValueDerivative AssetDerivative Liability
Balance as of September 30, 2023
IRLCs$211,897 $211 $1,678 
Forward commitments$294,000 3,506 — 
Total$3,717 $1,678 
Balance as of December 31, 2022
IRLCs$225,372 $316 $1,828 
Forward commitments$422,000 2,732 — 
Total$3,048 $1,828 
Warrant and equity related liabilities—The warrant liability consists of Warrants and the Sponsor-Locked up Shares. The Warrants consist of Public Warrants and Private Warrants. The Public Warrants trade on the Nasdaq Capital Market under the ticker symbol “BETRW” and as such is considered a Level 1 input from an active market to derive the value. The Private Warrants and Sponsor-Locked up Shares, although not publicly traded on an active market, use inputs from the publicly traded Public Warrants and the Company’s publicly traded common stock,
respectively, and are further calibrated using unobservable inputs representing Level 2 measurements within the fair value hierarchy.
Convertible Preferred Stock Warrants—The Company issued Former Preferred Stock Warrants to certain investors and to the Lender under its corporate line of credit (see Note 10). The Company obtained a fair value analysis from a third party to assist in determination of the fair value of warrants. The Company used the Black-Scholes-Merton option-pricing model to estimate the fair value of the warrants at the issuance date and as of December 31, 2022, which is based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Significant changes in the unobservable inputs could result in significant changes in the fair value of the convertible preferred stock warrants. The warrant valuation was based on the intrinsic value of the Company’s underlying stock price and included certain assumptions such as risk free rate, volatility rate, and expected term.
Bifurcated Derivative—The Company’s Pre-Closing Bridge Notes included embedded features that were separately accounted for and were marked to fair value at each reporting period with changes included in change in fair value of bifurcated derivative on the consolidated statements of operations and comprehensive loss. The Company obtained a fair value analysis from a third party to assist in determination of the fair value of the bifurcated derivative. In estimating the fair value of the bifurcated derivative, management considered factors management believed were material to the valuation process, including, but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As there was no active market for the Company’s equity, the fair value of the bifurcated derivative was based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Management believed the combination of these factors provided an appropriate estimate of the expected fair value and reflected the best estimate of the fair value of the bifurcated derivative.
As of September 30, 2023 and December 31, 2022, Level 3 instruments include IRLCs, bifurcated derivative and convertible preferred stock warrants. The following table presents the rollforward of Level 3 IRLCs:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$(514)$197 $(1,513)$7,568 
Change in fair value of IRLCs(953)(6,976)46 (14,347)
Balance at end of period$(1,467)$(6,779)$(1,467)$(6,779)
The following table presents the rollforward of Level 3 bifurcated derivative:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$237,667 $277,777 $236,603 $— 
Change in fair value of bifurcated derivative(237,667)29,089 (236,603)306,866 
Balance at end of period$— $306,866 $— $306,866 
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$2,830 $11,586 $3,096 $31,997 
Exercises(2,830)— (2,830)— 
Change in fair value of convertible preferred stock warrants— (4,202)(266)(24,613)
Balance at end of period$— $7,384 $— $7,384 
Counterparty agreements for forward sale commitments contain master netting agreements, which contain a legal right to offset amounts due to and from the same counterparty and can be settled on a net basis. The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized Liabilities
Net Amounts Presented in the Condensed Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
September 30, 2023:$3,525 $(19)$3,506 
December 31, 2022$3,263 $(531)$2,732 
Offsetting of Forward Commitments - Liabilities
Balance as of:
September 30, 2023:$— $— $— 
December 31, 2022$— $— $— 
Significant Unobservable Inputs—The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
September 30, 2023
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
10.27% - 97.49%
85.1 %
December 31, 2022
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% - 96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94% - 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24 - 5.74
4.8
Fair value of common stock
$0.00 - $6.60
$1.60 
U.S. GAAP requires disclosure of fair value information about financial instruments, whether recognized or not recognized in the condensed consolidated financial statements, for which it is practical to estimate the fair value. In cases where quoted market prices are not available, fair values are based upon the estimation of discount rates to estimated future cash flows using market yields or other valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimates of fair value in both inactive and orderly markets. Accordingly, fair values are not necessarily indicative of the amount the Company could realize on disposition of the
financial instruments in a current market exchange. The use of market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.
The estimated fair value of the Company’s cash and cash equivalents, restricted cash, warehouse lines of credit, and escrow funds and customer deposits approximates their carrying values as these financial instruments are highly liquid or short-term in nature. The following table presents the carrying amounts and estimated fair value of financial instruments that are not recorded at fair value on a recurring or non-recurring basis:
September 30, 2023December 31, 2022
(Amounts in thousands)Fair Value LevelCarrying AmountFair ValueCarrying AmountFair Value
Short-term investmentsLevel 1$29,831 $29,884 $— $— 
Loans held for investmentLevel 3$4,163 $4,649 $— $— 
Post-Closing Convertible NotesLevel 3$513,001 $252,796 $— $— 
Loan commitment assetLevel 3$— $— $16,119 $54,654 
Pre-Closing Bridge NotesLevel 3$— $— $750,000 $269,067 
Corporate line of creditLevel 3$— $— $144,403 $145,323 
In determining the fair value of the Short term investments, management used observable inputs such as quoted prices in active markets for identical assets. The fair value of loans held for investment is determined by management estimates of the specific credit risk attributes of each pool of loans, in addition to the quoted secondary-market prices which account for the interest rate characteristics of each loan. The corporate line of credit was valued using a Black Derman Toy model which incorporates the option to prepay given the make-whole premium as well as other inputs such as risk-free rates and credit spreads. In determining the fair value of the loan commitment asset and the Pre-Closing Bridge Notes, management used factors that are material to the valuation process, including but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As a number of assumptions and estimates were involved that are largely unobservable, loans held for investment, loan commitment asset and Corporate line of credit were classified as Level 3 inputs within the fair value hierarchy.
16. FAIR VALUE MEASUREMENTS
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative— — 236,603 236,603 
Total Assets
$— $251,558 $236,919 $488,478 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities
$— $— $4,924 $4,924 
December 31, 2021
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $1,854,435 $— $1,854,435 
Derivative assets, at fair value (1)
— 812 8,484 9,296 
Bifurcated derivative— — — — 
Total Assets
$— $1,855,247 $8,484 $1,863,731 
Derivative liabilities, at fair value (1)
$— $1,466 $916 $2,382 
Convertible preferred stock warrants (2)
— — 31,997 31,997 
Total Liabilities
$— $1,466 $32,913 $34,379 
__________________
(1)As of December 31, 2022 and 2021, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
Specific valuation techniques and inputs used in determining the fair value of each significant class of assets and liabilities are as follows:
Mortgage Loans Held for Sale—The Company originates certain LHFS to be sold to loan purchasers and elected to carry these loans at fair value in accordance with ASC 825. The fair value is primarily based on the price obtained for other mortgage loans with similar characteristics. The changes in fair value of these assets are largely driven by changes in interest rates subsequent to loan funding and receipt of principal payments associated with the relevant LHFS.
Derivative Assets and Liabilities—The Company uses derivatives to manage various financial risks. The fair values of derivative instruments are determined based on quoted prices for similar assets and liabilities, dealer quotes, and internal pricing models that are primarily sensitive to market observable data. The Company utilizes IRLCs and forward sale commitments. The fair value of IRLCs, which are related to mortgage loan commitments, is based on quoted market prices, adjusted by the pull-through factor, and includes the value attributable to the net servicing fee. The Company evaluated the significance and unobservable nature of the pull-through factor and determined that the classification of IRLCs should be Level 3 as of December 31, 2022 and 2021. Significant changes in the pull-through factor of the IRLCs, in isolation, could result in significant changes in the IRLCs’ fair value measurement. The value of IRLCs also rises and falls with changes in interest rates; for example, entering into interest rate lock commitments at low interest rates followed by an increase in interest rates in the market, will decrease the value of IRLC. The Company had purchases/issuances of approximately $4.3 million and $50.7 million of IRLCs during the years ended December 31, 2022 and 2021, respectively.
The number of days from the date of the IRLC to expiration of the rate lock commitment outstanding as of December 31, 2022 and 2021 was approximately 60 days on average. The Company attempts to match the maturity date of the IRLCs with the forward commitments. Derivatives are presented in the consolidated balance sheets under derivative assets, at fair value and derivative liabilities, at fair value. During the year ended December 31, 2022, the Company recognized $9.1 million of losses and $187.3 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. During the year ended December 31, 2021, the Company recognized $32.4 million of losses and $95.4 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. Gains and losses related to changes in the fair value of IRLCs and forward sale commitments are included in mortgage platform revenue, net within the consolidated statements of operations and comprehensive loss. Unrealized activity related to changes in the fair value of forward sale commitments were $3.4 million of gains and $24.7 million of gains, included in the $187.3 million of gains and $95.4 million of gains,
during the years ended December 31, 2022 and 2021, respectively. The notional and fair value of derivative financial instruments not designated as hedging instruments were as follows:
(Amounts in thousands)Notional ValueDerivative AssetDerivative Liability    
Balance as of December 31, 2022
IRLCs$225,372 $316 $1,828 
Forward commitments$422,000 2,732 — 
Total$3,048 $1,828 
Balance as of December 31, 2021
IRLCs$2,560,577 $8,484 $916 
Forward commitments$2,818,700 812 1,466 
Total$9,296 $2,382 
Convertible Preferred Stock Warrants—The Company issued warrants to certain investors and to the Lender under its corporate line of credit (see Note 11). The Company obtains a fair value analysis from a third party to assist in determination of the fair value of warrants. The Company used the Black-Scholes option-pricing model to estimate the fair value of the warrants at the issuance date and as of December 31, 2022 and 2021, which is based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Significant changes in the unobservable inputs could result in significant changes in the fair value of the convertible preferred stock warrants. The warrant valuation was based on the intrinsic value of the Company’s underlying stock price and includes certain assumptions such as risk free rate, volatility rate, and expected term.
Bifurcated Derivative—The Company’s Pre-Closing Bridge Notes included embedded features that are separately accounted for and are marked to fair value at each reporting period with changes included in change in fair value of bifurcated derivative on the consolidated statements of operations and comprehensive loss. The Company obtains a fair value analysis from a third party to assist in determination of the fair value of the bifurcated derivative. In estimating the fair value of the bifurcated derivative, management considers factors management believes are material to the valuation process, including, but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As there is no active market for the Company’s equity, the fair value of the bifurcated derivative is based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Management believes the combination of these factors provides an appropriate estimate of the expected fair value and reflects the best estimate of the fair value of the bifurcated derivative.
As of December 31, 2022 and 2021, Level 3 instruments include IRLCs, bifurcated derivative, and convertible preferred stock warrants. The following table presents the rollforward of Level 3 IRLCs:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$7,568 $39,972 
Change in fair value of IRLCs(9,081)(32,404)
Balance at end of year
$(1,513)$7,568 
The following table presents the rollforward of Level 3 bifurcated derivative:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$— $— 
Change in fair value of bifurcated derivative236,603 — 
Balance at end of year
$236,603 $— 
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$31,997 $25,799 
Issuances— — 
Exercises— (26,592)
Change in fair value of convertible preferred stock warrants(28,901)32,790 
Balance at end of year
$3,096 $31,997 
Counterparty agreements for forward sale commitments contain master netting agreements, which contain a legal right to offset amounts due to and from the same counterparty and can be settled on a net basis. The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized LiabilitiesNet Amounts Presented in the Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
December 31, 2022:
$3,263 $(531)$2,732 
December 31, 2021
$2,598 $(1,786)$812 
Offsetting of Forward Commitments - Liabilities
Balance as of:
December 31, 2022:
$— $— $— 
December 31, 2021
$282 $(1,748)$(1,466)
Significant Unobservable Inputs—The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
December 31, 2022
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% -96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94%- 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24- 5.74
4.8 
Fair value of common stock
$0.00 - $6.60
$1.60 
December 31, 2021
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
5.01% - 99.43%
83.5 %
Convertible preferred stock warrants
Risk free rate
0.19% - 0.73%
0.27 %
Volatility rate
32.8% - 120.3%
65.0 %
Expected term (years)
0.5 - 2.0
0.7 
Fair value of common stock
$6.80 - $29.42
$14.91 
U.S. GAAP requires disclosure of fair value information about financial instruments, whether recognized or not recognized in the consolidated financial statements, for which it is practical to estimate the fair value. In cases where quoted market prices are not available, fair values are based upon the estimation of discount rates to estimated future cash flows using market yields or other valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimates of fair value in both inactive and orderly markets. Accordingly, fair values are not necessarily indicative of the amount the Company could realize on disposition of the financial instruments in a current market exchange. The use of market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.
The estimated fair value of the Company’s cash and cash equivalents, restricted cash, warehouse lines of credit, and escrow funds approximates their carrying values as these financial instruments are highly liquid or short-term in
nature. The following table presents the carrying amounts and estimated fair value of financial instruments that are not recorded at fair value on a recurring or non-recurring basis:
As of December 31,
20222021
(Amounts in thousands)Fair Value LevelCarrying AmountFair ValueCarrying AmountFair Value
Loan commitment assetLevel 3$16,119 $54,654 $121,723 $121,723 
Pre-Closing Bridge Notes
Level 3$750,000 $269,067 $477,333 $458,122 
Corporate line of creditLevel 3$144,403 $145,323 $149,022 $161,417 
The corporate line of credit was valued using a Black Derman Toy model which incorporates the option to prepay given the make-whole premium as well as other inputs such as risk-free rates and credit spreads. In determining the fair value of the loan commitment asset and the Pre-Closing Bridge Notes, management uses factors that are material to the valuation process, including but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As a number of assumptions and estimates were involved that are largely unobservable, loan commitment asset and Pre-Closing Bridge Notes are classified as Level 3 inputs within the fair value hierarchy.
Aurora Acquisition Corp  
Fair Value, Option, Quantitative Disclosures [Line Items]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3: Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.
On or around February 24, 2023, the Company liquidated its funds in the Trust Account and moved them to a cash and cash equivalent account that will likely receive minimal, if any, interest. Prior to this date and as of December 31, 2022, all assets in the Trust Account were money market funds which were invested primarily in U.S. Treasury Securities. At June 30, 2023, investments held in the Trust Account comprised of $21,317,257 in cash and cash equivalents.
The Company utilizes a Modified Black Scholes model to value the Private Placement Warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the warrant liabilities are determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero. The Company had no transfers out of Level 3 for the three and six months ended June 30, 2023 and June 30, 2022. The fair value of the Public Warrants issued in connection with the Initial Public Offering are measured based on the listed market price of such warrants, a Level 1 measurement.
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2023 by level within the fair value hierarchy:
Quoted Prices inSignificant OtherSignificant Other
Active MarketsObservable InputsUnobservable
(Level 1)(Level 2)Inputs (Level 3)
Assets:
Investments held in Trust Account – cash and cash equivalents$21,317,257 $— $— 
Liabilities:  
Derivative public warrant liabilities153,699 — — 
Derivative private warrant liabilities— — 326,902 
Total Fair Value$21,470,956 $— $326,902 
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2022 by level within the fair value hierarchy:
Quoted Prices inSignificant OtherSignificant Other
Active MarketsObservable InputsUnobservable
(Level 1)(Level 2)Inputs (Level 3)
Assets:
Investments held in Trust Account – money market funds$282,284,619 $— $— 
Liabilities: 
Derivative public warrant liabilities91,126 — — 
Derivative private warrant liabilities— — 381,386 
Total Fair Value$282,375,745 $— $381,386 
The following table provides the significant unobservable inputs used in the Modified Black Scholes model to measure the fair value of the Private Placement Warrants(1):
At March 8, 2021 (Initial
Measurement) 		As of December 31,
2022		As of June 30,
2023
Stock price10.02 10.09 10.45 
Strike price11.50 11.50 11.50 
Probability of completing a Business Combination90.00 %40.00 %60.00 %
Remaining term (in years)5.52.891.13
Volatility15.00 %3.00 %5.00 %
Risk-free rate0.96 %4.20 %5.26 %
Fair value of warrants0.86 0.07 0.06 
The following tables provides a summary of the changes in the fair value of the Company’s financial instruments that are measured at fair value on a recurring basis:
As of June 30, 2023
Level 1Level 3Warrant Liabilities
Fair value as of December 31, 202291,126 381,386 472,512 
Change in valuation inputs or other assumptions261,227 — 261,227 
Fair value as of March 31, 2023352,353 381,386 733,739 
Change in valuation inputs or other assumptions(198,654)(54,484)(253,138)
Fair value as of June 30, 2023153,699 326,902 480,601 
As of June 30, 2022
Level 1Level 3Warrant Liabilities
Fair value as of December 31, 20214,677,805 8,662,912 13,340,717 
Change in valuation inputs or other assumptions(2,187,034)108,967 (2,078,067)
Fair value as of March 31, 20222,490,771 8,771,879 11,262,650 
Change in valuation inputs or other assumptions(1,579,513)(2,233,833)(3,813,346)
Fair value as of June 30, 2022911,258 6,538,046 7,449,304 
FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3: Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.
At December 31, 2022, investments held in the Trust Account were comprised of $282,284,619 in money market funds which are invested primarily in U.S. Treasury Securities. As of December 31, 2022, the Company did not withdraw any interest income from the Trust Account.
The Company utilizes a Modified Black Scholes model to value the Private Placement Warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the warrant liabilities are determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its ordinary shares based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.
Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement for the years ended December 31, 2022 and 2021, and the Company had no transfers out of Level 3 for the years ended December 31, 2022 and 2021.
The fair value of the Public Warrants issued in connection with the Initial Public Offering are measured based on the listed market price of such warrants, a Level 1 measurement.
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2022 by level within the fair value hierarchy:
Quoted Prices in
Active Markets
(Level 1)		Significant Other
Observable Inputs
(Level 2)		Significant Other
Unobservable Inputs
(Level 3)
Assets:
Investments held in Trust Account – money market funds$282,284,619 $— $— 
Liabilities:   
Derivative public warrant liabilities91,126 — — 
Derivative private warrant liabilities— — 381,386 
Total Fair Value$282,375,745 $— $381,386 
The following table provides the significant unobservable inputs used in the Modified Black Scholes model to measure the fair value of the Private Placement Warrants(1):
At March 8, 2021 (Initial Measurement) As of December 31, 2021As of December 31, 2022
Stock price10.02 9.90 10.09 
Strike price11.50 11.50 11.50 
Probability of completing a Business Combination90.00 %100.00 %40.00 %
Remaining term (in years)5.50 5.00 2.89 
Volatility15.00 %22.00 %3.00 %
Risk-free rate0.96 %1.26 %4.20 %
Fair value of warrants0.86 1.59 0.07 
___________________
(1)The expected term of the Private Placement Warrants has been adjusted to 2.89 as of December 31, 2022 due to multiple factors, including an expected additional 3-6 months duration of the Private Placement Warrants as a result of the extension of the date by which the Company has to consummate a business combination from March 8, 2023 to September 30, 2023. Additionally, weighted probability factors contribute to the decrease in term from the remaining 5 years per the previous date valued at December 31, 2021.
The following table provides a summary of the changes in the fair value of the Company’s financial instruments that are measured at fair value on a recurring basis:
Level 3Level 1Warrant Liabilities
Fair value as of December 31, 2020$— $— $— 
Initial measurement at March 8, 20219,152,167 4,730,000 13,882,167 
Initial measurement of over-allotment warrants545,935 488,811 1,034,746 
Change in valuation inputs or other assumptions(1,035,190)(541,006)(1,576,196)
Fair value as of December 31, 20218,662,912 4,677,805 13,340,717 
Change in valuation inputs or other assumptions(8,281,526)(4,586,679)(12,868,205)
Fair value as of December 31, 2022$381,386 $91,126 $472,512 
v3.23.4
SUBSEQUENT EVENTS
 9 Months Ended
Sep. 30, 2023
Subsequent Event [Line Items]  
SUBSEQUENT EVENTS
21. Subsequent Events
The Company evaluated subsequent events from the date of the condensed consolidated balance sheets of September 30, 2023 through the date of the release of financial statements, and has determined that, there have been no subsequent events that require recognition or disclosure in the condensed consolidated financial statements, except as described in Note 1, Note 6, Note 10, Note 12 and as follows:
Nasdaq Delisting Notice—On October 12, 2023, the Company received a letter from the listing qualifications staff (the “Staff”) of Nasdaq notifying the Company that it is not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Rule”) for continued listing. The Bid Price Rule requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) (the “Compliance Period Rule”) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. The Notice has no immediate effect on the listing of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”), which continues to trade on The Nasdaq Global Market under the symbol “BETR.”
In accordance with the Compliance Period Rule, the Company has 180 calendar days to regain compliance. If the Company does not regain compliance during this 180-day period, then the Company may be eligible to transfer to The Nasdaq Capital Market and the Staff may grant the Company a second 180 calendar day period to regain compliance pursuant to the Compliance Period Rule, provided the Company meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement. In addition, the Company would be required to notify Nasdaq of its intent to cure the minimum bid price deficiency during the second compliance period by effecting a reverse stock split if necessary.
The Company will continue to monitor the closing bid price of its Common Stock and seek to regain compliance with all applicable Nasdaq requirements within the allotted compliance periods.
22. SUBSEQUENT EVENTS
The Company evaluated subsequent events from the date of the consolidated balance sheets of December 31, 2022 through May 11, 2023, the date the consolidated financial statements were issued, and has determined that, there have been no subsequent events that require recognition or disclosure in the consolidated financial statements, except as described in Note 1, Note 5, Note 11, Note 12, Note 13, and as follows:
Amended Corporate Line of Credit—In February 2023, the Company entered into a loan and security agreement (the “2023 Credit Facility”) with Clear Spring Life and Annuity Company, an entity affiliated with the previous agent and acting as an agent for such lenders (together the “Lender”) to amend the existing 2021 Credit Facility. Subsequent to year end, the Company paid down $20.0 million leaving $126.4 million owed in principal balance on the facility. The terms of the 2023 Credit Facility grant relief from the acceleration of payments under minimum revenue triggers from the 2021 Credit Facility. The 2023 Credit Facility splits the principal balance into two tranches, tranche “AB” in the amount of $99.9 million and tranche “C” in the amount of $26.5 million. Tranche
AB is backed by assets that the Company has pledged, mainly loans held for sale that the Company fully owns while tranche C is unsecured debt. Tranche AB has a fixed interest rate of 8.5% and tranche C has a variable interest rate based on the SOFR reference rate for a one-month tenor plus 9.5%. Tranche AB will be repaid with proceeds from sales of pledged assets. Tranche C will be repaid starting in June 2023, $5.0 million per month if the Company obtains commitments to raise $250.0 million in equity or debt by that same date or $200.0 million by June 2024. If the Company does not obtain commitments to raise equity or debt at such dates, the repayment amount will be $12.5 million per month for tranche C. The maturity date of the 2023 Credit Facility will be the earlier of 45 days after the Merger is consummated or in the event that the Merger is not consummated shall be March 25, 2027.
Lease Amendment and Reassignment—In February 2023, the Company entered into a lease amendment with a landlord to surrender an office floor and reassign the lease to a third party. The Company had a lease liability of $13.0 million related to the office space and as part of the amendment the Company paid $4.7 million in cash to the third party. The amendment relieves the Company of the primary obligation under the original lease and as such is considered a termination of the original lease.
Acquisition regulatory approval—In March 2023, the Company obtained regulatory approval from the financial control authorities in the U.K. to close on its acquisition of a banking entity in the U.K. The acquisition is for a total consideration of approximately $15.2 million. The Company subsequently closed on the acquisition on April 1, 2023.
Aurora Acquisition Corp  
Subsequent Event [Line Items]  
SUBSEQUENT EVENTS SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to August 4, 2023, the date that the financial statement was issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statement.
As previously disclosed, in the second quarter of 2022, Aurora, received a voluntary request for documents from the Division of Enforcement of the SEC, indicating that it was conducting an investigation relating to Aurora and Better to determine if violations of the federal securities laws had occurred. On August 3, 2023, SEC staff informed Aurora and Better that they have concluded the investigation and that they do not intend to recommend an enforcement action against Aurora or Better. This notice from the SEC staff was provided under the guidelines set forth in the final paragraph of Securities Act Release No. 5310.
SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to April 17, 2023, the date that the financial statement was issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statement.
On January 9, 2023, the Company received a notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC stating that the Company failed to hold an annual meeting of shareholders within 12 months after its fiscal year ended December 31, 2021, as required by Nasdaq Listing Rule 5620(a). In accordance with Nasdaq Listing Rule 5810(c)(2)(G), the Company submitted a plan to regain compliance on February 17, 2023. The Company believes the combined annual and extraordinary general meeting it held on February 24, 2023 will satisfy this requirement under Nasdaq rules.
On February 7, 2023, the Company, Better and the Sponsor entered into a letter agreement, pursuant to which, subject to Better receiving requisite approval therefor (which Better has agreed to use reasonable best efforts to obtain), the parties agreed that, if the proposed Business Combination has not been consummated by the maturity date of the bridge notes, the Sponsor will have the option, without limiting its rights under the bridge note purchase agreement to alternatively exchange its bridge notes on or before the maturity date as follows: (x) for a number of shares of Better preferred stock at a conversion price that represents a 50% discount to the $6.9 billion pre-money equity valuation of Better or (y) for a number of shares of the Company’s Class B common stock at a price per share that represents a 75% discount to the $6.9 billion pre-money equity valuation of Better. On the same date, the Sponsor and Better agreed to defer the maturity date of the bridge notes until September 30, 2023.
On February 8, 2023, the Company repaid an aggregate principal amount of $2.4 million under the Note. After giving effect to this repayment, the amount outstanding under the Note is approximately $412,395.
On February 23, 2023, the Company, the Sponsor, certain individuals, each of whom is a member of our board of directors and/or management team (the “Insiders”), and Better entered into a limited waiver (the “Limited Waiver”) to the Amended and Restated Letter Agreement (the “A&R Letter Agreement”), dated as of May 10, 2021, by and among us, the Sponsor and the Insiders. In the A&R Letter Agreement, the Sponsor and each Insider waived, with respect to any shares of Capital Stock (as defined in the A&R Letter Agreement) held by it, him or her, if any, any redemption rights it, he or she may have in connection with (i) a shareholder vote to approve the Business Combination (as defined in the A&R Letter Agreement), or (ii) a shareholder vote to approve certain amendments to the Company’s amended and restated articles of association (the “Redemption Restriction”).
Pursuant to the Limited Waiver, the Company and the Insiders agreed to waive the Redemption Restriction as it applies to the Sponsor to the limited extent required to allow the redemption of up to an aggregate of $17 million worth of Novator Private Placement Shares held by it in connection with the shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association held on February 24, 2023
As consideration for the Limited Waiver, the Sponsor agreed: (a) if the proposed Business Combination is completed on or before September 30, 2023, to subscribe for and purchase common stock of Better Home & Finance (the “Better Common Stock”), for aggregate cash proceeds to Better equal to the actual aggregate amount of Novator Private Placement Shares redeemed by it in connection with the Limited Waiver (the “Sponsor Redeemed Amount”) at a purchase price of $10.00 per share of Better Common Stock on the closing date of the proposed Business Combination; or (b) if the proposed Business Combination is not completed on or before September 30, 2023, to subscribe for and purchase for $35 million aggregate cash proceeds to Better, at the Sponsor’s election, (x) a number of newly issued shares of Better’s Company Series D Equivalent Preferred Stock (as defined in the bridge note purchase agreement) at a price per share that represents a 50% discount to the Pre-Money Valuation (as defined below) or (y) for a number of shares of Better’s Class B common stock at a price per share that represents a 75% discount to the Pre-Money Valuation. “Pre-Money Valuation” means the $6.9 billion pre-money equity valuation of Better based on the aggregate amount of fully diluted shares of Better’s common stock on an as-converted basis.
As further consideration for the Limited Waiver, the Sponsor agreed to reimburse the Company for reasonable and documented expenses incurred by the Company in connection with the proposed Business Combination, up to the Sponsor Redeemed Amount, to the extent such expenses are not otherwise subject to reimbursement by Better pursuant to the Merger Agreement.
On February 24, 2023, Aurora, Merger Sub and Better entered into Amendment No. 5 to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) from March 8, 2023 to September 30, 2023.
The Company held a combined annual and extraordinary general meeting on February 24, 2023, and extended the date by which the Company has to consummate a business combination from March 8, 2023 to September 30, 2023. As part of the meeting, public shareholders redeemed 24,087,689 ordinary shares and the Sponsor redeemed 1,663,760 ordinary shares for an aggregate cash balance of approximately $263,123,592.
v3.23.4
AURORA 10K - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
 9 Months Ended
Sep. 30, 2023
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS  
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
1. Organization and Nature of the Business
Better Home & Finance Holding Company, formerly known as Aurora Acquisition Corp. (“Aurora”), together with its subsidiaries (collectively, the “Company”), provides a comprehensive set of homeownership offerings in the United States while expanding in the United Kingdom. The Company’s offerings include mortgage loans, real estate agent services, title and homeowner’s insurance, and other homeownership offerings, such as the Company’s cash offer program. The Company leverages Tinman, its proprietary technology platform, to optimize the mortgage process from the initial application, to the integration of a suite of additional homeownership offerings, to the sale of loans to a network of loan purchasers.
Mortgage loans originated within the United States are through the Company’s wholly-owned subsidiary Better Mortgage Corporation (“BMC”). BMC is an approved Title II Single Family Program Lender with the Department of Housing and Urban Development’s (“HUD”) Federal Housing Administration (“FHA”), and is an approved seller and servicer with the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FMCC”). The Company has expanded into the U.K. and offers a multitude of financial products and services to consumers via regulated entities obtained through acquisitions.
On August 22, 2023 (the “Closing Date”), the Company consummated the previously announced Business Combination (the “Business Combination”), pursuant to the terms of the Agreement and Plan of Merger, dated as of May 10, 2021, as amended as of October 27, 2021, November 9, 2021, November 30, 2021, August 26, 2022, February 24, 2023 and June 23, 2023 (as amended, the “Merger Agreement”), by and among Aurora, Better Holdco, Inc. (“Better”), and Aurora Merger Sub I, Inc., formerly a wholly owned subsidiary of Aurora (“Merger Sub”). On the Closing Date, Merger Sub merged with and into Better, with Better surviving the merger (the “First Merger”) and Better merged with and into Aurora, with Aurora surviving the merger and changing its name to “Better Home & Finance Holding Company” (referred to as “Better Home & Finance” or the “Company”) (such merger, the “Second Merger,” and together with the First Merger, the “Business Combination” and the completion thereof, the “Closing”).
Better Home & Finance Class A common stock and warrants are listed on the Nasdaq Global Market and the Nasdaq Capital Market, respectively, under the ticker symbols “BETR” and “BETRW.” 
1. ORGANIZATION AND NATURE OF THE BUSINESS
Better Holdco, Inc. and its subsidiaries (together, the “Company”) provide a comprehensive set of homeownership offerings. The Company’s offerings include mortgage loans, real estate agent services, title and homeowner’s insurance, and other homeownership offerings, such as the Company’s cash offer program. The Company leverages Tinman, its proprietary technology platform, to optimize the mortgage process from the initial application, to the integration of a suite of additional homeownership offerings, to the sale of loans to a network of loan purchasers.
The Company originates mortgage loans throughout the United States through its wholly-owned subsidiary Better Mortgage Corporation (“BMC”). BMC is an approved Title II Single Family Program Lender with the Department of Housing and Urban Development’s (“HUD”) Federal Housing Administration (“FHA”), and is an approved seller and servicer with the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FMCC”).
The Company commenced operations in 2015 and is headquartered in New York. The Company’s fiscal year ends on December 31.
In May 2021, the Company entered into a definitive merger agreement (“Merger Agreement” or the “Merger”) with Aurora Acquisition Corp (“Aurora”), a special purpose acquisition company (“SPAC”) traded on the NASDAQ under “AURC”, which will transform the Company into a publicly listed company. The transaction will be accounted for as a reverse recapitalization and the Company has been determined to be the accounting acquirer. Pursuant to the Merger Agreement, the Company will merge with Aurora Merger Sub I, Inc. (“Merger Sub”), a wholly owned subsidiary of Aurora, with the Company surviving as a wholly owned subsidiary of Aurora (the “First Merger”). Immediately following the First Merger, the Company will merge with and into its parent, Aurora, with Aurora surviving and changing its corporate name from “Aurora Acquisition Corp.” to “Better Home & Finance Holding Company” (the “Second Merger”). The Second Merger together with the First Merger will be referred to as “the Merger”.
The stock consideration will consist of a number of shares of Better Home & Finance Holding Company (“Better Home & Finance”) Class A common stock, Better Home & Finance Class B common stock or Better Home & Finance Class C common stock equal to (A) 690,000,000 shares, minus (B) the aggregate amount of Better Home & Finance Class B common stock that would be issuable upon the net exercise or conversion, as applicable, of the Better Awards (the “Stock Consideration”). Better Awards include all (i) options to purchase shares of the Company’s common stock, (ii) restricted stock units based on shares of the Company’s common stock, and (iii) restricted shares of the Company’s common stock outstanding as of immediately prior to the First Merger. As a result of and upon the closing of the Merger Agreement, among other things, (i) all outstanding shares of the Company’s common stock as of immediately prior to the effective time of the First Merger, will be cancelled in exchange for the right to receive the Stock Consideration; (ii) all Better Awards outstanding as of immediately prior to the effective time of the First Merger will be converted, based on the Exchange Ratio, into awards based on shares of Better Home & Finance Class B common stock; and (iii) all of the Company’s warrants outstanding as of immediately prior to the effective time of the First Merger will, in accordance with the warrant holders’ agreements, be conditionally exercised and eligible to receive their portion of the Stock Consideration or be converted, based on the Exchange Ratio, into warrants to purchase shares of Better Home & Finance Class A common stock. The Exchange Ratio is the quotient obtained by dividing (a) 690,000,000 by (b) the number of aggregate fully diluted common shares of the Company. Amounts remaining in Aurora’s trust account as of immediately following the effective time of the Merger will be retained by Better Home & Finance following the closing of the Merger.
In November 2021, in connection with the Merger Agreement, the Company entered into Amendment No.3 (“Amendment No. 3”) to the Merger. In order to provide the Company with immediate liquidity, the structure of the Merger Agreement was amended to replace the $1.5 billion private investment into public equity (“PIPE”), including the use of such proceeds for a $950.0 million secondary purchase of shares of existing stockholders of the Company, with $750.0 million of bridge notes (the “Pre-Closing Bridge Notes”) and $750.0 million of post-closing convertible notes (“Post-Closing Convertible Notes”). Amendment No. 3 also extended the end date of the Merger Agreement from February 12, 2022 to September 30, 2022, among other amendments.
The Pre-Closing Bridge Notes were issued in December 2021 in the amount of $750.0 million as part of a convertible bridge note purchase agreement (“Pre-Closing Bridge Note Purchase Agreement”) and Amendment No. 3. The Pre-Closing Bridge Notes were funded by Novator Capital Ltd. (the “Sponsor” or “Novator”) and SB Northstar LP (“Softbank”) in an aggregate principal amount of $100.0 million and $650.0 million, respectively. Under the terms of the Pre-Closing Bridge Note Purchase Agreement immediately prior to the closing of the Second Merger, Aurora will be deemed to automatically assume each Pre-Closing Bridge Note and the outstanding principal amount under each Pre-Closing Bridge Note will automatically be converted into a number of shares of Class A Common Stock of Aurora, based on a conversion ratio of $10 of principal amount payable on a Pre-Closing Bridge Note at the time of conversion to one share of Aurora Class A Common Stock. In the event that the Merger Agreement has not been consummated by the maturity date of the Pre-Closing Bridge Notes which was December 2, 2022, and has since been extended, or the Merger Agreement is withdrawn, then on the maturity date or upon withdrawal, the Pre-Closing Bridge Notes will convert into a new series of preferred stock with terms consistent with those of the Company’s Series D Preferred Stock. If the Merger Agreement is not consummated due to a breach by Aurora, the Sponsor or SoftBank, the Pre-Closing Bridge Notes will convert into the Company’s common stock. See Note 11 for further details on the Pre-Closing Bridge Notes.
The Post-Closing Convertible Notes are in an amount equal to $750.0 million and is reduced dollar for dollar by any remaining cash in Aurora’s trust account released to Better Home & Finance. As further discussed in Note 11, the First Novator Letter Agreement gives the Sponsor the right, but not the obligation, to fund any portion or none of its Post-Closing Convertible Notes. SoftBank’s commitment shall be reduced on a dollar-for-dollar basis by the amount that is not funded by the Sponsor. In the event that the Sponsor elects not to fund in full its Post-Closing Convertible Note, then SoftBank is only obligated to fund $550.0 million of its Post-Closing Convertible Note. See Note 11 for further details on the First Novator Letter Agreement, Second Novator Letter Agreement, and Deferral Letter Agreement.
On August 26, 2022, in connection with the Merger Agreement, the Company entered into Amendment No.4 (the “Amendment No. 4”) to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) to March 8, 2023.
In consideration of extending the Agreement End Date, the Company will reimburse Aurora for certain reasonable and documented expenses in an aggregate sum not to exceed $15.0 million. The reimbursement payments will be structured in three tranches, in each case subject to receipt by the Company of reasonable documentation related to the expenses: (i) the first payment of up to $7.5 million will be made within 5 business days after the date of Amendment No. 4; (ii) the second payment of up to $3.8 million will be made on January 2, 2023; and (iii) the third payment of up to $3.8 million will become due upon termination of the Merger Agreement by mutual consent of the parties thereto, and shall be payable on March 8, 2023 (or any earlier termination date, as applicable). For the year ended December 31, 2022, the Company has paid Aurora $7.5 million in reimbursements. Subsequent to December 31, 2022, the Company has made the second and third payment, each $3.8 million, totaling $7.5 million. The parties have also agreed to amend the Merger Agreement to provide a waiver from the exclusivity provisions thereof to allow the Company to discuss alternative financing structures with SoftBank.
On February 24, 2023, the parties entered into Amendment No.5 to the Merger Agreement, which amended the Merger Agreement to extend the Agreement End Date (as defined in the Merger Agreement) from March 8, 2023 to September 30, 2023.
Going concern consideration—In connection with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205-40, “Basis of Presentation - Going Concern,” the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
For the year ended December 31, 2022, the Company incurred a net loss of $888.8 million and used $632.8 million in cash. As a result the Company has an accumulated deficit of $1.2 billion as of December 31, 2022. The Company’s cash and cash equivalents as of December 31, 2022 was $318.0 million. Management expects losses and negative cash flows to continue in the near term, primarily due to a difficult interest rate environment that has had a
significant impact on the Company’s business which is dependent on mortgage applications for new home purchases and applications to refinance existing mortgage loans.
In response to the difficult interest rate environment and impact on the business, the Company commenced an operational restructuring plan late in 2021, which primarily consisted of reductions in headcount, reassessment of vendor relationships, reductions in the Company’s real estate footprint, and other cost reductions. The Company will continue its cost reduction initiatives through the near term. There is no assurance that reductions in costs will offset the reduction in revenues experienced as a result of the difficult interest rate environment.
The Company’s primary sources of funding have been raises of preferred stock, issuance of convertible debt, warehouse and corporate lines of credit, and cash generated from operations.
In order for the Company to continue as a going concern, the Company must obtain additional sources of funding, refinance existing lines of credit, and increase revenues while decreasing expenses to a point where the Company can better fund its operations. Upon consummation of the Merger, the Company will become a publicly listed company, which will give it the ability to draw on additional funding, including the Post-Closing Convertible Notes, which will provide the Company with increased financial flexibility to execute its strategic objectives. The Merger had not been completed as of December 31, 2022, and has still not been completed as of May 11, 2023, the date the consolidated financial statements were issued. Subsequent to December 31, 2022, Better Holdco amended the Merger Agreement to extend the maturity from March 8, 2023, to September 30, 2023.
Management has determined that the expected future losses and negative cash flows paired with the possibility of being unable to raise additional funding, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the consolidated financial statements are issued.
Immaterial restatement corrections and reclassifications to previously issued consolidated financial statements
Immaterial restatement corrections—Subsequent to the issuance of the Company's consolidated financial statements as of and for the year ended December 31, 2021, the Company identified immaterial errors which required correction of the Company's previously issued consolidated financial statements for the year ended December 31, 2021. The impact of these errors in the prior year are not material to the consolidated financial statements in that year and are primarily related to the timing and classification of certain revenue and expense line items and the related balance sheet impacts on the Company’s consolidated financial statements. Additionally, the Company corrected the presentation of deferred tax liabilities from accounts payable and accrued expenses to properly present it with net deferred tax assets within prepaid expenses and other assets as of December 31, 2021. Consequently, the Company has corrected these immaterial errors in the year to which they relate.
Reclassifications—The Company also made certain reclassifications to prior years' consolidated statement of operations and comprehensive loss to conform to the current year presentation as follows: (1) the Company reclassified revenue and expense amounts related to its cash offer program from other platform revenue and other platform expenses to separately present as cash offer program revenue and cash offer program expenses, respectively, and (2) the Company has also reclassified expenses related to its restructuring program, specifically employee termination benefits, which were previously recorded as compensation and benefits within mortgage platform, other platform, general and administrative, marketing and advertising, and technology and product development expenses to separately present restructuring and impairment expenses.
The corrections to our consolidated balance sheet as of December 31, 2021 were as follows:
December 31, 2021
(Amounts in thousands)As Previously ReportedCorrectionsAs Corrected
Assets
Mortgage loans held for sale, at fair value
$1,851,161 $3,274 $1,854,435 
Other receivables, net
51,246 2,916 54,162 
Prepaid expenses and other assets110,075 (19,077)90,998 
Total Assets
$3,312,604 $(12,887)$3,299,717 
Liabilities, Convertible Preferred Stock, and Stockholders’ Equity (Deficit)
Liabilities
Accounts payable and accrued expenses$148,767 $(15,511)$133,256 
Total Liabilities
2,638,788 (15,511)2,623,277 
Accumulated deficit(295,237)2,624 (292,613)
Total Stockholders’ Equity 237,536 2,624 240,160 
Total Liabilities, Convertible Preferred Stock, and Stockholders’ Equity
$3,312,604 $(12,887)$3,299,717 
The reclassifications and corrections to our consolidated statement of operations and comprehensive loss for the year ended December 31, 2021 were as follows:
Year Ended December 31, 2021
(Amounts in thousands, except per share amounts)As Previously ReportedReclassificationsCorrectionsAs Reclassified and Corrected
Revenues:
Mortgage platform revenue, net$1,081,421 $— $6,802 $1,088,223 
Cash offer program revenue— 39,361 39,361 
Other platform revenue133,749 (39,361)94,388 
Net interest income (expense)
Interest income88,965 — 662 89,627 
Net interest income19,036 — 662 19,698 
Total net revenues1,234,206 — 7,464 1,241,670 
Expenses:
Mortgage platform expenses 710,132 (11,636)1,617 700,113 
Cash offer program expenses— 39,505 39,505 
Other platform expenses140,479 (40,404)100,075 
General and administrative expenses 232,669 (2,517)1,068 231,220 
Marketing and advertising expenses249,275 (380)248,895 
Technology and product development expenses143,951 (1,616)2,155 144,490 
Restructuring and impairment expenses— 17,048 17,048 
Total expenses1,476,506 — 4,840 1,481,346 
Loss from operations(242,300)— 2,624 (239,676)
Loss before income tax expense (benefit)(306,135)— 2,624 (303,511)
Net loss$(303,752)$— $2,624 $(301,128)
Other comprehensive loss:
Comprehensive loss$(303,717)$— $2,624 $(301,093)
Per share data:
Basic$(3.49)$— $0.03 $(3.46)
Diluted$(3.49)$— $0.03 $(3.46)
The reclassifications and corrections to the consolidated statement of changes in convertible preferred stock and stockholders’ equity (deficit) include the change to net loss as noted above for the year ended December 31, 2021.
The reclassifications and corrections had no impact on net cash flows from operating activities, cash flows from investing activities, or cash flows from financing activities for the year ended December 31, 2021.
Aurora Acquisition Corp  
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS  
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Aurora Acquisition Corp. (the “Company” or “Aurora”) is a blank check company incorporated as a Cayman Islands exempted company on October 7, 2020. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”).
Although the Company is not limited to a particular industry or geographic region for purposes of completing a Business Combination, the Company is an early stage and emerging growth company, and as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of May 10, 2021, the Company entered into an Agreement and Plan of Merger (as subsequently amended, the “Merger Agreement”) with Aurora Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub”), and Better HoldCo, Inc., a Delaware corporation (“Better”). All activity for the period from October 7, 2020 (inception) through June 30, 2023 relates to the Company’s formation, the initial public offering (“Initial Public Offering” or “IPO”), which is described below, and activities in connection with entering into the Merger Agreement. Since our Initial Public Offering, our only costs have been identifying a target for our initial Business Combination, negotiating the transaction with Better, and maintaining our Company and SEC reporting. We do not expect to generate any operating revenues until after completion of our initial Business Combination. We generate non-operating income in the form of interest income on cash and cash equivalents. The Company incurs expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses incurred by conducting due diligence on prospective Business Combination candidates, including Better.
The Company has selected December 31 as its fiscal year end.
The registration statement for the Company’s Initial Public Offering was declared effective on March 3, 2021. On March 8, 2021, the Company consummated the Initial Public Offering of 22,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $220,000,000.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 3,500,000 private placement units (the “Novator Private Placement Units”), consisting of one Class A ordinary shares (the “Novator Private Placement Shares”) and one-quarter of one redeemable warrant (each whole warrant exercisable for one Class A ordinary share) (the “Novator Private Placement Warrants”), at a price of $10.00 per Novator Private Placement Unit in a private placement to Novator Capital Sponsor Ltd. (the “Sponsor”), an affiliate of Novator Capital Ltd., directors, and executive officers of the Company, generating gross proceeds of $35,000,000. In addition, the Company consummated the sale of 4,266,667 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor and certain of the Company’s directors and executive officers, generating gross proceeds of $6,400,000, which is described in Note 3.
Transaction costs amounted to $13,946,641 consisting of $4,860,057 of underwriting fees, $8,505,100 of deferred underwriting fees (see Note 5) and $581,484 of other offering costs.
Following the closing of Aurora’s Initial Public Offering on March 8, 2021, an amount equal to $255,000,000 ($10.00 per unit) (see Note 6) from the proceeds from Aurora’s Initial Public Offering and the sale of the Private Placement Warrants was placed in the trust account (the “Trust Account”). Additionally, the cash held in the Trust Account is comprised of the gross proceeds from the Initial Public Offering of $220,000,000, $23,002,870 from the
gross proceeds of the partial exercise of the Underwriters over-allotment option, $35,000,000 from 3,500,000 units at a price $10.00 per unit and interest income earned on the trust account funds since its establishement, including interest income of $2,156,230 for the six months ended June 30, 2023. As of June 30, 2023, funds in the Trust Account totaled approximately $21,317,257 and, since on or about February 24, 2023 are held in a cash and cash equivalents account that will likely receive minimal, if any, interest, until the earlier of: (i) the completion of an initial business combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.
On March 10, 2021, the underwriters partially exercised their over-allotment option, resulting in an additional 2,300,287 Units issued for an aggregate amount of $23,002,870 in gross proceeds ($22,542,813 of net proceeds). In connection with the underwriters’ partial exercise of their over-allotment option, the Company also consummated the sale of an additional 306,705 Private Placement Warrants at $1.50 per Private Placement Warrant, generating total proceeds of $460,057.
The funds held in the Trust Account were, since our IPO until on or about February 24, 2023, held only invested in U.S. “government securities” within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), having a maturity of 185 days or less, or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. To mitigate the risk of us being deemed to have been operating as an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act), in connection with the extraordinary general meeting held to approve the Extension, we instructed Continental, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and now hold all funds in the Trust Account in cash (i.e., in one or more bank accounts) until the earlier of the completion of a business combination or our liquidation.
The Company’s management has broad discretion with respect to the specific uses of the funds in the Trust Account, although substantially all of the funds are intended to be applied generally toward completing a Business Combination and to pay the deferred portion of the underwriters’ discount associated with the Initial Public Offering and partial exercise of the underwriters’ over-allotment option. The Company must complete its initial Business Combination with one or more target businesses that together have a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.
Following the February 2023 liquidation of the assets in the Trust Account, we have and will continue to receive minimal interest, if any, on the funds held in the Trust Account, which would reduce the dollar amount our public shareholders would have otherwise received upon any redemption or liquidation of the Company if the assets in the Trust Account had remained in U.S. government treasury obligations or money market funds. The Company will provide its shareholders with the opportunity to redeem all or a portion of their Public Shares, with the exception of the Founder Shares (as defined below) and Novator Private Placement Shares, upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The shareholders will be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account (initially $10.00 per share), calculated as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Class A ordinary shares will be recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
If the Company seeks shareholder approval in connection with a Business Combination, it will need to receive an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who vote at a general meeting of the Company (assuming a quorum is present). If a shareholder vote is not required under applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor and the Company’s officers and directors have agreed to vote their Class B ordinary shares (the “Founder Shares”), Novator Private Placement Shares and any Public Shares purchased in or after the Initial Public Offering in favor of approving a Business Combination and to waive their redemption rights with respect to any such shares in connection with a shareholder vote to approve a Business Combination (although they have not waived rights to liquidating distributions from the trust account with respect to any Class A ordinary shares it or they hold if Aurora fails to consummate a Business Combination within the required period). However, in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. Additionally, each public shareholder may elect to redeem its Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 20% of the Public Shares without the Company’s prior written consent.
The Sponsor and the Company’s directors and officers have agreed (a) to waive their redemption rights with respect to any Founder Shares, Novator Private Placement Shares and Public Shares held by them in connection with the completion of a Business Combination (although they have not waived rights to liquidating distributions from the trust account with respect to any Class A ordinary shares it or they hold if Aurora fails to consummate a Business Combination within the required period) and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the public shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The Company had until 24 months from the closing of the Initial Public Offering to complete a Business Combination. On February 24, 2023, the Company obtained shareholder approval to extend the date by which the Company must complete the Initial Business Combination to September 30, 2023 (the “Combination Period”). In the event that the Company does not consummate a Business Combination within this timeline, the Company can seek a further extension, provided it has shareholder approval. If the Company is unable to complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than 10 business days thereafter, redeem 100% of the outstanding Public Shares and Novator Private Placement Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding Public Shares and Novator Private Placement Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
The Sponsor and the Company’s directors and officers have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, any Public Shares acquired by the Sponsor or the Company’s directors and officers and Novator Private Placement Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval). The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval) and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares and Novator Private Placement Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
The Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a third party for services rendered or products sold to the Company, or by a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent public accountants), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
As a condition to the consummation of the Business Combination, the board of directors of the Company has unanimously approved a change of the Company’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware. In connection with the consummation of the Business Combination, the Company will change its name to “Better Home & Finance Holding Company.”
Recent Developments
On August 26, 2022, Aurora, Better and the Sponsor entered into a letter agreement (the “First Novator Letter Agreement”) to, among other things, defer the maturity date of the Pre-Closing Bridge Notes (as defined below) held by the Sponsor to March 8, 2023, subject to SoftBank consenting to extending the maturity of its Pre-Closing Bridge Notes accordingly. On February 7, 2023, Aurora, Better and the Sponsor entered into a letter agreement (the “Second Novator Letter Agreement”) to defer the maturity date of the Pre-Closing Bridge Notes held by the Sponsor until September 30, 2023. Furthermore, pursuant to the Second Novator Letter Agreement, subject to Better receiving requisite approval therefor (which Better has agreed to use reasonable best efforts to obtain), the parties agreed that, if the proposed Business Combination has not been consummated by the maturity date of the Pre-Closing Bridge Note, the Sponsor will have the option, without limiting its rights under the Pre-Closing Bridge Note Purchase Agreement (as defined below) to alternatively exchange its Pre-Closing Bridge Notes on or before the maturity date as follows: (x) for a number of shares of Better preferred stock at a conversion price that represents a 50% discount to the $6.9 billion pre-money equity valuation of Better or (y) for a number of shares of the Company’s Class B common stock at a price per share that represents a 75% discount to the $6.9 billion pre-money equity valuation of Better. In addition, under the Second Novator Letter Agreement, Better agreed to reimburse Aurora for one-half of its reasonable and documented fees and expenses in connection with regulatory matters arising out of or relating to the transactions contemplated by the Merger Agreement on or after the date thereof, in an aggregate amount not to exceed $2,500,000, structured in two tranches to be paid on each of June 1, 2023 and September 1, 2023. As of June 30, 2023, Better has not yet reimbursed the first payment due on June 1, 2023 in the amount of $1,250,000, so Aurora has a receivable of $1,250,000.
On January 9, 2023, the Company received a notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) stating that the Company failed to hold an annual meeting of shareholders within 12 months after its fiscal year ended December 31, 2021, as required by Nasdaq Listing Rule 5620(a). In accordance with Nasdaq Listing Rule 5810(c)(2)(G), Aurora submitted a plan to regain compliance on February 17, 2023. We believe the combined annual and extraordinary general meeting the Company held on February 24, 2023 satisfied this requirement under Nasdaq Listing Rules.
On February 8, 2023, the Company repaid an aggregate principal amount of $2.4 million under the unsecured promissory note (as amended and restated on February 23, 2022, the “Note”) issued to the Sponsor (“Payee”) on May 10, 2021 and as amended and restated on February 23, 2022. After giving effect to this repayment, the amount outstanding under the Note is $412,395. As of June 30, 2023, the amount outstanding under the Note was $412,395.
On February 24, 2023, we held a combined annual and extraordinary general meeting pursuant to which the Company’s shareholders approved extending the date by which Aurora had to complete a business combination from March 8, 2023 to September 30, 2023 (the “Extension”). In connection with the approval of the Extension, public shareholders elected to redeem an aggregate of 24,087,689 Class A ordinary shares and the Sponsor elected to redeem an aggregate of 1,663,760 Class A ordinary shares. As a result, an aggregate of $263,123,592 (or approximately $10.2178 per share) was released from the Trust Account to pay such shareholders and the Sponsor and 2,048,838 Class A ordinary shares were issued and outstanding as of June 30, 2023.
Also on February 24, 2023, Aurora, Merger Sub and Better entered into Amendment No. 5 to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) from March 8, 2023 to September 30, 2023.
On April 24, 2023, the Company received a further letter (the “Public Float Notice”) from the Listing Qualifications department of Nasdaq notifying us that Aurora no longer meets the minimum 500,000 publicly held shares required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(4) (the “Public Float Standard”). The Public Float Notice required that the Company provide Nasdaq with a specific plan to achieve and sustain compliance with all Nasdaq listing requirements, including the time frame for completion of this plan, by June 8, 2023. The Public Float Notice is only a notification of deficiency, not of imminent delisting, and has no immediate effect on the listing or trading of Aurora’s securities on the Nasdaq. On June 8, 2023, the Company provided to Nasdaq our plan to meet the Public Float Standard, including actions to be taken with respect to the Business Combination, and will continue to evaluate available options to regain compliance with the Nasdaq continued listing standards. On June 20, 2023, the Company received a response from Nasdaq confirming that the Company had been granted an extension to regain compliance with the Public Float Standard. The Company must now file with the SEC and Nasdaq, on or before October 3, 2023, a public document containing the Company’s then current total shares outstanding and a beneficial ownership table in accordance with SEC proxy rules. In the event that the Company does not satisfy such terms, Nasdaq may provide written notification that the Company’s securities will be delisted and we will have the opportunity to appeal the decision in front of a Nasdaq Hearings Panel.
On June 21, 2023, the Company received an additional letter (the “MVLS Notice”) from the Listing Qualifications department of Nasdaq notifying the Company that, for the prior 30 consecutive business days, Aurora’s Market Value of Listed Securities (“MVLS”) with respect to Aurora Class A ordinary shares was below the minimum of $35 million required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(b)(2) (the “Market Value Standard”). The Company has 180 calendar days from the date of the MVLS Notice (the “Compliance Period”), or until December 18, 2023, to regain compliance with the Market Value Standard. The MVLS Notice states that if, at any time during the Compliance Period, the market value of Aurora’s Class A ordinary shares closes at a value of at least $35 million for a minimum of ten consecutive business days, Nasdaq will provide written confirmation of compliance and the matter will be closed. The MVLS Notice is only a notification of deficiency, not of imminent delisting, and has no immediate effect on the listing or trading of Aurora’s securities on The Nasdaq Capital Market. The Company intends to monitor the Company’s MVLS and may, if appropriate, consider implementing available options to regain compliance with the Market Value Standard.
On June 23, 2023, the Company, Merger Sub and Better entered into Amendment No. 6 (“Amendment No. 6”) to the Merger Agreement, which amended the Proposed Form of Certificate of Incorporation upon Domestication at Exhibit A to the Merger Agreement to implement a corrective change to the authorized share capital of the combined company. Specifically, the Form of Certificate of Incorporation was amended in order to: (i) increase the total number of shares of all classes of stock that the combined company will have authority to issue from 3,250,000,000 to 3,400,000,000; (ii) increase the number of shares of Class A common stock that the combined company will have authority to issue from 1,750,000,000 to 1,800,000,000; and (iii) increase the number of shares of Class B common stock that the combined company will have authority to issue from 600,000,000 to 700,000,000.
On or around July 11, 2023, a vendor and legal advisor to the Company agreed to reduce total fees then due from the Company by approximately $560,000 to $350,000. The Company had previously paid the advisor an aggregate of approximately $2 million for services provided, and immediately prior to the adjustment the Company had a balance outstanding of approximately $910,000, therefore reducing the fees by approximately $560,000. The services were provided during current and prior periods, including the quarter ended June 30, 2023. The vendor has neither received financial nor non-financial benefits in exchange for the reduction in fees. The Company recorded debt extinguishment of the liability as well as recognized a gain in the current period related to the debt extinguishment in the amount of approximately $560,000.
Risks and Uncertainties
Management has evaluated the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Going Concern
In connection with the Company’s going concern considerations in accordance with guidance in the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements – Going Concern, the Company has until September 30, 2023 to consummate a Business Combination. The Company’s mandatory liquidation date, if a Business Combination is not consummated, raises substantial doubt about the Company’s ability to continue as a going concern. These unaudited condensed financial statements do not include any adjustments related to the recovery of the recorded assets or the classification of the liabilities should the Company be unable to continue as a going concern. In the event of a mandatory liquidation, within ten business days, the Company will redeem the Public Shares, at a per-share price, payable in cash, equal to the allocated amount towards the Public Shares (in this case, not including the existing Novator Private Placement Shares) then on deposit in the Trust Account including the allocated interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares.
Liquidity and Management’s Plan
As of June 30, 2023, the Company had $1,228,847 in its operating bank account, and a working capital deficit of $17,712,429.
On August 26, 2022, Aurora entered into Amendment No. 4 (“Amendment No. 4”) to the Merger Agreement, by and among, Aurora, Merger Sub and Better. Pursuant to Amendment No. 4, the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) to March 8, 2023. Pursuant to Amendment No. 4, Better agreed to reimburse the Company, for reasonable transaction expenses as defined in the Merger Agreement, up to an aggregate amount not to exceed $15,000,000. As of June 30, 2023, $11,250,000 had been received in two tranches from Better, and, on April 4, 2023, Better transferred the third tranche of $3,750,000 (net of the accounts payable amount that was owed to a third party provider on behalf of Aurora), each as part of Better’s agreement to reimburse Aurora for transaction expenses as defined in the Merger Agreement.
In addition, under the Second Novator Letter Agreement, Better agreed to reimburse Aurora for one-half of its reasonable and documented fees and expenses in connection with regulatory matters arising out of or relating to the transactions contemplated by the Merger Agreement on or after the date thereof, in an aggregate amount not to exceed $2,500,000, structured in two tranches to be paid on each of June 1, 2023 and September 1, 2023. As of June 30, 2023, Better has not yet reimbursed the first payment due on June 1, 2023 in the amount of $1,250,000, so Aurora has a receivable of $1,250,000.
In addition, the Company issued the Note to the Sponsor (“Payee”) pursuant to which the Company could borrow up to an aggregate principal amount of $4,000,000. Should the Company’s operating costs, in relation to its proposed Business Combination, exceed the amounts still available and not currently drawn under the promissory note, the Sponsor shall increase the amount available under the Note to cover such costs, subject to an aggregate cap of $12,000,000. This amount was reflective of estimated total costs of the Company through August 15, 2024. As of June 30, 2023, the amount outstanding under the Note was $412,395.
In addition, as consideration for the Limited Waiver, the Sponsor agreed to reimburse the Company for reasonable and documented expenses incurred by the Company in connection with the proposed Business Combination, up to the actual aggregate amount of Novator Private Placement Shares redeemed by the Sponsor in connection with the Limited Waiver (the “Sponsor Redeemed Amount”), to the extent such expenses are not otherwise subject to reimbursement by Better pursuant to the Merger Agreement.
In the event that the Company does not consummate a Business Combination by September 30, 2023, the Company can seek a further extension, provided we have our shareholder approval.
Accordingly, management has evaluated the Company’s liquidity and financial condition and determined that sufficient capital exists to sustain operations through the earlier of a Business Combination or one year from the date of this filing.
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Aurora Acquisition Corp. (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on October 7, 2020. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Transaction”).
Although the Company is not limited to a particular industry or geographic region for purposes of completing a Transaction. The Company is an early stage and emerging growth company, and as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
On May 10, 2021, Aurora Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Better HoldCo, Inc., a Delaware corporation (“Better”). The Company will present their financial statements on a consolidated basis, which includes the Merger Sub, as the Company its sole shareholder. The consolidated activity of the Merger Sub includes only transactions related to governance and Director fees under the Director Services Agreement, which is described in Note 5. All activity for the period from October 7, 2020 (inception) through December 31, 2022 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and activities in connection with entering into the Merger Agreement. Since our Initial Public Offering, our only costs have been identifying a target for our initial Transaction, negotiating the transaction with Better, and maintaining our Company and SEC reporting. We do not expect to generate any operating revenues until after completion of our initial Business Combination (“Business Combination”). We generate non-operating income in the form of interest income on cash and cash equivalents. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses as we conduct due diligence on prospective Transaction candidates.
The Company has selected December 31 as its fiscal year end.
The registration statement for the Company’s Initial Public Offering was declared effective on March 3, 2021. On March 8, 2021, the Company consummated the Initial Public Offering of 22,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $220,000,000 which is described in Note 3.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 3,500,000 private placement units (the “Novator Private Placement Units”), consisting of one Class A ordinary shares (the “Novator Private Placement Shares”) and one-quarter of one redeemable warrant (each whole warrant exercisable for one Class A ordinary share) (the “Novator Private Placement Warrants”), at a price of $10.00 per Novator Private Placement Unit in a private placement to Novator Capital Sponsor Ltd., or Novator, an affiliate of Novator Capital Ltd. (the “Sponsor”), directors, and executive officers of the Company, generating gross proceeds of $35,000,000 . In addition, the Company consummated the sale of 4,266,667 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor and certain of the Company’s directors and executive officers, generating gross proceeds of $6,400,000, which is described in Note 4.
Transaction costs amounted to $13,946,641 consisting of $4,860,057 of underwriting fees, $8,505,100 of deferred underwriting fees (see Note 6) and $581,484 of other offering costs.
Following the closing of Aurora’s Initial Public Offering on March 8, 2021, an amount equal to $255,000,000 ($10.00 per unit) (see Note 7) from the net proceeds from Aurora’s Initial Public Offering and the sale of the Private Placement Warrants was placed in the trust account (the “Trust Account”). Additionally, the cash held in the Trust Account comprises of gross proceeds from the Initial Public Offering of $220,000,000, $23,002,870 from the proceeds of the Underwriters over-allotment, $35,000,000 from 3,500,000 units at a price $10.00 per unit and interest income of $4,262,222 for the year ended December 31, 2022. As of December 31, 2022, funds in the Trust Account totaled $282,284,619 and will be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 of the Investment Company Act,
as determined by the Company, until the earlier of: (i) the completion of a Transaction and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.
On March 10, 2021, the underwriters partially exercised their over-allotment option, resulting in an additional 2,300,287 Units issued for an aggregate amount of $23,002,870 in gross proceeds ($22,542,813 of net proceeds). In connection with the underwriters’ partial exercise of their over-allotment option, the Company also consummated the sale of an additional 306,705 Private Placement Warrants at $1.50 per Private Placement Warrant, generating total proceeds of $460,057.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering, the sale of the Novator Private Placement Units, the sale of the Private Placement Warrants and the partial exercise of the underwriters’ over-allotment option, although substantially all of the net proceeds are intended to be applied generally toward completing a Business Combination and to pay the deferred portion of the underwriters’ discounts associated with the Initial Public Offering and partial exercise of the underwriters’ over-allotment options. The Company must complete its initial Business Combination with one or more target businesses that together have a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.
The Company will provide its shareholders with the opportunity to redeem all or a portion of their Public Shares, with the exception of the founder shares and Novator Private Placement Shares, upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The shareholders will be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account (initially $10.00 per share), calculated as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Class A ordinary shares are recorded at redemption value and classified as temporary equity, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
If the Company seeks shareholder approval in connection with a Business Combination, it will need to receive an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who vote at a general meeting of the Company (assuming a quorum is present). If a shareholder vote is not required under applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor and the Company’s officers and directors have agreed to vote their Founder Shares (as defined in Note 5), Novator Private Placement Shares and any Public Shares purchased in or after the Initial Public Offering in favor of approving a Business Combination and to waive their redemption rights with respect to any such shares in connection with a shareholder vote to approve a Business Combination. However, in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. Additionally, each public shareholder may elect to redeem its Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated
Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 20% of the Public Shares without the Company’s prior written consent.
The Sponsor and the Company’s directors and officers have agreed (a) to waive their redemption rights with respect to any Founder Shares, Novator Private Placement Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the public shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The Company had until 24 months from the closing of the Initial Public Offering to complete a Business Combination. On February 24, 2023, the Company obtained shareholder approval to extend the date by which the Company must complete the Initial Business Combination to September 30, 2023. In the event that the Company does not consummate a Business Combination within this timeline, the Company can seek an extension (with no limit to such extension) provided it has shareholder approval. If the Company is unable to complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than 10 business days thereafter, redeem 100% of the outstanding Public Shares and Novator Private Placement Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding Public Shares and Novator Private Placement Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
The Sponsor and the Company’s directors and officers have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval). However, any Public Shares acquired by the Sponsor or the Company’s directors and officers and Novator Private Placement Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval). The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval) and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares and Novator Private Placement Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
The Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a third party for services rendered or products sold to the Company, or by a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the
extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent public accountants), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
As a condition to the consummation of the Business Combination, the board of directors of the Company has unanimously approved a change of the Company’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware. In connection with the consummation of the Business Combination, the Company will change its name to “Better Home & Finance Holding Company.”
Risks and Uncertainties
Management has evaluated the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Liquidity and Management’s Plan
As of December 31, 2022, the Company had $285,307 in its operating bank account, and a working capital deficit of $14,605,202.
The Company issued an unsecured promissory note (the “Note”) to the Sponsor (“Payee”) pursuant to which the Company could borrow up to an aggregate principal amount of $4,000,000. Should the Company’s operating costs, in relation to its proposed business combination, exceed the amounts still available and not currently drawn under the promissory note, the Sponsor shall increase the amount available under the promissory note to cover such costs, subject to an aggregate cap of $12,000,000. This amount was reflective of estimated total costs of the Company through November 15, 2023 in relation to the business combination, in the event the business combination is unsuccessful. Aurora, Merger Sub and Better entered into Amendment No. 4 whereby Better has also agreed to reimburse the Company, for reasonable transaction expenses as defined in the Merger Agreement, an aggregate amount not to exceed $15,000,000. In the event that the Company does not consummate a Business Combination by September 30, 2023, the Company can seek an extension (with no limit to such extension) provided we have our shareholder approval. The Note is non-interest bearing and payable by check or wire transfer of immediately available funds or as otherwise determined by the Company to such account as the Payee may from time to time designate by written notice in accordance with the provision of the Note. Within five business days of the day of Amendment No.4, Better paid Aurora a sum of $7,500,000 and, on February 6, 2023, Better paid Aurora an additional sum of $3,750,000, each as part of Better’s agreement to reimburse Aurora for transaction expenses as defined in the Merger Agreement. Accordingly, management has evaluated the Company’s liquidity and financial condition and determined that sufficient capital exists to sustain operations through the earlier of a Business Combination or one year from the date of this filing.
Going Concern
In connection with the Company’s going concern considerations in accordance with guidance in the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements – Going Concern, the Company has until September 30, 2023 to consummate a Business Combination. The Company’s mandatory liquidation date, if a Business Combination is not consummated, raises substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments related to the recovery of the recorded assets or the classification of the liabilities should the Company be unable to continue as a going concern. As discussed in Note 1, in the event of a mandatory liquidation, within ten business days, the Company will redeem the Public Shares, at a per-share price, payable in cash, equal to the allocated amount towards the Public Shares (in this case, not including the existing Novator Private Placement Shares) then on deposit in the Trust Account including the allocated interest earned on
the funds held in the Trust Account and not previously released to the Company to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares.
v3.23.4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 9 Months Ended
Sep. 30, 2023
Aurora Acquisition Corp  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying financial statements are presented in conformity in U.S. dollars with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging growth company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, a significant accounting estimate included in these financial statements is the valuation of the warrant liability. Such estimates may be subject to change as more current information becomes available.
Cash and cash equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2023 and December 31, 2022.
Investments Held in the Trust Account
On or around February 24, 2023, the Company liquidated its funds in the Trust Account and moved them to a cash and cash equivalent account that will likely receive minimal, if any, interest. Prior to this date and as of December 31, 2022, all assets in the Trust Account were money market funds which were invested primarily in U.S. Treasury Securities.
Deferred offering costs
Deferred offering costs consist of legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Initial Public Offering and were charged to shareholders’ equity upon the completion of the Initial Public Offering.
On June 22, 2022, Barclays Capital Inc. (“Barclays”), resigned from its role as underwriter and financial advisor to Aurora. In connection with such resignation, Barclays waived their entitlement to certain fees which would be owed upon completion of the proposed Business Combination, which was comprised of approximately $8.5 million as a deferred underwriting fee and financial advisory fee. Accordingly, the Company derecognized the liability for the deferred underwriting and financial advisory fee in the quarter ending June 30, 2022 that was accrued as of December 31, 2021. As of June 30, 2023, there is no liability for the deferred underwriting or financial advisory fee.
Class A ordinary shares subject to possible redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption would be classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.
Accordingly, at June 30, 2023 and December 31, 2022, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
Class A ordinary shares subject to possible redemption
Class A ordinary shares subject to redemption – December 31, 2022
$246,628,487 
Plus:
Reclass of permanent equity to temporary equity16,999,995 
Interest adjustment to redemption value1,676,767 
Less: 
Shares redeemed by public(246,123,596)
Shares redeemed by Sponsor(16,999,995)
Class A ordinary shares subject to redemption – March 31, 2023
$2,181,658 
Adjustment to redemption value19,954 
Class A ordinary shares subject to redemption – June 30, 2023
$2,201,612 
Warrant Liability
At June 30, 2023 and December 31, 2022, there were 6,075,049 and 6,075,050 Public Warrants outstanding, respectively, and 5,448,372 Private Placement Warrants outstanding (including warrants included in the Novator Private Placement Units). The Company accounts for the Public Warrants and Private Placement Warrants (including warrants included in the Novator Private Placement Units) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.
The accounting treatment of derivative financial instruments required that the Company record the warrants as derivative liabilities at fair value upon the closing of the Initial Public Offering. The Public Warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. The warrant liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liabilities are adjusted to current fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
Income taxes
The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Net income (loss) per share
Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. The Company has not considered the effect of the Warrants sold in the Public Offering and Private Placement Warrants to purchase an aggregate of 11,523,421 shares in the calculation of diluted loss per share in connection with the Novator Private Placement Units, since the exercise of the Warrants are contingent upon the occurrence of future events and the inclusion of such Warrants would be anti-dilutive.
The Company’s statement of operations includes a presentation of income (loss) per share for Common Stock subject to possible redemption in a manner similar to the two-class method of income per common stock. According to SEC guidance, common stock that is redeemable based on a specified formula is considered to be redeemable at fair value if the formula is designed to equal or reasonably approximate fair value. When deemed to be redeemable at fair value, the weighted average redeemable shares would be included with the non-redeemable shares in the denominator of the calculation and initially calculated as if they were a single class of common stock.
The following table reflects the calculation of basic and diluted net earnings (loss) per common share (in dollars, except per share amounts):
Three Months Ended
June 30, 2023June 30, 2022
Class A Common Stock subject to possible redemption
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption$(19,635)$1,248,851 
Net earnings (losses) attributable to Class A Common Stock subject to possible redemption$(19,635)$1,248,851 
Denominator: Weighted average Class A Common Stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption212,59824,300,287
Basic and diluted net income (loss) per share, Class A Common Stock subject to possible redemption$(0.09)$0.05 
Non-Redeemable Class A and Class B Common Stock
Numerator: Net income (loss) minus net earnings
Net income (loss)$(811,496)$537,055 
Less: Net earnings (losses) attributable to Class A Common Stock subject to possible redemption— — 
Non-redeemable net income (loss)$(811,496)$537,055 
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock8,786,31210,450,072
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B Common Stock$(0.09)$0.05 
Six Months Ended
June 30, 2023June 30, 2022
Class A Common Stock subject to possible redemption
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption$(429,904)$1,955,153 
Net earnings (losses) attributable to Class A Common Stock subject to possible redemption$(429,904)$1,955,153 
Denominator: Weighted average Class A Common Stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption7,541,25424,300,287
Basic and diluted net income (loss) per share, Class A Common Stock subject to possible redemption$(0.06)$0.08 
Non-Redeemable Class A and Class B Common Stock
Numerator: Net income (loss) minus net earnings
Net income (loss)$(529,182)$840,793 
Less: Net earnings (losses) attributable to Class A Common Stock subject to possible redemption— — 
Non-redeemable net income (loss)$(529,182)$840,793 
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock9,282,72410,450,072
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B Common Stock$(0.06)$0.08 
Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000 and up to £85,000 by the Financial Services Compensation Scheme per financial institution in the United Kingdom. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Recent issued accounting standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying consolidated financial statements are presented in conformity in U.S. dollars with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging growth company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, a significant accounting estimate included in these financial statements is the valuation of the warrant liability and valuation of Class B ordinary shares. Such estimates may be subject to change as more current information becomes available.
Cash and cash equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2022 and 2021.
Investments held in Trust Account
At December 31, 2022 and 2021, substantially all of the assets held in the Trust Account are money market funds which are invested primarily in U.S. Treasury Securities.
Deferred offering costs
Deferred offering costs consist of legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Initial Public Offering and were charged to shareholders’ equity upon the completion of the Initial Public Offering.
On June 22, 2022, Barclays resigned from its role as underwriter and financial advisor to Aurora. In connection with such resignation, Barclays waived its entitlement to a deferred underwriting fee of approximately $8.5 million that would be payable at the close of the Business Combination. Accordingly, the Company derecognized the liability for the deferred underwriting fee in the quarter ending June 30, 2022 that was accrued as of December 31, 2021. As of December 31, 2022, there is no liability for the deferred underwriting fee.
Class A ordinary shares subject to possible redemption
The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. Accordingly, at December 31, 2022 and 2021, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
At December 31, 2022 and 2021, the Class A ordinary shares reflected in the condensed balance sheets are reconciled in the following table:
Class A ordinary shares subject to possible redemption
Gross proceeds$243,002,870 
Less: 
Proceeds allocated to Public Warrants(299,536)
Class A ordinary shares issuance costs(13,647,105)
Plus: 
Accretion of carrying value to redemption value12,681,484 
Accretion of carrying value to redemption value – Over-Allotment1,265,157 
Class A ordinary shares subject to redemption – December 31, 2021
243,002,870 
Remeasurement of Class A ordinary shares subject to redemption:3,625,617 
Class A ordinary shares subject to redemption – December 31, 2022
$246,628,487 
Warrant Liability
At December 31, 2022 and 2021, there were 6,075,052 Public Warrants and 5,448,372 Private Placement Warrants outstanding (including warrants included in the Novator Private Placement Units). The Company accounts for the Public Warrants and Private Placement Warrants (including warrants included in the Novator Private
Placement Units) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.
The accounting treatment of derivative financial instruments required that the Company record the warrants as derivative liabilities at fair value upon the closing of the Initial Public Offering. The Public Warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. The warrant liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liabilities are adjusted to current fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
Offering Costs Associated with the Initial Public Offering
The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $13,946,641 as a result of the Initial Public Offering (consisting of a $4,860,057 underwriting fee, $8,505,100 of deferred underwriting fees and $581,484 of other offering costs). The Company recorded $13,647,118 of offering costs as a reduction of equity in connection with the Class A ordinary shares included in the Units. The Company immediately expensed $299,523 of offering costs in connection with the Public Warrants included in the Units that were classified as liabilities within the nine months ended September, 2021. For the years ended December 31, 2022 and 2021, the Company recorded a gain of $182,658 and $0, respectively, relating to offering costs allocated to the warrant liability due to Barclays waiving its entitlement to a deferred underwriting fee of $8,505,100 that would be payable at the close of the Business Combination. There was no gain due to the waiver of underwriting fees for the year ended December 31, 2021.
Income taxes
The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2022 or December 31,2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.
Net income (loss) per share
Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. Weighted average shares are reduced for the effect of an aggregate of 249,928 Class B ordinary shares that were forfeited when the over-allotment option was partially exercised by the underwriters within the 45-day window (see Note 5). The
Company has not considered the effect of the Warrants sold in the Public Offering and Private Placement Warrants to purchase an aggregate of 11,523,444 shares in the calculation of diluted loss per share in connection with the Novator Private Placement Units, since the exercise of the Warrants are contingent upon the occurrence of future events.
The Company’s statement of operations includes a presentation of income (loss) per share subject to possible redemption in a manner similar to the two-class method of income per share. According to SEC guidance, shares that are redeemable based on a specified formula are considered to be redeemable at fair value if the formula is designed to equal or reasonably approximate fair value. When deemed to be redeemable at fair value, the weighted average redeemable shares would be included with the non-redeemable shares in the denominator of the calculation and initially calculated as if they were a single class of ordinary shares.
The following table reflects the calculation of basic and diluted net earnings (loss) per ordinary share (in dollars, except per share amounts):
Year Ended
December 31, 2022December 31, 2021
Class A ordinary shares subject to possible redemption
Numerator: Earnings (losses) attributable to Class A ordinary shares subject to possible redemption$6,108,604 $(4,399,283)
Net earnings (losses) attributable to Class A ordinary shares subject to possible redemption$6,108,604 $(4,399,283)
Denominator: Weighted average Class A ordinary shares subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption24,300,287 19,827,082 
Basic and diluted net income (loss) per share, Class A ordinary shares subject to possible redemption$0.25 $(0.22)
Non-Redeemable Class A and Class B ordinary shares
Numerator: Net income (loss) minus net earnings
Net income (loss)$2,626,938 $(2,127,892)
Less: Net earnings (losses) attributable to Class A ordinary shares subject to possible redemption$— $— 
Non-redeemable net income (loss)$2,626,938 $(2,127,892)
Denominator: Weighted average Non-Redeemable Class A and Class B ordinary shares
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B ordinary shares10,450,072 9,590,182 
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B ordinary shares$0.25 $(0.22)
Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000 and up to £85,000 by the Financial Services Compensation Scheme per financial institution in the United Kingdom. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on these accounts.
Recent issued accounting standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
v3.23.4
INITIAL PUBLIC OFFERING
 9 Months Ended
Sep. 30, 2023
Aurora Acquisition Corp  
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS  
Initial Public Offering INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering (and the partial exercise of the underwriter’s over-allotment option), the Company sold 24,300,287 Units, at a purchase price of $10.00 per Unit. Each Unit consists of one Class A ordinary share and one-fourth of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at an exercise price of $11.50 per whole share (see Note 7).
In connection with the IPO, the Company granted the underwriters a 45-day option to purchase up to 3,300,000 additional Units to cover over-allotments, if any, and on March 10, 2021, the underwriters partially exercised this over-allotment option (see Note 6).
v3.23.4
PRIVATE PLACEMENTS
 9 Months Ended
Sep. 30, 2023
Aurora Acquisition Corp  
PRIVATE PLACEMENTS  
PRIVATE PLACEMENTS PRIVATE PLACEMENTS
Simultaneously with the closing of the Initial Public Offering, the Sponsor, and certain of the Company’s directors and officers purchased an aggregate of 4,266,667 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $6,400,000 from the Company. The Sponsor and certain of the Company’s directors and officers agreed to purchase up to an additional 440,000 Private Placement Warrants, for an aggregate purchase price of an additional $660,000, if the over-allotment option is exercised in full or in part by the underwriters. On March 10, the Sponsor and certain of the Company’s directors and officers purchased 306,705 Private Placement Warrants for an additional aggregate purchase price of $460,057 in connection with the partial exercise of the underwriter’s over-allotment option. Each Private Placement Warrant is exercisable
for one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 6). If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares and the shares included in the Novator Private Placement Units (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
In connection with the execution of the Merger Agreement, the Sponsor entered into a letter agreement (the “Sponsor Agreement”) with Aurora on November 9, 2021, pursuant to which the Sponsor will forfeit upon closing 50% of its Aurora private placement warrants and 20% of the Better Home & Finance Class A common stock retained by the Sponsor as of the Closing will become subject to transfer restrictions, contingent upon the price of Better Home & Finance Class A common stock exceeding certain thresholds (“Sponsor Locked-Up Shares”).
The Sponsor and certain of the Company’s directors and officers also purchased 3,500,000 Novator Private Placement Units at a price of $10.00 per Private Placement Unit for an aggregate purchase price of $35,000,000. Each Private Placement Unit consists of 1 Novator Private Placement Share and one-quarter of one warrant (“Private Placement Warrant”). Each whole Private Placement Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 6). If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor and the Company’s directors and officers have agreed to vote their Founder Shares, Novator Private Placement Shares and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination.
On February 24, 2023, we held a combined annual and extraordinary general meeting pursuant to which the Company’s shareholders approved the Extension. In connection with the approval of the Extension, public shareholders elected to redeem an aggregate of 24,087,689 Class A ordinary shares and the Sponsor elected to redeem an aggregate of 1,663,760 Class A ordinary shares. As a result, an aggregate of $263,123,592 (or approximately $10.2178 per share) was released from the Trust Account to pay such shareholders and the Sponsor and 2,048,838 Class A ordinary shares were issued and outstanding at June 30, 2023.
PRIVATE PLACEMENTS
Simultaneously with the closing of the Initial Public Offering, the Sponsor, and certain of the Company’s directors and officers purchased an aggregate of 4,266,667 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $6,400,000 from the Company. The Sponsor and certain of the Company’s directors and officers also agreed to purchase up to an additional 440,000 Private Placement Warrants, for an aggregate purchase price of an additional $660,000, if the over-allotment option is exercised in full or in part by the underwriters. On March 10, the Sponsor and certain of the Company’s directors and officers purchased 306,705 Private Placement Warrants for an additional aggregate purchase price of $460,057 in connection with the partial exercise of the underwriter’s over-allotment option. Each Private Placement Warrant is exercisable for one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7). A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval), the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares and the shares included in the Novator Private Placement Units (subject to the requirements of applicable law) and the Private Placement Warrants will expire, and no amount will be due to holders.
In connection with the execution of the Merger Agreement, the Sponsor entered into a letter agreement (the “Sponsor Agreement”) with Aurora on November 9, 2021, pursuant to which the Sponsor will forfeit upon Closing 50% of the Aurora private warrants and 20% of the Better Home & Finance Class A common stock retained by the Sponsor as of the Closing will become subject to transfer restrictions, contingent upon the price of Better Home & Finance Class A common stock exceeding certain thresholds (“Sponsor Locked-Up Shares”).
The Sponsor and certain of the Company’s directors and officers also purchased 3,500,000 Novator Private Placement Units at a price of $10.00 per Private Placement Unit for an aggregate purchase price of $35,000,000. Each Private Placement Unit consists of one Novator Private Placement Share and one-quarter of one warrant (“Private Placement Warrant”). Each whole Private Placement Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7). If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor and the Company’s directors and officers have agreed to vote their Founder Shares, Novator Private Placement Shares and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination
v3.23.4
RELATED PARTY TRANSACTIONS
 9 Months Ended
Sep. 30, 2023
RELATED PARTY TRANSACTIONS  
RELATED PARTY TRANSACTIONS
11. Related Party Transactions
The Company has entered into a number of commercial agreements with related parties, which management believes provide the Company with products or services that are beneficial to its commercial objectives. Often these products and services have been tailored to the Company’s specific needs or are part of new pilot programs, both for
the Company and the counterparty, for which there are not clear alternative vendors offering comparable services to compare pricing with. It is reasonable to assume that none of these related party commercial agreements were structured at arm’s length and therefore may be beneficial to the counterparty.
1/0 Capital—The Company is a party to an employee and expense allocation agreement with 1/0 Capital, LLC (“1/0 Capital”), an entity affiliated with 1/0 Real Estate, LLC (“1/0 Real Estate”) (an entity wholly owned by 1/0 Holdco, in which Vishal Garg, the Chief Executive Officer of the Company, and the Company’s executive officers each hold a more than five percent ownership interest). Under the employee and expense allocation agreement, 1/0 Capital provides the Company access to certain employees in exchange for reasonable consideration in the form of fees based on their time, as well as IT support services. Any intellectual property created under the agreement by 1/0 Capital employees working on behalf of the Company belongs to the Company. The term of the agreement will continue in perpetuity. The services provided by 1/0 Capital are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with this agreement, the Company reduced the accrued expense by $27.0 thousand and $187.3 thousand in the three months ended September 30, 2023 and 2022, respectively. As part of this agreement, the Company may provide access to certain of its employees for use by 1/0 Capital which reduced the amounts owed to 1/0 Capital by none and none for the three months ended September 30, 2023 and 2022, respectively. The Company recorded a reduction of expenses of $27.0 thousand and $187.3 thousand for the three months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss. The Company incurred gross expenses of $6.4 thousand and $386.8 thousand in the nine months ended September 30, 2023 and 2022, respectively. As part of this agreement, the Company may provide access to certain of its employees for use by 1/0 Capital which reduced the amounts owed to 1/0 Capital by none and $18.2 thousand for the nine months ended September 30, 2023 and 2022, respectively. The Company recorded net expenses of $6.4 thousand and $368.6 thousand for the nine months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss. The Company is invoiced on a net basis and recorded a $144.4 thousand and $177.0 thousand payable as of September 30, 2023 and December 31, 2022, respectively, included within other liabilities, respectively, on the condensed consolidated balance sheets.
TheNumber—The Company originally entered into a data analytics services agreement in August 2016 with TheNumber, LLC (“TheNumber”), an entity affiliated with both Vishal Garg, the Chief Executive Officer of the Company, and 1/0 Real Estate.
In September 2021, the Company and TheNumber entered into a technology integration and license agreement, which was amended in November 2021, to develop a consumer credit profile technology which is to be launched in three stages. The first stage involves testing TheNumber’s limited graph Application Programming Interface (“API”) in a testing environment with test data. The second stage involves data such as credit, income, and assets of staged borrowers meeting certain measures of speed and performance. The third stage requires TheNumber to run the product and serve all borrowers on the production side as well as provide data to the Company from its rich data set. The listed services provided by TheNumber are lead generation, market rate analysis, lead growth analysis, property listing analysis, automated valuation models, and financial risk analysis. Both parties agreed to jointly develop all aspects of this program, and the agreement provides for the utilization of TheNumber employees by the Company. In January 2023, the agreement was extended for an additional year. The services provided by TheNumber are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with these agreements, the Company paid expenses of $66.9 thousand and $617.7 thousand for the three months ended September 30, 2023 and 2022 respectively, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company paid expenses of $438.0 thousand and $1,123.0 thousand for the nine months ended September 30, 2023 and 2022 respectively, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss and had a payable of $204.3 thousand and $232.0 thousand as of September 30, 2023 and December 31, 2022, respectively, within other liabilities on the condensed consolidated balance sheets.
Holy Machine—In January 2018, the Company entered into a consulting agreement (the “2018 Holy Machine Consulting Agreement”) with Holy Machine LLC (“Holy Machine”) an entity controlled by Aaron Schildkrout, a former member of Better’s board of directors (the “Better Board”). Aaron Schildkrout resigned from the Better
Board on June 8, 2022 and as an advisor shortly thereafter. The 2018 Holy Machine Consulting Agreement provided for consulting services related to executive recruiting and such other services as mutually agreed upon, and grants Holy Machine 603,024 options with a 4-year vesting period and no cliff at two times the fair market value of the Company. Further, any inventions, discoveries, improvements or works of authorship made by Holy Machine and the results thereof that may be considered works made for hire shall be assigned to the Company and be the Company’s exclusive property to which the Company has the exclusive right to obtain and own all copyrights. In May 2020, the parties entered into an amendment to the 2018 Holy Machine Consulting Agreement to insert terms relating to compliance with applicable laws, contracts, and indemnification among the parties. No other terms of the 2018 Holy Machine Consulting Agreement were altered. The agreement ended in November 2022.
In July 2020, the Company and Holy Machine entered into a new consulting agreement (the “2020 Holy Machine Consulting Agreement”). The 2020 Holy Machine Consulting Agreement granted Holy Machine (i) the option to purchase 764,143 shares of Better’s common stock, with an accompanying stock option agreement having a term of 10 years, at the then fair market value at the time of the grant and (ii) the option to purchase 764,143 shares of Better’s common stock, with an accompanying stock option agreement having a term of 10 years, with an exercise price per share equal to (a) $5.14 minus (b) the then current fair market value at the time of grant. Both tranches of granted options vest each month on the same day of the month as the vesting commencement date of April 18, 2020, subject to Holy Machine continuing to provide consulting services through each such date, and both have change in control vesting provisions which would result in 100% of unvested options vesting should there be a change of control of the Company, as defined in such a stock option agreement. The services provided by Holy Machine were not integral to the Company’s technology platform and amounts incurred were not material to the Company. During the second quarter of 2022, Aaron Schildkrout resigned from the Better Board and resigned as an advisor to Better shortly thereafter. The Company recorded none and $37.5 thousand of expenses during the three months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss. The Company recorded none and $137.5 thousand of expenses during the nine months ended September 30, 2023 and 2022, respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss and a payable of none and none as of September 30, 2023 and December 31, 2022, respectively, within other liabilities on the condensed consolidated balance sheets.
Notable—In October 2021, the Company entered into a private label and consumer lending program agreement (the “2021 Notable Program Agreement”) to provide home improvement lines of credit to qualified borrowers of the Company with Notable Finance, LLC (“Notable”), an entity in which Vishal Garg, the Chief Executive Officer of the Company, and 1/0 Real Estate collectively hold a majority ownership interest. The program is intended to be used by qualified customers of the Company for home improvement purchases (the “Home Improvement Line of Credit”).
This program required Notable to originate and service the loan and in consideration, the Company pays Notable $600 for each loan originated pursuant to the agreement. In connection with the 2021 Notable Program Agreement, Notable provided an unsecured personal loan product with an initial 12-month “draw period” during which the customers can use the approved loan amount and only pay interest on the used loan fund. Following this initial 12-month draw period, the customers are no longer able to withdraw funds and there is a 3 or 5-year “fixed” period to pay back the loan in full in months installments.
For the three months ended September 30, 2023, the Company incurred $16.3 thousand of expenses under the agreement, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. For the three months ended September 30, 2022, the Company incurred $74.3 thousand of expenses under the agreement, $31.9 thousand of which are included within marketing expenses and $42.4 thousand of which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2023, the Company incurred $38.5 thousand of expenses under the agreement, which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2022, the Company incurred $74.3 thousand of expenses under the agreement, $31.9 thousand of which are included within marketing expenses and $42.4 thousand of which are included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company recorded a payable of $10.0 thousand
and $15.0 thousand included within other liabilities on the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.
In January 2022, Better Trust I, a subsidiary of the Company entered into a master loan purchase agreement (the “Notable MLPA”) with Notable to purchase from Notable up to $20.0 million of unsecured home improvement loans underwritten and originated by Notable for the Company’s customers. Under the Notable MLPA, Notable originated home improvement loans, all of which Notable makes available for purchase by the Company. No additional cost outside the sale of the loan was contemplated by the Notable MLPA. The services provided by Notable are not integral to the Company’s technology platform and expenses incurred are not material to the Company. As of September 30, 2023 and December 31, 2022, the Company had $6.8 million and $8.3 million of unsecured home improvement loans from Notable, which are included within mortgage loans held for sale, at fair value on the condensed consolidated balance sheets.
Truework—The Company is a party to a data analytics services agreement with Zethos, Inc., (“Truework”), an entity in which Vishal Garg, the Chief Executive Officer of the Company, is an investor. Under the data analytics services agreement, Truework provides digital Verification of Employment (“VOE”) and Verification of Income (“VOI”) services to the Company during the mortgage loan origination process to confirm the employment and income of borrowers seeking a mortgage. This is data required for underwriting mortgages to the specifications of FNMA, FMCC, and private loan purchasers. These data services are standard product offerings of Truework, which they offer to a number of mortgage lenders. Truework is one of multiple vendors the Company uses for VOE and VOI services, the largest other one being The Work Number by Equifax. The Company uses the two vendors interchangeably based on estimated lowest cost and turnaround time. The Company originally entered into the data services agreement in September 2020, and amended the agreement in October 2021 to run until September 30, 2023. In connection with usage of the services, the Company reduced the accrued expense of $8.6 thousand for the three months ended September 30, 2023, which is included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company incurred expenses of $414.3 thousand for the three months ended September 30, 2022, which is included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive. The Company reduced the accrued expense of $7.4 thousand for the nine months ended September 30, 2023 and recorded the expense of $414.3 thousand nine months ended September 30, 2022, respectively, which is included within mortgage platform expenses on the condensed consolidated statements of operations and comprehensive loss. The Company recorded a payable of $101.2 thousand and $16.2 thousand included within other liabilities on the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.
Share Repurchases—During the first quarter of 2022, Better repurchased from former member of the Better Board, Gabrielle Toledano, a total of 33,995 shares of Better’s common stock for an aggregate purchase price of $254,154 to defray taxes associated with vesting of equity awards of such shares. Ms. Toledano subsequently resigned from the Better Board in April 2022.
During the third quarter of 2022, Better repurchased from General Counsel and Chief Compliance Officer Paula Tuffin a total of 82,527 shares of Better common stock for an aggregate purchase price of $399,600 to defray taxes associated with vesting of equity awards of such shares.
Notes Receivable from Stockholders—The Company, previously at times, entered into promissory note agreements with certain employees for the purpose of financing the exercise of the Company’s stock options. These employees may have the ability to use the promissory notes to exercise stock options that have not yet been vested by the respective employees. Interest is compounded and accrued based on any unpaid principal balance and is due upon the earliest of maturity, 120 days after an employee leaves the Company, the date the employee sells shares acquired through the promissory note agreement without prior written consent of the Company, or the day prior to the date that any change in the employee’s status would cause the loan to be a prohibited extension or maintenance of credit under Section 402 of the Sarbanes-Oxley Act. The Company no longer enters into promissory note agreements for the purpose of financing the exercise of the Company’s stock options and no longer allows for the early exercise of stock options
The Company included $10.4 million and $53.9 million of the notes, which include the outstanding principal amount and accrued interest, within notes receivable from stockholders in stockholders’ equity (deficit) on the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively. The balance as of September 30, 2023 does not include any promissory notes due from directors and officers of the Company. The balance as of December 31, 2022 includes $43.6 million of promissory notes due from directors and officers of the Company, of which $40.2 million was due from Vishal Garg. During the three months ended September 30, 2023, the Company reduced interest income from the promissory notes of $0.5 million, and during three months ended September 30, 2022, the Company recognized interest income from the promissory notes of $0.1 million which is included within interest income on the condensed consolidated statements of operations and comprehensive loss. During the nine months ended September 30, 2023, the Company reduced interest income from the promissory notes of $0.3 million, and nine months ended September 30, 2022, the company recognized interest income from the promissory notes of $0.3 million, which is included within interest income on the condensed consolidated statements of operations and comprehensive loss. The notes range in maturity from May 2025 to January 2026 and include interest rates ranging from 0.5% to 2.5% per annum. See Note 17 for further details on the accounting for notes receivable from stockholders.
In August 2023, Better derecognized $46.4 million related to the partial forgiveness by Better to executive officers Vishal Garg, Kevin Ryan, and Paula Tuffin for their outstanding notes and cancellation of the shares collateralizing the notes to satisfy the remaining principal which was forgiven and cancelled upon the Closing. Additionally, for the nine months ended September 30, 2023, the Company recognized additional compensation expense of $0.4 million to certain of the Company's executives in connection with taxes due for capital gains on the sale of shares for settlement of the notes outstanding.
12. RELATED PARTY TRANSACTIONS
The Company has entered into a number of commercial agreements with related parties, which management believes provide the Company with products or services that are beneficial to its commercial objectives. Often these products and services have been tailored to the Company’s specific needs or are part of new pilot programs, both for the Company and the counterparty, for which there are not clear alternative vendors offering comparable services to compare pricing with. It is reasonable to assume that none of these related party commercial agreements were structured at arm’s length and therefore may be beneficial to the counterparty.
1/0 Capital—The Company is a party to an employee and expense allocation agreement with 1/0 Capital, LLC (“1/0 Capital”), an entity affiliated with 1/0 Real Estate, LLC (“1/10 Real Estate”) (an entity wholly owned by 1/0 Holdco, in which Vishal Garg, the Chief Executive Officer of the Company, and the Company’s executive officers each hold a more than five percent ownership interest). Under the employee and expense allocation agreement, 1/0 Capital provides the Company access to certain employees in exchange for reasonable consideration in the form of
fees based on their time, as well as IT support services. Any intellectual property created under the agreement by 1/0 Capital employees working on behalf of the Company belongs to the Company. The term of the agreement will continue in perpetuity. The services provided by 1/0 Capital are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with this agreement, the Company incurred gross expenses of $0.5 million and $1.5 million during the years ended December 31, 2022 and 2021, respectively. As part of this agreement, the Company may provide access to certain of its employees for use by 1/0 Capital which reduced the amounts owed to 1/0 Capital by $18.2 thousand and $0.2 million for the years ended December 31, 2022 and 2021, respectively. The Company recorded net expenses of $0.4 million and $1.3 million for the years ended December 31, 2022 and 2021, respectively, and are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss. The Company is invoiced on a net basis and recorded a $177.0 thousand payable and a $6.1 thousand receivable as of December 31, 2022 and 2021, respectively, included within other liabilities and other receivables, net, respectively, on the consolidated balance sheets.
TheNumber—The Company originally entered into a data analytics services agreement in August 2016 with TheNumber, LLC (“TheNumber”), an entity affiliated with both Vishal Garg, the Chief Executive Officer, and 1/0 Real Estate.
In September 2021, the Company and TheNumber entered into a technology integration and license agreement, which was amended in November 2021, to develop a consumer credit profile technology which is to be launched in three stages. The first stage involves testing TheNumber’s limited graph Application Programming Interface (“API”) in a testing environment with test data. The second stage involves data such as credit, income, and assets of staged borrowers meeting certain measures of speed and performance. The third stage requires TheNumber to run the product and serve all borrowers on the production side as well as provide data to the Company from its rich data set. The listed services provided by TheNumber are lead generation, market rate analysis, lead growth analysis, property listing analysis, automated valuation models, and financial risk analysis. Both parties agreed to jointly develop all aspects of this program, and the agreement provides for the utilization of TheNumber employees by the Company. Subsequent to December 31, 2022, the agreement was extended into 2023. The services provided by TheNumber are not integral to the Company’s technology platform and amounts incurred are not material to the Company. In connection with these agreements, the Company paid expenses of $1.4 million and $0.1 million for the years ended December 31, 2022 and 2021 respectively, which are included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss and a payable of $0.2 million and none as of December 31, 2022 and 2021, respectively, within other liabilities on the consolidated balance sheets.
Holy Machine—In January 2018, the Company entered into a consulting agreement (the “2018 Holy Machine Consulting Agreement”) with Holy Machine LLC (“Holy Machine”) an entity controlled by Aaron Schildkrout, a member of the Company’s board of directors (the “Board of Directors”) at such time. During the year ended December 31, 2022, Aaron Schildkrout resigned from the Board of Directors on June 8, 2022 and as an advisor shortly thereafter. The 2018 Holy Machine Consulting Agreement provided for consulting services related to executive recruiting and such other services as mutually agreed upon, and grants Holy Machine 603,024 options with a 4-year vesting period and no cliff at two times the then fair market value of the Company. Further, any inventions, discoveries, improvements or works of authorship made by Holy Machine and the results thereof that may be considered works for made for hire shall be assigned to the Company and be the Company’s exclusive property to which the Company has the exclusive right to obtain and own all copyrights. The term of the agreement ended in November 2022, although any party may terminate the agreement at any time. In May 2020, the parties entered into an amendment to the 2018 Holy Machine Consulting Agreement to insert terms relating to compliance with applicable laws, contracts, and indemnification among the parties. No other terms of the 2018 Holy Machine Consulting Agreement were altered.
In July 2020, the Company and Holy Machine entered into a new consulting agreement (the “2020 Holy Machine Consulting Agreement”). The 2020 Holy Machine Consulting Agreement grants Holy Machine (i) the option to purchase 250,000 shares of the Company’s common stock, with an accompanying stock option agreement having a term of 10 years, at the then fair market value at the time of the grant and (ii) the option to purchase 250,000 shares of the Company’s common stock, with an accompanying stock option agreement having a term of 10 years, with an exercise price per share equal to (a) $15.71 minus (b) the then current fair market value at the time of grant. Both tranches of granted options vest each month on the same day of the month as the vesting commencement
date of April 18, 2020, subject to Holy Machine continuing to provide consulting services through each such date, and both have change in control vesting provisions which would result in 100% of unvested options vesting should there be a change of control of the Company, as defined in such a stock option agreement. The term will continue until the services are completed or terminated. The services provided by Holy Machine are not integral to the Company’s technology platform and amounts incurred are not material to the Company. The Company recorded $0.1 million and $0.3 million of expenses during the years ended December 31, 2022 and 2021, respectively, which are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss and a payable of none and $50.0 thousand as of December 31, 2022 and 2021, respectively, within other liabilities on the consolidated balance sheets.
Embark—In November 2020, the Company entered into a license agreement with Embark Corp (“Embark”), a company for which Vishal Garg served as a director and Vishal Garg’s spouse serves as chief executive officer, and in which Vishal Garg and his spouse collectively hold a 25.8% ownership interest. Vishal Garg resigned from the board of directors effective October 1, 2021. The agreement provides the Company the use of one floor of office space in midtown Manhattan, New York City, for a period of 15 months. In connection with the agreement, the Company is obligated to pay Embark $127.0 thousand annually plus applicable taxes and utilities. For the year ended December 31, 2021, the Company incurred $80.7 thousand of expenses under the agreement which are included within general and administrative expenses on the statements of operations and comprehensive loss. The agreement was terminated in June 2021.
Notable—In October 2021, the Company entered into a private label and consumer lending program agreement (the “2021 Notable Program Agreement”) to provide home improvement lines of credit to qualified borrowers of the Company with Notable Finance, LLC (“Notable”), an entity in which Vishal Garg and 1/0 Real Estate collectively hold a majority ownership interest. The program is intended to be used by qualified customers of the Company for home improvement purchases (the “Home Improvement Line of Credit”).
This program required Notable to originate and service the loan and in consideration, the Company pays Notable $600 for each loan originated pursuant to the agreement. In connection with the 2021 Notable Program Agreement, Notable provided a branded prepaid card, similar to a gift card, which converts into an unsecured line of credit in certain circumstances.
For the years ended December 31, 2022 and 2021, the Company incurred $0.1 million and $0.6 million, respectively, of expenses under the agreement, of which $42.9 thousand and none are included within mortgage platform expenses, and $55.3 thousand and $0.6 million are included within marketing and advertising expenses on the consolidated statements of operations and comprehensive loss. The Company recorded a payable of $15.0 thousand and $0.3 million included within other liabilities on the consolidated balance sheets as of December 31, 2022 and 2021, respectively.
In January 2022, Better Trust I, a subsidiary of the Company entered into a master loan purchase agreement (the “Notable MLPA”) with Notable to purchase from Notable up to $20.0 million of unsecured home improvement loans underwritten and originated by Notable for the Company’s customers. Under the Notable MLPA, Notable originated home improvement loans, all of which Notable makes available for purchase by the Company. No additional cost outside the sale of the loan was contemplated by the Notable MLPA. The services provided by Notable are not integral to the Company’s technology platform and expenses incurred are not material to the Company. As of December 31, 2022, the Company had $8.3 million of unsecured home improvement loans from Notable, which are included within mortgage loans held for sale, at fair value on the consolidated balance sheets.
Truework—The Company is a party to a data analytics services agreement with Zethos, Inc., (“Truework”), an entity in which Vishal Garg, the Chief Executive Officer, is an investor. Under the data analytics services agreement, Truework provides digital Verification of Employment (VOE) and Verification of Income (VOI) services to the Company during the mortgage loan origination process to confirm the employment and income of borrowers seeking a mortgage. This is data required for underwriting mortgages to the specifications of Fannie Mae, Freddie Mac, and private loan purchasers. These data services are standard product offerings of Truework, which they offer to a number of mortgage lenders. Truework is one of multiple vendors the Company uses for VOE and VOI services, the largest other one being The Work Number by Equifax. The Company uses the two vendors
interchangeably based on estimated lowest cost and turnaround time. The Company originally entered into the data services agreement in June 2020, and amended the agreement in October 2021 to run until September 30, 2023. In connection with usage of the services, the Company incurred expenses of $0.5 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively, which is included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss and a payable of $16.2 thousand and $19.2 thousand included within other liabilities on the consolidated balance sheets as of December 31, 2022 and 2021, respectively.
Share Repurchases—During the first quarter of 2022, the Company repurchased from former director Gabrielle Toledano a total of 11,122 shares of common stock for an aggregate purchase price of $254,154 to defray taxes associated with vesting of equity awards of such shares. Ms. Toledano subsequently resigned from the Company’s Board in April 2022.
During the second quarter of 2022, the Company repurchased from General Counsel and Chief Compliance Officer Paula Tuffin a total of 27,000 shares of common stock for an aggregate purchase price of $399,600 to defray taxes associated with vesting of equity awards of such shares.
Notes Receivable from Stockholders—The Company, at times, enters into promissory note agreements with certain employees for the purpose of financing the exercise of the Company’s stock options. These employees may have the ability to use the promissory notes to exercise stock options that have not yet been vested by the respective employees. Interest is compounded and accrued based on any unpaid principal balance and is due upon the earliest of maturity, 120 days after an employee leaves the Company, the date the employee sells shares acquired through the promissory note agreement without prior written consent of the Company, or the day prior to the date that any change in the employee’s status would cause the loan to be a prohibited extension or maintenance of credit under Section 402 of the Sarbanes Oxley Act of 2002. The Company included $53.9 million and $38.6 million of the notes, which include the outstanding principal amount and accrued interest, within notes receivable from stockholders in stockholders’ equity (deficit) on the consolidated balance sheets as of December 31, 2022 and 2021, respectively. The balance as of December 31, 2022 includes $43.6 million of promissory notes due from directors and officers of the Company, of which $40.2 million is due from Vishal Garg. The balance as of December 31, 2021 includes $33.9 million of promissory notes due from directors and officers of the Company, of which $29.9 million was due from Vishal Garg. During the years ended December 31, 2022 and 2021, the Company recognized interest income from the promissory notes of $0.7 million and $0.3 million, respectively, which is included within interest income on the consolidated statements of operations and comprehensive loss. The notes range in maturity from May 2025 to January 2026 and include interest rates ranging from 0.5% to 2.5% per annum.
Aurora Acquisition Corp  
RELATED PARTY TRANSACTIONS  
RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS
Founder Shares
The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares (or Novator Private Placement Shares) until the earlier to occur of: (A) one year after the completion of a Business Combination; and (B) subsequent to a Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 3,500,000 Novator Private Placement Units at a price of $10.00 per Novator Private Placement Unit in a private placement to the Sponsor, directors, and executive officers of the Company, generating gross proceeds of $35,000,000. In addition, the Company consummated the sale of 4,266,667 Private Placement Warrants at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor and certain of the Company’s directors and executive officers, generating gross proceeds of $6,400,000, which is described in Note 3.
Prior to the closing of Aurora’s Initial Public Offering, the Sponsor sold an aggregate of 1,407,813 Class B ordinary shares (Founder Shares) to certain independent directors. All Founder Shares are subject to transfer restrictions which limit the ability of the independent directors to transfer or otherwise deal with such shares, except in certain limited circumstances such as transfers to affiliates and the gifting to immediate family members. The Founder Shares were effectively sold to the independent directors subject to a performance condition - i.e., the consummation of a business combination, which is subject to certain conditions to closing, such as, for example, approval by the Company’s shareholders.
The fair value of the shares on the date they were transferred to the independent directors was estimated to be approximately $6,955,000, however if the performance condition is not satisfied the fair value of the shares transferred is zero.
Compensation expense related to the Founder Shares is recognized only when the performance condition is probable of achievement under the applicable accounting literature, hence recognition of compensation cost is deferred until consummation of the business combination. This position is based on the principle established in the guidance on business combinations in ASC 805-20-55-50 and 55-51. The Company believes a similar approach should be applied under ASC 718 and that a contingent event for realization of the compensation expense is the business combination.
Pre-Closing Bridge Notes
On November 2, 2021, Aurora entered into a convertible bridge note purchase agreement (the “Pre-Closing Bridge Note Purchase Agreement”), dated as of November 30, 2021, with Better, SB Northstar LP and the Sponsor (SB Northstar LP and the Sponsor, together, the “Purchasers”). Under the Pre-Closing Bridge Note Purchase Agreement, Better issued $750,000,000 of bridge notes (the “Pre-Closing Bridge Notes”) that convert to shares of Class A common stock of Aurora (post-proposed Business Combination and domestication) in connection with the closing of the proposed Business Combination, with SB Northstar LP and the Sponsor, as Purchasers, purchasing $650 million and $100 million, respectively, of such Pre-Closing Bridge Notes.
The Pre-Closing Bridge Note Purchase Agreement will result in the issuance of either Better Class A common stock, a new series of preferred stock of Better (as described below), or Better common stock (together, the “Pre-Closing Bridge Conversion Shares”, as applicable) as follows: (i) upon closing of the proposed Business Combination, the Pre-Closing Bridge Notes will convert into shares of Better Class A common stock at a conversion rate of one share per $10 of consideration; (ii) if the closing of the proposed Business Combination does not occur by the September 30, 2023, or in the event of a Corporate Transaction or Merger Withdrawal (each as defined in the Pre-Closing Bridge Note Purchase Agreement) prior to September 30, 2023 or prior to the time when a Pre-Closing Bridge Note may otherwise be converted pursuant to the Pre-Closing Bridge Note Purchase Agreement, the Pre-Closing Bridge Notes will convert into a new series of preferred stock of Better, which series will be identical to Better’s Series D Preferred Stock, provided that the ratchet adjustment provisions relating to Better’s Series D Preferred Stock will not apply, and such series will vote together with Better’s Series D Preferred Stock as a single class on all matters; or (iii) in the event of a termination of the Merger Agreement (a) by Better, arising out of or resulting from breaches on the part of Aurora or the Sponsor, (b) by Better, arising out of or resulting from breaches on the part of Aurora or any Subscriber in connection with any Subscription Agreement or (c) arising out of or resulting from breaches on the part of Aurora, SB Northstar LP or the Sponsor in connection with the Pre-Closing Bridge Note Purchase Agreement or any ancillary agreement, the bridge notes will convert into shares of Better common stock.
On August 26, 2022, Aurora, Better and Novator entered into the First Novator Letter Agreement to, among other things, extend the maturity date of the Pre-Closing Bridge Notes held by the Sponsor to March 8, 2023, subject to SB Northstar LP consenting to extending the maturity of its Pre-Closing Bridge Notes accordingly. On February 7, 2023, Aurora, Better and the Sponsor entered into the Second Novator Letter Agreement, pursuant to which, subject to Better receiving requisite approval therefor (which Better has agreed to use reasonable best efforts to obtain), the parties agreed that, if the proposed Business Combination has not been consummated by the maturity date of the Pre-Closing Bridge Notes, the Sponsor will have the option, without limiting its rights under the Pre-Closing Bridge Note Purchase Agreement to alternatively exchange its Pre-Closing Bridge Notes on or before the maturity date as follows: (x) for a number of shares of Better preferred stock at a conversion price that represents a 50% discount to the $6.9 billion pre-money equity valuation of Better or (y) for a number of shares of the Company’s Class B common stock at a price per share that represents a 75% discount to the $6.9 billion pre-money equity valuation of Better. On the same date, the Sponsor and Better agreed to defer the maturity date of the Pre-Closing Bridge Notes until September 30, 2023.
Director Services Agreement and Director Compensation
On October 15, 2021, Merger Sub entered into a Director’s Services Agreement (the “DSA”) by and among Merger Sub, Caroline Jane Harding, and the Company, effective as of May 10, 2021. On October 29, 2021, the DSA was amended, and the amended DSA was ratified by the Compensation Committee on November 3, 2021. Under the terms of the DSA, Ms. Harding is to provide services to Merger Sub, which include acting as a non-executive director and president and secretary of Merger Sub. Ms. Harding will receive $50,000 in annual payments (and in certain circumstances an incremental hourly fee of $500). In addition, the Company remunerates Ms. Harding $10,000 per month for professional services rendered to our Company in her role as chief financial officer and $15,000 per year and an incremental hourly fee of $500 in certain circumstances for her service on our board of directors. Additionally, in contemplation of her services to Aurora, Ms. Harding received a $50,000 payment on March 21, 2021, and was entitled to receive a $75,000 payment on March 21, 2023, which was paid on April 11, 2023. As of June 30, 2023 and December 31, 2022, $300,000 and $87,875 was accrued, respectively, and as of June 30, 2023 and 2022, $492,500 and $117,500 was expensed for above services, respectively. If we do not have sufficient funds to make the payments due to Ms. Harding as set forth herein professional services provided by her, we may borrow funds from our sponsor or an affiliate of the initial shareholders or certain of our directors and officers to enable us to make such payments.
Related Party Merger Agreement
On May 10, 2021, the Company entered into the Merger Agreement, by and among the Company, Merger Sub, and Better, relating to, among other things, (i) each of the mergers of (x) Merger Sub, with and into Better, with Better surviving the merger as a wholly owned subsidiary of Aurora (the “First Merger”), and (y) Better with and into Aurora, with Aurora surviving the merger (together with the First Merger, the “Mergers”), and (ii) as a condition to the effectiveness of the Mergers, the proposal of the Company to change its jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and domesticating as a Delaware corporation pursuant to Section 388 of the General Corporation Law of the State of Delaware (the “Domestication”), subject to the approval thereof by the shareholders of the Company.
On October 27, 2021, Aurora entered into Amendment No. 1 (“Amendment No. 1”) to the Merger Agreement, by and among Aurora, Merger Sub and Better. Pursuant to Amendment No. 1, the parties agreed to, among other things, (i) eliminate the reference to a letter of transmittal in the exchange procedures provisions of the Merger Agreement and (ii) amend the proposed form of Certificate of Incorporation of Better Home & Finance Holding Company to include the lock-up provision applicable to stockholders that beneficially owned greater than 1% of Better capital stock as of the execution date of the Merger Agreement that was previously contemplated to be included in a letter of transmittal.
On November 9, 2021, Aurora entered into Amendment No. 2 (“Amendment No. 2”) to the Merger Agreement, by and among, Aurora, Merger Sub and Better. Amendment No. 2 includes a further amendment to the proposed form of Certificate of Incorporation of Better Home & Finance Holding Company to eliminate the lock-up provision that was applicable to stockholders that beneficially owned greater than 1% of Better capital stock as of the execution date of the Merger Agreement that have not already signed the Better Holder Support Agreement (as defined in the Merger Agreement).
On November 30, 2021, Aurora entered into Amendment No. 3 (“Amendment No. 3”) to the Merger Agreement, by and among, Aurora, Merger Sub and Better. Pursuant to Amendment No. 3, among other things, the parties (i) adjusted the mix of consideration to be received by stockholders of Better, (ii) extended the outside date pursuant to which the parties may elect to terminate the Merger Agreement in accordance with its terms from February 12, 2022 to September 30, 2022 (subject to extensions relating to specified regulatory approvals), and (iii) provided for certain additional amendments consistent with the foregoing changes and changes contemplated by certain other documents previously described and filed by Aurora in its Current Report on Form 8-K on December 2, 2021, including a bridge note purchase agreement, amendments to certain existing subscription agreements, and termination of the redemption subscription agreement, all as described therein.
On August 26, 2022, Aurora entered into Amendment No. 4 by and among, Aurora, Merger Sub and Better. Pursuant to Amendment No. 4, the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) to March 8, 2023.
In consideration of extending the Agreement End Date, Better will reimburse Aurora for certain reasonable and documented expenses in an aggregate sum not to exceed $15,000,000. The reimbursement payments are structured in three tranches. The first payment of $7,500,000 was made within 5 business days after the execution of Amendment No. 4, the second payment of $3,750,000 was made on February 6, 2023 and, on April 4, 2023, Better transferred the third tranche of $3,750,000 (net of the accounts payable amount that was owed to a third party provider on behalf of Aurora). Aurora, Merger Sub and Better also agreed to amend the Merger Agreement to provide a waiver from the exclusivity provisions thereof to allow Better to discuss alternative financing structures with SB Northstar LP.
The Company has treated the inflow of cash with an offsetting liability that is considered the Deferred Credit Liability within the financial statements, in the way relevant fees are repaid by the Company before the IPO as this cash was not a capital contribution from the Sponsor, but merely a reimbursement from Better for expenses paid by the Company. As the merger has not yet occurred as of June 30, 2023, Better will be responsible for handling the equity effect once the merger occurs and reduce the liability of the combined entity. In the event of the merger or liquidation, the liability will be extinguished on Company’s financial statements.
In addition, on February 7, 2023, Aurora, the Sponsor and Better entered into the Second Novator Letter Agreement, whereby Better agreed to reimburse Aurora for one-half of its reasonable and documented fees and expenses in connection with regulatory matters arising out of or relating to the transactions contemplated by the Merger Agreement on or after the date thereof, in an aggregate amount not to exceed $2,500,000, structured in two tranches to be paid on each of June 1, 2023 and September 1, 2023. As of June 30, 2023, Better has not yet reimbursed the first payment due on June 1, 2023 in the amount of $1,250,000, so Aurora has a receivable of $1,250,000.
On February 24, 2023, Aurora, Merger Sub and Better entered into Amendment No. 5 to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) from March 8, 2023 to September 30, 2023.
On June 23, 2023, Aurora, Merger Sub and Better entered into Amendment No. 6, which amended the Proposed Form of Certificate of Incorporation upon Domestication at Exhibit A to the Merger Agreement to implement a corrective change to the authorized share capital of the combined company. Specifically, the Form of Certificate of Incorporation was amended in order to: (i) increase the total number of shares of all classes of stock that the combined company will have authority to issue from 3,250,000,000 to 3,400,000,000; (ii) increase the number of shares of Class A common stock that the combined company will have authority to issue from 1,750,000,000 to 1,800,000,000; and (iii) increase the number of shares of Class B common stock that the combined company will have authority to issue from 600,000,000 to 700,000,000.
Promissory Note from Related Party
On May 10, 2021, the Company issued the Note to the Sponsor (“Payee”), pursuant to which the Company could borrow up to an aggregate principal amount of $2,000,000. The Note was non-interest bearing and payable by check or wire transfer of immediately available funds or as otherwise determined by the Company to such account as the Payee may from time to time designate by written notice in accordance with the provision of the Note. Effective as of the date hereof, this Note amended and restated in its entirety that certain promissory note dated as of December 9, 2020 (the “Prior Note”) issued by the Company to the Payee in the principal amount of $300,000.
On February 23, 2022, the Note was again amended and restated pursuant to which Aurora could borrow an aggregate principal amount of to $4,000,000. Should the Company’s operating costs, in relation to its proposed Business Combination, exceed the amounts still available and not currently drawn under the Note, the Sponsor shall increase the amount available under the Note to cover such costs, subject to an aggregate cap of $12,000,000. This amount was reflective of estimated total costs of the Company through August 15, 2024 in relation to the Business Combination, in the event the Business Combination is unsuccessful. In the event that the Company does not
consummate a Business Combination by September 30, 2023, we can seek a further extension, provided we have our shareholder approval.
On February 8, 2023, we repaid an aggregate principal amount of $2.4 million under the Note. After giving effect to this repayment, the amount outstanding under the Note is $412,395. As of June 30, 2023 and December 31, 2022 the amount outstanding under the Note was $412,395 and $2,812,395, respectively.
RELATED PARTY TRANSACTIONS
Founder Shares
On December 9, 2020, the Sponsor paid $25,000 to cover certain offering and formation costs of the Company in consideration for 5,750,000 shares of Class B ordinary shares (the “Founder Shares”). During February 2021, the Company effectuated a share dividend of 1,006,250 Class B ordinary shares and subsequently issued a cancellation
for 131,250 Class B ordinary shares, resulting in an aggregate of 6,625,000 founder shares issued and outstanding. In March 2021, the Company effectuated a share dividend of 575,000 shares. On May 10, 2021, as a result of the underwriters’ election to partially exercise their over-allotment option, a total of 249,928 Founder Shares were irrevocably surrendered for cancellation and no consideration, so that the number of Founder Shares collectively represented 20% of the Company’s issued and outstanding shares upon the completion of the Initial Public Offering and Novator Private Placement. All share and per-share amounts have been retroactively restated to reflect the share dividend and related cancellation. A portion of the founder shares issued and outstanding were transferred to certain directors of the Company but remain subject to the same conditions and restrictions as apply to those founder shares as held by the Sponsor which are set out in greater detail below.
The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares (or Novator Private Placement Shares) until the earlier to occur of: (A) one year after the completion of a Business Combination; and (B) subsequent to a Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations, or other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 3,500,000 Novator Private Placement Units at a price of $10.00 per Novator Private Placement Unit in a private placement to the Sponsor, directors, and executive officers of the Company, generating gross proceeds of $35,000,000. In addition, the Company consummated the sale of 4,266,667 Private Placement Warrants at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor and certain of the Company’s directors and executive officers, generating gross proceeds of $6,400,000, which is described in Note 4.
On March 2, 2021, the Sponsor transferred 1,407,813 Class B ordinary shares to the executive officers and directors. The agreement with the Sponsor provides that membership interests only be transferred to the executive officers or directors or other persons affiliated with the Sponsor, or in connection with estate planning transfers. The fair value of the shares on the date they were transferred to the independent directors was estimated to be approximately $6,955,000, recognition of compensation cost is deferred until consummation of the business combination. This position is based on the principle established in the guidance on business combinations in ASC 805-20-55-50 and 55-51. The Company believes a similar approach should be applied under ASC 718 and that a contingent event for realization of the compensation expense is the business combination.
Pre-Closing Bridge Notes
On November 2, 2021, Aurora entered into a convertible bridge note purchase agreement (the “Bridge Note Purchase Agreement”), dated as of November 30, 2021, with Better, SB Northstar LP and the Sponsor (SB Northstar LP and the Sponsor, together, the “Purchasers”). Under the Bridge Note Purchase Agreement, Better issued $750,000,000 of bridge notes that convert to shares of Class A common stock of Aurora (post-Proposed Busness Combination and domestication) in connection with the closing of the Proposed Business Combination, with SB Northstar LP and the Sponsor, as Purchasers, purchasing $650 million and $100 million, respectively, of such bridge notes.
The Bridge Note Purchase Agreement will result in the issuance of either Better Class A common stock, a new series of preferred stock of Better (as described below), or Better common stock (together, the “Bridge Conversion Shares”, as applicable) as follows: (i) upon closing of the Proposed Business Combination, the bridge notes will convert into shares of Better Class A common stock at a conversion rate of one share per $10 of consideration; (ii) if the closing of the Proposed Business Combination does not occur by the September 30, 2023, or in the event of a Corporate Transaction or Merger Withdrawal (each as defined in the Bridge Note Purchase Agreement) prior to September 30, 2023 or prior to the time when a bridge note may otherwise be converted pursuant to the Bridge Note Purchase Agreement, the bridge notes will convert into a new series of preferred stock of Better, which series will be identical to Better’s Series D Preferred Stock, provided that the ratchet adjustment provisions relating to Better’s Series D Preferred Stock will not apply, and such series will vote together with Better’s Series D Preferred Stock as
a single class on all matters; or (iii) in the event of a termination of the Merger Agreement (a) by Better, arising out of or resulting from breaches on the part of Aurora or the Sponsor, (b) by Better, arising out of or resulting from breaches on the part of Aurora or any Subscriber in connection with any Subscription Agreement or (c) arising out of or resulting from breaches on the part of Aurora, SB Northstar LP or the Sponsor in connection with the Bridge Note Purchase Agreement or any ancillary agreement, the bridge notes will convert into shares of Better common stock.
On August 26, 2022, Aurora, Better and Novator entered into a letter agreement to, among other things, extend the maturity date of the bridge notes held by the Sponsor to March 8, 2023, subject to SB Northstar LP consenting to extending the maturity of its bridge notes accordingly. On February 7, 2023, Aurora, Better and the Sponsor entered into a further letter agreement, pursuant to which, subject to Better receiving requisite approval therefor (which Better has agreed to use reasonable best efforts to obtain), the parties agreed that, if the Proposed Business Combination has not been consummated by the maturity date of the bridge notes, the Sponsor will have the option, without limiting its rights under the Bridge Note Purchase Agreement to alternatively exchange its bridge notes on or before the maturity date as follows: (x) for a number of shares of Better preferred stock at a conversion price that represents a 50% discount to the $6.9 billion pre-money equity valuation of Better or (y) for a number of shares of the Company’s Class B common stock at a price per share that represents a 75% discount to the $6.9 billion pre-money equity valuation of Better. On the same date, the Sponsor and Better agreed to defer the maturity date of the bridge notes until September 30, 2023.
Director Services Agreement
On October 15, 2021, Merger Sub entered into a Director’s Services Agreement (the “DSA”) by and among Merger Sub, Caroline Jane Harding (the “Director”), and the Company, effective as of May 10, 2021. On October 29, 2021, the DSA was amended, and the amended DSA was ratified by the Compensation Committee on November 3, 2021. Under the terms of the DSA, the Director is to provide services to Merger Sub, which include acting as a non-executive director and president and secretary of Merger Sub. The Director will receive $50,000 in annual payments (and in certain circumstances an incremental hourly fee of $500). For the years ended December 31, 2022 and 2021, the Company recognized $50,000 of expense related to the amended DSA. As of December 31, 2022 and 2021, there were no unpaid amounts related to the amended DSA.
In addition, our Company remunerates the Director $10,000 per month for professional services rendered to our Company in her role as chief financial officer and $15,000 per year and an incremental hourly fee of $500 in certain circumstances for her service on our board of directors. Additionally, Ms. Harding received a $50,000 payment on March 21, 2021 in contemplation of her services to Aurora and will receive a $75,000 payment on the earlier of March 21, 2023 or the date on which Aurora is liquidated. As of December 31, 2022 and 2021, $87,875 and $100,000 was accrued and for the years ended December 31, 2022 and 2021, $222,875 and $390,000 was expensed for these services. If we do not have sufficient funds to make the payments due to Ms. Harding as set forth herein professional services provided by her, we may borrow funds from our sponsor or an affiliate of the initial shareholders or certain of our directors and officers to enable us to make such payments.
Related Party Merger Agreement and Promissory Note
On August 26, 2022, Aurora, Merger Sub and Better entered into Amendment No.4 to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date from September 30, 2022 (as defined in the Merger Agreement) to March 8, 2023. On February 24, 2023, Aurora, Merger Sub and Better entered into Amendment No. 5 to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) from March 8, 2023 to September 30, 2023.
In consideration of extending the Agreement End Date, Better will reimburse Aurora for certain reasonable and documented expenses in an aggregate sum not to exceed $15,000,000. The reimbursement payments are structured in three tranches. The first payment of $7,500,000 was made within 5 business days after the execution of Amendment No. 4, the second payment of $3,750,000 was made on February 6, 2023 and the third payment of up to $3,750,000 will be paid on April 1, 2023. Aurora, Merger Sub and Better also agreed to amend the Merger
Agreement to provide a waiver from the exclusivity provisions thereof to allow Better to discuss alternative financing structures with SB Northstar LP.
On May 10, 2021, the Company issued an unsecured promissory note (the “Note”) to the Sponsor (“Payee”), pursuant to which the Company could borrow up to an aggregate principal amount of $2,000,000. The Note is non-interest bearing and payable by check or wire transfer of immediately available funds or as otherwise determined by the Company to such account as the Payee may from time to time designate by written notice in accordance with the provision of the Note. This Note amended and restated in its entirety that certain Promissory Note dated as of December 9, 2020 (the “Prior Note”) issued by the Company to the Payee in the principal amount of $300,000. On February 23, 2022 this note was again amended and restated pursuant to which the Company could borrow up to an aggregate principal amount of $4,000,000.
Should the Company’s operating costs, in relation to its proposed business combination, exceed the amounts still available and not currently drawn under the promissory note, the Sponsor shall increase the amount available under the promissory note to cover such costs, subject to an aggregate cap of $12,000,000. This amount was reflective of estimated total costs of the Company through November 15, 2023 in relation to the business combination, in the event the business combination is unsuccessful. In the event that the Company does not consummate a Business Combination by September 30, 2023, we can seek a further extension (with no limit to such extension) provided we have our shareholder approval. As of December 31, 2022 and 2021 the amount outstanding under the Note was $2,812,395 and $1,412,295.
Capital Contribution from Sponsor
In July of 2021, the Sponsor paid an SEC filing fee of approximately $669,000 on behalf of the Company. The Company accounted for the filing fee as an expense incurred for the period, as well as a capital contribution from the Sponsor
v3.23.4
COMMITMENTS AND CONTINGENCIES
 9 Months Ended
Sep. 30, 2023
COMMITMENTS AND CONTINGENCIES  
COMMITMENTS AND CONTINGENCIES
12. Commitments and Contingencies
Litigation—The Company, among other things, engages in mortgage lending, title and settlement services, and other financial technology services. The Company operates in a highly regulated industry and may be subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies. While the ultimate outcome of these matters cannot be predicted with certainty due to inherent uncertainties in litigation, management is of the opinion that these matters will not have a material impact on the condensed consolidated financial statements of the Company. The Company accrues for losses when they are probable to occur and such losses are reasonably estimable, and discloses pending litigation if the Company believes a possibility exists that the litigation will have a material effect on its financial results. Legal costs expected to be incurred are accounted for as they are incurred.
The Company is currently a party to pending legal claims and proceedings regarding an employee related labor dispute brought forth during the third quarter of 2020. The dispute alleges that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California and the State of Florida. The case is still in its early stages and has not yet reached the class certification stage and as such the ultimate outcome cannot be predicted with certainty due to inherent uncertainties in the legal claims. As part of the dispute, the Company included an estimated liability of $8.4 million as of both September 30, 2023 and December 31, 2022, which is included in accounts payable and accrued expenses on the condensed consolidated balance sheets. No additional expense was accrued for the nine months ended September 30, 2023. During the first quarter of 2023, the Company settled its employee related labor dispute in the State of Florida for an immaterial amount.
In September 2022, the former Head of Sales and Operations of the Company, Sarah Pierce, filed litigation against the Company, the Company’s founder and CEO Vishal Garg, and the Company’s Chief Administrative Officer and Senior Counsel Nicholas Calamari. The complaint alleges several causes of action including: violation of certain state labor laws, breach of fiduciary duty and defamation against Mr. Garg, aiding and abetting breach of fiduciary duty against Mr. Calamari, and intentional infliction of emotional distress against Mr. Garg and Mr. Calamari.
On September 29, 2023, the Court filed an Order granting the Company's motions to dismiss in part and denying the Company’s motions to dismiss in part. The following motions were granted: (i) the Company’s motion to dismiss Ms. Pierce’s Sarbanes-Oxley claim was granted; (ii) the Company’s motion to dismiss Ms. Pierce’s Dodd-Frank claim was granted; (iii) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for breach of fiduciary duty was granted; (iv) the Company's motion to dismiss Ms. Pierce’s defamation claim was granted; (v) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for intentional infliction of emotional distress was granted; (vi) Mr. Garg and Mr. Calamari’s motion to dismiss Ms. Pierce’s claim for tortious interference with contract was granted; and (vii) the Company’s motion to dismiss Ms. Pierce’s breach of contract claim was granted. The Company’s motion to dismiss Ms. Pierce's claim of retaliation was dismissed. Mr. Garg’s motion to dismiss Ms. Pierce’s defamation claim was denied, and the Company’s motion to dismiss Ms. Pierce’s defamation claim under the theory of respondeat superior was denied. The Company intends to vigorously defend this action.
Regulatory Matters—In the third quarter of 2021, following third-party audits of samples of loans produced during the fiscal years 2018, 2019, and 2021, the Company became aware of certain TILA-RESPA Integrated Disclosure (“TRID”) defects in the loan production process that resulted in the final closing costs disclosed in the closing disclosure, in some instances, being greater than those disclosed in the loan estimate. Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers. As of September 30, 2023 and December 31, 2022, the Company included an estimated liability of $9.3 million and $11.9 million, respectively, within accounts payable and accrued expenses on the condensed consolidated balance sheets. For the three months ended September 30, 2023, the Company reduced the accrual for these potential TRID defects by $3.0 million and is included within mortgage platform expenses in the condensed consolidated statement of operations and comprehensive loss. For the nine months ended September 30, 2023, the Company reduced the accrual for these potential TRID defects by $2.7 million and is included within mortgage platform expenses in the condensed consolidated statement of operations and comprehensive loss. This accrual is the Company’s best estimate of potential exposure on the larger population of loans based on the results obtained by the audited sample. The accrued amounts are for estimated refunds potentially due to consumers for TRID tolerance errors for loans produced from 2018 through 2022. The Company completed a TRID audit of 2022 files and is continuing to remediate TRID tolerance defects as necessary.
In the second quarter of 2022, Better and Aurora received a voluntary request for documents from the Division of Enforcement of the Securities and Exchange Commission (the “SEC”) and subsequently received several subpoenas, indicating that it is conducting an investigation relating to Aurora and Better to determine if violations of the federal securities laws had occurred. The SEC requested that Aurora and Better provide the SEC with certain information and documents. The voluntary and subpoena requests covered, among other things, certain aspects of Better’s business and operations, certain matters relating to certain actions and circumstances of the Company’s founder and Chief Executive Officer, Vishal Garg, and his other business activities, related party transactions, public statements made about the Company’s proprietary mortgage platform, Better’s financial condition, and allegations made in litigation filed by Sarah Pierce, Better’s former Head of Sales and Operations. On August 3, 2023, the SEC Division of Enforcement informed Aurora and Better that it has concluded its previously announced investigation and that the SEC does not intend to recommend an enforcement action against Aurora or Better.
Loan Commitments—The Company enters into IRLCs to fund mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. As of September 30, 2023 and December 31, 2022, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $211.9 million and $225.4 million, respectively. The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of September 30, 2023 and December 31, 2022, respectively, on the condensed consolidated balance sheets. See Note 15.
Forward Sale Commitments—In the ordinary course of business, the Company enters into contracts to sell existing LHFS or loans committed but yet to be funded into the secondary market at specified future dates. As of September 30, 2023 and December 31, 2022, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $294.0 million and $422.0 million, respectively. The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of
September 30, 2023 and December 31, 2022, respectively, on the condensed consolidated balance sheets. See Note 15.
Concentrations—See below for areas considered to be concentrations of credit risk for the Company:
Significant loan purchasers are those which represent more than 10% of the Company’s loan volume. During the three months ended September 30, 2023, the Company had three loan purchasers that accounted for 56%, 22% and 11% of loans sold by the Company. During the three months ended September 30, 2022, the Company had one loan purchaser that accounted for 59% of loans sold by the Company. During the nine months ended September 30, 2023 and 2022, the Company had one loan purchaser that accounted for 68% and 65% of loans sold by the Company.
Concentrations of credit risk associated with the LHFS carried at fair value are limited due to the large number of borrowers and their dispersion across many geographic areas throughout the United States. As of September 30, 2023, the Company originated 12% and 11% of its LHFS secured by properties in Texas and Florida, respectively. As of December 31, 2022, the company originated 11% of its LHFS secured by properties in each of California and Texas and 10% of its LHFS secured by properties in Florida.
The Company maintains cash and cash equivalent balances at various financial institutions. Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million. As of September 30, 2023 and December 31, 2022, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.
Advanced Loan Origination Fees (Deferred Revenue)—Deferred revenue primarily consists of advance payments for loan origination and servicing on behalf of an integrated relationship partner. The total advance was for $50.0 million and were recognized in revenue starting in August 2022 through August 2023. The Company must repay the advance in three tranches, $20.0 million due December 2022, $15.0 million due April 2023, and $15.0 million due October 2023, each to be reduced by the amount of loan origination revenue earned between the tranches. The Company repaid $12.9 million of the first tranche after reductions for loan origination revenue earned within mortgage platform revenue from August 2022 through December 31, 2022. In April 2023, the Company repaid $12.7 million of the second tranche after reductions for loan origination revenue earned within mortgage platform revenue from January 2023 through March 2023. As of September 30, 2023 and December 31, 2022, the Company included deferred revenue of $12.9 million and $30.0 million, respectively within other liabilities on the condensed consolidated balance sheets after reductions for loan origination revenue earned within mortgage platform revenue. Subsequent to September 30, 2023, in October 2023, the Company paid off $12.9 million of the third tranche.
Escrow Funds—In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement. The Company administers escrow deposits representing undisbursed amounts received for payment of property taxes, insurance and principal, and interest on mortgage loans held for sale. The Company also administers customer deposits in relation to other non-mortgage products and services that the Company offers. These funds are shown as restricted cash and there is a corresponding escrow payable on the consolidated balance sheet, as they are being held on behalf of the borrower or customer. The balance in these accounts as of September 30, 2023 and December 31, 2022 was $3.2 million and $8.0 million, respectively. In some instances the Company may administer funds that are legally owned by a third-party which are excluded from the condensed consolidated balance sheets which amounted to none and $0.3 million as of September 30, 2023 and December 31, 2022, respectively.
Customer Deposits—In relation to the Company’s banking activities tied to the Birmingham acquisition in the U.K., the Company offers individual savings accounts and other depository products with differing maturities and interest rates to its customers. The balance of customer deposits as of September 30, 2023 and December 31, 2022 was $9.9 million and none, respectively on the condensed consolidated balance sheets.
13. Risks and Uncertainties
In the normal course of business, companies in the mortgage lending industry encounter certain economic and regulatory risks. Economic risks include credit risk and interest rate risk, in either a rising or declining interest rate environment. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which loans are being held for sale by the Company.
Interest Rate Risk—The Company is subject to interest rate risk in a rising interest rate environment, as the Company may experience a decrease in loan production, as well as decreases in the fair value of LHFS, loan applications in process with locked-in rates, and commitments to originate loans, which may negatively impact the Company’s operations. To preserve the value of such fixed-rate loans or loan applications in process with locked-in rates, agreements are executed for best effort or mandatory loan sales to be settled at future dates with fixed prices. These loan sales take the form of short-term forward sales of mortgage-backed securities and commitments to sell loans to loan purchasers.
Alternatively, in a declining interest rate environment, customers may withdraw their loan applications that include locked-in rates with the Company. Additionally, when interest rates decline, interest income received from LHFS will decrease. The Company uses an interest rate hedging program to manage these risks. Through this program, mortgage-backed securities are purchased and sold forward.
For all counterparties with open positions as of September 30, 2023, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis. Net settlements entail paying or receiving cash based upon the change in market value of the existing instrument.
The Company currently uses forward sales of mortgage-backed securities, interest rate commitments from borrowers, and mandatory and/or best-efforts forward commitments to sell loans to loan purchasers to protect the Company from interest rate fluctuations. These short-term instruments, which do not require any payments to be paid to the counterparty in connection with the execution of the commitments, are generally executed simultaneously.
Credit Risk—The Company’s hedging program is not designated as formal hedging from an accounting standpoint, contains an element of risk because the counterparties to its mortgage securities transactions may be unable to meet their obligations. While the Company does not anticipate nonperformance by any counterparty, it is exposed to potential credit losses in the event the counterparty fails to perform. The Company’s exposure to credit risk in the event of default by the counterparty is the difference between the contract and the current market price. The Company minimizes its credit risk exposure by limiting the counterparties to well-established banks and securities dealers who meet established credit and capital guidelines.
Loan Repurchase Reserve—The Company sells loans to loan purchasers without recourse. As such, the loan purchasers have assumed the risk of loss or default by the borrower. However, the Company is usually required by these loan purchasers to make certain standard representations and warranties relating to the loan for up to three years post sale. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these loan purchasers for losses. In addition, if loans pay-off within a specified time frame the Company may be required to refund a portion of the sales proceeds to the loan purchasers. The Company repurchased $3.6 million (11 loans) and $37.9 million (82 loans) in unpaid principal balance of loans during the three months ended September 30, 2023 and 2022, respectively, related to its loan repurchase obligations. The Company repurchased $20.8 million (52 loans) and $97.0 million (221 loans) in unpaid principal balance of loans during the nine months ended September 30, 2023 and 2022, respectively, related to its loan repurchase obligations. The Company’s loan repurchase reserve as of September 30, 2023 and December 31, 2022 was $21.8 million and $26.7 million, respectively, and is included within other liabilities on the condensed consolidated balance sheets. The provision for the loan repurchase reserve
is included within mortgage platform expenses on the condensed consolidated statement of operations and comprehensive loss. The following presents the activity of the Company’s loan repurchase reserve:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Loan repurchase reserve at beginning of period$21,832 $21,070 $26,745 $17,540 
Provision866 11,683 178 25,125 
Charge-offs(945)(9,754)(5,170)(19,667)
Loan repurchase reserve at end of period$21,753 $22,999 $21,753 $22,999 
Borrowing Capacity—The Company funds the majority of mortgage loans on a short-term basis through committed and uncommitted warehouse lines as well as from operations for any amounts not advanced by warehouse lenders. As a result, the Company’s ability to fund current operations depends on its ability to secure these types of short-term financings. If the Company’s principal lenders decided to terminate or not to renew any of the warehouse lines with the Company, the loss of borrowing capacity could be detrimental to the Company’s condensed consolidated financial statements unless the Company found a suitable alternative source.
13. COMMITMENTS AND CONTINGENCIES
Litigation—The Company, among other things, engages in mortgage lending, title and settlement services, and other financial technology services. The Company operates in a highly regulated industry and may be subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies. While the ultimate outcome of these matters cannot be predicted with certainty due to inherent uncertainties in litigation, management is of the opinion that these matters will not have a material impact on the consolidated financial statements of the Company. The Company accrues for losses when they are probable to occur and such losses are reasonably estimable, and discloses pending litigation if the Company believes a possibility exists that the litigation will have a material effect on its financial results. Legal costs expected to be incurred are accounted for as they are incurred.
The Company is currently a party to pending legal claims and proceedings regarding an employee related labor dispute brought forth during the third quarter of 2020. The dispute alleges that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California and the State of Florida. The dispute is still in its infancy and the ultimate outcome cannot be predicted with certainty due to inherent uncertainties in the legal claims. As part of the dispute, the Company recorded an estimated liability of $8.4 million and $5.9 million, which is included in accounts payable and accrued expenses on the consolidated balance sheets as of December 31, 2022 and 2021, respectively. Subsequent to December 31, 2022, the Company settled its employee related labor dispute in the State of Florida for an immaterial amount.
In June 2022, the former Head of Sales and Operations of the Company, Sarah Pierce, filed litigation against the Company, the Company’s founder and CEO Vishal Garg, and the Company’s Chief Administrative Officer and Senior Counsel Nicholas Calamari. The complaint alleges several causes of action including: violation of certain state labor laws, breach of fiduciary duty and defamation against Mr. Garg, aiding and abetting breach of fiduciary duty against Mr. Calamari, and intentional infliction of emotional distress against Mr. Garg and Mr. Calamari. In addition, Ms. Pierce claims that she has filed a notice of claim with the Occupational Safety and Health Administration (“OSHA”) against the Company for retaliation in violation of the Sarbanes-Oxley Act which has been denied. The litigation is still in its early stages and as such no amounts have been estimated or accrued for by the Company related to this matter.
Investor Legal Matter—In July 2021, Pine Brook, a current investor in the Company, commenced litigation against the Company among other parties, seeking declaratory judgement in relation to a side letter which was entered into as part of the Series C Preferred Stock issuance by the Company in 2019. The dispute is whether the Company, in connection with the Merger Agreement described in Note 1, would be entitled to trigger a side letter provision allowing the Company to repurchase approximately 1.9 million shares of Series A Preferred Stock for a total price of $1.
On November 1, 2021, the Company and Pine Brook reached a settlement agreement pursuant to which (1) the Company is entitled to exercise its purchase right for half of the 1.9 million shares of Series A Preferred Stock subject to the side letter provision, (2) the Company and Aurora agreed to amend the Merger Agreement (see Note 1) to waive or remove the lock up for holders of 1% or more of the Company’s capital stock, and (3) Mr. Howard Newman immediately resigned from the Company’s board of directors. As a result of the settlement, each party granted one another customary releases.
Regulatory Matters—In September of 2021, the Company received a “Notice of Charges” from a state regulatory agency making several claims against the Company, alleging certain violations of state disclosure, advertising, licensable activity rules, and certain federal disclosure rules. In November 2021, the Company and the state regulatory agency reached a settlement agreement whereby the Company has agreed to pay an immaterial fine and provide additional training to management directly overseeing the origination of mortgage loans for property located in the state. The settlement does not impact the Company’s ability to do business in the state.
In the third quarter of 2021, following third-party audits of samples of loans produced during the fiscal years 2018, 2019, and 2021, the Company became aware of certain TILA-RESPA Integrated Disclosure (“TRID”) defects in the loan production process that resulted in the final closing costs disclosed in the closing disclosure, in some instances, being greater than those disclosed in the loan estimate. Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers. As of December 31, 2022 and 2021, the Company included an estimated liability of $11.9 million and $13.2 million, respectively, within accounts payable and accrued expenses on the consolidated balance sheets. For the year ended December 31, 2022, the Company reduced the estimated liability for these potential TRID defects in the amount of $1.3 million. The reduction of expense for the year ended December 31, 2022 of $1.3 million and the expense for the year ended December 31, 2021 of $13.2 million is included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss. This accrual is the Company’s best estimate of potential exposure on the larger population of loans based on the results obtained by the audited sample. The accrued amounts are for estimated refunds potentially due to consumers for TRID tolerance errors for loans produced from 2018 through 2022. The Company completed a TRID audit of 2022 files and is continuing to remediate TRID tolerance defects as necessary.
In the second quarter of 2022, the Company received a voluntary request for documents from the Division of Enforcement of the Securities and Exchange Commission (“SEC”) and subsequently received several subpoenas, indicating that it is conducting an investigation relating to Aurora and the Company to determine if violations of the federal securities laws have occurred. The SEC has requested that Aurora and the Company provide the SEC with certain information and documents. The voluntary and subpoena requests cover, among other things, certain aspects of the Company’s business and operations, certain matters relating to certain actions and circumstances of the Company’s Founder and CEO and his other business activities, related party transactions, public statements made about the Company’s proprietary mortgage platform, the Company’s financial condition, and allegations made in
litigation filed by Sarah Pierce, the Company’s former Head of Sales and Operations. The Company is cooperating with the SEC. As the investigation is ongoing, it is uncertain how long the investigation will continue or whether, at its conclusion, the SEC will bring an enforcement action against either Aurora or the Company or any of their personnel and, if it does, what remedies it may seek.
Loan Commitments—The Company enters into IRLCs to fund mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. As of December 31, 2022, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $225.4 million. The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of December 31, 2022 and 2021, respectively, on the consolidated balance sheets. See Note 16.
Forward Sale Commitments—In the ordinary course of business, the Company enters into contracts to sell existing LHFS or loans committed but yet to be funded into the secondary market at specified future dates. As of December 31, 2022, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $422.0 million. The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of December 31, 2022 and 2021, respectively, on the consolidated balance sheets. See Note 16.
Concentrations—See below for areas considered to be concentrations of credit risk for the Company:
Significant loan purchasers are those which represent more than 10% of the Company’s loan volume. During the years ended December 31, 2022 and 2021, the Company had one loan purchaser that accounted for 65% and 60% of loans sold by the Company, respectively.
Concentrations of credit risk associated with the LHFS carried at fair value are limited due to the large number of borrowers and their dispersion across many geographic areas throughout the United States. As of December 31, 2022, the Company originated 11% of its LHFS secured by properties in each of Texas and California and 10% of its LHFS secured by properties in Florida. As of December 31, 2021, the Company originated 15% of its LHFS secured by properties in California.
The Company maintains cash and cash equivalent balances at various financial institutions. Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million. As of December 31, 2022 and 2021, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.
As of December 31, 2022, the Company held a cash balance of $0.9 million at Silicon Valley Bank (“SVB”). On March 10, 2023, the California Department of Financial Protection and Innovation declared SVB insolvent and appointed the FDIC as receiver. On March 13, 2023, the FDIC announced that all deposits and substantially all assets of SVB were transferred to a bridge bank, and that all depositors will be made whole. Subsequent to December 31, 2022, the Company transferred cash held at SVB to other financial institutions and does not have any remaining material banking relationship with SVB outside of a standby letter of credit in place with SVB of approximately $6.5 million securing obligations under certain of the Company’s office lease agreements which is classified on the Company’s consolidated balance sheet within prepaid expenses and other assets. The Company does not expect this matter to materially impact its operations or ability to meet its cash obligations.
Escrow Funds—In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement. The Company administers escrow deposits representing undisbursed amounts received for payment of property taxes, insurance and principal, and interest on mortgage loans held for sale. These funds are shown as restricted cash and there is a corresponding escrow payable on the consolidated balance sheet, as they are being held on behalf of the borrower. The balance in these accounts as of December 31, 2022 and 2021 was $8.0 million and $11.6 million, respectively. In some instances the Company may administer funds that are legally owned by a third-party which are excluded from the consolidated balance sheets which amounted to $0.3 million and $2.0 million as of December 31, 2022 and 2021, respectively.
14. RISKS AND UNCERTAINTIES
In the normal course of business, companies in the mortgage lending industry encounter certain economic and regulatory risks. Economic risks include credit risk and interest rate risk, in either a rising or declining interest rate environment. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which loans are being held for sale by the Company.
Interest Rate Risk—The Company is subject to interest rate risk in a rising interest rate environment, as the Company may experience a decrease in loan production, as well as decreases in the fair value of LHFS, loan applications in process with locked-in rates, and commitments to originate loans, which may negatively impact the Company’s operations. To preserve the value of such fixed-rate loans or loan applications in process with locked-in rates, agreements are executed for best effort or mandatory loan sales to be settled at future dates with fixed prices. These loan sales take the form of short-term forward sales of mortgage-backed securities and commitments to sell loans to loan purchasers.
Alternatively, in a declining interest rate environment, customers may withdraw their loan applications that include locked-in rates with the Company. Additionally, when interest rates decline, interest income received from LHFS will decrease. The Company uses an interest rate hedging program to manage these risks. Through this program, mortgage-backed securities are purchased and sold forward.
For all counterparties with open positions as of December 31, 2022, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis. Net settlements entail paying or receiving cash based upon the change in market value of the existing instrument.
The Company currently uses forward sales of mortgage-backed securities, interest rate commitments from borrowers, and mandatory and/or best-efforts forward commitments to sell loans to loan purchasers to protect the Company from interest rate fluctuations. These short-term instruments, which do not require any payments to be paid to the counterparty in connection with the execution of the commitments, are generally executed simultaneously.
Credit Risk—The Company’s hedging program is not designated as formal hedging from an accounting standpoint, contains an element of risk because the counterparties to its mortgage securities transactions may be unable to meet their obligations. While the Company does not anticipate nonperformance by any counterparty, it is exposed to potential credit losses in the event the counterparty fails to perform. The Company’s exposure to credit risk in the event of default by the counterparty is the difference between the contract and the current market price. The Company minimizes its credit risk exposure by limiting the counterparties to well-established banks and securities dealers who meet established credit and capital guidelines.
Loan Repurchase Reserve—The Company sells loans to loan purchasers without recourse. As such, the loan purchasers have assumed the risk of loss or default by the borrower. However, the Company is usually required by these loan purchasers to make certain standard representations and warranties relating to the loan. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these loan purchasers for losses. In addition, if loans pay-off within a specified time frame the Company may be required to refund a portion of the sales proceeds to the loan purchasers. The Company repurchased $110.6 million (262 loans) and $29.1 million (95 loans) in unpaid principal balance of loans during the years ended December 31, 2022 and 2021, respectively related to its loan repurchase obligations. The Company’s loan repurchase reserve is included within other liabilities on the consolidated balance sheets. The provision for the loan repurchase reserve is included within mortgage platform expenses on the consolidated
statements of operations and comprehensive loss. The following presents the activity of the Company’s loan repurchase reserve:
Year Ended December 31,
(Amounts in thousands)20222021
Loan repurchase reserve at beginning of year$17,540 $7,438 
Provision33,518 13,780 
Charge-offs(24,313)(3,678)
Loan repurchase reserve at end of year$26,745 $17,540 
Borrowing Capacity—The Company funds the majority of mortgage loans on a short-term basis through committed and uncommitted warehouse lines as well as from operations for any amounts not advanced by warehouse lenders. As a result, the Company’s ability to fund current operations depends on its ability to secure these types of short-term financings. If the Company’s principal lenders decided to terminate or not to renew any of the warehouse lines with the Company, the loss of borrowing capacity could be detrimental to the Company’s consolidated financial statements unless the Company found a suitable alternative source.
Aurora Acquisition Corp  
COMMITMENTS AND CONTINGENCIES  
COMMITMENTS AND CONTINGENCIES
NOTE 5. COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Registration Rights
Pursuant to a registration and shareholder rights agreement entered into on March 3, 2021, the Sponsor and the Company’s directors and executive officers have rights to require the Company to register any of its securities held by them for resale under the Securities Act. These holders will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities for sale under the Securities Act. In addition, the holders of the Founder Shares, Private Placement Warrants, Novator Private Placement Shares, and warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants, Novator Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
In connection with the IPO, the Company granted the underwriters a 45-day option to purchase up to 3,300,000 additional Units to cover over-allotments, if any, and on March 10, 2021, the Company issued 2,300,287 Units to the underwriters pursuant to such option, at the Initial Public Offering price, less the underwriting discounts and commissions. The Units sold pursuant to the underwriters’ partial exercise of such option were sold at a price of $10.00 per Unit, generating gross proceeds of $23,002,870 to the Company and net proceeds equal to $22,542,813 after the deduction of the 2% underwriting fee.
In addition, the underwriters were entitled to a deferred fee of $0.35 per Unit (including the Units sold in connection with the underwriters’ partial exercise of their over-allotment option) from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
On June 22, 2022, Barclays, resigned from its role as underwriter and financial advisor to Aurora In connection with such resignation, Barclays waived their entitlement to certain fees which would be owed upon completion of the proposed Business Combination, which was comprised of approximately $8.5 million as a deferred underwriting fee and financial advisory fee. Accordingly, the Company derecognized the liability for the deferred underwriting and financial advisory fees in the quarter ending June 30, 2022 that was accrued as of December 31, 2021. As of June 30, 2023, there is no liability for the deferred underwriting or financial advisory fee.
Pre-Closing Bridge Notes
On November 2, 2021, Aurora entered into the Pre-Closing Bridge Note Purchase Agreement, dated as of November 30, 2021, with Better and the Purchasers. Under the Pre-Closing Bridge Note Purchase Agreement,
Better issued $750,000,000 of Pre-Closing Bridge Notes that convert to shares of Class A common stock of Aurora (post-proposed Business Combination and domestication) in connection with the closing of the proposed Business Combination, with SB Northstar LP and the Sponsor, as Purchasers, purchasing $650 million and $100 million, respectively, of such Pre-Closing Bridge Notes.
The Pre-Closing Bridge Note Purchase Agreement will result in the issuance of Pre-Closing Bridge Conversion Shares as follows: (i) upon closing of the proposed Business Combination, the Pre-Closing Bridge Notes will convert into shares of Better Class A common stock at a conversion rate of one share per $10 of consideration; (ii) if the closing of the proposed Business Combination does not occur by the September 30, 2023, or in the event of a Corporate Transaction or Merger Withdrawal (each as defined in the Pre-Closing Bridge Note Purchase Agreement) prior to September 30, 2023 or prior to the time when a Pre-Closing Bridge Note may otherwise be converted pursuant to the Pre-Closing Bridge Note Purchase Agreement, the Pre-Closing Bridge Notes will convert into a new series of preferred stock of Better, which series will be identical to Better’s Series D Preferred Stock, provided that the ratchet adjustment provisions relating to Better’s Series D Preferred Stock will not apply, and such series will vote together with Better’s Series D Preferred Stock as a single class on all matters; or (iii) in the event of a termination of the Merger Agreement (a) by Better, arising out of or resulting from breaches on the part of Aurora or the Sponsor, (b) by Better, arising out of or resulting from breaches on the part of Aurora or any Subscriber in connection with any Subscription Agreement or (c) arising out of or resulting from breaches on the part of Aurora, SB Northstar LP or the Sponsor in connection with the Pre-Closing Bridge Note Purchase Agreement or any ancillary agreement, the bridge notes will convert into shares of Better common stock.
On August 26, 2022, Aurora, Better and Novator entered into the First Novator Letter Agreement to, among other things, extend the maturity date of the Pre-Closing Bridge Notes held by the Sponsor to March 8, 2023, subject to SB Northstar LP consenting to extending the maturity of its Pre-Closing Bridge Notes accordingly. On February 7, 2023, Aurora, Better and the Sponsor entered into the Second Novator Letter Agreement, pursuant to which, subject to Better receiving requisite approval therefor (which Better has agreed to use reasonable best efforts to obtain), the parties agreed that, if the proposed Business Combination has not been consummated by the maturity date of the Pre-Closing Bridge Notes, the Sponsor will have the option, without limiting its rights under the Pre-Closing Bridge Note Purchase Agreement to alternatively exchange its Pre-Closing Bridge Notes on or before the maturity date as follows: (x) for a number of shares of Better preferred stock at a conversion price that represents a 50% discount to the $6.9 billion pre-money equity valuation of Better or (y) for a number of shares of the Company’s Class B common stock at a price per share that represents a 75% discount to the $6.9 billion pre-money equity valuation of Better. On the same date, the Sponsor and Better agreed to defer the maturity date of the Pre-Closing Bridge Notes until September 30, 2023.
Litigation Matters
Aurora and its affiliate, Merger Sub (together, “Aurora”), were named as co-defendants with Better in a lawsuit initially filed in July 2021 by Pine Brook. Pine Brook sought, among other things, declaratory judgments and damages in relation to a side letter agreement that had been entered into with Better in 2019, as well as a lockup provision restricting the transfer of stock after the merger with Better for any holders of 1% or more of Better’s pre-merger shares for a period of 6 months post-merger. Aurora was named as a defendant only with respect to the lockup claims. On November 1, 2021, the parties to the lawsuit entered into a confidential settlement agreement, resolving all claims in the above action, and the action was dismissed with prejudice pursuant to the court’s November 3, 2021 order.
Aurora has also received two demand letters from stockholders of the Company regarding the Company’s registration statement filed with the United States Securities and Exchange Commission in connection with the Business Combination. The stockholders allege that the registration statement omits material information with respect to the Business Combination, and demand that the Company provides corrective disclosures to address the alleged omissions. No lawsuits have been filed in relation to the stockholder demand letters.
In the second quarter of 2022, Aurora received a voluntary request for documents from the Division of Enforcement of the SEC indicating that it is conducting an investigation relating to Aurora and Better to determine if violations of the federal securities laws have occurred. The SEC requested that Better and Aurora provide the SEC
with certain information and documents.On August 3, 2023, SEC staff informed Aurora and Better that they have concluded the investigation and that they do not intend to recommend an enforcement action against Aurora or Better. This notice from the SEC staff was provided under the guidelines set forth in the final paragraph of Securities Act Release No. 5310.
COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Registration Rights
Pursuant to a registration and shareholder rights agreement entered into on March 3, 2021, the Sponsor and the Company’s directors and executive officers have rights to require the Company to register any of its securities held by them for resale under the Securities Act. These holders will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities for sale under the Securities Act. In addition, the holders of the Founder Shares, Private Placement Warrants, Novator Private Placement Shares, and warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants, Novator Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
In connection with the IPO, the Company granted the underwriters a 45-day option to purchase up to 3,300,000 additional Units to cover over-allotments, if any, and on March 10, 2021, the Company issued 2,300,287 Units to the
underwriters pursuant to such option, at the Initial Public Offering price, less the underwriting discounts and commissions. The Units sold pursuant to the underwriters’ exercise of such option were sold at a price of $10.00 per Unit, generating gross proceeds of $23,002,870 to the Company and net proceeds equal to $22,542,813 after the deduction of the 2% underwriting fee.
In addition, the underwriters will be entitled to a deferred fee of $0.35 per Unit (including the Units sold in connection with the underwriters’ partial exercise of their over-allotment option). The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
On June 22, 2022, Barclays resigned from its role as underwriter and financial advisor to the Company. In connection with such resignation, Barclays waived its entitlement to a deferred underwriting fee of $8,505,100 that would be payable at the close of the Business Combination. Accordingly, the Company did not recognize the liability for the deferred underwriting fee as of June 30, 2022. As of December 31, 2022, there is no liability for the deferred underwriting fee.
Pre-Closing Bridge Notes
On November 2, 2021, Aurora entered into a convertible bridge note purchase agreement (the “Bridge Note Purchase Agreement”), dated as of November 30, 2021, with Better, SB Northstar LP and the Sponsor (SB Northstar LP and the Sponsor, together, the “Purchasers”). Under the Bridge Note Purchase Agreement, Better issued $750,000,000 of bridge notes that convert to shares of Class A common stock of Aurora (post-Proposed Busness Combination and domestication) in connection with the closing of the Proposed Business Combination, with SB Northstar LP and the Sponsor, as Purchasers, purchasing $650 million and $100 million, respectively, of such bridge notes.
The Bridge Note Purchase Agreement will result in the issuance of either Better Class A common stock, a new series of preferred stock of Better (as described below), or Better common stock (together, the “Bridge Conversion Shares”, as applicable) as follows: (i) upon closing of the Proposed Business Combination, the bridge notes will convert into shares of Better Class A common stock at a conversion rate of one share per $10 of consideration; (ii) if the closing of the Proposed Business Combination does not occur by the September 30, 2023, or in the event of a Corporate Transaction or Merger Withdrawal (each as defined in the Bridge Note Purchase Agreement) prior to September 30, 2023 or prior to the time when a bridge note may otherwise be converted pursuant to the Bridge Note Purchase Agreement, the bridge notes will convert into a new series of preferred stock of Better, which series will be identical to Better’s Series D Preferred Stock, provided that the ratchet adjustment provisions relating to Better’s Series D Preferred Stock will not apply, and such series will vote together with Better’s Series D Preferred Stock as a single class on all matters; or (iii) in the event of a termination of the Merger Agreement (a) by Better, arising out of or resulting from breaches on the part of Aurora or the Sponsor, (b) by Better, arising out of or resulting from breaches on the part of Aurora or any Subscriber in connection with any Subscription Agreement or (c) arising out of or resulting from breaches on the part of Aurora, SB Northstar LP or the Sponsor in connection with the Bridge Note Purchase Agreement or any ancillary agreement, the bridge notes will convert into shares of Better common stock.
On August 26, 2022, Aurora, Better and Novator entered into a letter agreement to, among other things, extend the maturity date of the bridge notes held by the Sponsor to March 8, 2023, subject to SB Northstar LP consenting to extending the maturity of its bridge notes accordingly. On February 7, 2023, Aurora, Better and the Sponsor entered into a further letter agreement, pursuant to which, subject to Better receiving requisite approval therefor (which Better has agreed to use reasonable best efforts to obtain), the parties agreed that, if the Proposed Business Combination has not been consummated by the maturity date of the bridge notes, the Sponsor will have the option, without limiting its rights under the Bridge Note Purchase Agreement to alternatively exchange its bridge notes on or before the maturity date as follows: (x) for a number of shares of Better preferred stock at a conversion price that represents a 50% discount to the $6.9 billion pre-money equity valuation of Better or (y) for a number of shares of the Company’s Class B common stock at a price per share that represents a 75% discount to the $6.9 billion pre-money equity valuation of Better. On the same date, the Sponsor and Better agreed to defer the maturity date of the bridge notes until September 30, 2023.
Litigation Matters
Aurora and its affiliate, Merger Sub (together, “Aurora”), were named as co-defendants with Better in a lawsuit initially filed in July 2021 by Pine Brook. Pine Brook sought, among other things, declaratory judgments and damages in relation to a side letter agreement that had been entered into with Better in 2019, as well as a lockup provision restricting the transfer of stock after the merger with Better for any holders of 1% or more of Better’s pre-merger shares for a period of 6 months post-merger. Aurora was named as a defendant only with respect to the lockup claims. On November 1, 2021, the parties to the lawsuit entered into a confidential settlement agreement, resolving all claims in the above action, and the action was dismissed with prejudice pursuant to the court’s November 3, 2021 order.
In addition, Aurora has also received two demand letters from stockholders of the Company regarding the Company’s registration statement filed with the United States Securities and Exchange Commission in connection with the Business Combination. The stockholders allege that the registration statement omits material information with respect to the Business Combination, and demand that the Company provides corrective disclosures to address the alleged omissions. No lawsuits have been filed in relation to the stockholder demand letters.
In the second quarter of 2022, Aurora received a voluntary request for documents from the Division of Enforcement of the SEC indicating that it is conducting an investigation relating to Aurora and Better to determine if violations of the federal securities laws have occurred. The SEC has requested that Better and Aurora provide the SEC with certain information and documents.
v3.23.4
SHAREHOLDERS' EQUITY
 9 Months Ended
Sep. 30, 2023
SHAREHOLDERS' EQUITY  
SHAREHOLDERS' EQUITY
18. Stockholders' Equity
On the Closing Date, the Company consummated the Business Combination pursuant to the terms of the Merger Agreement and on August 24, 2023, Better Home & Finance Class A common stock began trading and Public Warrants continued trading on the Nasdaq Global Market and the Nasdaq Capital Market, respectively, under the ticker symbols “BETR” and “BETRW”, respectively. Each outstanding share of Legacy Better common stock was exchanged for approximately 3.06 shares of the Company’s Class B common stock.
The Company’s authorized capital stock consists of 1.8 billion shares of Class A common stock, 700.0 million shares of Class B common stock, and 800.0 million shares of Class C common stock, each with a par value per share of $0.0001. Each holder of Class A common stock has the right to one vote per share and each holder of Class B common stock has the right to three votes per share. Except as described below or otherwise provided by the Company’s certificate of incorporation or required by applicable law, shares of Class C common stock are non-voting and will not entitle the holder thereof to any voting power. Shares of Class A common stock, Class B common stock and Class C common stock are treated equally, identically and ratably, on a per share basis, with respect to any dividends or distributions as may be declared and paid from time to time. Upon the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holders of Class A common stock, Class B common stock and Class C common stock will be entitled to receive ratably all assets of the Company
available for distribution to its stockholders unless disparate or different treatment of the shares of each such class with respect to distributions upon any such liquidation, dissolution or winding up is approved in advance by the affirmative vote of the holders of a majority of the then-outstanding shares of Class A common stock, Class B common stock and Class C common stock, each voting separately as a class.
Further, each share of Class B common stock is convertible into one fully paid and nonassessable share of Class A common stock or Class C common stock at the option of the holder thereof at any time upon written notice to the Company. Each share of Class C common stock is convertible into one fully paid and nonassessable share of Class A common stock at the option of the holder thereof at any time upon written notice to the Company.
All share amounts in periods prior to the Business Combination have been retroactively adjusted using the Exchange Ratio for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization. The Company's equity structure prior to the Closing consisted of different classes of common stock which is presented in the order of liquidation preference below:
As of December 31, 2022
(Amounts in thousands, except share amounts)Shares AuthorizedShares Issued and outstandingPar Value
Common A Stock24,452,56524,452,565$1 
Common B Stock588,261,164171,441,7805 
Common B-1 Stock236,938,220—— 
Common O Stock236,375,239103,889,0764 
Total common stock1,086,027,188299,783,421$10 
Pre-Closing Common Stock Warrants—Immediately prior to the Closing of the Business Combination, all common stock warrant holders exercised their warrants on a net basis. The Company had outstanding the following common stock warrants as of December 31, 2022:
(Amounts in thousands, except warrants, price, and per share amounts)
IssuanceShare
Class		Issue
Date		Expiration
Date		No.
Warrants		StrikeValuation at Issuance
March 2019Common B3/29/20193/29/20261,146,214$0.23 $179 
March 2020Common B3/25/20203/25/20274,584,856$1.12 $271 
Total equity warrants5,731,070
Private and Public Warrants—As of September 30, 2023 and December 31, 2022, the Company had a total of $1.1 million and none, respectively, of Warrants included as warrant liabilities within the condensed consolidated balance sheets. The change in fair value of Warrants for the three and nine months ended September 30, 2023 was a gain of $0.21 million and $0.21 million, respectively, and is included in change in fair value of warrant liabilities within the condensed consolidated statements of operations and comprehensive loss.
Sponsor locked-up Shares—As of September 30, 2023 and December 31, 2022, the Company had a total of $0.5 million and none, respectively, of Sponsor locked-up Share liabilities which are included within warrant liabilities in the condensed consolidated balance sheets. The change in fair value of Sponsor locked-up Shares for the three and nine months ended September 30, 2023was a gain of $0.65 million and $0.65 million, respectively, and was recorded in change in fair value of warrant liabilities within the condensed consolidated statements of operations and comprehensive loss.
Notes Receivable from Stockholders—The Company, in previous years, issued notes to stockholders to fund the payment of the exercise price of the stock options granted to such stockholders. The Company previously allowed stock option holders to early exercise stock options prior to the vesting date but no longer allows for the early exercise of stock options. The notes issued to stockholders to fund the exercises may include the exercise of stock options that have been vested by the holder as well as stock options that have not yet been vested by the
holder. As of September 30, 2023 and December 31, 2022, the Company had a total of $19.1 million and $65.2 million, respectively, of outstanding promissory notes.
Of the notes outstanding as of September 30, 2023 and December 31, 2022, $10.5 million and $53.9 million, respectively, were issued for the exercise of stock options vested and are recorded as a component of stockholders’ equity within the condensed consolidated balance sheets.
Of the notes outstanding as of September 30, 2023 and December 31, 2022, $8.5 million and $12.3 million, respectively, were issued for the early exercise of stock options not yet vested. Notes issued for the early exercise of stock options not yet vested are not reflected within stockholders’ equity on the condensed consolidated balance sheets as they relate to unvested share awards and therefore are considered non-substantive exercises. As the unvested share awards, exercised in conjunction with the notes, vest, they are recognized in the statement of equity within vesting of common stock issued via notes receivable from stockholders. The notes bear annual interest payable upon maturity of the respective note (see Note 11).
19. STOCKHOLDERS' EQUITY
The Company's equity structure consists of different classes of common stock which is presented in the order of liquidation preference below:
As of December 31,
20222021
(Amounts in thousands, except share amounts)
Shares
Authorized
Shares Issued and
outstanding
Par
Value
Shares
Authorized
Shares Issued and
outstanding
Par
Value
Common A Stock8,000,000 8,000,000 $1 8,000,000 8,000,000 $1 
Common B Stock192,457,901 56,089,586 5 192,457,901 56,089,586 5 
Common B-1 Stock77,517,666 — — 77,517,666 — — 
Common O Stock77,333,479 33,988,770 4 77,333,479 34,977,573 4 
Total common stock355,309,046 98,078,356 $10 355,309,046 99,067,159 $10 
Common Stock—The holders of Common A Stock, Common B Stock, and Common O Stock (collectively, “Voting Common Stock”) are entitled to one vote for each share. Shares of Common B-1 Stock do not have voting rights. Additionally, upon a qualified transfer, the holder can convert any shares of Common B-1 Stock into an equivalent number of shares of Common B Stock without the payment of additional consideration.
Common Stock Warrants—The Company had outstanding the following common stock warrants as of both December 31, 2022 and 2021, respectively:
(Amounts in thousands, except warrants, price, and per share amounts)
IssuanceShare
Class		Issue
Date		Expiration
Date		No.
Warrants		StrikeValuation at Issuance
March 2019Common B3/29/20193/29/2026375,000 $0.71 $179 
March 2020Common B3/25/20203/25/20271,500,000 $3.42 $271 
Total equity warrants1,875,000 
Notes Receivable from Stockholders—The Company issued notes to stockholders to fund the payment of the exercise price of the stock options granted to such stockholders. The Company also generally allows stock option holders to early exercise stock options prior to the vesting date. The notes issued to stockholders to fund the exercises may include the exercise of stock options that have been vested by the holder as well as stock options that have not yet been vested by the holder. As of December 31, 2022 and 2021, the Company had a total of $65.2 million and $67.8 million, respectively, of outstanding promissory notes.
Of the notes outstanding as of December 31, 2022 and 2021, $53.9 million and $38.6 million, respectively, were issued for the exercise of stock options vested and are recorded as a component of stockholders’ equity within the consolidated balance sheets.
Of the notes outstanding as of December 31, 2022 and 2021, $11.3 million and $29.2 million, respectively, were issued for the early exercise of stock options not yet vested. Notes issued for the early exercise of stock options not yet vested are not reflected within stockholders’ equity or on the consolidated balance sheets as they relate to unvested share awards and therefore are considered non-substantive exercises. The notes bear annual interest payable upon maturity of the respective note (see Note 12).
Aurora Acquisition Corp  
SHAREHOLDERS' EQUITY  
SHAREHOLDERS' EQUITY SHAREHOLDERS’ EQUITY
Preference Shares — The Company is authorized to issue 5,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of June 30,2023 and December 31, 2022, there were no preference shares issued or outstanding.
Class A Ordinary Shares — The Company is authorized to issue 500,000,000 Class A ordinary shares, with a par value of $0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share.
On February 23, 2023, Aurora, the Sponsor, certain individuals, each of whom is a member of our board of directors and/or management team (the “Insiders”), and Better entered into a limited waiver (the “Limited Waiver”) to the Amended and Restated Letter Agreement (the “A&R Letter Agreement”) dated as of May 10, 2021, by and among us, the Sponsor and the Insiders. In the A&R Letter Agreement, the Sponsor and each Insider waived, with respect to any shares of Capital Stock (as defined in the A&R Letter Agreement) held by it, him or her, if any, any redemption rights it, he or she may have in connection with (i) a shareholder vote to approve the Business Combination (as defined in the A&R Letter Agreement), or (ii) a shareholder vote to approve certain amendments to the Company’s amended and restated articles of association (the “Redemption Restriction”).
Pursuant to the Limited Waiver, the Company and the Insiders agreed to waive the Redemption Restriction as it applies to the Sponsor to the limited extent required to allow the redemption of up to an aggregate of $17 million worth of Novator Private Placement Shares held by it in connection with the shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association held on February 24, 2023. The Limited Waiver resulted in 1,663,760 Class A ordinary shares being reclassed from permanent to temporary equity. This resulted in an increase of temporary equity by $16,999,995 and a corresponding reduction of Class A Ordinary Share, Additional Paid in Capital, and Accumulated Deficit of $166, $16,637,434, and 362,395 respectively. These shares were subsequently redeemed as described below.
As consideration for the Limited Waiver, the Sponsor agreed: (a) if the proposed Business Combination is completed on or before September 30, 2023, to subscribe for and purchase common stock of Better Home & Finance (the “Better Common Stock”), for aggregate cash proceeds to Better equal to the actual aggregate amount of Novator Private Placement Shares redeemed by it in connection with the Limited Waiver (the “Sponsor Redeemed Amount”) at a purchase price of $10.00 per share of Better Common Stock on the closing date of the proposed Business Combination; or (b) if the proposed Business Combination is not completed on or before September 30, 2023, to subscribe for and purchase for $35 million aggregate cash proceeds to Better, at the Sponsor’s election, (x) a number of newly issued shares of Better’s Company Series D Equivalent Preferred Stock (as defined in the Pre-Closing Bridge Note Purchase Agreement (as defined in Note 3)) at a price per share that represents a 50% discount to the Pre-Money Valuation (as defined below) or (y) for a number of shares of Better’s Class B common stock at a price per share that represents a 75% discount to the Pre-Money Valuation. “Pre-Money Valuation” means the $6.9 billion pre-money equity valuation of Better based on the aggregate amount of fully diluted shares of Better’s common stock on an as-converted basis.
As further consideration for the Limited Waiver, the Sponsor agreed to reimburse the Company for reasonable and documented expenses incurred by the Company in connection with the proposed Business Combination, up to the Sponsor Redeemed Amount, to the extent such expenses are not otherwise subject to reimbursement by Better pursuant to the Merger Agreement.
The Company held a combined annual and extraordinary general meeting on February 24, 2023, pursuant to which the Company’s shareholders approved the Extension. In connection with approval of the Extension, public shareholders redeemed an aggregate of 24,087,689 Class A ordinary shares and the Sponsor redeemed an aggregate of 1,663,760 Class A ordinary shares for an aggregate cash balance of approximately $263,123,592. At June 30,
2023 and December 31, 2022, there were 1,836,240 and 3,500,000 Class A ordinary shares issued and outstanding, respectively, excluding 212,598 and 24,300,287 Class A ordinary shares subject to possible redemption.
On February 24, 2023, Aurora, Merger Sub and Better entered into Amendment No. 5 to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) from March 8, 2023 to September 30, 2023.
Class B Ordinary Shares — The Company is authorized to issue 50,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class B ordinary shares are entitled to one vote for each share. At June 30, 2023 and December 31, 2022, there were 6,950,072 Class B ordinary shares issued and outstanding of which an aggregate of 249,928 Class B ordinary shares were forfeited in connection with the underwriters’ election to partially exercise their over-allotment option so that the number of Founder Shares will equal 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering.
Only holders of the Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of the Company’s shareholders except as otherwise required by law. The Founder Shares will automatically convert into Class A ordinary shares on the day of the closing of an initial Business Combination, or earlier at the option of the holders thereof, at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Initial Public Offering and the Novator Private Placement, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor, members of the Company’s management team or any of the Company’s affiliates upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one. On the first business day following the consummation of the Business Combination at a ratio such that the total number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of Class A ordinary shares (including any such shares issued following the exercise of the over-allotment option), plus (ii) the sum of (a) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the Business Combination and any warrants issued in a private placement to the Sponsor or an affiliate of the Sponsor upon conversion of Working Capital Loans, minus (b) the number of Public Shares redeemed by public shareholders in connection with the Business Combination. In no event will any Founder Shares convert into Class A ordinary shares at a ratio that is less than one-for-one.
Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that as soon as practicable, but in no event later than 30 business days, after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of Warrants for Cash When the Price per Class A Ordinary Share Equals or Exceeds $18.00—Once the warrants become exercisable, the Company may redeem the outstanding Public Warrants:
•in whole and not in part;
•at a price of $0.01 per Public Warrant;
•upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
•if, and only if, the reported last sales price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending on third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of Warrants for Class A Ordinary Shares When the Price per Class A Ordinary Share Equals or Exceeds $10.00—Commencing 90 days after the warrants become exercisable, the Company may redeem the outstanding warrants:
•in whole and not in part;
•at $0.10 per warrant
•upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A ordinary shares;
•if, and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per Public Share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.
•There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial shareholders, directors and officers have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their Founder Shares, Novator Private Placement Shares and any Public Shares they may acquire during or after this offering in connection with the completion of our initial business combination.
The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will
the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 10 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants and Novator Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Novator Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants and Novator Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, so long as they are held by the initial purchasers, directors and officers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers, directors and officers or their permitted transferees, the Private Placement Warrants and the Novator Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
SHAREHOLDERS’ EQUITY
Preference Shares — The Company is authorized to issue 5,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At December 31, 2022 and 2021, there were no preference shares issued or outstanding.
Class A Ordinary Shares — The Company is authorized to issue 500,000,000 Class A ordinary shares, with a par value of $0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share. At December 31, 2022 and 2021, there were 3,500,000 Class A ordinary shares issued and outstanding, excluding 24,300,287 Class A ordinary shares subject to possible redemption.
Class B Ordinary Shares — The Company is authorized to issue 50,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class B ordinary shares are entitled to one vote for each share. At December 31, 2022 and 2021, there were 6,950,072 Class B ordinary shares issued and outstanding of which an aggregate of 249,928 Class B ordinary shares were forfeited in connection with the underwriters’ election to partially exercise their over-allotment option so that the number of Founder Shares will equal 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering.
Only holders of the Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of the Company’s shareholders except as otherwise required by law.
The Founder Shares will automatically convert into Class A ordinary shares on the day of the closing of an initial Business Combination, or earlier at the option of the holders thereof, at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Initial Public Offering and the Novator Private Placement, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into
Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor, members of the Company’s management team or any of the Company’s affiliates upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one. On the first business day following the consummation of the Business Combination at a ratio such that the total number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of Class A ordinary shares (including any such shares issued following the exercise of the over-allotment option), plus (ii) the sum of (a) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the Business Combination and any warrants issued in a private placement to the Sponsor or an affiliate of the Sponsor upon conversion of Working Capital Loans, minus (b) the number of Public Shares redeemed by public shareholders in connection with the Business Combination. In no event will any Founder Shares convert into Class A ordinary shares at a ratio that is less than one-for-one.
Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that as soon as practicable, but in no event later than 30 business days, after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of Warrants for Cash When the Price per Class A Ordinary Share Equals or Exceeds $18.00—Once the warrants become exercisable, the Company may redeem the outstanding Public Warrants:
•in whole and not in part;
•at a price of $0.01 per Public Warrant;
•upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
•if, and only if, the reported last sales price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending on third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of Warrants for Class A Ordinary Shares When the Price per Class A Ordinary Share Equals or Exceeds $10.00—Commencing 90 days after the warrants become exercisable, the Company may redeem the outstanding warrants:
•in whole and not in part;
•at $0.10 per warrant
•upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A ordinary shares;
•if, and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.
•There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial shareholders, directors and officers have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, Novator Private Placement Shares and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination.
The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination by September 30, 2023 (unless further extended with shareholder approval) and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 10 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants and Novator Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Novator Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Warrants will not be
transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants and Novator Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, so long as they are held by the initial purchasers, directors and officers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers, directors and officers or their permitted transferees, the Private Placement Warrants and the Novator Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants
v3.23.4
FAIR VALUE MEASUREMENTS
 9 Months Ended
Sep. 30, 2023
Fair Value, Option, Quantitative Disclosures [Line Items]  
FAIR VALUE MEASUREMENTS
15. Fair Value Measurements
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
September 30, 2023
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $160,025 $— $160,025 
Derivative assets, at fair value (1)
— 3,506 211 3,717 
Total Assets$— $163,531 $211 $163,742 
Derivative liabilities, at fair value (1)
$— $— $1,678 $1,678 
Warrants and equity related liabilities, at fair value
$577 $950 $— $1,527 
Total Liabilities$577 $950 $1,678 $3,205 
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative, at fair value— — 236,603 236,603 
Total Assets$— $251,558 $236,919 $488,477 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities$— $— $4,924 $4,924 
__________________
(1)As of September 30, 2023 and December 31, 2022, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
Specific valuation techniques and inputs used in determining the fair value of each significant class of assets and liabilities are as follows:
Mortgage Loans Held for Sale—The Company originates certain LHFS to be sold to loan purchasers and elected to carry these loans at fair value in accordance with ASC 825. The fair value is primarily based on the price obtained for other mortgage loans with similar characteristics. The changes in fair value of these assets are largely driven by changes in interest rates subsequent to loan funding and receipt of principal payments associated with the relevant LHFS.
Derivative Assets and Liabilities—The Company uses derivatives to manage various financial risks. The fair values of derivative instruments are determined based on quoted prices for similar assets and liabilities, dealer quotes, and internal pricing models that are primarily sensitive to market observable data. The Company utilizes IRLCs and forward sale commitments. The fair value of IRLCs, which are related to mortgage loan commitments, is based on quoted market prices, adjusted by the pull-through factor, and includes the value attributable to the net servicing fee. The Company evaluated the significance and unobservable nature of the pull-through factor and determined that the classification of IRLCs should be Level 3 as of September 30, 2023 and December 31, 2022. Significant changes in the pull-through factor of the IRLCs, in isolation, could result in significant changes in the IRLCs’ fair value measurement. The value of IRLCs also rises and falls with changes in interest rates; for example, entering into interest rate lock commitments at low interest rates followed by an increase in interest rates in the market, will decrease the value of IRLC. The Company had purchases/issuances of approximately $0.1 million and $2.4 million of IRLCs during the three months ended September 30, 2023 and 2022, respectively. The Company had purchases/issuances of approximately $0.6 million and $5.0 million of IRLCs during the nine months ended September 30, 2023 and 2022, respectively.
The number of days from the date of the IRLC to expiration of the rate lock commitment outstanding as of September 30, 2023 was approximately 60 days on average. The Company attempts to match the maturity date of the IRLCs with the forward commitments. Derivatives are presented in the condensed consolidated balance sheets under derivative assets, at fair value and derivative liabilities, at fair value. During the three months ended September 30, 2023, the Company recognized $0.9 million of loss and $5.0 million of gains related to changes in fair value of IRLCs and forward sale commitments, respectively. During the nine months ended September 30, 2023, the Company recognized $0.1 million and $8.4 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. During the three months ended September 30, 2022, the Company recognized $7.0 million of losses and $26.2 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. During the nine months ended September 30, 2022, the Company recognized $14.3 million of losses and $188.6 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. Gains and losses related to changes in the fair value of IRLCs and forward sale commitments are included in mortgage platform revenue, net within the condensed consolidated statements of operations and comprehensive loss. Unrealized activity related to changes in the fair value of forward sale commitments were $1.5 million of gains and $13.2 million of gains, included in the $5.0 million of gains and $26.2 million of gains, during the three months ended September 30, 2023 and 2022, respectively. Unrealized activity related to changes in the fair value of forward sale commitments were $0.8 million of gains and $14.1 million of gains, included in the $8.4 million of gains and $188.6 million of gains, during the nine months ended September 30, 2023 and 2022, respectively. The notional and fair value of derivative financial instruments not designated as hedging instruments were as follows:
(Amounts in thousands)Notional ValueDerivative AssetDerivative Liability
Balance as of September 30, 2023
IRLCs$211,897 $211 $1,678 
Forward commitments$294,000 3,506 — 
Total$3,717 $1,678 
Balance as of December 31, 2022
IRLCs$225,372 $316 $1,828 
Forward commitments$422,000 2,732 — 
Total$3,048 $1,828 
Warrant and equity related liabilities—The warrant liability consists of Warrants and the Sponsor-Locked up Shares. The Warrants consist of Public Warrants and Private Warrants. The Public Warrants trade on the Nasdaq Capital Market under the ticker symbol “BETRW” and as such is considered a Level 1 input from an active market to derive the value. The Private Warrants and Sponsor-Locked up Shares, although not publicly traded on an active market, use inputs from the publicly traded Public Warrants and the Company’s publicly traded common stock,
respectively, and are further calibrated using unobservable inputs representing Level 2 measurements within the fair value hierarchy.
Convertible Preferred Stock Warrants—The Company issued Former Preferred Stock Warrants to certain investors and to the Lender under its corporate line of credit (see Note 10). The Company obtained a fair value analysis from a third party to assist in determination of the fair value of warrants. The Company used the Black-Scholes-Merton option-pricing model to estimate the fair value of the warrants at the issuance date and as of December 31, 2022, which is based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Significant changes in the unobservable inputs could result in significant changes in the fair value of the convertible preferred stock warrants. The warrant valuation was based on the intrinsic value of the Company’s underlying stock price and included certain assumptions such as risk free rate, volatility rate, and expected term.
Bifurcated Derivative—The Company’s Pre-Closing Bridge Notes included embedded features that were separately accounted for and were marked to fair value at each reporting period with changes included in change in fair value of bifurcated derivative on the consolidated statements of operations and comprehensive loss. The Company obtained a fair value analysis from a third party to assist in determination of the fair value of the bifurcated derivative. In estimating the fair value of the bifurcated derivative, management considered factors management believed were material to the valuation process, including, but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As there was no active market for the Company’s equity, the fair value of the bifurcated derivative was based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Management believed the combination of these factors provided an appropriate estimate of the expected fair value and reflected the best estimate of the fair value of the bifurcated derivative.
As of September 30, 2023 and December 31, 2022, Level 3 instruments include IRLCs, bifurcated derivative and convertible preferred stock warrants. The following table presents the rollforward of Level 3 IRLCs:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$(514)$197 $(1,513)$7,568 
Change in fair value of IRLCs(953)(6,976)46 (14,347)
Balance at end of period$(1,467)$(6,779)$(1,467)$(6,779)
The following table presents the rollforward of Level 3 bifurcated derivative:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$237,667 $277,777 $236,603 $— 
Change in fair value of bifurcated derivative(237,667)29,089 (236,603)306,866 
Balance at end of period$— $306,866 $— $306,866 
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$2,830 $11,586 $3,096 $31,997 
Exercises(2,830)— (2,830)— 
Change in fair value of convertible preferred stock warrants— (4,202)(266)(24,613)
Balance at end of period$— $7,384 $— $7,384 
Counterparty agreements for forward sale commitments contain master netting agreements, which contain a legal right to offset amounts due to and from the same counterparty and can be settled on a net basis. The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized Liabilities
Net Amounts Presented in the Condensed Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
September 30, 2023:$3,525 $(19)$3,506 
December 31, 2022$3,263 $(531)$2,732 
Offsetting of Forward Commitments - Liabilities
Balance as of:
September 30, 2023:$— $— $— 
December 31, 2022$— $— $— 
Significant Unobservable Inputs—The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
September 30, 2023
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
10.27% - 97.49%
85.1 %
December 31, 2022
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% - 96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94% - 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24 - 5.74
4.8
Fair value of common stock
$0.00 - $6.60
$1.60 
U.S. GAAP requires disclosure of fair value information about financial instruments, whether recognized or not recognized in the condensed consolidated financial statements, for which it is practical to estimate the fair value. In cases where quoted market prices are not available, fair values are based upon the estimation of discount rates to estimated future cash flows using market yields or other valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimates of fair value in both inactive and orderly markets. Accordingly, fair values are not necessarily indicative of the amount the Company could realize on disposition of the
financial instruments in a current market exchange. The use of market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.
The estimated fair value of the Company’s cash and cash equivalents, restricted cash, warehouse lines of credit, and escrow funds and customer deposits approximates their carrying values as these financial instruments are highly liquid or short-term in nature. The following table presents the carrying amounts and estimated fair value of financial instruments that are not recorded at fair value on a recurring or non-recurring basis:
September 30, 2023December 31, 2022
(Amounts in thousands)Fair Value LevelCarrying AmountFair ValueCarrying AmountFair Value
Short-term investmentsLevel 1$29,831 $29,884 $— $— 
Loans held for investmentLevel 3$4,163 $4,649 $— $— 
Post-Closing Convertible NotesLevel 3$513,001 $252,796 $— $— 
Loan commitment assetLevel 3$— $— $16,119 $54,654 
Pre-Closing Bridge NotesLevel 3$— $— $750,000 $269,067 
Corporate line of creditLevel 3$— $— $144,403 $145,323 
In determining the fair value of the Short term investments, management used observable inputs such as quoted prices in active markets for identical assets. The fair value of loans held for investment is determined by management estimates of the specific credit risk attributes of each pool of loans, in addition to the quoted secondary-market prices which account for the interest rate characteristics of each loan. The corporate line of credit was valued using a Black Derman Toy model which incorporates the option to prepay given the make-whole premium as well as other inputs such as risk-free rates and credit spreads. In determining the fair value of the loan commitment asset and the Pre-Closing Bridge Notes, management used factors that are material to the valuation process, including but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As a number of assumptions and estimates were involved that are largely unobservable, loans held for investment, loan commitment asset and Corporate line of credit were classified as Level 3 inputs within the fair value hierarchy.
16. FAIR VALUE MEASUREMENTS
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative— — 236,603 236,603 
Total Assets
$— $251,558 $236,919 $488,478 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities
$— $— $4,924 $4,924 
December 31, 2021
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $1,854,435 $— $1,854,435 
Derivative assets, at fair value (1)
— 812 8,484 9,296 
Bifurcated derivative— — — — 
Total Assets
$— $1,855,247 $8,484 $1,863,731 
Derivative liabilities, at fair value (1)
$— $1,466 $916 $2,382 
Convertible preferred stock warrants (2)
— — 31,997 31,997 
Total Liabilities
$— $1,466 $32,913 $34,379 
__________________
(1)As of December 31, 2022 and 2021, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
Specific valuation techniques and inputs used in determining the fair value of each significant class of assets and liabilities are as follows:
Mortgage Loans Held for Sale—The Company originates certain LHFS to be sold to loan purchasers and elected to carry these loans at fair value in accordance with ASC 825. The fair value is primarily based on the price obtained for other mortgage loans with similar characteristics. The changes in fair value of these assets are largely driven by changes in interest rates subsequent to loan funding and receipt of principal payments associated with the relevant LHFS.
Derivative Assets and Liabilities—The Company uses derivatives to manage various financial risks. The fair values of derivative instruments are determined based on quoted prices for similar assets and liabilities, dealer quotes, and internal pricing models that are primarily sensitive to market observable data. The Company utilizes IRLCs and forward sale commitments. The fair value of IRLCs, which are related to mortgage loan commitments, is based on quoted market prices, adjusted by the pull-through factor, and includes the value attributable to the net servicing fee. The Company evaluated the significance and unobservable nature of the pull-through factor and determined that the classification of IRLCs should be Level 3 as of December 31, 2022 and 2021. Significant changes in the pull-through factor of the IRLCs, in isolation, could result in significant changes in the IRLCs’ fair value measurement. The value of IRLCs also rises and falls with changes in interest rates; for example, entering into interest rate lock commitments at low interest rates followed by an increase in interest rates in the market, will decrease the value of IRLC. The Company had purchases/issuances of approximately $4.3 million and $50.7 million of IRLCs during the years ended December 31, 2022 and 2021, respectively.
The number of days from the date of the IRLC to expiration of the rate lock commitment outstanding as of December 31, 2022 and 2021 was approximately 60 days on average. The Company attempts to match the maturity date of the IRLCs with the forward commitments. Derivatives are presented in the consolidated balance sheets under derivative assets, at fair value and derivative liabilities, at fair value. During the year ended December 31, 2022, the Company recognized $9.1 million of losses and $187.3 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. During the year ended December 31, 2021, the Company recognized $32.4 million of losses and $95.4 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively. Gains and losses related to changes in the fair value of IRLCs and forward sale commitments are included in mortgage platform revenue, net within the consolidated statements of operations and comprehensive loss. Unrealized activity related to changes in the fair value of forward sale commitments were $3.4 million of gains and $24.7 million of gains, included in the $187.3 million of gains and $95.4 million of gains,
during the years ended December 31, 2022 and 2021, respectively. The notional and fair value of derivative financial instruments not designated as hedging instruments were as follows:
(Amounts in thousands)Notional ValueDerivative AssetDerivative Liability    
Balance as of December 31, 2022
IRLCs$225,372 $316 $1,828 
Forward commitments$422,000 2,732 — 
Total$3,048 $1,828 
Balance as of December 31, 2021
IRLCs$2,560,577 $8,484 $916 
Forward commitments$2,818,700 812 1,466 
Total$9,296 $2,382 
Convertible Preferred Stock Warrants—The Company issued warrants to certain investors and to the Lender under its corporate line of credit (see Note 11). The Company obtains a fair value analysis from a third party to assist in determination of the fair value of warrants. The Company used the Black-Scholes option-pricing model to estimate the fair value of the warrants at the issuance date and as of December 31, 2022 and 2021, which is based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Significant changes in the unobservable inputs could result in significant changes in the fair value of the convertible preferred stock warrants. The warrant valuation was based on the intrinsic value of the Company’s underlying stock price and includes certain assumptions such as risk free rate, volatility rate, and expected term.
Bifurcated Derivative—The Company’s Pre-Closing Bridge Notes included embedded features that are separately accounted for and are marked to fair value at each reporting period with changes included in change in fair value of bifurcated derivative on the consolidated statements of operations and comprehensive loss. The Company obtains a fair value analysis from a third party to assist in determination of the fair value of the bifurcated derivative. In estimating the fair value of the bifurcated derivative, management considers factors management believes are material to the valuation process, including, but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As there is no active market for the Company’s equity, the fair value of the bifurcated derivative is based on significant inputs not observable in the market representing a Level 3 measurement within the fair value hierarchy. Management believes the combination of these factors provides an appropriate estimate of the expected fair value and reflects the best estimate of the fair value of the bifurcated derivative.
As of December 31, 2022 and 2021, Level 3 instruments include IRLCs, bifurcated derivative, and convertible preferred stock warrants. The following table presents the rollforward of Level 3 IRLCs:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$7,568 $39,972 
Change in fair value of IRLCs(9,081)(32,404)
Balance at end of year
$(1,513)$7,568 
The following table presents the rollforward of Level 3 bifurcated derivative:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$— $— 
Change in fair value of bifurcated derivative236,603 — 
Balance at end of year
$236,603 $— 
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$31,997 $25,799 
Issuances— — 
Exercises— (26,592)
Change in fair value of convertible preferred stock warrants(28,901)32,790 
Balance at end of year
$3,096 $31,997 
Counterparty agreements for forward sale commitments contain master netting agreements, which contain a legal right to offset amounts due to and from the same counterparty and can be settled on a net basis. The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized LiabilitiesNet Amounts Presented in the Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
December 31, 2022:
$3,263 $(531)$2,732 
December 31, 2021
$2,598 $(1,786)$812 
Offsetting of Forward Commitments - Liabilities
Balance as of:
December 31, 2022:
$— $— $— 
December 31, 2021
$282 $(1,748)$(1,466)
Significant Unobservable Inputs—The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
December 31, 2022
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% -96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94%- 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24- 5.74
4.8 
Fair value of common stock
$0.00 - $6.60
$1.60 
December 31, 2021
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
5.01% - 99.43%
83.5 %
Convertible preferred stock warrants
Risk free rate
0.19% - 0.73%
0.27 %
Volatility rate
32.8% - 120.3%
65.0 %
Expected term (years)
0.5 - 2.0
0.7 
Fair value of common stock
$6.80 - $29.42
$14.91 
U.S. GAAP requires disclosure of fair value information about financial instruments, whether recognized or not recognized in the consolidated financial statements, for which it is practical to estimate the fair value. In cases where quoted market prices are not available, fair values are based upon the estimation of discount rates to estimated future cash flows using market yields or other valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimates of fair value in both inactive and orderly markets. Accordingly, fair values are not necessarily indicative of the amount the Company could realize on disposition of the financial instruments in a current market exchange. The use of market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.
The estimated fair value of the Company’s cash and cash equivalents, restricted cash, warehouse lines of credit, and escrow funds approximates their carrying values as these financial instruments are highly liquid or short-term in
nature. The following table presents the carrying amounts and estimated fair value of financial instruments that are not recorded at fair value on a recurring or non-recurring basis:
As of December 31,
20222021
(Amounts in thousands)Fair Value LevelCarrying AmountFair ValueCarrying AmountFair Value
Loan commitment assetLevel 3$16,119 $54,654 $121,723 $121,723 
Pre-Closing Bridge Notes
Level 3$750,000 $269,067 $477,333 $458,122 
Corporate line of creditLevel 3$144,403 $145,323 $149,022 $161,417 
The corporate line of credit was valued using a Black Derman Toy model which incorporates the option to prepay given the make-whole premium as well as other inputs such as risk-free rates and credit spreads. In determining the fair value of the loan commitment asset and the Pre-Closing Bridge Notes, management uses factors that are material to the valuation process, including but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third parties, actual and projected financial results, risks, prospects, and economic and market conditions, among other factors. As a number of assumptions and estimates were involved that are largely unobservable, loan commitment asset and Pre-Closing Bridge Notes are classified as Level 3 inputs within the fair value hierarchy.
Aurora Acquisition Corp  
Fair Value, Option, Quantitative Disclosures [Line Items]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3: Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.
On or around February 24, 2023, the Company liquidated its funds in the Trust Account and moved them to a cash and cash equivalent account that will likely receive minimal, if any, interest. Prior to this date and as of December 31, 2022, all assets in the Trust Account were money market funds which were invested primarily in U.S. Treasury Securities. At June 30, 2023, investments held in the Trust Account comprised of $21,317,257 in cash and cash equivalents.
The Company utilizes a Modified Black Scholes model to value the Private Placement Warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the warrant liabilities are determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero. The Company had no transfers out of Level 3 for the three and six months ended June 30, 2023 and June 30, 2022. The fair value of the Public Warrants issued in connection with the Initial Public Offering are measured based on the listed market price of such warrants, a Level 1 measurement.
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2023 by level within the fair value hierarchy:
Quoted Prices inSignificant OtherSignificant Other
Active MarketsObservable InputsUnobservable
(Level 1)(Level 2)Inputs (Level 3)
Assets:
Investments held in Trust Account – cash and cash equivalents$21,317,257 $— $— 
Liabilities:  
Derivative public warrant liabilities153,699 — — 
Derivative private warrant liabilities— — 326,902 
Total Fair Value$21,470,956 $— $326,902 
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2022 by level within the fair value hierarchy:
Quoted Prices inSignificant OtherSignificant Other
Active MarketsObservable InputsUnobservable
(Level 1)(Level 2)Inputs (Level 3)
Assets:
Investments held in Trust Account – money market funds$282,284,619 $— $— 
Liabilities: 
Derivative public warrant liabilities91,126 — — 
Derivative private warrant liabilities— — 381,386 
Total Fair Value$282,375,745 $— $381,386 
The following table provides the significant unobservable inputs used in the Modified Black Scholes model to measure the fair value of the Private Placement Warrants(1):
At March 8, 2021 (Initial
Measurement) 		As of December 31,
2022		As of June 30,
2023
Stock price10.02 10.09 10.45 
Strike price11.50 11.50 11.50 
Probability of completing a Business Combination90.00 %40.00 %60.00 %
Remaining term (in years)5.52.891.13
Volatility15.00 %3.00 %5.00 %
Risk-free rate0.96 %4.20 %5.26 %
Fair value of warrants0.86 0.07 0.06 
The following tables provides a summary of the changes in the fair value of the Company’s financial instruments that are measured at fair value on a recurring basis:
As of June 30, 2023
Level 1Level 3Warrant Liabilities
Fair value as of December 31, 202291,126 381,386 472,512 
Change in valuation inputs or other assumptions261,227 — 261,227 
Fair value as of March 31, 2023352,353 381,386 733,739 
Change in valuation inputs or other assumptions(198,654)(54,484)(253,138)
Fair value as of June 30, 2023153,699 326,902 480,601 
As of June 30, 2022
Level 1Level 3Warrant Liabilities
Fair value as of December 31, 20214,677,805 8,662,912 13,340,717 
Change in valuation inputs or other assumptions(2,187,034)108,967 (2,078,067)
Fair value as of March 31, 20222,490,771 8,771,879 11,262,650 
Change in valuation inputs or other assumptions(1,579,513)(2,233,833)(3,813,346)
Fair value as of June 30, 2022911,258 6,538,046 7,449,304 
FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3: Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.
At December 31, 2022, investments held in the Trust Account were comprised of $282,284,619 in money market funds which are invested primarily in U.S. Treasury Securities. As of December 31, 2022, the Company did not withdraw any interest income from the Trust Account.
The Company utilizes a Modified Black Scholes model to value the Private Placement Warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the warrant liabilities are determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its ordinary shares based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.
Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement for the years ended December 31, 2022 and 2021, and the Company had no transfers out of Level 3 for the years ended December 31, 2022 and 2021.
The fair value of the Public Warrants issued in connection with the Initial Public Offering are measured based on the listed market price of such warrants, a Level 1 measurement.
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2022 by level within the fair value hierarchy:
Quoted Prices in
Active Markets
(Level 1)		Significant Other
Observable Inputs
(Level 2)		Significant Other
Unobservable Inputs
(Level 3)
Assets:
Investments held in Trust Account – money market funds$282,284,619 $— $— 
Liabilities:   
Derivative public warrant liabilities91,126 — — 
Derivative private warrant liabilities— — 381,386 
Total Fair Value$282,375,745 $— $381,386 
The following table provides the significant unobservable inputs used in the Modified Black Scholes model to measure the fair value of the Private Placement Warrants(1):
At March 8, 2021 (Initial Measurement) As of December 31, 2021As of December 31, 2022
Stock price10.02 9.90 10.09 
Strike price11.50 11.50 11.50 
Probability of completing a Business Combination90.00 %100.00 %40.00 %
Remaining term (in years)5.50 5.00 2.89 
Volatility15.00 %22.00 %3.00 %
Risk-free rate0.96 %1.26 %4.20 %
Fair value of warrants0.86 1.59 0.07 
___________________
(1)The expected term of the Private Placement Warrants has been adjusted to 2.89 as of December 31, 2022 due to multiple factors, including an expected additional 3-6 months duration of the Private Placement Warrants as a result of the extension of the date by which the Company has to consummate a business combination from March 8, 2023 to September 30, 2023. Additionally, weighted probability factors contribute to the decrease in term from the remaining 5 years per the previous date valued at December 31, 2021.
The following table provides a summary of the changes in the fair value of the Company’s financial instruments that are measured at fair value on a recurring basis:
Level 3Level 1Warrant Liabilities
Fair value as of December 31, 2020$— $— $— 
Initial measurement at March 8, 20219,152,167 4,730,000 13,882,167 
Initial measurement of over-allotment warrants545,935 488,811 1,034,746 
Change in valuation inputs or other assumptions(1,035,190)(541,006)(1,576,196)
Fair value as of December 31, 20218,662,912 4,677,805 13,340,717 
Change in valuation inputs or other assumptions(8,281,526)(4,586,679)(12,868,205)
Fair value as of December 31, 2022$381,386 $91,126 $472,512 
v3.23.4
SUBSEQUENT EVENTS
 9 Months Ended
Sep. 30, 2023
Subsequent Event [Line Items]  
SUBSEQUENT EVENTS
21. Subsequent Events
The Company evaluated subsequent events from the date of the condensed consolidated balance sheets of September 30, 2023 through the date of the release of financial statements, and has determined that, there have been no subsequent events that require recognition or disclosure in the condensed consolidated financial statements, except as described in Note 1, Note 6, Note 10, Note 12 and as follows:
Nasdaq Delisting Notice—On October 12, 2023, the Company received a letter from the listing qualifications staff (the “Staff”) of Nasdaq notifying the Company that it is not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Rule”) for continued listing. The Bid Price Rule requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) (the “Compliance Period Rule”) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. The Notice has no immediate effect on the listing of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”), which continues to trade on The Nasdaq Global Market under the symbol “BETR.”
In accordance with the Compliance Period Rule, the Company has 180 calendar days to regain compliance. If the Company does not regain compliance during this 180-day period, then the Company may be eligible to transfer to The Nasdaq Capital Market and the Staff may grant the Company a second 180 calendar day period to regain compliance pursuant to the Compliance Period Rule, provided the Company meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement. In addition, the Company would be required to notify Nasdaq of its intent to cure the minimum bid price deficiency during the second compliance period by effecting a reverse stock split if necessary.
The Company will continue to monitor the closing bid price of its Common Stock and seek to regain compliance with all applicable Nasdaq requirements within the allotted compliance periods.
22. SUBSEQUENT EVENTS
The Company evaluated subsequent events from the date of the consolidated balance sheets of December 31, 2022 through May 11, 2023, the date the consolidated financial statements were issued, and has determined that, there have been no subsequent events that require recognition or disclosure in the consolidated financial statements, except as described in Note 1, Note 5, Note 11, Note 12, Note 13, and as follows:
Amended Corporate Line of Credit—In February 2023, the Company entered into a loan and security agreement (the “2023 Credit Facility”) with Clear Spring Life and Annuity Company, an entity affiliated with the previous agent and acting as an agent for such lenders (together the “Lender”) to amend the existing 2021 Credit Facility. Subsequent to year end, the Company paid down $20.0 million leaving $126.4 million owed in principal balance on the facility. The terms of the 2023 Credit Facility grant relief from the acceleration of payments under minimum revenue triggers from the 2021 Credit Facility. The 2023 Credit Facility splits the principal balance into two tranches, tranche “AB” in the amount of $99.9 million and tranche “C” in the amount of $26.5 million. Tranche
AB is backed by assets that the Company has pledged, mainly loans held for sale that the Company fully owns while tranche C is unsecured debt. Tranche AB has a fixed interest rate of 8.5% and tranche C has a variable interest rate based on the SOFR reference rate for a one-month tenor plus 9.5%. Tranche AB will be repaid with proceeds from sales of pledged assets. Tranche C will be repaid starting in June 2023, $5.0 million per month if the Company obtains commitments to raise $250.0 million in equity or debt by that same date or $200.0 million by June 2024. If the Company does not obtain commitments to raise equity or debt at such dates, the repayment amount will be $12.5 million per month for tranche C. The maturity date of the 2023 Credit Facility will be the earlier of 45 days after the Merger is consummated or in the event that the Merger is not consummated shall be March 25, 2027.
Lease Amendment and Reassignment—In February 2023, the Company entered into a lease amendment with a landlord to surrender an office floor and reassign the lease to a third party. The Company had a lease liability of $13.0 million related to the office space and as part of the amendment the Company paid $4.7 million in cash to the third party. The amendment relieves the Company of the primary obligation under the original lease and as such is considered a termination of the original lease.
Acquisition regulatory approval—In March 2023, the Company obtained regulatory approval from the financial control authorities in the U.K. to close on its acquisition of a banking entity in the U.K. The acquisition is for a total consideration of approximately $15.2 million. The Company subsequently closed on the acquisition on April 1, 2023.
Aurora Acquisition Corp  
Subsequent Event [Line Items]  
SUBSEQUENT EVENTS SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to August 4, 2023, the date that the financial statement was issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statement.
As previously disclosed, in the second quarter of 2022, Aurora, received a voluntary request for documents from the Division of Enforcement of the SEC, indicating that it was conducting an investigation relating to Aurora and Better to determine if violations of the federal securities laws had occurred. On August 3, 2023, SEC staff informed Aurora and Better that they have concluded the investigation and that they do not intend to recommend an enforcement action against Aurora or Better. This notice from the SEC staff was provided under the guidelines set forth in the final paragraph of Securities Act Release No. 5310.
SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to April 17, 2023, the date that the financial statement was issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statement.
On January 9, 2023, the Company received a notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC stating that the Company failed to hold an annual meeting of shareholders within 12 months after its fiscal year ended December 31, 2021, as required by Nasdaq Listing Rule 5620(a). In accordance with Nasdaq Listing Rule 5810(c)(2)(G), the Company submitted a plan to regain compliance on February 17, 2023. The Company believes the combined annual and extraordinary general meeting it held on February 24, 2023 will satisfy this requirement under Nasdaq rules.
On February 7, 2023, the Company, Better and the Sponsor entered into a letter agreement, pursuant to which, subject to Better receiving requisite approval therefor (which Better has agreed to use reasonable best efforts to obtain), the parties agreed that, if the proposed Business Combination has not been consummated by the maturity date of the bridge notes, the Sponsor will have the option, without limiting its rights under the bridge note purchase agreement to alternatively exchange its bridge notes on or before the maturity date as follows: (x) for a number of shares of Better preferred stock at a conversion price that represents a 50% discount to the $6.9 billion pre-money equity valuation of Better or (y) for a number of shares of the Company’s Class B common stock at a price per share that represents a 75% discount to the $6.9 billion pre-money equity valuation of Better. On the same date, the Sponsor and Better agreed to defer the maturity date of the bridge notes until September 30, 2023.
On February 8, 2023, the Company repaid an aggregate principal amount of $2.4 million under the Note. After giving effect to this repayment, the amount outstanding under the Note is approximately $412,395.
On February 23, 2023, the Company, the Sponsor, certain individuals, each of whom is a member of our board of directors and/or management team (the “Insiders”), and Better entered into a limited waiver (the “Limited Waiver”) to the Amended and Restated Letter Agreement (the “A&R Letter Agreement”), dated as of May 10, 2021, by and among us, the Sponsor and the Insiders. In the A&R Letter Agreement, the Sponsor and each Insider waived, with respect to any shares of Capital Stock (as defined in the A&R Letter Agreement) held by it, him or her, if any, any redemption rights it, he or she may have in connection with (i) a shareholder vote to approve the Business Combination (as defined in the A&R Letter Agreement), or (ii) a shareholder vote to approve certain amendments to the Company’s amended and restated articles of association (the “Redemption Restriction”).
Pursuant to the Limited Waiver, the Company and the Insiders agreed to waive the Redemption Restriction as it applies to the Sponsor to the limited extent required to allow the redemption of up to an aggregate of $17 million worth of Novator Private Placement Shares held by it in connection with the shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association held on February 24, 2023
As consideration for the Limited Waiver, the Sponsor agreed: (a) if the proposed Business Combination is completed on or before September 30, 2023, to subscribe for and purchase common stock of Better Home & Finance (the “Better Common Stock”), for aggregate cash proceeds to Better equal to the actual aggregate amount of Novator Private Placement Shares redeemed by it in connection with the Limited Waiver (the “Sponsor Redeemed Amount”) at a purchase price of $10.00 per share of Better Common Stock on the closing date of the proposed Business Combination; or (b) if the proposed Business Combination is not completed on or before September 30, 2023, to subscribe for and purchase for $35 million aggregate cash proceeds to Better, at the Sponsor’s election, (x) a number of newly issued shares of Better’s Company Series D Equivalent Preferred Stock (as defined in the bridge note purchase agreement) at a price per share that represents a 50% discount to the Pre-Money Valuation (as defined below) or (y) for a number of shares of Better’s Class B common stock at a price per share that represents a 75% discount to the Pre-Money Valuation. “Pre-Money Valuation” means the $6.9 billion pre-money equity valuation of Better based on the aggregate amount of fully diluted shares of Better’s common stock on an as-converted basis.
As further consideration for the Limited Waiver, the Sponsor agreed to reimburse the Company for reasonable and documented expenses incurred by the Company in connection with the proposed Business Combination, up to the Sponsor Redeemed Amount, to the extent such expenses are not otherwise subject to reimbursement by Better pursuant to the Merger Agreement.
On February 24, 2023, Aurora, Merger Sub and Better entered into Amendment No. 5 to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date (as defined in the Merger Agreement) from March 8, 2023 to September 30, 2023.
The Company held a combined annual and extraordinary general meeting on February 24, 2023, and extended the date by which the Company has to consummate a business combination from March 8, 2023 to September 30, 2023. As part of the meeting, public shareholders redeemed 24,087,689 ordinary shares and the Sponsor redeemed 1,663,760 ordinary shares for an aggregate cash balance of approximately $263,123,592.
v3.23.4
Summary of Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation—The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Business Combination has been accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Aurora was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Better issuing stock for the net assets of Aurora, accompanied by a recapitalization. All share amounts in periods prior to the Business Combination have been retroactively adjusted using the Exchange Ratio for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization. The financials of Better are presented here for all comparative periods.
In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position and its results of operations, changes in convertible preferred stock and stockholders’ equity (deficit) and cash flows. The results of operations and other information for the nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2023. The unaudited condensed consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes of Better thereto for the year ended December 31, 2022.
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Consolidation
Consolidation—The accompanying condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
The accompanying consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
Use of Estimates—The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant items subject to such estimates and assumptions include the fair value of mortgage loans held for sale, the fair value of derivative assets and liabilities, including bifurcated derivatives, interest rate lock commitments and forward sale commitments, the determination of a valuation allowance on the Company’s deferred tax assets, capitalization of internally developed software and its associated useful life, determination of fair value of the Company’s common stock, stock option and RSUs at grant date, the fair value of acquired intangible assets and goodwill, the provision for loan repurchase reserves, the incremental borrowing rate used in determining lease liabilities and warrant liabilities.
The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant items subject to such estimates and assumptions include the fair value of mortgage loans held for sale, the fair value of derivative assets and liabilities, including bifurcated derivatives, interest rate lock commitments and forward sale commitments, the determination of a valuation allowance on the Company’s deferred tax assets, capitalization of internally developed software and its associated useful life, determination of fair value of the Company’s common stock, convertible preferred stock and convertible preferred stock warrants, stock option and RSUs at grant date, the fair value of acquired intangible assets and goodwill, the fair value of loan commitment asset, the provision for loan repurchase reserves, and the incremental borrowing rate used in determining lease liabilities.
Business Combinations
Business Combinations—The Company includes the financial results of businesses that the Company acquires from the date of acquisition. The Company records all assets acquired and liabilities assumed at fair value, with the excess of the purchase price over the aggregate fair values recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. During the measurement period the Company may record adjustments to the assets acquired and liabilities assumed. Transaction costs associated with business combinations are expensed as incurred.
The Company includes the financial results of businesses that the Company acquires from the date of acquisition. The Company records all assets acquired and liabilities assumed at fair value, with the excess of the purchase price over the aggregate fair values recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. During the measurement period the Company may record adjustments to the assets acquired and liabilities assumed. Transaction costs associated with business combinations are expensed as incurred.
Short-term investments
Short-term investments—Short term investments consist of fixed income securities, typically U.K. government treasury securities and U.K. government agency securities with maturities ranging from 91 days to one year. Management determines the appropriate classification of short-term investments at the time of purchase. Short-term investments reported as held-to-maturity are those investments which the Company has both the positive intent and ability to hold to maturity and are stated at amortized cost on the condensed consolidated balance sheets. All of the Company’s short term investments are classified as held to maturity. The Company has not recognized any impairments on these investments to date and any unrealized gains or losses on these investments are immaterial.
Allowance for Credit Losses
Allowance for Credit Losses - Held to Maturity (“HTM”) Short-term Investments—The Company's HTM Short-term investments are also required to utilize the Current Expected Credit Loss (“CECL”) approach to estimate expected credit losses. Management measures expected credit losses on short-term investments on a collective basis by major security types that share similar risk characteristics, such as financial asset type and collateral type adjusted for current conditions and reasonable and supportable forecasts. Management classifies the short term investments portfolio by security types, such as U.K. government agency.
The U.K. government treasury securities and U.K. government agency securities are issued by U.K. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.K. government as to timely repayment of principal and interest, are highly rated by major rating agencies, and have a long history of no credit losses. Therefore, credit losses for these securities were immaterial as the Company does not currently expect any material credit losses.
Mortgage Loans Held for Sale, at Fair Value
Mortgage Loans Held for Sale, at Fair Value—The Company sells its mortgage loans held for sale (“LHFS”) to loan purchasers. These loans can be sold in one of two ways, servicing released, or servicing retained. If a loan is sold servicing released, the Company has sold all the rights to the loan and the associated servicing rights.
If a loan is sold servicing retained, the Company has sold the loan and kept the servicing rights, and thus the Company is responsible for collecting monthly principal and interest payments and performing certain escrow services for the borrower. The loan purchaser, in turn, pays a fee for these services. The Company generally sells all of its loans servicing released. For interim servicing, the Company engages a third-party sub-servicer to collect monthly payments and perform associated services.
LHFS consists of loans originated for sale by BMC. The Company elects the fair value option, in accordance with Accounting Standard Codification (“ASC”) 825 – Financial Instruments (“ASC 825”), for all LHFS with changes in fair value recorded in mortgage platform revenue, net in the condensed consolidated statements of
operations and comprehensive loss. Management believes that the election of the fair value option for LHFS improves financial reporting by presenting the most relevant market indication of LHFS. The fair value of LHFS is based on market prices and yields at period end. The Company accounts for the gains or losses resulting from sales of mortgage loans based on the guidance of ASC 860-20 – Sales of Financial Assets (“ASC 860”).
The Company issues interest rate lock commitments (“IRLC”) to originate mortgage loans and the fair value of the IRLC, adjusted for the probability that a given IRLC will close and fund, is recognized within mortgage platform revenue, net. Subsequent changes in the fair value of the IRLC are measured at each reporting period within mortgage platform revenue, net until the loan is funded. When the loan is funded, the IRLC is derecognized and the LHFS is recognized based on the fair value of the loan. The LHFS is subsequently remeasured at fair value at each reporting period and the changes in fair value are included within mortgage platform revenue, net until the loan is sold on the secondary market. When the loan is sold on the secondary market, the LHFS is derecognized and the gain/(loss) is included within mortgage platform revenue, net based on the cash settlement.
LHFS are considered sold when the Company surrenders control over the loans. Control is considered to have been surrendered when the transferred loans have been isolated from the Company, are beyond the reach of the Company and its creditors, and the loan purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred loans. The Company typically considers the above criteria to have been met upon receipt of sales proceeds from the loan purchaser.
The Company sells its mortgage loans held for sale (“LHFS”) to loan purchasers. These loans can be sold in one of two ways, servicing released, or servicing retained. If a loan is sold servicing released, the Company has sold all the rights to the loan and the associated servicing rights.
If a loan is sold servicing retained, the Company has sold the loan and kept the servicing rights, and thus the Company is responsible for collecting monthly principal and interest payments and performing certain escrow services for the borrower. The loan purchaser, in turn, pays a fee for these services. The Company generally sells all of its loans servicing released. For interim servicing, the Company engages a third-party sub-servicer to collect monthly payments and perform associated services.
LHFS consists of loans originated for sale by BMC. The Company elects the fair value option, in accordance with Accounting Standard Codification (“ASC”) 825 – Financial Instruments (“ASC 825”), for all LHFS with changes in fair value recorded in mortgage platform revenue, net in the consolidated statements of operations and comprehensive loss. Management believes that the election of the fair value option for LHFS improves financial
reporting by presenting the most relevant market indication of LHFS. The fair value of LHFS is based on market prices and yields at period end. The Company accounts for the gains or losses resulting from sales of mortgage loans based on the guidance of ASC 860-20 – Sales of Financial Assets (“ASC 860”).
The Company issues interest rate lock commitments (“IRLC”) to originate mortgage loans and the fair value of the IRLC, adjusted for the probability that a given IRLC will close and fund, is recognized within mortgage platform revenue, net. Subsequent changes in the fair value of the IRLC are measured at each reporting period within mortgage platform revenue, net until the loan is funded. When the loan is funded, the IRLC is derecognized and the LHFS is recognized based on the fair value of the loan. The LHFS is subsequently remeasured at fair value at each reporting period and the changes in fair value are included within mortgage platform revenue, net until the loan is sold on the secondary market. When the loan is sold on the secondary market, the LHFS is derecognized and the gain/(loss) is included within mortgage platform revenue, net based on the cash settlement.
LHFS are considered sold when the Company surrenders control over the loans. Control is considered to have been surrendered when the transferred loans have been isolated from the Company, are beyond the reach of the Company and its creditors, and the loan purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred loans. The Company typically considers the above criteria to have been met upon receipt of sales proceeds from the loan purchaser.
Loan Repurchase Reserve
Loan Repurchase Reserve—The Company sells LHFS in the secondary market and in connection with those sales, makes customary representations and warranties to the relevant loan purchasers about various characteristics of each loan, such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local laws. In the event of a breach of its representations and warranties, the Company may be required to repurchase the loan with the identified defects.
The loan repurchase reserve on loans sold relates to expenses incurred due to the potential repurchase of loans, indemnification of losses based on alleged violations or representations and warranties, which are customary to the mortgage banking industry. Provisions for potential losses are charged to expenses and are included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss. The loan repurchase reserve represents the Company’s estimate of the total losses expected to occur and is considered to be adequate by management based upon the Company’s evaluation of the potential exposure related to the loan sale agreements over the life of the associated loans sold. The Company records the loan repurchase reserve within other liabilities on the consolidated balance sheets.
The Company sells LHFS in the secondary market and in connection with those sales, makes customary representations and warranties to the relevant loan purchasers about various characteristics of each loan, such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local laws. In the event of a breach of its representations and warranties, the Company may be required to repurchase the loan with the identified defects.The loan repurchase reserve on loans sold relates to expenses incurred due to the potential repurchase of loans, indemnification of losses based on alleged violations or representations and warranties, which are customary to the mortgage banking industry. Provisions for potential losses are charged to expenses and are included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss. The loan repurchase reserve represents the Company’s estimate of the total losses expected to occur and is considered to be adequate by management based upon the Company’s evaluation of the potential exposure related to the loan sale agreements over the life of the associated loans sold. The Company records the loan repurchase reserve within other liabilities on the consolidated balance sheets.
Fair Value Measurements
Fair Value Measurements—Assets and liabilities recorded at fair value on a recurring basis on the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The price used to measure fair value is not adjusted for transaction costs. The principal market is the market in which the Company would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability, it is assumed that the Company has access to the market as of the measurement date. If no market for the asset exists, or if the Company does not have access to the principal market, a hypothetical market is used.
The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:
Level 1—Unadjusted quoted market prices in active markets for identical assets or liabilities;
Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Assets and liabilities measured at fair value on a recurring basis include LHFS, derivative assets and liabilities, including IRLCs and forward sale commitments, MSRs, bifurcated derivatives, convertible preferred stock warrants and warrant liabilities. Common stock warrants are measured at fair value at issuance only and are classified as equity on the condensed consolidated balance sheets. When developing fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments, the Company must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are based primarily upon the Company’s own estimates, and the measurements reflect information and assumptions that management believes a market participant would use in pricing the asset or liability.
Upon the Closing of the Business Combination and issuance of the Post-Closing Convertible Notes, the Loan commitment asset was reclassified as a discount to the Post-Closing Convertible Notes and was amortized as part of interest expense over the term of the note.
Assets and liabilities recorded at fair value on a recurring basis on the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The price used to measure fair value is not adjusted for transaction costs. The principal market is the market in which the Company would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability, it is assumed that the Company has access to the market as of the measurement date. If no market for the asset exists, or if the Company does not have access to the principal market, a hypothetical market is used.
The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:
Level 1—Unadjusted quoted market prices in active markets for identical assets or liabilities;
Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Assets and liabilities measured at fair value on a recurring basis include LHFS, derivative assets and liabilities, including IRLCs and forward sale commitments, MSRs, bifurcated derivatives, and convertible preferred stock warrants. Common stock warrants are measured at fair value at issuance only and are classified as equity on the consolidated balance sheets. When developing fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments, the Company must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are based primarily upon the Company’s own estimates, and the measurements reflect information and assumptions that management believes a market participant would use in pricing the asset or liability.
Loan Commitment Asset The Merger Agreement, as discussed in Note 1, contains a commitment from SoftBank and the Sponsor to fund Post-Closing Convertible Notes, drawn at the Company’s discretion, available when certain criteria is met such as the closing of the Merger. The Company determined that the commitment represented a freestanding financial instrument (loan commitment asset) and was accounted for at fair value at inception in November 2021 and will not be remeasured to fair value in subsequent periods. The loan commitment asset will be assessed for impairment if there are events or circumstances that indicate that it is probable that the asset has been impaired. As both parties with the commitment to fund the Post-Closing Convertible notes are considered related parties and the terms of the Post-Closing Convertible Notes are not considered at market terms, the “Loan Commitment Asset” is considered a capital contribution from those parties and was recognized within additional-paid-in capital at inception in the consolidated balance sheets in the amount of $121.7 million as of December 31, 2021. During the year ended December 31, 2022, the Company recognized $105.6 million of impairment on the loan commitment asset with $16.1 million remaining on the consolidated balance sheets, see Note 4. Upon the closing of the Merger and the Post-Closing Convertible Notes are issued, the Loan Commitment Asset will be considered a discount to the Post-Closing Convertible Notes and will be amortized as part of interest expense over the term of the note.
Debt Warehouse Lines of Credit—Warehouse lines of credit represent the outstanding balance of the Company’s warehouse borrowings collateralized by mortgage loans held for sale or related borrowings collateralized by restricted cash. Generally, warehouse lines of credit are used as interim, short-term financing which bears interest at a fixed margin over an index rate, such as the Secured Oversight Financing Rate (“SOFR”). The outstanding balance of the Company’s warehouse lines of credit will fluctuate based on its lending volume. The advances received under the warehouse lines of credit are based upon a percentage of the fair value or par value of the mortgage loans collateralizing the advance, depending upon the type of mortgage loan. Should the fair value of the pledged mortgage loans decline, the warehouse provider may require the Company to provide additional cash collateral or mortgage loans to maintain the required collateral level under the relevant warehouse line. Post-Closing Convertible Notes—As part of the Closing of the Business Combination, the Company issued convertible notes. Upon initial issuance, convertible notes are evaluated for redemption and conversion features that could result in embedded derivatives that require bifurcation from the notes. Upon initial issuance, any embedded derivatives are measured at fair value. Convertible notes proceeds are allocated between the carrying value of the notes and the fair value of embedded derivatives on the initial issuance date. Any portion of proceeds allocated to embedded derivatives are treated as reductions in, or discounts to, the carrying value of the convertible notes on the issuance date. Embedded derivatives are adjusted to fair value at each reporting period, with the change in fair value included within the consolidated statements of operations and comprehensive income (loss).
Corporate Line of Credit, net of discount and debt issuance costs—The Company had a line of credit arrangement with a third-party lender. Debt and other related issuance costs are deferred and amortized through the maturity date of the line of credit as interest and amortization on non-funding debt expense. Any modifications of the line of credit arrangement are analyzed as to whether they are an extinguishment or modification of debt on a lender-by-lender basis, which is determined by whether (1) the lender remains the same, and (2) the change in the debt terms is considered substantial. Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised terms (see Note 10).
Warehouse lines of credit represent the outstanding balance of the Company’s warehouse borrowings collateralized by mortgage loans held for sale or related borrowings collateralized by restricted cash. Generally, warehouse lines of credit are used as interim, short-term financing which bears interest at a fixed margin over an index rate, such as SOFR or LIBOR. The outstanding balance of the Company’s warehouse lines of credit will fluctuate based on its lending volume. The advances received under the warehouse lines of credit are based upon a percentage of the fair value or par value of the mortgage loans collateralizing the advance, depending upon the type of mortgage loan. Should the fair value of the pledged mortgage loans decline, the warehouse provider may require the Company to provide additional cash collateral or mortgage loans to maintain the required collateral level under the relevant warehouse line. The Company did not incur any significant issuance costs related to its warehouse lines of credit. The Company has a line of credit arrangement with a third-party lender. Debt and other related issuance costs are deferred and amortized through the maturity date of the line of credit as interest and amortization on non-funding debt expense. Any modifications of the line of credit arrangement are analyzed as to whether they are an extinguishment or modification of debt on a lender-by-lender basis, which is determined by whether (1) the lender remains the same, and (2) the change in the debt terms is considered substantial. Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised termsDuring 2021, the Company issued Pre-Closing Bridge Notes with the Sponsor and SoftBank as described in Note 1. Sponsor and Softbank are related parties through the merger relationship and the terms of the Pre-Closing Bridge Notes are not considered at market terms and as such the Pre-Closing Bridge Notes were initially recorded at fair value with the excess of proceeds over fair value recorded as capital contributions. At issuance, the Company recorded $291.9 million in excess capital/proceeds from issuance of Pre-Closing Bridge Notes on the consolidated statements of changes in convertible preferred stock and stockholders’ equity (deficit). The excess capital/proceeds from issuance of Pre-Closing Bridge Notes is deemed to be a discount on the Pre-Closing Bridge Notes. In accordance with ASC 835-10, the Company accretes the discount to interest expense on the Pre-Closing Bridge Notes using the effective interest method over the shorter of the term of the Pre-Closing Bridge Notes, or until conversion.
Upon initial issuance, Pre-Closing Bridge Notes are evaluated for redemption and conversion features that could result in embedded derivatives that require bifurcation from the Pre-Closing Bridge Notes. Embedded derivatives are recorded at fair value as bifurcated derivative within the consolidated balance sheets and are adjusted to fair value at each reporting period, with the change in fair value included in change in fair value of bifurcated derivative, within the consolidated statements of operations and comprehensive loss.
Upon issuance, conversion features included in the Pre-Closing Bridge Notes that were deemed to be embedded derivatives were immaterial. As of December 31, 2022 and 2021, the embedded features had a fair value of $236.6 million and none, respectively, and were included as bifurcated derivative assets within the consolidated balance sheets.
Warrants
Warrant Liabilities—The Company assumed publicly-traded warrants (“Public Warrants”) issued in Aurora’s initial public offering, private placement warrants issued by Aurora in connection with its formation and warrants attached to certain private placement units (collectively, the “Private Warrants” and, together with the Public Warrants, the “Warrants”). Each Warrant issued entitles the holder to purchase one share of Better Home & Finance Holding Company Class A common stock at an exercise price of $11.50 per share, subject to certain adjustments, at any time commencing 30 days after the consummation of the Business Combination (which for the avoidance of doubt was September 21, 2023). The Public Warrants are publicly traded and may be exercised on a cashless basis
upon the occurrence of certain conditions. The Private Warrants are exercisable on a cashless basis and are not redeemable by the Company so long as they are held by the initial purchasers or their permitted transferees, subject to certain exceptions. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.
The Company evaluated the Public Warrants and Private Warrants and concluded that both meet the definition of a derivative and will be accounted for at fair value in accordance with ASC Topic 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, as the Public Warrants and Private Warrants are not considered indexed to the Company's stock.
The Company has used various fundraising methods, including the issuance of warrants. A warrant is a financial instrument that provides the holder of the warrant the right, but not the obligation, to buy a company’s stock in the future at a predetermined price.
Warrants to purchase convertible preferred stock are generally accounted for as a liability and are recorded at fair value on their initial issuance date and adjusted to fair value at each balance sheet date, with the change in fair value being recorded as changes in fair value of convertible preferred stock warrants, which is included in interest and other income (expense), net within the consolidated statements of operations and comprehensive loss.
Warrants to purchase common stock are accounted for as equity and are recorded at fair value on their initial issuance date.
Income taxes
Income Taxes—Income taxes are calculated in accordance with ASC 740, Accounting for Income Taxes. An estimated annual effective tax rate is applied to year-to-date income (loss). At the end of each interim period, the estimated effective tax rate expected to be applicable for the full year is calculated. This method differs from that described in the Company’s income taxes policy footnote in the audited consolidated financial statements and related notes thereto for the year ended December 31, 2022, which describes the Company’s annual significant income tax accounting policy and related methodology.
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income or expense in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred income tax assets to the amount expected to be realized based on management’s consideration of all positive and contradictory evidence available. The Company evaluates uncertainty in income tax positions based on a more-likely-than-not recognition standard. If that threshold is met, the tax position is then measured at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. If applicable, the Company records interest and penalties as a component of income tax expense.
Revenue Recognition
Revenue Recognition—The Company generates revenue from the following streams:
1)Mortgage platform revenue, net includes revenues generated from the Company's mortgage production process. See Note 4. The components of mortgage platform revenue, net are as follows:
1.Net gain (loss) on sale of loans—This represents the premium or discount the Company receives in excess of the loan principal amount and certain fees charged by loan purchasers upon sale of loans into the secondary market. Net gain (loss) on sale of loans includes unrealized changes in the fair value of LHFS which are recognized on a loan by loan basis as part of current period earnings until the loan is sold on the secondary market. The fair value of LHFS is measured based on observable market data. Also included within net gain (loss) on sale of loans is the day one recognition of the fair value of MSRs and any subsequent changes in the measurement of the fair value of the MSRs for loans sold servicing retained, including any gain or loss on subsequent sales of MSRs.
2.Integrated relationship revenue (loss)—Includes fees that the Company receives for originating loans on behalf of an integrated relationship partner which are recognized as revenue (loss) upon the integrated relationship partner’s funding of the loan. Some of the loans originated on behalf of the integrated relationship partner are purchased by the Company. Subsequent changes in fair value of loans purchased by the Company are included as part of current period earnings. These loans may be sold in the secondary market at the Company’s discretion for which any gain on sale is included in this account. For loans sold on the secondary market, the integrated relationship partner will receive a portion of the execution proceeds. A portion of the execution proceeds that is to be allocated to the integrated relationship partner is accrued as a reduction of integrated relationship revenue (loss) when the loan is initially purchased from the integrated relationship partner.
3.Changes in fair value of IRLCs and forward sale commitments—IRLCs include the fair value upon issuance with subsequent changes in the fair value recorded in each reporting period until the loan is sold on the secondary market. Fair value of forward sale commitments hedging IRLC and LHFS are measured based on quoted prices for similar assets.
2)Cash offer program revenue—The Company’s product offering includes a cash offer program (“Better Cash Offer”) where the Company works with a Buyer to identify and purchase a home directly from a property Seller. The Company will then subsequently sell the home to the Buyer. The Buyer may lease the home from the Company while the Buyer and Company go through the customary closing process to transfer ownership of the home to the Buyer. Arrangements where the Buyer leases the home from the Company are accounted for under ASC 842 while arrangements where the Buyer does not lease the home are accounted for under ASC 606. The Buyer does not directly or indirectly contract with the Seller.
For arrangements under the Better Cash Offer program that do not involve a lease, upon closing on the sale of the home from the Seller to the Company, the Company holds legal title of the home. The Company is responsible for any obligations related to the home while it holds title and is the legal owner and such is considered the principal in the transaction. The Company holds in inventory any homes where the Buyer does not subsequently purchase from the Company as well as homes held while the Company is waiting to transfer the home to the Buyer. Inventory of homes are included within prepaid expenses and other assets on the condensed consolidated balance sheets.
The Company recognizes revenue at the time of the closing of the home sale when title to and possession of the home are transferred to the Buyer. The amount of revenue recognized for each home sale is equal to the full sales price of the home. The contracts with the Buyers contain a single performance obligation that is satisfied upon the closing of the transaction and is typically completed in 1 to 90 days. The Company does not offer warranties for sold homes, and there are no continuing performance obligations following the transaction close date.
Also included in Better Cash Offer program revenue is revenue from transactions where the Company purchases the home from the Seller and subsequently leases the home to the Buyer until the title is transferred to the Buyer which is accounted for under ASC 842 in line with the Company’s accounting policy on sales-type leases as described above.
3)Other platform revenue consists of revenue from the Company’s additional homeownership offerings which primarily consist of title insurance, settlement services, and other homeownership offerings.
Title insurance, settlement services, and other homeownership offerings—Revenue from title insurance, settlement services, and other homeownership offerings is recognized based on ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”). ASC 606 outlines a single comprehensive model in accounting for revenue arising from contracts with customers. The core principle, involving a five-step process, of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The Company offers title insurance as an agent and works with third-party providers that underwrite the title insurance policies. For title insurance, the Company recognizes revenue from fees upon the completion of the performance obligation which is when the mortgage transaction closes. For title insurance, the Company is the agent in the transactions as the Company does not control the ability to direct the fulfillment of the service, is not primarily responsible for fulfilling the performance of the service, and does not assume the risk in a claim against a policy.
Settlement services revenue includes fees charged for services such as title search fees, wire fees, policy and document preparation, and other mortgage settlement services. The Company recognizes revenues from settlement services upon completion of the performance obligation which is when the mortgage transaction closes. The Company may use a third-party to fulfill these services, but the Company is considered the principal in the transaction as it directs the fulfillment of the services and ultimately bears the risk of nonperformance. As the Company is the principal, revenues from settlement services are presented on a gross basis.
Performance obligations for title insurance and settlement services are typically completed 40 to 60 days after the commencement of the loan origination process. Payment for these services is typically settled in cash as part of closing costs to the borrower upon closing of the mortgage transaction.
Other homeownership offerings consists primarily of real estate services. For real estate services, the Company generates revenues from fees related to real estate agent services, including cooperative brokerage fees from the Company’s network of third-party real estate agents, as well as brokerage fees earned when the Company provides it’s in-house real estate agents to assist customers in the purchase or sale of a home. The Company recognizes revenues from real estate services upon completion of the performance obligation which is when the mortgage transaction closes. Performance obligations for real
estate services are typically completed 40 to 60 days after the commencement of the home search process. Payment for these services is typically settled in cash as part of closing costs to the borrower upon closing of the mortgage transaction.
4)Net interest income (expense)—Includes interest income from LHFS calculated based on the note rate of the respective loan as well as interest expense on warehouse lines of credit.
Deferred revenue consists of fees paid to the Company in advance for the origination of loans. Such fees primarily include advance payments for loan origination and servicing on behalf of an integrated relationship partner. Deferred revenue is included within other liabilities on the consolidated balance sheets,The Company generates revenue from the following streams:
a)Mortgage platform revenue, net includes revenues generated from the Company's mortgage production process. See Note 3. The components of mortgage platform revenue, net are as follows:
i.Net gain (loss) on sale of loans—This represents the premium or discount the Company receives in excess of the loan principal amount and certain fees charged by loan purchasers upon sale of loans into the secondary market. Net gain (loss) on sale of loans includes unrealized changes in the fair value of
LHFS which are recognized on a loan by loan basis as part of current period earnings until the loan is sold on the secondary market. The fair value of LHFS is measured based on observable market data. Also included within net gain (loss) on sale of loans is the day one recognition of the fair value of MSRs and any subsequent changes in the measurement of the fair value of the MSRs for loans sold servicing retained, including any gain or loss on subsequent sales of MSRs.
ii.Integrated relationship revenue (loss)—Includes fees that the Company receives for originating loans on behalf of an integrated relationship partner which are recognized as revenue (loss) upon the integrated relationship partner’s funding of the loan. Some of the loans originated on behalf of the integrated relationship partner are purchased by the Company. Subsequent changes in fair value of loans purchased by the Company are included as part of current period earnings. These loans may be sold in the secondary market at the Company’s discretion for which any gain on sale is included in this account. For loans sold on the secondary market, the integrated relationship partner will receive a portion of the execution proceeds. A portion of the execution proceeds that is to be allocated to the integrated relationship partner is accrued as a reduction of integrated relationship revenue (loss) when the loan is initially purchased from the integrated relationship partner.
iii.Changes in fair value of IRLCs and forward sale commitments—IRLCs include the fair value upon issuance with subsequent changes in the fair value recorded in each reporting period until the loan is sold on the secondary market. Fair value of forward sale commitments hedging IRLC and LHFS are measured based on quoted prices for similar assets.
b)Cash offer program revenue—The Company’s product offering includes a Cash Offer Program where the Company works with a Buyer to identify and purchase a home directly from a property Seller. The Company will then subsequently sell the home to the Buyer. The Buyer may lease the home from the Company while the Buyer and Company go through the customary closing process to transfer ownership of the home to the Buyer. Arrangements where the Buyer leases the home from the Company are accounted for under ASC 842 while arrangements where the Buyer does not lease the home are accounted for under ASC 606. The Buyer does not directly or indirectly contract with the Seller.
For arrangements under the Cash Offer Program that do not involve a lease, upon closing on the sale of the home from the Seller to the Company, the Company holds legal title of the home. The Company is responsible for any obligations related to the home while it holds title and is the legal owner and such is considered the principal in the transaction. The Company holds in inventory any homes where the Buyer does not subsequently purchase from the Company as well as homes held while the Company is waiting to transfer the home to the Buyer. Inventory of homes are included within prepaid expenses and other assets on the consolidated balance sheets.
The Company recognizes revenue at the time of the closing of the home sale when title to and possession of the home are transferred to the Buyer. The amount of revenue recognized for each home sale is equal to the full sales price of the home. The contracts with the Buyers contain a single performance obligation that is satisfied upon the closing of the transaction and is typically completed in 1 to 90 days. The Company does not offer warranties for sold homes, and there are no continuing performance obligations following the transaction close date.
Also included in cash offer program revenue is revenue from transactions where the Company purchases the home from the Seller and subsequently leases the home to the Buyer until the title is transferred to the Buyer which is accounted for under ASC 842 in line with the Company’s accounting policy on sales-type leases as described above.
c)Other platform revenue consists of revenue from the Company’s additional homeownership offerings which primarily consist of title insurance, settlement services, and other homeownership offerings.
Title insurance, settlement services, and other homeownership offerings—Revenue from title insurance, settlement services, and other homeownership offerings is recognized based on ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”). ASC 606 outlines a single comprehensive model in accounting for revenue arising from contracts with customers. The core principle, involving a five-step process, of the revenue model is that
an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The Company offers title insurance as an agent and works with third-party providers that underwrite the title insurance policies. For title insurance, the Company recognizes revenue from fees upon the completion of the performance obligation which is when the mortgage transaction closes. For title insurance, the Company is the agent in the transactions as the Company does not control the ability to direct the fulfillment of the service, is not primarily responsible for fulfilling the performance of the service, and does not assume the risk in a claim against a policy.
Settlement services revenue includes fees charged for services such as title search fees, wire fees, policy and document preparation, and other mortgage settlement services. The Company recognizes revenues from settlement services upon completion of the performance obligation which is when the mortgage transaction closes. The Company may use a third-party to fulfill these services, but the Company is considered the principal in the transaction as it directs the fulfillment of the services and ultimately bears the risk of nonperformance. As the Company is the principal, revenues from settlement services are presented on a gross basis.
Performance obligations for title insurance and settlement services are typically completed 40 to 60 days after the commencement of the loan origination process. Payment for these services is typically settled in cash as part of closing costs to the borrower upon closing of the mortgage transaction.
d)Net interest income (expense)—Includes interest income from LHFS calculated based on the note rate of the respective loan as well as interest expense on warehouse lines of credit.
Mortgage Platform, Cash Offer Program, and Other Platform Expenses
Mortgage Platform Expenses—Mortgage platform expenses consist primarily of origination expenses, appraisal fees, processing expenses, underwriting, closing fees, servicing costs, and sales and operations personnel related expenses. Sales and operations personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. These expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Cash Offer Program Expenses—Better Cash Offer program expenses include the full cost of the home, including transaction closing costs and costs for maintaining the home before the legal title of the home is transferred to the Buyer. Better Cash Offer program expenses are recognized when title is transferred to the Buyer for arrangements recognized under ASC 606 and when the lease commences for arrangements recognized under ASC 842.
Other Platform Expenses—Other platform expenses relate to other non-mortgage homeownership activities, including settlement service expenses, lead generation, and personnel related costs. Settlement service expenses consist of fees for transactional services performed by third-party providers for borrowers while lead generation expenses consist of fees for services related to real estate agents. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. Other platform expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Mortgage platform expenses consist primarily of origination expenses, appraisal fees, processing expenses, underwriting, closing fees, servicing costs, and sales and operations personnel related expenses. Sales and operations personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. These expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.Cash offer program expenses include the full cost of the home, including transaction closing costs and costs for maintaining the home before the legal title of the home is transferred to the Buyer. Cash offer program expenses are recognized when title is transferred to the Buyer for arrangements recognized under ASC 606 and when the lease commences for arrangements recognized under ASC 842.Other platform expenses relate to other non-mortgage homeownership activities, including settlement service expenses, lead generation, and personnel related costs. Settlement service expenses consist of fees for transactional services performed by third-party providers for borrowers while lead generation expenses consist of fees for services related to real estate agents. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. Other platform expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
General and Administrative Expenses
General and Administrative Expenses—General and administrative expenses include personnel related expenses, including stock-based compensation and benefits for executive, finance, accounting, legal, and other administrative personnel. In addition, general and administrative expenses include external legal, tax and accounting services, and allocated occupancy expenses and related overhead based on headcount. General and administrative expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
General and administrative expenses include personnel related expenses, including stock-based compensation and benefits for executive, finance, accounting, legal, and other administrative personnel. In addition, general and administrative expenses include external legal, tax and accounting services, and allocated occupancy expenses and related overhead based on headcount. General and administrative expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Marketing and Advertising Expenses
Marketing and Advertising Expenses—Marketing and advertising expenses consist of customer acquisition expenses, brand costs, paid advertising, and personnel related costs for brand teams. For customer acquisition expenses, the Company primarily generates loan origination leads through third-party financial service websites for which they incur “pay-per-click” expenses. A majority of the Company’s marketing and advertising expenses are incurred from leads purchased from these third-party financial service websites. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. Marketing and advertising expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Marketing and advertising expenses consist of customer acquisition expenses, brand costs, paid advertising, and personnel related costs for brand teams. For customer acquisition expenses, the Company primarily generates loan origination leads through third-party financial service websites for which they incur “pay-per-click” expenses. A majority of the Company’s marketing and advertising expenses are incurred from leads purchased from these third-party financial service websites. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. Marketing and advertising expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Technology and Product Development Expenses
Technology and Product Development Expenses—Technology and product development expenses consist of employee compensation, amortization of capitalized internal-use software costs related to the Company’s technology platform, and expenses related to vendors engaged in product management, design, development, and testing of the Company’s websites and products. Employee compensation consists of stock-based compensation and benefits related to the Company’s technology team, product and creative team, and engineering team. Technology and product development expenses also include allocated occupancy expenses and related overhead based on headcount. Technology and product development expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Technology and product development expenses consist of employee compensation, amortization of capitalized internal-use software costs related to the Company’s technology platform, and expenses related to vendors engaged in product management, design, development, and testing of the Company’s websites and products. Employee compensation consists of stock-based compensation and benefits related to the Company’s technology team, product and creative team, and engineering team. Technology and product development expenses also include allocated occupancy expenses and related overhead based on headcount. Technology and product development expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Segments
Segments—The Company has one reportable segment. The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a company-wide basis for purposes of allocating resources and evaluating financial performance.
The Company has one reportable segment. The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a company-wide basis for purposes of allocating resources and evaluating financial performance.
Recently Adopted Accounting Standards
Recently Adopted Accounting Standards
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In addition, in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified the scope and application of the original guidance. Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (or “LIBOR”) by September 30, 2023. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The guidance is effective for all companies as of March 12, 2020 and can generally be applied through December 31, 2022. In December 2022, FASB issued ASU 2022-06, Reference Rate Reform ("Topic 848"): Deferral of the Sunset Date of Topic 848, because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The adoption of the new guidance did not have a material impact on the condensed consolidated financial statements.
The Company has early adopted ASC 842 in its 2021 annual consolidated financial statements effective January 1, 2021 using a modified retrospective approach. The Company has applied the new lease requirements to leases outstanding as of the adoption date through a cumulative effect adjustment to retained earnings. The Company has elected to utilize the package of practical expedients available under ASC 842, which permit the Company to not reassess the lease identification, lease classification and initial direct costs associated with any expired or existing contracts as of the date of adoption. The Company has also made accounting policy elections to: a) exempt leases with an initial term of 12 months or less from being recognized on the balance sheet, and b) not separate non-lease components of a contract from the lease component to which they relate.
In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The standard simplifies the accounting for certain convertible instruments by removing models with specific features, amends guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share (EPS) calculations as a result of these changes. This standard is effective for public companies for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and for all other entities beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2020. The Company early adopted ASU 2020-06 on January 1, 2021 using a modified retrospective approach, and such adoption did not have a material effect on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In addition, in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified the scope and application of the original guidance. Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (or “LIBOR”) by June 30, 2023. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The guidance is effective for all companies as of March 12, 2020 and can generally be applied through December 31, 2022. In December 2022, FASB issued ASU 2022-06, Reference Rate Reform ("Topic 848"): Deferral of the Sunset Date of Topic 848, because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The adoption of the new guidance did not have a material impact on the consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this standard were issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investments in leases and other commitments to extend credit held by a reporting entity at each reporting date. The amendments require that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the
amortized cost basis. The standard eliminates the current framework of recognizing probable incurred losses and instead requires an entity to use its current estimate of all expected credit losses over the contractual life. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets. The amendments in this standard are effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and for all other entities beginning after December 15, 2022, including interim periods within those fiscal years. The Company early adopted ASU 2016-13 on January 1, 2021, and such adoption did not have a material effect on the Company’s consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the application of ASC 740 - Income Taxes while maintaining or improving the usefulness of information provided to users of financial statements. The modifications include removal of certain exceptions and simplification to existing requirements. The amendments in ASU 2019-12 are effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and for all other entities beginning after December 15, 2021, and interim periods within those fiscal years beginning after December 15, 2022. The Company early adopted ASU 2019-12 on January 1, 2021, and such adoption did not have a material effect on the Company’s consolidated financial statements.
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BETTER 10K - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation—The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Business Combination has been accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Aurora was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Better issuing stock for the net assets of Aurora, accompanied by a recapitalization. All share amounts in periods prior to the Business Combination have been retroactively adjusted using the Exchange Ratio for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization. The financials of Better are presented here for all comparative periods.
In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position and its results of operations, changes in convertible preferred stock and stockholders’ equity (deficit) and cash flows. The results of operations and other information for the nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2023. The unaudited condensed consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes of Better thereto for the year ended December 31, 2022.
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Consolidation
Consolidation—The accompanying condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
The accompanying consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
Use of Estimates—The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant items subject to such estimates and assumptions include the fair value of mortgage loans held for sale, the fair value of derivative assets and liabilities, including bifurcated derivatives, interest rate lock commitments and forward sale commitments, the determination of a valuation allowance on the Company’s deferred tax assets, capitalization of internally developed software and its associated useful life, determination of fair value of the Company’s common stock, stock option and RSUs at grant date, the fair value of acquired intangible assets and goodwill, the provision for loan repurchase reserves, the incremental borrowing rate used in determining lease liabilities and warrant liabilities.
The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant items subject to such estimates and assumptions include the fair value of mortgage loans held for sale, the fair value of derivative assets and liabilities, including bifurcated derivatives, interest rate lock commitments and forward sale commitments, the determination of a valuation allowance on the Company’s deferred tax assets, capitalization of internally developed software and its associated useful life, determination of fair value of the Company’s common stock, convertible preferred stock and convertible preferred stock warrants, stock option and RSUs at grant date, the fair value of acquired intangible assets and goodwill, the fair value of loan commitment asset, the provision for loan repurchase reserves, and the incremental borrowing rate used in determining lease liabilities.
Business Combinations
Business Combinations—The Company includes the financial results of businesses that the Company acquires from the date of acquisition. The Company records all assets acquired and liabilities assumed at fair value, with the excess of the purchase price over the aggregate fair values recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. During the measurement period the Company may record adjustments to the assets acquired and liabilities assumed. Transaction costs associated with business combinations are expensed as incurred.
The Company includes the financial results of businesses that the Company acquires from the date of acquisition. The Company records all assets acquired and liabilities assumed at fair value, with the excess of the purchase price over the aggregate fair values recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. During the measurement period the Company may record adjustments to the assets acquired and liabilities assumed. Transaction costs associated with business combinations are expensed as incurred.
Cash and Cash Equivalents Cash and cash equivalents consists of cash on hand and other highly liquid and short-term investments with maturities of 90 days or less at acquisition. Of the cash and cash equivalents balances as of December 31, 2022 and 2021, $1.7 million and $3.3 million, respectively, were insured by the Federal Deposit Insurance Corporation (“FDIC”).
Restricted Cash Restricted cash primarily consists of amounts provided as collateral for the Company’s various warehouse lines of credit as well as escrow funds received from and held on behalf of borrowers. In some instances, the Company may administer funds that are legally owned by a third-party which are excluded from the Company’s consolidated balance sheets.
Mortgage Loans Held for Sale, at Fair Value
Mortgage Loans Held for Sale, at Fair Value—The Company sells its mortgage loans held for sale (“LHFS”) to loan purchasers. These loans can be sold in one of two ways, servicing released, or servicing retained. If a loan is sold servicing released, the Company has sold all the rights to the loan and the associated servicing rights.
If a loan is sold servicing retained, the Company has sold the loan and kept the servicing rights, and thus the Company is responsible for collecting monthly principal and interest payments and performing certain escrow services for the borrower. The loan purchaser, in turn, pays a fee for these services. The Company generally sells all of its loans servicing released. For interim servicing, the Company engages a third-party sub-servicer to collect monthly payments and perform associated services.
LHFS consists of loans originated for sale by BMC. The Company elects the fair value option, in accordance with Accounting Standard Codification (“ASC”) 825 – Financial Instruments (“ASC 825”), for all LHFS with changes in fair value recorded in mortgage platform revenue, net in the condensed consolidated statements of
operations and comprehensive loss. Management believes that the election of the fair value option for LHFS improves financial reporting by presenting the most relevant market indication of LHFS. The fair value of LHFS is based on market prices and yields at period end. The Company accounts for the gains or losses resulting from sales of mortgage loans based on the guidance of ASC 860-20 – Sales of Financial Assets (“ASC 860”).
The Company issues interest rate lock commitments (“IRLC”) to originate mortgage loans and the fair value of the IRLC, adjusted for the probability that a given IRLC will close and fund, is recognized within mortgage platform revenue, net. Subsequent changes in the fair value of the IRLC are measured at each reporting period within mortgage platform revenue, net until the loan is funded. When the loan is funded, the IRLC is derecognized and the LHFS is recognized based on the fair value of the loan. The LHFS is subsequently remeasured at fair value at each reporting period and the changes in fair value are included within mortgage platform revenue, net until the loan is sold on the secondary market. When the loan is sold on the secondary market, the LHFS is derecognized and the gain/(loss) is included within mortgage platform revenue, net based on the cash settlement.
LHFS are considered sold when the Company surrenders control over the loans. Control is considered to have been surrendered when the transferred loans have been isolated from the Company, are beyond the reach of the Company and its creditors, and the loan purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred loans. The Company typically considers the above criteria to have been met upon receipt of sales proceeds from the loan purchaser.
The Company sells its mortgage loans held for sale (“LHFS”) to loan purchasers. These loans can be sold in one of two ways, servicing released, or servicing retained. If a loan is sold servicing released, the Company has sold all the rights to the loan and the associated servicing rights.
If a loan is sold servicing retained, the Company has sold the loan and kept the servicing rights, and thus the Company is responsible for collecting monthly principal and interest payments and performing certain escrow services for the borrower. The loan purchaser, in turn, pays a fee for these services. The Company generally sells all of its loans servicing released. For interim servicing, the Company engages a third-party sub-servicer to collect monthly payments and perform associated services.
LHFS consists of loans originated for sale by BMC. The Company elects the fair value option, in accordance with Accounting Standard Codification (“ASC”) 825 – Financial Instruments (“ASC 825”), for all LHFS with changes in fair value recorded in mortgage platform revenue, net in the consolidated statements of operations and comprehensive loss. Management believes that the election of the fair value option for LHFS improves financial
reporting by presenting the most relevant market indication of LHFS. The fair value of LHFS is based on market prices and yields at period end. The Company accounts for the gains or losses resulting from sales of mortgage loans based on the guidance of ASC 860-20 – Sales of Financial Assets (“ASC 860”).
The Company issues interest rate lock commitments (“IRLC”) to originate mortgage loans and the fair value of the IRLC, adjusted for the probability that a given IRLC will close and fund, is recognized within mortgage platform revenue, net. Subsequent changes in the fair value of the IRLC are measured at each reporting period within mortgage platform revenue, net until the loan is funded. When the loan is funded, the IRLC is derecognized and the LHFS is recognized based on the fair value of the loan. The LHFS is subsequently remeasured at fair value at each reporting period and the changes in fair value are included within mortgage platform revenue, net until the loan is sold on the secondary market. When the loan is sold on the secondary market, the LHFS is derecognized and the gain/(loss) is included within mortgage platform revenue, net based on the cash settlement.
LHFS are considered sold when the Company surrenders control over the loans. Control is considered to have been surrendered when the transferred loans have been isolated from the Company, are beyond the reach of the Company and its creditors, and the loan purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred loans. The Company typically considers the above criteria to have been met upon receipt of sales proceeds from the loan purchaser.
Loan Repurchase Reserve
Loan Repurchase Reserve—The Company sells LHFS in the secondary market and in connection with those sales, makes customary representations and warranties to the relevant loan purchasers about various characteristics of each loan, such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local laws. In the event of a breach of its representations and warranties, the Company may be required to repurchase the loan with the identified defects.
The loan repurchase reserve on loans sold relates to expenses incurred due to the potential repurchase of loans, indemnification of losses based on alleged violations or representations and warranties, which are customary to the mortgage banking industry. Provisions for potential losses are charged to expenses and are included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss. The loan repurchase reserve represents the Company’s estimate of the total losses expected to occur and is considered to be adequate by management based upon the Company’s evaluation of the potential exposure related to the loan sale agreements over the life of the associated loans sold. The Company records the loan repurchase reserve within other liabilities on the consolidated balance sheets.
The Company sells LHFS in the secondary market and in connection with those sales, makes customary representations and warranties to the relevant loan purchasers about various characteristics of each loan, such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local laws. In the event of a breach of its representations and warranties, the Company may be required to repurchase the loan with the identified defects.The loan repurchase reserve on loans sold relates to expenses incurred due to the potential repurchase of loans, indemnification of losses based on alleged violations or representations and warranties, which are customary to the mortgage banking industry. Provisions for potential losses are charged to expenses and are included within mortgage platform expenses on the consolidated statements of operations and comprehensive loss. The loan repurchase reserve represents the Company’s estimate of the total losses expected to occur and is considered to be adequate by management based upon the Company’s evaluation of the potential exposure related to the loan sale agreements over the life of the associated loans sold. The Company records the loan repurchase reserve within other liabilities on the consolidated balance sheets.
Other Receivables, Net Other receivables, net are reported net of an allowance for doubtful accounts. Management’s estimate of the allowance is based on historical collection experience and a review of the current status of other receivables. It is reasonably possible that management’s estimate of the allowance will change. No allowance has been taken as of December 31, 2022 and 2021, respectively, as the balances reflect amounts fully collectible.
Other receivables, net consist primarily of amounts due from a third party loan sub-servicer, margin account balances with brokers, a major integrated relationship partner, and servicing partners of loan purchasers.
Derivatives and Hedging Activities The Company enters into IRLCs to originate mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. These IRLCs are not designated as accounting hedging instruments and are reflected in the consolidated balance sheets as derivative assets or liabilities at fair value with changes in fair value are recorded in current period earnings. Unrealized gains and losses on the IRLCs are recorded as derivative assets or liabilities on the consolidated balance sheets and in mortgage platform revenue, net within the consolidated statements of operations and comprehensive loss. The fair value of IRLCs are measured based on the value of the underlying mortgage loan, quoted MBS prices, estimates of the fair value of the mortgage servicing rights, and adjusted by the estimated loan funding probability, or “pull-through factor”.
The Company enters into forward sales commitment contracts for the sale of its mortgage loans held for sale or in the pipeline. These contracts are loan sales agreements in which the Company commits in principle to delivering a
mortgage loan of a specified principal amount and quality to a loan purchaser at a specified price on or before a specified date. Generally, the price the loan purchaser will pay the Company is agreed upon prior to the loan being funded (i.e., on the same day the Company commits to lend funds to a potential borrower). Under the majority of the forward sales commitment contracts if the Company fails to deliver the agreed-upon mortgage loans by the specified date, the Company must pay a “pair-off” fee to compensate the loan purchaser. The Company’s forward sale commitments are not designated as accounting hedging instruments and are reflected in the consolidated balance sheets as derivative assets or liabilities at fair value with changes in fair value are recorded in current period earnings. Unrealized gains and losses from changes in fair value on forward sales commitments are recorded as derivative assets or liabilities on the consolidated balance sheets and in mortgage platform revenue, net within the consolidated statements of operations and comprehensive loss. Forward commitments are entered into under arrangements between the Company and counterparties under Master Securities Forward Transaction Agreements, which contain a legal right to offset amounts due to and from the same counterparty and can be settled on a net basis. The Company does not utilize any other derivative instruments to manage risk.
Fair Value Measurements
Fair Value Measurements—Assets and liabilities recorded at fair value on a recurring basis on the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The price used to measure fair value is not adjusted for transaction costs. The principal market is the market in which the Company would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability, it is assumed that the Company has access to the market as of the measurement date. If no market for the asset exists, or if the Company does not have access to the principal market, a hypothetical market is used.
The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:
Level 1—Unadjusted quoted market prices in active markets for identical assets or liabilities;
Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Assets and liabilities measured at fair value on a recurring basis include LHFS, derivative assets and liabilities, including IRLCs and forward sale commitments, MSRs, bifurcated derivatives, convertible preferred stock warrants and warrant liabilities. Common stock warrants are measured at fair value at issuance only and are classified as equity on the condensed consolidated balance sheets. When developing fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments, the Company must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are based primarily upon the Company’s own estimates, and the measurements reflect information and assumptions that management believes a market participant would use in pricing the asset or liability.
Upon the Closing of the Business Combination and issuance of the Post-Closing Convertible Notes, the Loan commitment asset was reclassified as a discount to the Post-Closing Convertible Notes and was amortized as part of interest expense over the term of the note.
Assets and liabilities recorded at fair value on a recurring basis on the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The price used to measure fair value is not adjusted for transaction costs. The principal market is the market in which the Company would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability, it is assumed that the Company has access to the market as of the measurement date. If no market for the asset exists, or if the Company does not have access to the principal market, a hypothetical market is used.
The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:
Level 1—Unadjusted quoted market prices in active markets for identical assets or liabilities;
Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Assets and liabilities measured at fair value on a recurring basis include LHFS, derivative assets and liabilities, including IRLCs and forward sale commitments, MSRs, bifurcated derivatives, and convertible preferred stock warrants. Common stock warrants are measured at fair value at issuance only and are classified as equity on the consolidated balance sheets. When developing fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments, the Company must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are based primarily upon the Company’s own estimates, and the measurements reflect information and assumptions that management believes a market participant would use in pricing the asset or liability.
Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation expense is computed on the straight-line method over the estimated useful life of the asset, generally three to five years for computer and hardware and four to seven years for furniture and equipment. Leasehold improvements are depreciated over the shorter of the related lease term or the estimated useful life of the assets. Expenditures for maintenance and repairs necessary to maintain property and equipment in efficient operating condition are charged to operations as incurred while costs of additions and improvements are capitalized.
The Company’s property and equipment are considered long-lived assets and are reviewed for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the sum of the undiscounted cash flows expected to result from the use and eventual disposal of the asset and the asset’s carrying amount.
If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized to the extent the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of their carrying amount or the fair value of the asset, less costs to sell.
Goodwill Goodwill represents the excess of the purchase price of an acquired business over the fair value of the assets acquired, less liabilities assumed in connection with the acquisition. Goodwill is tested for impairment at least annually on the first day of the fourth quarter at each reporting unit level, or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired, and is required to be written down when impaired.
The guidance for goodwill impairment testing begins with an optional qualitative assessment to determine whether it is more likely than not that goodwill is impaired. The Company is not required to perform a quantitative impairment test unless it is determined, based on the results of the qualitative assessment, that it is more likely than not that goodwill is impaired. The quantitative impairment test is prepared at the reporting unit level. In performing the impairment test, management compares the estimated fair values of the applicable reporting units to their aggregate carrying values, including goodwill. If the carrying amounts of a reporting unit including goodwill were to exceed the fair value of the reporting unit, an impairment loss is recognized within the consolidated statements of operations and comprehensive loss in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company currently has only one reporting unit.
Internal Use Software and Other Intangible Assets, Net The Company reports and accounts for acquired intellectual properties included in other intangible asset with an indefinite life, such as domain name, under ASC 350, Intangibles-Goodwill and Other (“ASC 350”). Intangible assets with indefinite lives are recorded at their estimated fair value at the date of acquisition and are tested for impairment on an annual basis as well as when there is reason to suspect that their values have been diminished or impaired. Any write-downs will be included in results from operations.
Intangible assets with finite lives are recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives using the straight-line method.
The Company capitalizes certain development costs incurred in connection with its internal use software and website development. Software costs incurred in the preliminary stages of development are expensed as incurred. Once a software application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial software testing. The Company also capitalizes costs related to specific software upgrades and enhancements when it is probable the expenditures will result in additional features and functionality. Software maintenance costs are expensed as incurred. For website development, costs incurred in the planning stage are expensed as incurred whereas costs associated with the application and infrastructure development, graphics development, and content development are capitalized depending on the type of cost in each of those respective stages. Internal use software and website development are amortized on a straight-line basis over its estimated useful life, generally three years.
Loan Commitment Asset The Merger Agreement, as discussed in Note 1, contains a commitment from SoftBank and the Sponsor to fund Post-Closing Convertible Notes, drawn at the Company’s discretion, available when certain criteria is met such as the closing of the Merger. The Company determined that the commitment represented a freestanding financial instrument (loan commitment asset) and was accounted for at fair value at inception in November 2021 and will not be remeasured to fair value in subsequent periods. The loan commitment asset will be assessed for impairment if there are events or circumstances that indicate that it is probable that the asset has been impaired. As both parties with the commitment to fund the Post-Closing Convertible notes are considered related parties and the terms of the Post-Closing Convertible Notes are not considered at market terms, the “Loan Commitment Asset” is considered a capital contribution from those parties and was recognized within additional-paid-in capital at inception in the consolidated balance sheets in the amount of $121.7 million as of December 31, 2021. During the year ended December 31, 2022, the Company recognized $105.6 million of impairment on the loan commitment asset with $16.1 million remaining on the consolidated balance sheets, see Note 4. Upon the closing of the Merger and the Post-Closing Convertible Notes are issued, the Loan Commitment Asset will be considered a discount to the Post-Closing Convertible Notes and will be amortized as part of interest expense over the term of the note.
Impairment of Long-Lived Assets Long‑lived assets, including property and equipment, right-of-use assets, capitalized software, and other finite-lived intangible assets, are evaluated for recoverability when events or changes in circumstances indicate that the asset may have been impaired. In evaluating an asset for recoverability, the Company considers the future cash flows expected to result from the continued use of the asset and the eventual disposition of the asset. If the sum of the expected future cash flows, on an undiscounted basis, is less than the carrying amount of the asset, an impairment loss equal to the excess of the carrying amount over the fair value of the asset is recognized.
Debt Warehouse Lines of Credit—Warehouse lines of credit represent the outstanding balance of the Company’s warehouse borrowings collateralized by mortgage loans held for sale or related borrowings collateralized by restricted cash. Generally, warehouse lines of credit are used as interim, short-term financing which bears interest at a fixed margin over an index rate, such as the Secured Oversight Financing Rate (“SOFR”). The outstanding balance of the Company’s warehouse lines of credit will fluctuate based on its lending volume. The advances received under the warehouse lines of credit are based upon a percentage of the fair value or par value of the mortgage loans collateralizing the advance, depending upon the type of mortgage loan. Should the fair value of the pledged mortgage loans decline, the warehouse provider may require the Company to provide additional cash collateral or mortgage loans to maintain the required collateral level under the relevant warehouse line. Post-Closing Convertible Notes—As part of the Closing of the Business Combination, the Company issued convertible notes. Upon initial issuance, convertible notes are evaluated for redemption and conversion features that could result in embedded derivatives that require bifurcation from the notes. Upon initial issuance, any embedded derivatives are measured at fair value. Convertible notes proceeds are allocated between the carrying value of the notes and the fair value of embedded derivatives on the initial issuance date. Any portion of proceeds allocated to embedded derivatives are treated as reductions in, or discounts to, the carrying value of the convertible notes on the issuance date. Embedded derivatives are adjusted to fair value at each reporting period, with the change in fair value included within the consolidated statements of operations and comprehensive income (loss).
Corporate Line of Credit, net of discount and debt issuance costs—The Company had a line of credit arrangement with a third-party lender. Debt and other related issuance costs are deferred and amortized through the maturity date of the line of credit as interest and amortization on non-funding debt expense. Any modifications of the line of credit arrangement are analyzed as to whether they are an extinguishment or modification of debt on a lender-by-lender basis, which is determined by whether (1) the lender remains the same, and (2) the change in the debt terms is considered substantial. Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised terms (see Note 10).
Warehouse lines of credit represent the outstanding balance of the Company’s warehouse borrowings collateralized by mortgage loans held for sale or related borrowings collateralized by restricted cash. Generally, warehouse lines of credit are used as interim, short-term financing which bears interest at a fixed margin over an index rate, such as SOFR or LIBOR. The outstanding balance of the Company’s warehouse lines of credit will fluctuate based on its lending volume. The advances received under the warehouse lines of credit are based upon a percentage of the fair value or par value of the mortgage loans collateralizing the advance, depending upon the type of mortgage loan. Should the fair value of the pledged mortgage loans decline, the warehouse provider may require the Company to provide additional cash collateral or mortgage loans to maintain the required collateral level under the relevant warehouse line. The Company did not incur any significant issuance costs related to its warehouse lines of credit. The Company has a line of credit arrangement with a third-party lender. Debt and other related issuance costs are deferred and amortized through the maturity date of the line of credit as interest and amortization on non-funding debt expense. Any modifications of the line of credit arrangement are analyzed as to whether they are an extinguishment or modification of debt on a lender-by-lender basis, which is determined by whether (1) the lender remains the same, and (2) the change in the debt terms is considered substantial. Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised termsDuring 2021, the Company issued Pre-Closing Bridge Notes with the Sponsor and SoftBank as described in Note 1. Sponsor and Softbank are related parties through the merger relationship and the terms of the Pre-Closing Bridge Notes are not considered at market terms and as such the Pre-Closing Bridge Notes were initially recorded at fair value with the excess of proceeds over fair value recorded as capital contributions. At issuance, the Company recorded $291.9 million in excess capital/proceeds from issuance of Pre-Closing Bridge Notes on the consolidated statements of changes in convertible preferred stock and stockholders’ equity (deficit). The excess capital/proceeds from issuance of Pre-Closing Bridge Notes is deemed to be a discount on the Pre-Closing Bridge Notes. In accordance with ASC 835-10, the Company accretes the discount to interest expense on the Pre-Closing Bridge Notes using the effective interest method over the shorter of the term of the Pre-Closing Bridge Notes, or until conversion.
Upon initial issuance, Pre-Closing Bridge Notes are evaluated for redemption and conversion features that could result in embedded derivatives that require bifurcation from the Pre-Closing Bridge Notes. Embedded derivatives are recorded at fair value as bifurcated derivative within the consolidated balance sheets and are adjusted to fair value at each reporting period, with the change in fair value included in change in fair value of bifurcated derivative, within the consolidated statements of operations and comprehensive loss.
Upon issuance, conversion features included in the Pre-Closing Bridge Notes that were deemed to be embedded derivatives were immaterial. As of December 31, 2022 and 2021, the embedded features had a fair value of $236.6 million and none, respectively, and were included as bifurcated derivative assets within the consolidated balance sheets.
Leases The Company accounts for its leases in accordance with ASC 842, Leases (“ASC 842”) .
The Company’s lease portfolio primarily consists of operating leases for a number of small offices across the country for licensing purposes as well as several larger offices for employee and Company headquarters. The Company also leases various types of equipment, such as laptops and printers. The Company determines whether an arrangement is a lease at inception.
The Company has made an accounting policy election to exempt leases with an initial term of 12 months or less (“short-term leases”) from being recognized on the balance sheet. Short-term leases are not material in comparison to the Company’s overall lease portfolio. Payments related to short-term leases are recognized in the consolidated statement of operations and comprehensive loss on a straight-line basis over the lease term. The Company also elected not to separate non-lease components of a contract from the lease component to which they relate.
For leases with initial terms of greater than 12 months, the Company determines its classification as an operating or finance lease. At lease commencement, the Company recognizes a lease obligation and corresponding right-of-use asset based on the initial present value of the fixed lease payments using the Company's incremental borrowing rates for its population of leases. For leases that qualify as an operating lease, the right-of-use assets related to operating lease obligations are recorded in right-of-use assets in the consolidated balance sheets. The rate implicit on the Company’s leases are not readily determinable, therefore, management uses its incremental borrowing rate to discount the lease payments based on the information available at lease commencement. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow over a similar term, and with a similar security, in a similar economic environment, an amount equal to the fixed lease payments. The commencement date is the date the Company takes initial possession or control of the leased premise or asset, which is generally when the Company enters the leased premises and begins to make improvements in preparation for its intended use.
Non-cancelable lease terms for most of the Company's real estate leases typically range between 1-10 years and may also provide for renewal options. Renewal options are typically solely at the Company’s discretion and are only included within the lease term when the Company is reasonably certain that the renewal options would be exercised.
When a modification to the contractual terms occurs, the lease liability and right-of-use asset is remeasured based on the remaining lease payments and incremental borrowing rate as of the effective date of the modification.
The Company evaluates its right-of-use assets for impairment consistent with the impairments of long-lived assets policy disclosure described above.
Financing Leases—For leases that qualify as a finance lease, the right-of-use assets related to finance lease obligations are recorded in property and equipment as finance lease assets and are depreciated over the estimated useful life. The expense is included as a component of depreciation and amortization expense on the consolidated statements of operations and comprehensive loss.
Sales-Type Leases—The Company’s product offering includes a Cash Offer Program where the Company works with a prospective buyer (“Buyer”) to identify and purchase a home directly from a seller (“Seller”) and then subsequently sell the home to the Buyer (see further description of Cash Offer Program within the Revenue Recognition section below). In most instances, the Buyer will lease the home from the Company while the Buyer and Company go through the customary closing procedures to transfer ownership of the home to the Buyer. The Company accounts for these leases as a sales-type lease under ASC 842 and at lease commencement recognizes:
•Revenue for the lease payments, which includes the sales price of the home, which is included within cash offer program revenue on the consolidated statements of operations and comprehensive loss.
•Expenses for the cost of the home, including transaction closing costs, which is included within cash offer program expenses on the consolidated statements of operations and comprehensive loss;
•Net investment in the lease, which is included within prepaid expenses and other assets on the consolidated balance sheets, which consists of the minimum lease payments not yet received and the purchase price of the home to be financed through a mortgage.
When the Buyer has exercised the purchase option, the Company will derecognize the net investment in the lease which is offset by cash received from the Buyer for the purchase price of the home. For transactions that include a lease with the Buyer, the transaction from lease commencement to the closing and transfer of ownership of the home from the Company to the Buyer is typically completed in 1 to 90 days. The Cash Offer Program began in the fourth quarter of 2021 and as of December 31, 2022 and 2021, net investment in leases was $0.9 million and $11.1 million, respectively, and included within prepaid expenses and other assets on the consolidated balance sheets. The Company had no leases greater than 180 days and 30 days as of December 31, 2022 and 2021, respectively.
Leases The Company accounts for its leases in accordance with ASC 842, Leases (“ASC 842”) .
The Company’s lease portfolio primarily consists of operating leases for a number of small offices across the country for licensing purposes as well as several larger offices for employee and Company headquarters. The Company also leases various types of equipment, such as laptops and printers. The Company determines whether an arrangement is a lease at inception.
The Company has made an accounting policy election to exempt leases with an initial term of 12 months or less (“short-term leases”) from being recognized on the balance sheet. Short-term leases are not material in comparison to the Company’s overall lease portfolio. Payments related to short-term leases are recognized in the consolidated statement of operations and comprehensive loss on a straight-line basis over the lease term. The Company also elected not to separate non-lease components of a contract from the lease component to which they relate.
For leases with initial terms of greater than 12 months, the Company determines its classification as an operating or finance lease. At lease commencement, the Company recognizes a lease obligation and corresponding right-of-use asset based on the initial present value of the fixed lease payments using the Company's incremental borrowing rates for its population of leases. For leases that qualify as an operating lease, the right-of-use assets related to operating lease obligations are recorded in right-of-use assets in the consolidated balance sheets. The rate implicit on the Company’s leases are not readily determinable, therefore, management uses its incremental borrowing rate to discount the lease payments based on the information available at lease commencement. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow over a similar term, and with a similar security, in a similar economic environment, an amount equal to the fixed lease payments. The commencement date is the date the Company takes initial possession or control of the leased premise or asset, which is generally when the Company enters the leased premises and begins to make improvements in preparation for its intended use.
Non-cancelable lease terms for most of the Company's real estate leases typically range between 1-10 years and may also provide for renewal options. Renewal options are typically solely at the Company’s discretion and are only included within the lease term when the Company is reasonably certain that the renewal options would be exercised.
When a modification to the contractual terms occurs, the lease liability and right-of-use asset is remeasured based on the remaining lease payments and incremental borrowing rate as of the effective date of the modification.
The Company evaluates its right-of-use assets for impairment consistent with the impairments of long-lived assets policy disclosure described above.
Financing Leases—For leases that qualify as a finance lease, the right-of-use assets related to finance lease obligations are recorded in property and equipment as finance lease assets and are depreciated over the estimated useful life. The expense is included as a component of depreciation and amortization expense on the consolidated statements of operations and comprehensive loss.
Sales-Type Leases—The Company’s product offering includes a Cash Offer Program where the Company works with a prospective buyer (“Buyer”) to identify and purchase a home directly from a seller (“Seller”) and then subsequently sell the home to the Buyer (see further description of Cash Offer Program within the Revenue Recognition section below). In most instances, the Buyer will lease the home from the Company while the Buyer and Company go through the customary closing procedures to transfer ownership of the home to the Buyer. The Company accounts for these leases as a sales-type lease under ASC 842 and at lease commencement recognizes:
•Revenue for the lease payments, which includes the sales price of the home, which is included within cash offer program revenue on the consolidated statements of operations and comprehensive loss.
•Expenses for the cost of the home, including transaction closing costs, which is included within cash offer program expenses on the consolidated statements of operations and comprehensive loss;
•Net investment in the lease, which is included within prepaid expenses and other assets on the consolidated balance sheets, which consists of the minimum lease payments not yet received and the purchase price of the home to be financed through a mortgage.
When the Buyer has exercised the purchase option, the Company will derecognize the net investment in the lease which is offset by cash received from the Buyer for the purchase price of the home. For transactions that include a lease with the Buyer, the transaction from lease commencement to the closing and transfer of ownership of the home from the Company to the Buyer is typically completed in 1 to 90 days. The Cash Offer Program began in the fourth quarter of 2021 and as of December 31, 2022 and 2021, net investment in leases was $0.9 million and $11.1 million, respectively, and included within prepaid expenses and other assets on the consolidated balance sheets. The Company had no leases greater than 180 days and 30 days as of December 31, 2022 and 2021, respectively.
Warrants
Warrant Liabilities—The Company assumed publicly-traded warrants (“Public Warrants”) issued in Aurora’s initial public offering, private placement warrants issued by Aurora in connection with its formation and warrants attached to certain private placement units (collectively, the “Private Warrants” and, together with the Public Warrants, the “Warrants”). Each Warrant issued entitles the holder to purchase one share of Better Home & Finance Holding Company Class A common stock at an exercise price of $11.50 per share, subject to certain adjustments, at any time commencing 30 days after the consummation of the Business Combination (which for the avoidance of doubt was September 21, 2023). The Public Warrants are publicly traded and may be exercised on a cashless basis
upon the occurrence of certain conditions. The Private Warrants are exercisable on a cashless basis and are not redeemable by the Company so long as they are held by the initial purchasers or their permitted transferees, subject to certain exceptions. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.
The Company evaluated the Public Warrants and Private Warrants and concluded that both meet the definition of a derivative and will be accounted for at fair value in accordance with ASC Topic 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, as the Public Warrants and Private Warrants are not considered indexed to the Company's stock.
The Company has used various fundraising methods, including the issuance of warrants. A warrant is a financial instrument that provides the holder of the warrant the right, but not the obligation, to buy a company’s stock in the future at a predetermined price.
Warrants to purchase convertible preferred stock are generally accounted for as a liability and are recorded at fair value on their initial issuance date and adjusted to fair value at each balance sheet date, with the change in fair value being recorded as changes in fair value of convertible preferred stock warrants, which is included in interest and other income (expense), net within the consolidated statements of operations and comprehensive loss.
Warrants to purchase common stock are accounted for as equity and are recorded at fair value on their initial issuance date.
Income taxes
Income Taxes—Income taxes are calculated in accordance with ASC 740, Accounting for Income Taxes. An estimated annual effective tax rate is applied to year-to-date income (loss). At the end of each interim period, the estimated effective tax rate expected to be applicable for the full year is calculated. This method differs from that described in the Company’s income taxes policy footnote in the audited consolidated financial statements and related notes thereto for the year ended December 31, 2022, which describes the Company’s annual significant income tax accounting policy and related methodology.
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income or expense in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred income tax assets to the amount expected to be realized based on management’s consideration of all positive and contradictory evidence available. The Company evaluates uncertainty in income tax positions based on a more-likely-than-not recognition standard. If that threshold is met, the tax position is then measured at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. If applicable, the Company records interest and penalties as a component of income tax expense.
Foreign Currency Translation The U.S. dollar is the functional currency of the Company’s consolidated entities operating in the United States. The Company’s non U.S. dollar functional currency operations include a non-operating service entity as well as several operating entities resulting from acquisitions. All balance sheet accounts have been translated using the exchange rates in effect as of the balance sheet date. Income statement amounts have been translated using the monthly average exchange rates for each month in the year. Accumulated net translation adjustments have been reported separately in other comprehensive loss in the consolidated statements of operations and comprehensive loss.
Deferred Revenue and Revenue Recognition
Revenue Recognition—The Company generates revenue from the following streams:
1)Mortgage platform revenue, net includes revenues generated from the Company's mortgage production process. See Note 4. The components of mortgage platform revenue, net are as follows:
1.Net gain (loss) on sale of loans—This represents the premium or discount the Company receives in excess of the loan principal amount and certain fees charged by loan purchasers upon sale of loans into the secondary market. Net gain (loss) on sale of loans includes unrealized changes in the fair value of LHFS which are recognized on a loan by loan basis as part of current period earnings until the loan is sold on the secondary market. The fair value of LHFS is measured based on observable market data. Also included within net gain (loss) on sale of loans is the day one recognition of the fair value of MSRs and any subsequent changes in the measurement of the fair value of the MSRs for loans sold servicing retained, including any gain or loss on subsequent sales of MSRs.
2.Integrated relationship revenue (loss)—Includes fees that the Company receives for originating loans on behalf of an integrated relationship partner which are recognized as revenue (loss) upon the integrated relationship partner’s funding of the loan. Some of the loans originated on behalf of the integrated relationship partner are purchased by the Company. Subsequent changes in fair value of loans purchased by the Company are included as part of current period earnings. These loans may be sold in the secondary market at the Company’s discretion for which any gain on sale is included in this account. For loans sold on the secondary market, the integrated relationship partner will receive a portion of the execution proceeds. A portion of the execution proceeds that is to be allocated to the integrated relationship partner is accrued as a reduction of integrated relationship revenue (loss) when the loan is initially purchased from the integrated relationship partner.
3.Changes in fair value of IRLCs and forward sale commitments—IRLCs include the fair value upon issuance with subsequent changes in the fair value recorded in each reporting period until the loan is sold on the secondary market. Fair value of forward sale commitments hedging IRLC and LHFS are measured based on quoted prices for similar assets.
2)Cash offer program revenue—The Company’s product offering includes a cash offer program (“Better Cash Offer”) where the Company works with a Buyer to identify and purchase a home directly from a property Seller. The Company will then subsequently sell the home to the Buyer. The Buyer may lease the home from the Company while the Buyer and Company go through the customary closing process to transfer ownership of the home to the Buyer. Arrangements where the Buyer leases the home from the Company are accounted for under ASC 842 while arrangements where the Buyer does not lease the home are accounted for under ASC 606. The Buyer does not directly or indirectly contract with the Seller.
For arrangements under the Better Cash Offer program that do not involve a lease, upon closing on the sale of the home from the Seller to the Company, the Company holds legal title of the home. The Company is responsible for any obligations related to the home while it holds title and is the legal owner and such is considered the principal in the transaction. The Company holds in inventory any homes where the Buyer does not subsequently purchase from the Company as well as homes held while the Company is waiting to transfer the home to the Buyer. Inventory of homes are included within prepaid expenses and other assets on the condensed consolidated balance sheets.
The Company recognizes revenue at the time of the closing of the home sale when title to and possession of the home are transferred to the Buyer. The amount of revenue recognized for each home sale is equal to the full sales price of the home. The contracts with the Buyers contain a single performance obligation that is satisfied upon the closing of the transaction and is typically completed in 1 to 90 days. The Company does not offer warranties for sold homes, and there are no continuing performance obligations following the transaction close date.
Also included in Better Cash Offer program revenue is revenue from transactions where the Company purchases the home from the Seller and subsequently leases the home to the Buyer until the title is transferred to the Buyer which is accounted for under ASC 842 in line with the Company’s accounting policy on sales-type leases as described above.
3)Other platform revenue consists of revenue from the Company’s additional homeownership offerings which primarily consist of title insurance, settlement services, and other homeownership offerings.
Title insurance, settlement services, and other homeownership offerings—Revenue from title insurance, settlement services, and other homeownership offerings is recognized based on ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”). ASC 606 outlines a single comprehensive model in accounting for revenue arising from contracts with customers. The core principle, involving a five-step process, of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The Company offers title insurance as an agent and works with third-party providers that underwrite the title insurance policies. For title insurance, the Company recognizes revenue from fees upon the completion of the performance obligation which is when the mortgage transaction closes. For title insurance, the Company is the agent in the transactions as the Company does not control the ability to direct the fulfillment of the service, is not primarily responsible for fulfilling the performance of the service, and does not assume the risk in a claim against a policy.
Settlement services revenue includes fees charged for services such as title search fees, wire fees, policy and document preparation, and other mortgage settlement services. The Company recognizes revenues from settlement services upon completion of the performance obligation which is when the mortgage transaction closes. The Company may use a third-party to fulfill these services, but the Company is considered the principal in the transaction as it directs the fulfillment of the services and ultimately bears the risk of nonperformance. As the Company is the principal, revenues from settlement services are presented on a gross basis.
Performance obligations for title insurance and settlement services are typically completed 40 to 60 days after the commencement of the loan origination process. Payment for these services is typically settled in cash as part of closing costs to the borrower upon closing of the mortgage transaction.
Other homeownership offerings consists primarily of real estate services. For real estate services, the Company generates revenues from fees related to real estate agent services, including cooperative brokerage fees from the Company’s network of third-party real estate agents, as well as brokerage fees earned when the Company provides it’s in-house real estate agents to assist customers in the purchase or sale of a home. The Company recognizes revenues from real estate services upon completion of the performance obligation which is when the mortgage transaction closes. Performance obligations for real
estate services are typically completed 40 to 60 days after the commencement of the home search process. Payment for these services is typically settled in cash as part of closing costs to the borrower upon closing of the mortgage transaction.
4)Net interest income (expense)—Includes interest income from LHFS calculated based on the note rate of the respective loan as well as interest expense on warehouse lines of credit.
Deferred revenue consists of fees paid to the Company in advance for the origination of loans. Such fees primarily include advance payments for loan origination and servicing on behalf of an integrated relationship partner. Deferred revenue is included within other liabilities on the consolidated balance sheets,The Company generates revenue from the following streams:
a)Mortgage platform revenue, net includes revenues generated from the Company's mortgage production process. See Note 3. The components of mortgage platform revenue, net are as follows:
i.Net gain (loss) on sale of loans—This represents the premium or discount the Company receives in excess of the loan principal amount and certain fees charged by loan purchasers upon sale of loans into the secondary market. Net gain (loss) on sale of loans includes unrealized changes in the fair value of
LHFS which are recognized on a loan by loan basis as part of current period earnings until the loan is sold on the secondary market. The fair value of LHFS is measured based on observable market data. Also included within net gain (loss) on sale of loans is the day one recognition of the fair value of MSRs and any subsequent changes in the measurement of the fair value of the MSRs for loans sold servicing retained, including any gain or loss on subsequent sales of MSRs.
ii.Integrated relationship revenue (loss)—Includes fees that the Company receives for originating loans on behalf of an integrated relationship partner which are recognized as revenue (loss) upon the integrated relationship partner’s funding of the loan. Some of the loans originated on behalf of the integrated relationship partner are purchased by the Company. Subsequent changes in fair value of loans purchased by the Company are included as part of current period earnings. These loans may be sold in the secondary market at the Company’s discretion for which any gain on sale is included in this account. For loans sold on the secondary market, the integrated relationship partner will receive a portion of the execution proceeds. A portion of the execution proceeds that is to be allocated to the integrated relationship partner is accrued as a reduction of integrated relationship revenue (loss) when the loan is initially purchased from the integrated relationship partner.
iii.Changes in fair value of IRLCs and forward sale commitments—IRLCs include the fair value upon issuance with subsequent changes in the fair value recorded in each reporting period until the loan is sold on the secondary market. Fair value of forward sale commitments hedging IRLC and LHFS are measured based on quoted prices for similar assets.
b)Cash offer program revenue—The Company’s product offering includes a Cash Offer Program where the Company works with a Buyer to identify and purchase a home directly from a property Seller. The Company will then subsequently sell the home to the Buyer. The Buyer may lease the home from the Company while the Buyer and Company go through the customary closing process to transfer ownership of the home to the Buyer. Arrangements where the Buyer leases the home from the Company are accounted for under ASC 842 while arrangements where the Buyer does not lease the home are accounted for under ASC 606. The Buyer does not directly or indirectly contract with the Seller.
For arrangements under the Cash Offer Program that do not involve a lease, upon closing on the sale of the home from the Seller to the Company, the Company holds legal title of the home. The Company is responsible for any obligations related to the home while it holds title and is the legal owner and such is considered the principal in the transaction. The Company holds in inventory any homes where the Buyer does not subsequently purchase from the Company as well as homes held while the Company is waiting to transfer the home to the Buyer. Inventory of homes are included within prepaid expenses and other assets on the consolidated balance sheets.
The Company recognizes revenue at the time of the closing of the home sale when title to and possession of the home are transferred to the Buyer. The amount of revenue recognized for each home sale is equal to the full sales price of the home. The contracts with the Buyers contain a single performance obligation that is satisfied upon the closing of the transaction and is typically completed in 1 to 90 days. The Company does not offer warranties for sold homes, and there are no continuing performance obligations following the transaction close date.
Also included in cash offer program revenue is revenue from transactions where the Company purchases the home from the Seller and subsequently leases the home to the Buyer until the title is transferred to the Buyer which is accounted for under ASC 842 in line with the Company’s accounting policy on sales-type leases as described above.
c)Other platform revenue consists of revenue from the Company’s additional homeownership offerings which primarily consist of title insurance, settlement services, and other homeownership offerings.
Title insurance, settlement services, and other homeownership offerings—Revenue from title insurance, settlement services, and other homeownership offerings is recognized based on ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”). ASC 606 outlines a single comprehensive model in accounting for revenue arising from contracts with customers. The core principle, involving a five-step process, of the revenue model is that
an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The Company offers title insurance as an agent and works with third-party providers that underwrite the title insurance policies. For title insurance, the Company recognizes revenue from fees upon the completion of the performance obligation which is when the mortgage transaction closes. For title insurance, the Company is the agent in the transactions as the Company does not control the ability to direct the fulfillment of the service, is not primarily responsible for fulfilling the performance of the service, and does not assume the risk in a claim against a policy.
Settlement services revenue includes fees charged for services such as title search fees, wire fees, policy and document preparation, and other mortgage settlement services. The Company recognizes revenues from settlement services upon completion of the performance obligation which is when the mortgage transaction closes. The Company may use a third-party to fulfill these services, but the Company is considered the principal in the transaction as it directs the fulfillment of the services and ultimately bears the risk of nonperformance. As the Company is the principal, revenues from settlement services are presented on a gross basis.
Performance obligations for title insurance and settlement services are typically completed 40 to 60 days after the commencement of the loan origination process. Payment for these services is typically settled in cash as part of closing costs to the borrower upon closing of the mortgage transaction.
d)Net interest income (expense)—Includes interest income from LHFS calculated based on the note rate of the respective loan as well as interest expense on warehouse lines of credit.
Mortgage Platform, Cash Offer Program, and Other Platform Expenses
Mortgage Platform Expenses—Mortgage platform expenses consist primarily of origination expenses, appraisal fees, processing expenses, underwriting, closing fees, servicing costs, and sales and operations personnel related expenses. Sales and operations personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. These expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Cash Offer Program Expenses—Better Cash Offer program expenses include the full cost of the home, including transaction closing costs and costs for maintaining the home before the legal title of the home is transferred to the Buyer. Better Cash Offer program expenses are recognized when title is transferred to the Buyer for arrangements recognized under ASC 606 and when the lease commences for arrangements recognized under ASC 842.
Other Platform Expenses—Other platform expenses relate to other non-mortgage homeownership activities, including settlement service expenses, lead generation, and personnel related costs. Settlement service expenses consist of fees for transactional services performed by third-party providers for borrowers while lead generation expenses consist of fees for services related to real estate agents. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. Other platform expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Mortgage platform expenses consist primarily of origination expenses, appraisal fees, processing expenses, underwriting, closing fees, servicing costs, and sales and operations personnel related expenses. Sales and operations personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. These expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.Cash offer program expenses include the full cost of the home, including transaction closing costs and costs for maintaining the home before the legal title of the home is transferred to the Buyer. Cash offer program expenses are recognized when title is transferred to the Buyer for arrangements recognized under ASC 606 and when the lease commences for arrangements recognized under ASC 842.Other platform expenses relate to other non-mortgage homeownership activities, including settlement service expenses, lead generation, and personnel related costs. Settlement service expenses consist of fees for transactional services performed by third-party providers for borrowers while lead generation expenses consist of fees for services related to real estate agents. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. Other platform expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
General and Administrative Expenses
General and Administrative Expenses—General and administrative expenses include personnel related expenses, including stock-based compensation and benefits for executive, finance, accounting, legal, and other administrative personnel. In addition, general and administrative expenses include external legal, tax and accounting services, and allocated occupancy expenses and related overhead based on headcount. General and administrative expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
General and administrative expenses include personnel related expenses, including stock-based compensation and benefits for executive, finance, accounting, legal, and other administrative personnel. In addition, general and administrative expenses include external legal, tax and accounting services, and allocated occupancy expenses and related overhead based on headcount. General and administrative expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Marketing and Advertising Expenses
Marketing and Advertising Expenses—Marketing and advertising expenses consist of customer acquisition expenses, brand costs, paid advertising, and personnel related costs for brand teams. For customer acquisition expenses, the Company primarily generates loan origination leads through third-party financial service websites for which they incur “pay-per-click” expenses. A majority of the Company’s marketing and advertising expenses are incurred from leads purchased from these third-party financial service websites. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. Marketing and advertising expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Marketing and advertising expenses consist of customer acquisition expenses, brand costs, paid advertising, and personnel related costs for brand teams. For customer acquisition expenses, the Company primarily generates loan origination leads through third-party financial service websites for which they incur “pay-per-click” expenses. A majority of the Company’s marketing and advertising expenses are incurred from leads purchased from these third-party financial service websites. Personnel related expenses include compensation and related benefits, stock-based compensation, and allocated occupancy expenses and related overhead based on headcount. Marketing and advertising expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Technology and Product Development Expenses
Technology and Product Development Expenses—Technology and product development expenses consist of employee compensation, amortization of capitalized internal-use software costs related to the Company’s technology platform, and expenses related to vendors engaged in product management, design, development, and testing of the Company’s websites and products. Employee compensation consists of stock-based compensation and benefits related to the Company’s technology team, product and creative team, and engineering team. Technology and product development expenses also include allocated occupancy expenses and related overhead based on headcount. Technology and product development expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Technology and product development expenses consist of employee compensation, amortization of capitalized internal-use software costs related to the Company’s technology platform, and expenses related to vendors engaged in product management, design, development, and testing of the Company’s websites and products. Employee compensation consists of stock-based compensation and benefits related to the Company’s technology team, product and creative team, and engineering team. Technology and product development expenses also include allocated occupancy expenses and related overhead based on headcount. Technology and product development expenses are expensed as incurred with the exception of stock-based compensation, which is recognized over the requisite service period.
Stock-Based Compensation The Company measures and records the expense related to stock-based compensation awards based on the fair value of those awards as determined on the date of grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period and uses the straight-line method to recognize stock-based compensation. For stock-based compensation with performance conditions, the Company records stock-based compensation expense when it is deemed probable that the performance condition will be met.
The Company uses the Black-Scholes-Merton (“Black-Scholes”) option-pricing model to determine the fair value of stock options. The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions, which determine the fair value of stock-based compensation awards, including the option’s expected term and the price volatility of the underlying stock. The Company calculates the fair value of stock options granted using the following assumptions:
a)Expected Volatility—The Company estimated volatility for option grants by evaluating the average historical volatility of a peer group of companies for the period immediately preceding the option grant for a term that is approximately equal to the options’ expected term.
b)Expected Term—The expected term of the Company’s options represents the period that the stock-based awards are expected to be outstanding. The Company has elected to use the midpoint of the stock options vesting term and contractual expiration period to compute the expected term, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.
c)Risk-Free Interest Rate—The risk-free interest rate is based on the implied yield currently available on US Treasury zero-coupon issues with a term that is equal to the options’ expected term at the grant date.
d)Dividend Yield—The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, the dividend yield has been estimated to be zero.
Forfeitures of stock options and RSUs are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from initial estimates.
The Company records compensation expense related to stock options issued to non-employees, including consultants based on the fair value of the stock options on the grant date over the service performance period as the stock options vest.
The Company also generally allows stock option holders to early exercise stock options prior to the vesting date. The early exercise of stock options not yet vested are not reflected within stockholders’ equity or on the consolidated balance sheets as they relate to unvested share awards and therefore are considered non-substantive exercises.
Net Income (Loss) Per Share The Company follows the two-class method when computing net income (loss) per share, as the Company has issued shares that meet the definition of participating securities. The two-class method determines net income (loss) per share for each class of common and participating securities according to
dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. In periods where there is net income, we apply the two-class method to calculate basic and diluted net income (loss) per share of common stock, as our convertible preferred stock is a participating security. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. In periods where there is a net loss, the two-class method of computing earnings per share does not apply as the Company’s convertible preferred stock does not contractually participate in losses.
Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income (loss) attributable to common stockholders is computed by adjusting net income (loss) attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares. For purpose of this calculation, outstanding stock options, including stock options exercised not yet vested, convertible notes, convertible preferred stock and warrants to purchase shares of convertible preferred stock are considered potential dilutive common shares.
The Company's convertible preferred stock contractually entitles the holders of such shares to participate in dividends but does not contractually require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss attributable to common stockholders, such losses are not allocated to such participating securities. In addition, as the convertible preferred stock can convert into common stock, the Company uses the more dilutive of the two-class method or the if-converted method in the calculation of diluted net income (loss) per share.
Diluted net income (loss) per share is the amount of net income (loss) available to each share of common stock outstanding during the reporting period, adjusted to include the effect of potentially dilutive common shares. For periods in which the Company reports net losses, basic and diluted net loss per share attributable to common stockholders are the same because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.
Segments
Segments—The Company has one reportable segment. The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a company-wide basis for purposes of allocating resources and evaluating financial performance.
The Company has one reportable segment. The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a company-wide basis for purposes of allocating resources and evaluating financial performance.
Recently Adopted Accounting Standards
Recently Adopted Accounting Standards
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In addition, in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified the scope and application of the original guidance. Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (or “LIBOR”) by September 30, 2023. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The guidance is effective for all companies as of March 12, 2020 and can generally be applied through December 31, 2022. In December 2022, FASB issued ASU 2022-06, Reference Rate Reform ("Topic 848"): Deferral of the Sunset Date of Topic 848, because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The adoption of the new guidance did not have a material impact on the condensed consolidated financial statements.
The Company has early adopted ASC 842 in its 2021 annual consolidated financial statements effective January 1, 2021 using a modified retrospective approach. The Company has applied the new lease requirements to leases outstanding as of the adoption date through a cumulative effect adjustment to retained earnings. The Company has elected to utilize the package of practical expedients available under ASC 842, which permit the Company to not reassess the lease identification, lease classification and initial direct costs associated with any expired or existing contracts as of the date of adoption. The Company has also made accounting policy elections to: a) exempt leases with an initial term of 12 months or less from being recognized on the balance sheet, and b) not separate non-lease components of a contract from the lease component to which they relate.
In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The standard simplifies the accounting for certain convertible instruments by removing models with specific features, amends guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share (EPS) calculations as a result of these changes. This standard is effective for public companies for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and for all other entities beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2020. The Company early adopted ASU 2020-06 on January 1, 2021 using a modified retrospective approach, and such adoption did not have a material effect on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In addition, in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified the scope and application of the original guidance. Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (or “LIBOR”) by June 30, 2023. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The guidance is effective for all companies as of March 12, 2020 and can generally be applied through December 31, 2022. In December 2022, FASB issued ASU 2022-06, Reference Rate Reform ("Topic 848"): Deferral of the Sunset Date of Topic 848, because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The adoption of the new guidance did not have a material impact on the consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this standard were issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investments in leases and other commitments to extend credit held by a reporting entity at each reporting date. The amendments require that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the
amortized cost basis. The standard eliminates the current framework of recognizing probable incurred losses and instead requires an entity to use its current estimate of all expected credit losses over the contractual life. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets. The amendments in this standard are effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and for all other entities beginning after December 15, 2022, including interim periods within those fiscal years. The Company early adopted ASU 2016-13 on January 1, 2021, and such adoption did not have a material effect on the Company’s consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the application of ASC 740 - Income Taxes while maintaining or improving the usefulness of information provided to users of financial statements. The modifications include removal of certain exceptions and simplification to existing requirements. The amendments in ASU 2019-12 are effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and for all other entities beginning after December 15, 2021, and interim periods within those fiscal years beginning after December 15, 2022. The Company early adopted ASU 2019-12 on January 1, 2021, and such adoption did not have a material effect on the Company’s consolidated financial statements.
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AURORA 10Q - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 9 Months Ended
Sep. 30, 2023
Summary of Significant Accounting Policies [Line Items]  
Basis of presentation
Basis of Presentation—The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Business Combination has been accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Aurora was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Better issuing stock for the net assets of Aurora, accompanied by a recapitalization. All share amounts in periods prior to the Business Combination have been retroactively adjusted using the Exchange Ratio for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization. The financials of Better are presented here for all comparative periods.
In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position and its results of operations, changes in convertible preferred stock and stockholders’ equity (deficit) and cash flows. The results of operations and other information for the nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2023. The unaudited condensed consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes of Better thereto for the year ended December 31, 2022.
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use of estimates
Use of Estimates—The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant items subject to such estimates and assumptions include the fair value of mortgage loans held for sale, the fair value of derivative assets and liabilities, including bifurcated derivatives, interest rate lock commitments and forward sale commitments, the determination of a valuation allowance on the Company’s deferred tax assets, capitalization of internally developed software and its associated useful life, determination of fair value of the Company’s common stock, stock option and RSUs at grant date, the fair value of acquired intangible assets and goodwill, the provision for loan repurchase reserves, the incremental borrowing rate used in determining lease liabilities and warrant liabilities.
The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant items subject to such estimates and assumptions include the fair value of mortgage loans held for sale, the fair value of derivative assets and liabilities, including bifurcated derivatives, interest rate lock commitments and forward sale commitments, the determination of a valuation allowance on the Company’s deferred tax assets, capitalization of internally developed software and its associated useful life, determination of fair value of the Company’s common stock, convertible preferred stock and convertible preferred stock warrants, stock option and RSUs at grant date, the fair value of acquired intangible assets and goodwill, the fair value of loan commitment asset, the provision for loan repurchase reserves, and the incremental borrowing rate used in determining lease liabilities.
Income taxes
Income Taxes—Income taxes are calculated in accordance with ASC 740, Accounting for Income Taxes. An estimated annual effective tax rate is applied to year-to-date income (loss). At the end of each interim period, the estimated effective tax rate expected to be applicable for the full year is calculated. This method differs from that described in the Company’s income taxes policy footnote in the audited consolidated financial statements and related notes thereto for the year ended December 31, 2022, which describes the Company’s annual significant income tax accounting policy and related methodology.
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income or expense in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred income tax assets to the amount expected to be realized based on management’s consideration of all positive and contradictory evidence available. The Company evaluates uncertainty in income tax positions based on a more-likely-than-not recognition standard. If that threshold is met, the tax position is then measured at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. If applicable, the Company records interest and penalties as a component of income tax expense.
Net income (loss) per share The Company follows the two-class method when computing net income (loss) per share, as the Company has issued shares that meet the definition of participating securities. The two-class method determines net income (loss) per share for each class of common and participating securities according to
dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. In periods where there is net income, we apply the two-class method to calculate basic and diluted net income (loss) per share of common stock, as our convertible preferred stock is a participating security. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. In periods where there is a net loss, the two-class method of computing earnings per share does not apply as the Company’s convertible preferred stock does not contractually participate in losses.
Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income (loss) attributable to common stockholders is computed by adjusting net income (loss) attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares. For purpose of this calculation, outstanding stock options, including stock options exercised not yet vested, convertible notes, convertible preferred stock and warrants to purchase shares of convertible preferred stock are considered potential dilutive common shares.
The Company's convertible preferred stock contractually entitles the holders of such shares to participate in dividends but does not contractually require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss attributable to common stockholders, such losses are not allocated to such participating securities. In addition, as the convertible preferred stock can convert into common stock, the Company uses the more dilutive of the two-class method or the if-converted method in the calculation of diluted net income (loss) per share.
Diluted net income (loss) per share is the amount of net income (loss) available to each share of common stock outstanding during the reporting period, adjusted to include the effect of potentially dilutive common shares. For periods in which the Company reports net losses, basic and diluted net loss per share attributable to common stockholders are the same because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.
Recent issued accounting standards
Recently Adopted Accounting Standards
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In addition, in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified the scope and application of the original guidance. Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (or “LIBOR”) by September 30, 2023. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The guidance is effective for all companies as of March 12, 2020 and can generally be applied through December 31, 2022. In December 2022, FASB issued ASU 2022-06, Reference Rate Reform ("Topic 848"): Deferral of the Sunset Date of Topic 848, because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The adoption of the new guidance did not have a material impact on the condensed consolidated financial statements.
The Company has early adopted ASC 842 in its 2021 annual consolidated financial statements effective January 1, 2021 using a modified retrospective approach. The Company has applied the new lease requirements to leases outstanding as of the adoption date through a cumulative effect adjustment to retained earnings. The Company has elected to utilize the package of practical expedients available under ASC 842, which permit the Company to not reassess the lease identification, lease classification and initial direct costs associated with any expired or existing contracts as of the date of adoption. The Company has also made accounting policy elections to: a) exempt leases with an initial term of 12 months or less from being recognized on the balance sheet, and b) not separate non-lease components of a contract from the lease component to which they relate.
In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The standard simplifies the accounting for certain convertible instruments by removing models with specific features, amends guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share (EPS) calculations as a result of these changes. This standard is effective for public companies for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and for all other entities beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2020. The Company early adopted ASU 2020-06 on January 1, 2021 using a modified retrospective approach, and such adoption did not have a material effect on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In addition, in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified the scope and application of the original guidance. Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (or “LIBOR”) by June 30, 2023. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The guidance is effective for all companies as of March 12, 2020 and can generally be applied through December 31, 2022. In December 2022, FASB issued ASU 2022-06, Reference Rate Reform ("Topic 848"): Deferral of the Sunset Date of Topic 848, because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The adoption of the new guidance did not have a material impact on the consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this standard were issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investments in leases and other commitments to extend credit held by a reporting entity at each reporting date. The amendments require that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the
amortized cost basis. The standard eliminates the current framework of recognizing probable incurred losses and instead requires an entity to use its current estimate of all expected credit losses over the contractual life. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets. The amendments in this standard are effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and for all other entities beginning after December 15, 2022, including interim periods within those fiscal years. The Company early adopted ASU 2016-13 on January 1, 2021, and such adoption did not have a material effect on the Company’s consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the application of ASC 740 - Income Taxes while maintaining or improving the usefulness of information provided to users of financial statements. The modifications include removal of certain exceptions and simplification to existing requirements. The amendments in ASU 2019-12 are effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and for all other entities beginning after December 15, 2021, and interim periods within those fiscal years beginning after December 15, 2022. The Company early adopted ASU 2019-12 on January 1, 2021, and such adoption did not have a material effect on the Company’s consolidated financial statements.
Aurora Acquisition Corp  
Summary of Significant Accounting Policies [Line Items]  
Basis of presentation
Basis of presentation
The accompanying financial statements are presented in conformity in U.S. dollars with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Basis of presentation
The accompanying consolidated financial statements are presented in conformity in U.S. dollars with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging growth company
Emerging growth company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Emerging growth company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of estimates
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, a significant accounting estimate included in these financial statements is the valuation of the warrant liability. Such estimates may be subject to change as more current information becomes available.
Use of estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, a significant accounting estimate included in these financial statements is the valuation of the warrant liability and valuation of Class B ordinary shares. Such estimates may be subject to change as more current information becomes available.
Cash and cash equivalents
Cash and cash equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2023 and December 31, 2022.
Cash and cash equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2022 and 2021.
Investments held in trust account
Investments Held in the Trust Account
On or around February 24, 2023, the Company liquidated its funds in the Trust Account and moved them to a cash and cash equivalent account that will likely receive minimal, if any, interest. Prior to this date and as of December 31, 2022, all assets in the Trust Account were money market funds which were invested primarily in U.S. Treasury Securities.
Investments held in Trust Account
At December 31, 2022 and 2021, substantially all of the assets held in the Trust Account are money market funds which are invested primarily in U.S. Treasury Securities.
Deferred offering costs
Deferred offering costs
Deferred offering costs consist of legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Initial Public Offering and were charged to shareholders’ equity upon the completion of the Initial Public Offering.
On June 22, 2022, Barclays Capital Inc. (“Barclays”), resigned from its role as underwriter and financial advisor to Aurora. In connection with such resignation, Barclays waived their entitlement to certain fees which would be owed upon completion of the proposed Business Combination, which was comprised of approximately $8.5 million as a deferred underwriting fee and financial advisory fee. Accordingly, the Company derecognized the liability for the deferred underwriting and financial advisory fee in the quarter ending June 30, 2022 that was accrued as of December 31, 2021. As of June 30, 2023, there is no liability for the deferred underwriting or financial advisory fee.
Deferred offering costs
Deferred offering costs consist of legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Initial Public Offering and were charged to shareholders’ equity upon the completion of the Initial Public Offering.
On June 22, 2022, Barclays resigned from its role as underwriter and financial advisor to Aurora. In connection with such resignation, Barclays waived its entitlement to a deferred underwriting fee of approximately $8.5 million that would be payable at the close of the Business Combination. Accordingly, the Company derecognized the liability for the deferred underwriting fee in the quarter ending June 30, 2022 that was accrued as of December 31, 2021. As of December 31, 2022, there is no liability for the deferred underwriting fee.
Class A ordinary shares subject to possible redemption
Class A ordinary shares subject to possible redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption would be classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.
Accordingly, at June 30, 2023 and December 31, 2022, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
Class A ordinary shares subject to possible redemption
Class A ordinary shares subject to redemption – December 31, 2022
$246,628,487 
Plus:
Reclass of permanent equity to temporary equity16,999,995 
Interest adjustment to redemption value1,676,767 
Less: 
Shares redeemed by public(246,123,596)
Shares redeemed by Sponsor(16,999,995)
Class A ordinary shares subject to redemption – March 31, 2023
$2,181,658 
Adjustment to redemption value19,954 
Class A ordinary shares subject to redemption – June 30, 2023
$2,201,612 
Class A ordinary shares subject to possible redemption
The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. Accordingly, at December 31, 2022 and 2021, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
Warrant Liability
Warrant Liability
At June 30, 2023 and December 31, 2022, there were 6,075,049 and 6,075,050 Public Warrants outstanding, respectively, and 5,448,372 Private Placement Warrants outstanding (including warrants included in the Novator Private Placement Units). The Company accounts for the Public Warrants and Private Placement Warrants (including warrants included in the Novator Private Placement Units) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.
The accounting treatment of derivative financial instruments required that the Company record the warrants as derivative liabilities at fair value upon the closing of the Initial Public Offering. The Public Warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. The warrant liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liabilities are adjusted to current fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
Income taxes
Income taxes
The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Income taxes
The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2022 or December 31,2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.
Net income (loss) per share
Net income (loss) per share
Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. The Company has not considered the effect of the Warrants sold in the Public Offering and Private Placement Warrants to purchase an aggregate of 11,523,421 shares in the calculation of diluted loss per share in connection with the Novator Private Placement Units, since the exercise of the Warrants are contingent upon the occurrence of future events and the inclusion of such Warrants would be anti-dilutive.
The Company’s statement of operations includes a presentation of income (loss) per share for Common Stock subject to possible redemption in a manner similar to the two-class method of income per common stock. According to SEC guidance, common stock that is redeemable based on a specified formula is considered to be redeemable at fair value if the formula is designed to equal or reasonably approximate fair value. When deemed to be redeemable at fair value, the weighted average redeemable shares would be included with the non-redeemable shares in the denominator of the calculation and initially calculated as if they were a single class of common stock.
The following table reflects the calculation of basic and diluted net earnings (loss) per common share (in dollars, except per share amounts):
Three Months Ended
June 30, 2023June 30, 2022
Class A Common Stock subject to possible redemption
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption$(19,635)$1,248,851 
Net earnings (losses) attributable to Class A Common Stock subject to possible redemption$(19,635)$1,248,851 
Denominator: Weighted average Class A Common Stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption212,59824,300,287
Basic and diluted net income (loss) per share, Class A Common Stock subject to possible redemption$(0.09)$0.05 
Non-Redeemable Class A and Class B Common Stock
Numerator: Net income (loss) minus net earnings
Net income (loss)$(811,496)$537,055 
Less: Net earnings (losses) attributable to Class A Common Stock subject to possible redemption— — 
Non-redeemable net income (loss)$(811,496)$537,055 
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock8,786,31210,450,072
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B Common Stock$(0.09)$0.05 
Six Months Ended
June 30, 2023June 30, 2022
Class A Common Stock subject to possible redemption
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption$(429,904)$1,955,153 
Net earnings (losses) attributable to Class A Common Stock subject to possible redemption$(429,904)$1,955,153 
Denominator: Weighted average Class A Common Stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption7,541,25424,300,287
Basic and diluted net income (loss) per share, Class A Common Stock subject to possible redemption$(0.06)$0.08 
Non-Redeemable Class A and Class B Common Stock
Numerator: Net income (loss) minus net earnings
Net income (loss)$(529,182)$840,793 
Less: Net earnings (losses) attributable to Class A Common Stock subject to possible redemption— — 
Non-redeemable net income (loss)$(529,182)$840,793 
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock9,282,72410,450,072
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B Common Stock$(0.06)$0.08 
Net income (loss) per share
Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. Weighted average shares are reduced for the effect of an aggregate of 249,928 Class B ordinary shares that were forfeited when the over-allotment option was partially exercised by the underwriters within the 45-day window (see Note 5). The
Company has not considered the effect of the Warrants sold in the Public Offering and Private Placement Warrants to purchase an aggregate of 11,523,444 shares in the calculation of diluted loss per share in connection with the Novator Private Placement Units, since the exercise of the Warrants are contingent upon the occurrence of future events.
The Company’s statement of operations includes a presentation of income (loss) per share subject to possible redemption in a manner similar to the two-class method of income per share. According to SEC guidance, shares that are redeemable based on a specified formula are considered to be redeemable at fair value if the formula is designed to equal or reasonably approximate fair value. When deemed to be redeemable at fair value, the weighted average redeemable shares would be included with the non-redeemable shares in the denominator of the calculation and initially calculated as if they were a single class of ordinary shares.
Concentration of credit risk
Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000 and up to £85,000 by the Financial Services Compensation Scheme per financial institution in the United Kingdom. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000 and up to £85,000 by the Financial Services Compensation Scheme per financial institution in the United Kingdom. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on these accounts.
Recent issued accounting standards
Recent issued accounting standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
Recent issued accounting standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
v3.23.4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 9 Months Ended
Sep. 30, 2023
Basis of presentation
Basis of Presentation—The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Business Combination has been accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Aurora was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Better issuing stock for the net assets of Aurora, accompanied by a recapitalization. All share amounts in periods prior to the Business Combination have been retroactively adjusted using the Exchange Ratio for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization. The financials of Better are presented here for all comparative periods.
In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position and its results of operations, changes in convertible preferred stock and stockholders’ equity (deficit) and cash flows. The results of operations and other information for the nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2023. The unaudited condensed consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes of Better thereto for the year ended December 31, 2022.
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use of estimates
Use of Estimates—The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant items subject to such estimates and assumptions include the fair value of mortgage loans held for sale, the fair value of derivative assets and liabilities, including bifurcated derivatives, interest rate lock commitments and forward sale commitments, the determination of a valuation allowance on the Company’s deferred tax assets, capitalization of internally developed software and its associated useful life, determination of fair value of the Company’s common stock, stock option and RSUs at grant date, the fair value of acquired intangible assets and goodwill, the provision for loan repurchase reserves, the incremental borrowing rate used in determining lease liabilities and warrant liabilities.
The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant items subject to such estimates and assumptions include the fair value of mortgage loans held for sale, the fair value of derivative assets and liabilities, including bifurcated derivatives, interest rate lock commitments and forward sale commitments, the determination of a valuation allowance on the Company’s deferred tax assets, capitalization of internally developed software and its associated useful life, determination of fair value of the Company’s common stock, convertible preferred stock and convertible preferred stock warrants, stock option and RSUs at grant date, the fair value of acquired intangible assets and goodwill, the fair value of loan commitment asset, the provision for loan repurchase reserves, and the incremental borrowing rate used in determining lease liabilities.
Warrant Liability
Warrant Liabilities—The Company assumed publicly-traded warrants (“Public Warrants”) issued in Aurora’s initial public offering, private placement warrants issued by Aurora in connection with its formation and warrants attached to certain private placement units (collectively, the “Private Warrants” and, together with the Public Warrants, the “Warrants”). Each Warrant issued entitles the holder to purchase one share of Better Home & Finance Holding Company Class A common stock at an exercise price of $11.50 per share, subject to certain adjustments, at any time commencing 30 days after the consummation of the Business Combination (which for the avoidance of doubt was September 21, 2023). The Public Warrants are publicly traded and may be exercised on a cashless basis
upon the occurrence of certain conditions. The Private Warrants are exercisable on a cashless basis and are not redeemable by the Company so long as they are held by the initial purchasers or their permitted transferees, subject to certain exceptions. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.
The Company evaluated the Public Warrants and Private Warrants and concluded that both meet the definition of a derivative and will be accounted for at fair value in accordance with ASC Topic 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, as the Public Warrants and Private Warrants are not considered indexed to the Company's stock.
The Company has used various fundraising methods, including the issuance of warrants. A warrant is a financial instrument that provides the holder of the warrant the right, but not the obligation, to buy a company’s stock in the future at a predetermined price.
Warrants to purchase convertible preferred stock are generally accounted for as a liability and are recorded at fair value on their initial issuance date and adjusted to fair value at each balance sheet date, with the change in fair value being recorded as changes in fair value of convertible preferred stock warrants, which is included in interest and other income (expense), net within the consolidated statements of operations and comprehensive loss.
Warrants to purchase common stock are accounted for as equity and are recorded at fair value on their initial issuance date.
Income taxes
Income Taxes—Income taxes are calculated in accordance with ASC 740, Accounting for Income Taxes. An estimated annual effective tax rate is applied to year-to-date income (loss). At the end of each interim period, the estimated effective tax rate expected to be applicable for the full year is calculated. This method differs from that described in the Company’s income taxes policy footnote in the audited consolidated financial statements and related notes thereto for the year ended December 31, 2022, which describes the Company’s annual significant income tax accounting policy and related methodology.
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income or expense in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred income tax assets to the amount expected to be realized based on management’s consideration of all positive and contradictory evidence available. The Company evaluates uncertainty in income tax positions based on a more-likely-than-not recognition standard. If that threshold is met, the tax position is then measured at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. If applicable, the Company records interest and penalties as a component of income tax expense.
Net income (loss) per share The Company follows the two-class method when computing net income (loss) per share, as the Company has issued shares that meet the definition of participating securities. The two-class method determines net income (loss) per share for each class of common and participating securities according to
dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. In periods where there is net income, we apply the two-class method to calculate basic and diluted net income (loss) per share of common stock, as our convertible preferred stock is a participating security. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. In periods where there is a net loss, the two-class method of computing earnings per share does not apply as the Company’s convertible preferred stock does not contractually participate in losses.
Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income (loss) attributable to common stockholders is computed by adjusting net income (loss) attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares. For purpose of this calculation, outstanding stock options, including stock options exercised not yet vested, convertible notes, convertible preferred stock and warrants to purchase shares of convertible preferred stock are considered potential dilutive common shares.
The Company's convertible preferred stock contractually entitles the holders of such shares to participate in dividends but does not contractually require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss attributable to common stockholders, such losses are not allocated to such participating securities. In addition, as the convertible preferred stock can convert into common stock, the Company uses the more dilutive of the two-class method or the if-converted method in the calculation of diluted net income (loss) per share.
Diluted net income (loss) per share is the amount of net income (loss) available to each share of common stock outstanding during the reporting period, adjusted to include the effect of potentially dilutive common shares. For periods in which the Company reports net losses, basic and diluted net loss per share attributable to common stockholders are the same because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.
Recent issued accounting standards
Recently Adopted Accounting Standards
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In addition, in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified the scope and application of the original guidance. Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (or “LIBOR”) by September 30, 2023. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The guidance is effective for all companies as of March 12, 2020 and can generally be applied through December 31, 2022. In December 2022, FASB issued ASU 2022-06, Reference Rate Reform ("Topic 848"): Deferral of the Sunset Date of Topic 848, because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The adoption of the new guidance did not have a material impact on the condensed consolidated financial statements.
The Company has early adopted ASC 842 in its 2021 annual consolidated financial statements effective January 1, 2021 using a modified retrospective approach. The Company has applied the new lease requirements to leases outstanding as of the adoption date through a cumulative effect adjustment to retained earnings. The Company has elected to utilize the package of practical expedients available under ASC 842, which permit the Company to not reassess the lease identification, lease classification and initial direct costs associated with any expired or existing contracts as of the date of adoption. The Company has also made accounting policy elections to: a) exempt leases with an initial term of 12 months or less from being recognized on the balance sheet, and b) not separate non-lease components of a contract from the lease component to which they relate.
In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The standard simplifies the accounting for certain convertible instruments by removing models with specific features, amends guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share (EPS) calculations as a result of these changes. This standard is effective for public companies for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and for all other entities beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2020. The Company early adopted ASU 2020-06 on January 1, 2021 using a modified retrospective approach, and such adoption did not have a material effect on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In addition, in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified the scope and application of the original guidance. Subject to meeting certain criteria, the new guidance provides optional expedients and exceptions to applying contract modification accounting under existing U.S. GAAP, to address the expected phase out of the London Inter-bank Offered Rate (or “LIBOR”) by June 30, 2023. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The guidance is effective for all companies as of March 12, 2020 and can generally be applied through December 31, 2022. In December 2022, FASB issued ASU 2022-06, Reference Rate Reform ("Topic 848"): Deferral of the Sunset Date of Topic 848, because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The adoption of the new guidance did not have a material impact on the consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this standard were issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investments in leases and other commitments to extend credit held by a reporting entity at each reporting date. The amendments require that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the
amortized cost basis. The standard eliminates the current framework of recognizing probable incurred losses and instead requires an entity to use its current estimate of all expected credit losses over the contractual life. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets. The amendments in this standard are effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and for all other entities beginning after December 15, 2022, including interim periods within those fiscal years. The Company early adopted ASU 2016-13 on January 1, 2021, and such adoption did not have a material effect on the Company’s consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the application of ASC 740 - Income Taxes while maintaining or improving the usefulness of information provided to users of financial statements. The modifications include removal of certain exceptions and simplification to existing requirements. The amendments in ASU 2019-12 are effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and for all other entities beginning after December 15, 2021, and interim periods within those fiscal years beginning after December 15, 2022. The Company early adopted ASU 2019-12 on January 1, 2021, and such adoption did not have a material effect on the Company’s consolidated financial statements.
Aurora Acquisition Corp  
Basis of presentation
Basis of presentation
The accompanying financial statements are presented in conformity in U.S. dollars with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Basis of presentation
The accompanying consolidated financial statements are presented in conformity in U.S. dollars with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging growth company
Emerging growth company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Emerging growth company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of estimates
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, a significant accounting estimate included in these financial statements is the valuation of the warrant liability. Such estimates may be subject to change as more current information becomes available.
Use of estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, a significant accounting estimate included in these financial statements is the valuation of the warrant liability and valuation of Class B ordinary shares. Such estimates may be subject to change as more current information becomes available.
Cash and cash equivalents
Cash and cash equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2023 and December 31, 2022.
Cash and cash equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2022 and 2021.
Investments held in trust account
Investments Held in the Trust Account
On or around February 24, 2023, the Company liquidated its funds in the Trust Account and moved them to a cash and cash equivalent account that will likely receive minimal, if any, interest. Prior to this date and as of December 31, 2022, all assets in the Trust Account were money market funds which were invested primarily in U.S. Treasury Securities.
Investments held in Trust Account
At December 31, 2022 and 2021, substantially all of the assets held in the Trust Account are money market funds which are invested primarily in U.S. Treasury Securities.
Deferred offering costs
Deferred offering costs
Deferred offering costs consist of legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Initial Public Offering and were charged to shareholders’ equity upon the completion of the Initial Public Offering.
On June 22, 2022, Barclays Capital Inc. (“Barclays”), resigned from its role as underwriter and financial advisor to Aurora. In connection with such resignation, Barclays waived their entitlement to certain fees which would be owed upon completion of the proposed Business Combination, which was comprised of approximately $8.5 million as a deferred underwriting fee and financial advisory fee. Accordingly, the Company derecognized the liability for the deferred underwriting and financial advisory fee in the quarter ending June 30, 2022 that was accrued as of December 31, 2021. As of June 30, 2023, there is no liability for the deferred underwriting or financial advisory fee.
Deferred offering costs
Deferred offering costs consist of legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Initial Public Offering and were charged to shareholders’ equity upon the completion of the Initial Public Offering.
On June 22, 2022, Barclays resigned from its role as underwriter and financial advisor to Aurora. In connection with such resignation, Barclays waived its entitlement to a deferred underwriting fee of approximately $8.5 million that would be payable at the close of the Business Combination. Accordingly, the Company derecognized the liability for the deferred underwriting fee in the quarter ending June 30, 2022 that was accrued as of December 31, 2021. As of December 31, 2022, there is no liability for the deferred underwriting fee.
Class A ordinary shares subject to possible redemption
Class A ordinary shares subject to possible redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption would be classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.
Accordingly, at June 30, 2023 and December 31, 2022, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
Class A ordinary shares subject to possible redemption
Class A ordinary shares subject to redemption – December 31, 2022
$246,628,487 
Plus:
Reclass of permanent equity to temporary equity16,999,995 
Interest adjustment to redemption value1,676,767 
Less: 
Shares redeemed by public(246,123,596)
Shares redeemed by Sponsor(16,999,995)
Class A ordinary shares subject to redemption – March 31, 2023
$2,181,658 
Adjustment to redemption value19,954 
Class A ordinary shares subject to redemption – June 30, 2023
$2,201,612 
Class A ordinary shares subject to possible redemption
The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. Accordingly, at December 31, 2022 and 2021, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
Warrant Liability
Warrant Liability
At December 31, 2022 and 2021, there were 6,075,052 Public Warrants and 5,448,372 Private Placement Warrants outstanding (including warrants included in the Novator Private Placement Units). The Company accounts for the Public Warrants and Private Placement Warrants (including warrants included in the Novator Private
Placement Units) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.
The accounting treatment of derivative financial instruments required that the Company record the warrants as derivative liabilities at fair value upon the closing of the Initial Public Offering. The Public Warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. The warrant liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liabilities are adjusted to current fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
Offering Costs Associated with the Initial Public Offering
Offering Costs Associated with the Initial Public Offering
The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $13,946,641 as a result of the Initial Public Offering (consisting of a $4,860,057 underwriting fee, $8,505,100 of deferred underwriting fees and $581,484 of other offering costs). The Company recorded $13,647,118 of offering costs as a reduction of equity in connection with the Class A ordinary shares included in the Units. The Company immediately expensed $299,523 of offering costs in connection with the Public Warrants included in the Units that were classified as liabilities within the nine months ended September, 2021. For the years ended December 31, 2022 and 2021, the Company recorded a gain of $182,658 and $0, respectively, relating to offering costs allocated to the warrant liability due to Barclays waiving its entitlement to a deferred underwriting fee of $8,505,100 that would be payable at the close of the Business Combination. There was no gain due to the waiver of underwriting fees for the year ended December 31, 2021.
Income taxes
Income taxes
The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Income taxes
The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2022 or December 31,2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.
Net income (loss) per share
Net income (loss) per share
Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. The Company has not considered the effect of the Warrants sold in the Public Offering and Private Placement Warrants to purchase an aggregate of 11,523,421 shares in the calculation of diluted loss per share in connection with the Novator Private Placement Units, since the exercise of the Warrants are contingent upon the occurrence of future events and the inclusion of such Warrants would be anti-dilutive.
The Company’s statement of operations includes a presentation of income (loss) per share for Common Stock subject to possible redemption in a manner similar to the two-class method of income per common stock. According to SEC guidance, common stock that is redeemable based on a specified formula is considered to be redeemable at fair value if the formula is designed to equal or reasonably approximate fair value. When deemed to be redeemable at fair value, the weighted average redeemable shares would be included with the non-redeemable shares in the denominator of the calculation and initially calculated as if they were a single class of common stock.
The following table reflects the calculation of basic and diluted net earnings (loss) per common share (in dollars, except per share amounts):
Three Months Ended
June 30, 2023June 30, 2022
Class A Common Stock subject to possible redemption
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption$(19,635)$1,248,851 
Net earnings (losses) attributable to Class A Common Stock subject to possible redemption$(19,635)$1,248,851 
Denominator: Weighted average Class A Common Stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption212,59824,300,287
Basic and diluted net income (loss) per share, Class A Common Stock subject to possible redemption$(0.09)$0.05 
Non-Redeemable Class A and Class B Common Stock
Numerator: Net income (loss) minus net earnings
Net income (loss)$(811,496)$537,055 
Less: Net earnings (losses) attributable to Class A Common Stock subject to possible redemption— — 
Non-redeemable net income (loss)$(811,496)$537,055 
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock8,786,31210,450,072
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B Common Stock$(0.09)$0.05 
Six Months Ended
June 30, 2023June 30, 2022
Class A Common Stock subject to possible redemption
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption$(429,904)$1,955,153 
Net earnings (losses) attributable to Class A Common Stock subject to possible redemption$(429,904)$1,955,153 
Denominator: Weighted average Class A Common Stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption7,541,25424,300,287
Basic and diluted net income (loss) per share, Class A Common Stock subject to possible redemption$(0.06)$0.08 
Non-Redeemable Class A and Class B Common Stock
Numerator: Net income (loss) minus net earnings
Net income (loss)$(529,182)$840,793 
Less: Net earnings (losses) attributable to Class A Common Stock subject to possible redemption— — 
Non-redeemable net income (loss)$(529,182)$840,793 
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock9,282,72410,450,072
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B Common Stock$(0.06)$0.08 
Net income (loss) per share
Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. Weighted average shares are reduced for the effect of an aggregate of 249,928 Class B ordinary shares that were forfeited when the over-allotment option was partially exercised by the underwriters within the 45-day window (see Note 5). The
Company has not considered the effect of the Warrants sold in the Public Offering and Private Placement Warrants to purchase an aggregate of 11,523,444 shares in the calculation of diluted loss per share in connection with the Novator Private Placement Units, since the exercise of the Warrants are contingent upon the occurrence of future events.
The Company’s statement of operations includes a presentation of income (loss) per share subject to possible redemption in a manner similar to the two-class method of income per share. According to SEC guidance, shares that are redeemable based on a specified formula are considered to be redeemable at fair value if the formula is designed to equal or reasonably approximate fair value. When deemed to be redeemable at fair value, the weighted average redeemable shares would be included with the non-redeemable shares in the denominator of the calculation and initially calculated as if they were a single class of ordinary shares.
Concentration of credit risk
Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000 and up to £85,000 by the Financial Services Compensation Scheme per financial institution in the United Kingdom. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000 and up to £85,000 by the Financial Services Compensation Scheme per financial institution in the United Kingdom. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on these accounts.
Recent issued accounting standards
Recent issued accounting standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
Recent issued accounting standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
v3.23.4
Business Combination (Tables)
 9 Months Ended
Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract]  
Schedule of Shares of Common Stock Issued Immediately Following Business Combination
The number of shares of common stock issued immediately following the Business Combination was as follows:
Number of Shares
Class AClass BClass C
Legacy Better Stockholders40,601,825 574,407,420 6,877,283 
Legacy Aurora Shareholders210,098 — — 
Sponsor and affiliates of Aurora10,488,812 — — 
Pre-Closing Bridge Note Investors40,000,000 — 65,000,000 
Total91,300,735 574,407,420 71,877,283 
v3.23.4
Revenue and Sales-Type Leases (Tables)
 9 Months Ended
Sep. 30, 2023
Revenue [Abstract]  
Schedule of Disaggregation of Revenue
Revenue— The Company disaggregates revenue based on the following revenue streams:
Mortgage platform revenue, net consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Net gain (loss) on sale of loans$7,120 $(10,125)$36,689 $(59,105)
Integrated partnership revenue (loss)3,067 2,265 9,797 (8,526)
Changes in fair value of IRLCs and forward sale commitments4,019 18,947 8,441 174,217 
Total mortgage platform revenue, net$14,207 $11,087 $54,927 $106,586 
Cash offer program revenue consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Revenue related to ASC 606$— $749 $— $11,333 
Revenue related to ASC 842— 8,991 304 214,764 
Total cash offer program revenue$— $9,739 $304 $226,096 
Other platform revenue consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Real estate services$651 $3,983 $6,214 $20,735 
Title insurance13 220 45 6,975 
Settlement services2 130 15 4,190 
Other homeownership offerings668 1,355 3,082 3,723 
Total other platform revenue$1,333 $5,688 $9,355 $35,623 
Sales-type Leases—The following table presents the revenue and expenses recognized at the commencement date of sales-type leases for the periods indicated:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Cash offer program revenue$— $8,991 $304 $214,764 
Cash offer program expenses$— $8,944 $278 $215,972 
Mortgage platform revenue, net consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Net (loss) gain on sale of loans$(63,372)$937,611 
Integrated partnership (loss) revenue(9,166)84,135 
Changes in fair value of IRLCs and forward sale commitments178,196 66,477 
Total mortgage platform revenue, net$105,658 $1,088,223 
Cash offer program revenue consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Revenue related to ASC 606$12,313 $8,725 
Revenue related to ASC 842216,408 30,636 
Total cash offer program revenue$228,721 $39,361 
Other platform revenue consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Title insurance$7,010 $39,602 
Settlement services4,222 31,582 
Real estate services23,053 20,602 
Other homeownership offerings4,657 2,601 
Total other platform revenue$38,942 $94,388 
Sales-type Leases—The following table presents the revenue and expenses recognized at the commencement date of sales-type leases for the periods indicated:
Year Ended December 31,
(Amounts in thousands)20222021
Cash offer program revenue$216,408 $30,636 
Cash offer program expenses$217,609 $30,780 
v3.23.4
Restructuring and Impairments (Tables)
 9 Months Ended
Sep. 30, 2023
Restructuring and Related Activities [Abstract]  
Restructuring and Related Costs
For the three and nine months ended September 30, 2023 and 2022, the Company’s restructuring and impairment expenses consists of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Employee one-time termination benefits$765 $5,277 $2,320 $99,291 
Impairment of loan commitment asset— 38,330 — 105,604 
Impairments of Right-of-Use Assets— 1,897 413 4,391 
Real estate restructuring loss— — 5,284 — 
(Gain) on lease settlement(86)— (1,063)— 
Impairment of property and equipment— 197 4,844 3,124 
Other impairments80 80 
Total Restructuring and Impairments$679 $45,781 $11,798 $212,490 
For the years ended December 31, 2022 and 2021, the Company’s restructuring and impairment expenses consists of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Impairment of Loan Commitment Asset$105,604 $— 
Employee one-time termination benefits102,261 17,048 
Impairments of Right-of-Use Assets—Real Estate3,707 — 
Impairments of Right-of-Use Assets—Equipment2,494 — 
Write-off of capitalized merger transaction costs27,287 — 
Impairments of intangible assets1,964 — 
Impairment of property and equipment 4,042 — 
Other impairments333 — 
Total Restructuring and Impairments$247,693 $17,048 
v3.23.4
Mortgage Loans Held for Sale and Warehouse Lines of Credit (Tables)
 9 Months Ended
Sep. 30, 2023
Mortgage Loans Held For Sale And Warehouse Agreement Borrowings [Abstract]  
Schedule of Warehouse Lines Of Credit
The Company has the following outstanding warehouse lines of credit:
(Amounts in thousands)MaturityFacility SizeSeptember 30, 2023December 31, 2022
Funding Facility 1 (1)
October 31, 2023$100,000 $— $89,673 
Funding Facility 2 (2)
August 4, 2023— — 9,845 
Funding Facility 3 (3)
December 8, 2023149,000 73,536 44,531 
Funding Facility 4 (4)
August 3, 2024175,000 — — 
Total warehouse lines of credit$424,000 $73,536 $144,049 
__________________
(1)Interest charged under the facility is the greater of i) a) thirty day term SOFR plus three and one-eighth percent for each repurchase and non-qualifying mortgage loans, and b) interest rate charged on the note (“Note Rate”) minus one and one-half percent and ii) a) thirty day term SOFR plus two and one-eight percent for each mortgage loans that is not a non-qualifying or a repurchase mortgage loan, and b) the Note Rate minus one and one-eighth percent. Cash collateral deposit of $15.0 million is maintained and included in restricted cash. Subsequent to September 30, 2023, the facility matured on October 31, 2023 and the Company extended the maturity to November 30, 2023.
(2)Interest charged under the facility is at the one month SOFR plus 1.77%. There is no cash collateral deposit maintained as of September 30, 2023. The facility matured on August 4, 2023 and the Company did not extend beyond maturity.
(3)Interest charged under the facility is at the one month SOFR plus 1.60% - 2.25%. Cash collateral deposit of $3.8 million is maintained and included in restricted cash. The Company extended the maturity from September 8, 2023 to December 8, 2023 during the three months ended September 30, 2023.
(4)Interest charged under the facility is at the one month SOFR plus 1.75% - 3.75%. There is no cash collateral deposit maintained as of September 30, 2023.
The Company has the following outstanding warehouse lines of credit:
December 31,
(Amounts in thousands)MaturityFacility Size20222021
Funding Facility 1 (1)
July 10, 2023$500,000 $89,673 $286,804 
Funding Facility 2 (2)
October 31, 2022— — 171,649 
Funding Facility 3 (3)
September 30, 2022— — 55,622 
Funding Facility 4 (4)
January 30, 2023500,000 9,845 409,616 
Funding Facility 5 (5)
May 31, 2022— — 622,573 
Funding Facility 6 (6)
August 31, 2022— — 4,184 
Funding Facility 7 (7)
August 25, 2022— — 7,279 
Funding Facility 8 (8)
March 8, 2023500,000 44,531 94,181 
Funding Facility 9 (9)
April 6, 2022— — 1,433 
Funding Facility 10 (10)
July 5, 2022— — 14,576 
Total warehouse lines of credit$1,500,000 $144,049 $1,667,917 
__________________
(1)Interest charged under the facility is the greater of i) a) thirty day term SOFR plus three and one-eight percent for each repurchase and non-qualifying mortgage loans, and b) interest rate charged on the note (“Note Rate”) minus one and one-half percent and ii) a) thirty day term SOFR plus two and one-eight percent for each mortgage loans that is not a non-qualifying or a repurchase mortgage loan, and b) the Note Rate minus one and one-eighth percent. Cash collateral deposit of $10.0 million is maintained.
(2)Interest charged under the facility was at the one month SOFR plus 1.75%, with a floor rate of one month LIBOR at 1.00%, as defined in agreement. Cash collateral deposit of $2.5 million was maintained until maturity. Funding Facility 2 matured on October 31, 2022 and the company did not extend beyond maturity.
(3)Interest charged under the facility was at the respective one month LIBOR plus 1.75%, with a floor rate of 2.25%, as defined in the agreement. Cash collateral deposit of $4.5 million was maintained until maturity. Funding Facility 3 matured on September 30, 2022 and the company did not extend beyond maturity.
(4)Interest charged under the facility is at the one month SOFR plus 1.77%. There is no cash collateral deposit maintained as of December 31, 2022. Subsequent to December 31, 2022, the facility was amended to decrease capacity to $250.0 million and to extend maturity to June 6, 2023.
(5)Interest charged under the facility was at the one month LIBOR plus 1.76% - 2.25%, with a floor rate of 0.50%. There was no cash collateral deposit maintained. Funding Facility 5 matured on May 31, 2022 and the company did not extend beyond maturity.
(6)Interest charged under the facility was at the one month SOFR plus 1.50% - 1.75%. Cash collateral deposit of $4.5 million was maintained. Funding Facility 6 matured on August 31, 2022 and the company did not extend beyond maturity.
(7)Interest charged under the facility was at the Adjusted one month Term SOFR plus 1.75% - 2.25%, with a floor rate of one month LIBOR at 0.38%. There was no cash collateral deposit maintained. Funding Facility 7 matured on August 25, 2022 and the company did not extend beyond maturity.
(8)Interest charged under the facility is at the one month SOFR plus 1.60% - 1.85%. Cash collateral deposit of $5.0 million is maintained. Subsequent to December 31, 2022, the facility was amended to decrease capacity to $250.0 million and to extend the maturity to June 6, 2023.
(9)Interest charged under the facility was at the one month LIBOR plus 1.60%, with a floor rate of one month LIBOR at 0.50%, as defined in the agreement. There was no cash collateral deposit maintained. Funding Facility 9 matured on April 6, 2022 and the company did not extend beyond maturity.
(10)Interest charged under the facility was at the one month LIBOR plus 1.88%, with a floor rate of one month LIBOR at 0.25%, as defined in the agreement. There was no cash collateral deposit maintained. Funding Facility 10 matured on July 5, 2022 and the company did not extend beyond maturity.
Schedule Of Loans Held For Sale The Company’s LHFS are summarized below by those pledged as collateral and those fully funded by the Company:
(Amounts in thousands)September 30, 2023December 31, 2022
Funding Facility 1 $43,288 $101,598 
Funding Facility 2— 10,218 
Funding Facility 383,582 46,356 
Total LHFS pledged as collateral126,870 158,172 
Company-funded LHFS19,890 136,599 
Company-funded Home Equity Line of Credit19,335 8,320 
Total LHFS166,095 303,091 
Fair value adjustment(6,070)(54,265)
Total LHFS at fair value$160,025 $248,826 
The Company’s LHFS are summarized below by those pledged as collateral and those fully funded by the Company:
December 31,
(Amounts in thousands)20222021
Funding Facility 1$101,598 $309,003 
Funding Facility 2— 186,698 
Funding Facility 3— 67,106 
Funding Facility 410,218 439,767 
Funding Facility 5— 681,521 
Funding Facility 6— 5,016 
Funding Facility 7— 9,828 
Funding Facility 846,356 110,845 
Funding Facility 9— 4,420 
Funding Facility 10— 16,666 
Total LHFS pledged as collateral158,172 1,830,870 
Company-funded LHFS136,599 5,944 
Company-funded Home Equity Line of Credit8,320 — 
Total LHFS303,091 1,836,814 
Fair value adjustment(54,266)17,621 
Total LHFS at fair value$248,826 $1,854,435 
v3.23.4
Goodwill and Internal Use Software and Other Intangible Assets, Net (Tables)
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$283 
Property and equipment20 
Indefinite lived intangibles - Licenses1,186 
Goodwill1,741 
Other assets (1)
65 
Accounts payable and accrued expenses (1)
(161)
Other liabilities (1)
(193)
Net assets acquired$2,941 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$2,907 
Accounts receivable (1)
60 
Short-term investments8,729 
Other assets7,530 
Property and equipment83 
Finite lived intangibles854 
Indefinite lived intangibles - Licenses31 
Goodwill12,300 
Accounts payable and accrued expenses (1)
(248)
Customer deposits(12,374)
Other liabilities (1)
(586)
Net assets acquired$19,286 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$781 
Finite lived intangibles - Intellectual property and other3,943 
Indefinite lived intangibles - Licenses and other277 
Goodwill3,317 
Other assets (1)
2,088 
Accounts payable and accrued expenses (1)
(5,512)
Other liabilities (1)
(3,510)
Total recognized assets and liabilities$1,384 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$1,739 
Finite lived intangibles - Intellectual property and other2,601 
Indefinite lived intangibles - Licenses and other1,038 
Goodwill4,420 
Other assets (1)
1,478 
Accounts payable and accrued expenses (1)
(1,172)
Total recognized assets and liabilities$10,104 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
Schedule of Goodwill
Changes in the carrying amount of goodwill, net consisted of the following:
Nine Months Ended September 30,
(Amounts in thousands)2023
Balance at beginning of period$18,525 
Goodwill acquired—Goodholm & Birmingham 14,041 
Effect of foreign currency exchange rate changes(74)
Balance at end of period$32,492 
Changes in the carrying amount of goodwill, net consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year$19,811 $10,995 
Goodwill acquired (Trussle and LHE)— 7,737 
Measurement period adjustment(375)1,269 
Effect of foreign currency exchange rate changes(911)(190)
Balance at end of year$18,525 $19,811 
Schedule of Indefinite-Lived Intangible Assets
Internal use software and other intangible assets, net consisted of the following:
As of September 30, 2023
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$136,092 $(94,835)$41,257 
Intellectual property and other6.24,322 (1,402)2,920 
Total Intangible assets with finite lives, net140,413 (96,237)44,176 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other2,410 — 2,410 
Total Internal use software and other intangible assets, net$144,643 $(96,237)$48,406 
As of December 31, 2022
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$123,734 $(67,319)$56,415 
Intellectual property and other7.53,449 (838)2,611 
Total Intangible assets with finite lives, net127,183 (68,157)59,026 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,150 — 1,150 
Total Internal use software and other intangible assets, net$130,153 $(68,157)$61,996 
Internal use software and other intangible assets, net consisted of the following:
As of December 31, 2022
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$123,734 $(67,319)$56,416 
Intellectual property and other7.53,449 (838)2,611 
Total Intangible assets with finite lives, net127,184 (68,157)59,026 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,150 — 1,150 
Total Internal use software and other intangible assets, net$130,153 $(68,157)$61,996 
As of December 31, 2021
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$96,155 $(32,832)$63,323 
Intellectual property and other7.56,384 (320)6,064 
Total Intangible assets with finite lives, net102,539 (33,152)69,387 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,282 — 1,282 
Total Internal use software and other intangible assets, net$105,641 $(33,152)$72,489 
Schedule of Finite-Lived Intangible Assets
Internal use software and other intangible assets, net consisted of the following:
As of September 30, 2023
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$136,092 $(94,835)$41,257 
Intellectual property and other6.24,322 (1,402)2,920 
Total Intangible assets with finite lives, net140,413 (96,237)44,176 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other2,410 — 2,410 
Total Internal use software and other intangible assets, net$144,643 $(96,237)$48,406 
As of December 31, 2022
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$123,734 $(67,319)$56,415 
Intellectual property and other7.53,449 (838)2,611 
Total Intangible assets with finite lives, net127,183 (68,157)59,026 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,150 — 1,150 
Total Internal use software and other intangible assets, net$130,153 $(68,157)$61,996 
Internal use software and other intangible assets, net consisted of the following:
As of December 31, 2022
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$123,734 $(67,319)$56,416 
Intellectual property and other7.53,449 (838)2,611 
Total Intangible assets with finite lives, net127,184 (68,157)59,026 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,150 — 1,150 
Total Internal use software and other intangible assets, net$130,153 $(68,157)$61,996 
As of December 31, 2021
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$96,155 $(32,832)$63,323 
Intellectual property and other7.56,384 (320)6,064 
Total Intangible assets with finite lives, net102,539 (33,152)69,387 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,282 — 1,282 
Total Internal use software and other intangible assets, net$105,641 $(33,152)$72,489 
v3.23.4
Prepaid Expenses and Other Assets (Tables)
 9 Months Ended
Sep. 30, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Schedule of Prepaid Expenses and Other Assets
Prepaid expenses and other assets consisted of the following:
As of September 30,As of December 31,
(Amounts in thousands)20232022
Prepaid expenses$27,095 $26,366 
Tax receivables9,717 18,139 
Security Deposits15,233 14,369 
Loans held for investment4,163 — 
Prepaid compensation asset— 5,615 
Inventory—Homes— 1,139 
Net investment in lease$— $944 
Total prepaid expenses and other assets$56,208 $66,572 
Prepaid expenses and other assets consisted of the following:
As of December 31,
(Amounts in thousands)20222021
Other prepaid expenses$26,366 $22,931 
Net investment in lease944 11,058 
Tax receivables18,139 20,250 
Prefunded loans in escrow — 12,148 
Merger transaction costs— 14,263 
Security Deposits14,369 9,226 
Prepaid compensation asset5,615 — 
Inventory—Homes
1,139 1,122 
Total prepaid expenses and other assets$66,572 $90,998 
v3.23.4
Customer Deposits (Tables)
 9 Months Ended
Sep. 30, 2023
Deposits [Abstract]  
Schedule of Average Balances and Weighted Average Rates Paid on Deposits
The following table presents average balances and weighted average rates paid on deposits for the periods indicated:
Three Months Ended September 30, 2023Three Months Ended September 30, 2022
(Amounts in thousands)Average BalanceAverage Rate PaidAverage BalanceAverage Rate Paid
Notice$2,190 2.92 %$— — %
Term2,962 2.13 %— — %
Savings4,991 2.18 %— — %
Total Deposits$10,143 2.41 %$— — %
Nine Months Ended September 30, 2023Nine Months Ended September 30, 2022
(Amounts in thousands)Average BalanceAverage Rate PaidAverage BalanceAverage Rate Paid
Notice$2,842 2.62 %$— — %
Term2,402 1.66 %— — %
Savings5,511 1.97 %— — %
Total Deposits$10,755 2.08 %$— — %
Schedule of Maturities of Deposits
The following table presents maturities of customer deposits:
(Amounts in thousands)As of September 30, 2023
Demand deposits$4,795 
Maturing In:
20232,608 
20242,299 
2025206 
2026— 
2027— 
Thereafter— 
Total$9,908 
Schedule of Interest Expense on Deposits
Interest Expense on deposits is recorded in warehouse interest expense in the condensed consolidated statements of operations and comprehensive loss for the periods indicated as follows:
Three Months Ended September 30, 2023Nine Months Ended September 30, 2023
(Amounts in thousands)2023202220232022
Notice$22 $— $43 $— 
Term4 — 10 — 
Savings26 — 54 — 
Total Interest Expense$52 $— $107 — 
v3.23.4
Risks and Uncertainties (Tables)
 9 Months Ended
Sep. 30, 2023
Risks and Uncertainties [Abstract]  
Schedule of Loan Repurchase Reserve Activity The following presents the activity of the Company’s loan repurchase reserve:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Loan repurchase reserve at beginning of period$21,832 $21,070 $26,745 $17,540 
Provision866 11,683 178 25,125 
Charge-offs(945)(9,754)(5,170)(19,667)
Loan repurchase reserve at end of period$21,753 $22,999 $21,753 $22,999 
The following presents the activity of the Company’s loan repurchase reserve:
Year Ended December 31,
(Amounts in thousands)20222021
Loan repurchase reserve at beginning of year$17,540 $7,438 
Provision33,518 13,780 
Charge-offs(24,313)(3,678)
Loan repurchase reserve at end of year$26,745 $17,540 
v3.23.4
Net Loss Per Share (Tables)
 9 Months Ended
Sep. 30, 2023
Earnings Per Share [Abstract]  
Schedule of Computation of Net Loss Per Share and Weighted Average Shares
The computation of net loss per share and weighted average shares of the Company's common stock outstanding during the periods presented is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands, except for share and per share amounts)2023202220232022
Basic net loss per share:
Net loss$(340,033)$(226,612)$(475,441)$(625,864)
Income allocated to participating securities— — — — 
Net loss attributable to common stockholders - Basic$(340,033)$(226,612)$(475,441)$(625,864)
Diluted net loss per share:
Net loss attributable to common stockholders - Basic$(340,033)$(226,612)$(475,441)$(625,864)
Interest expense and change in fair value of bifurcated derivatives on convertible notes— — — — 
Income allocated to participating securities— — — — 
Net loss income attributable to common stockholders - Diluted$(340,033)$(226,612)$(475,441)$(625,864)
Shares used in computation:
Weighted average common shares outstanding496,577,751292,660,334364,817,445289,934,149
Weighted-average effect of dilutive securities:——
Assumed exercise of stock options————
Assumed exercise of warrants————
Assumed conversion of convertible preferred stock————
Diluted weighted-average common shares outstanding496,577,751292,660,334364,817,445289,934,149
Earnings (loss) per share attributable to common stockholders:
Basic$(0.68)$(0.77)$(1.30)$(2.16)
Diluted$(0.68)$(0.77)$(1.30)$(2.16)
The computation of net loss per share and weighted average shares of the Company's common stock outstanding during the periods presented is as follows:
Year Ended December 31,
(Amounts in thousands, except for share and per share amounts)20222021
Basic net loss per share:
Net loss$(888,802)$(301,128)
Income allocated to participating securities— — 
Net loss attributable to common stockholders - Basic$(888,802)$(301,128)
Diluted net loss per share:
Net loss attributable to common stockholders - Basic$(888,802)$(301,128)
Interest expense and change in fair value of bifurcated derivatives on convertible notes— — 
Income allocated to participating securities— — 
Net loss income attributable to common stockholders - Diluted$(888,802)$(301,128)
Shares used in computation:
Weighted average common shares outstanding95,303,684 86,984,646 
Weighted-average effect of dilutive securities:
Assumed exercise of stock options— — 
Assumed exercise of warrants— — 
Assumed conversion of convertible preferred stock— — 
Diluted weighted-average common shares outstanding95,303,684 86,984,646 
Earnings (loss) per share attributable to common stockholders:
Basic$(9.33)$(3.46)
Diluted$(9.33)$(3.46)
Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share The Company excluded the following securities, presented based on amounts outstanding at each period end, from
the computation of diluted net loss per share attributable to common stockholders for the periods indicated as including them would have had an anti-dilutive effect:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Options to purchase common stock (1)
48,389 44,857 48,389 44,857 
Convertible preferred stock (2)
— 108,721 — 108,721 
Pre-Closing Bridge Notes
— 247,777 — 247,777 
Warrants to purchase convertible preferred stock (1)
— 6,649 — 6,649 
Total48,389 408,004 48,389 408,004 
__________________
(1)Securities have an antidilutive effect under the treasury stock method.
(2)Securities have an antidilutive effect under the if-converted method.
The Company excluded the following securities, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated as including them would have had an anti-dilutive effect:
Year Ended December 31,
(Amounts in thousands)20222021
Convertible preferred stock (2)
108,721 108,721 
Pre-Closing Bridge Notes
248,197 214,787 
Options to purchase common stock (1)
43,159 34,217 
Warrants to purchase convertible preferred stock (1)
4,774 3,948 
Warrants to purchase common stock(1)
1,875 1,875 
Total406,726 363,548 
__________________
(1)Securities have an antidilutive effect under the treasury stock method.
(2)Not applicable under the treasury stock method and therefore antidilutive.
v3.23.4
Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
September 30, 2023
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $160,025 $— $160,025 
Derivative assets, at fair value (1)
— 3,506 211 3,717 
Total Assets$— $163,531 $211 $163,742 
Derivative liabilities, at fair value (1)
$— $— $1,678 $1,678 
Warrants and equity related liabilities, at fair value
$577 $950 $— $1,527 
Total Liabilities$577 $950 $1,678 $3,205 
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative, at fair value— — 236,603 236,603 
Total Assets$— $251,558 $236,919 $488,477 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities$— $— $4,924 $4,924 
__________________
(1)As of September 30, 2023 and December 31, 2022, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative— — 236,603 236,603 
Total Assets
$— $251,558 $236,919 $488,478 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities
$— $— $4,924 $4,924 
December 31, 2021
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $1,854,435 $— $1,854,435 
Derivative assets, at fair value (1)
— 812 8,484 9,296 
Bifurcated derivative— — — — 
Total Assets
$— $1,855,247 $8,484 $1,863,731 
Derivative liabilities, at fair value (1)
$— $1,466 $916 $2,382 
Convertible preferred stock warrants (2)
— — 31,997 31,997 
Total Liabilities
$— $1,466 $32,913 $34,379 
__________________
(1)As of December 31, 2022 and 2021, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
Schedule of Notional and Fair Value of Derivative Financial Instruments The notional and fair value of derivative financial instruments not designated as hedging instruments were as follows:
(Amounts in thousands)Notional ValueDerivative AssetDerivative Liability
Balance as of September 30, 2023
IRLCs$211,897 $211 $1,678 
Forward commitments$294,000 3,506 — 
Total$3,717 $1,678 
Balance as of December 31, 2022
IRLCs$225,372 $316 $1,828 
Forward commitments$422,000 2,732 — 
Total$3,048 $1,828 
The notional and fair value of derivative financial instruments not designated as hedging instruments were as follows:
(Amounts in thousands)Notional ValueDerivative AssetDerivative Liability    
Balance as of December 31, 2022
IRLCs$225,372 $316 $1,828 
Forward commitments$422,000 2,732 — 
Total$3,048 $1,828 
Balance as of December 31, 2021
IRLCs$2,560,577 $8,484 $916 
Forward commitments$2,818,700 812 1,466 
Total$9,296 $2,382 
Schedule of Change in Fair Value of Derivative Liabilities
As of September 30, 2023 and December 31, 2022, Level 3 instruments include IRLCs, bifurcated derivative and convertible preferred stock warrants. The following table presents the rollforward of Level 3 IRLCs:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$(514)$197 $(1,513)$7,568 
Change in fair value of IRLCs(953)(6,976)46 (14,347)
Balance at end of period$(1,467)$(6,779)$(1,467)$(6,779)
The following table presents the rollforward of Level 3 bifurcated derivative:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$237,667 $277,777 $236,603 $— 
Change in fair value of bifurcated derivative(237,667)29,089 (236,603)306,866 
Balance at end of period$— $306,866 $— $306,866 
The following table presents the rollforward of Level 3 IRLCs:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$7,568 $39,972 
Change in fair value of IRLCs(9,081)(32,404)
Balance at end of year
$(1,513)$7,568 
The following table presents the rollforward of Level 3 bifurcated derivative:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$— $— 
Change in fair value of bifurcated derivative236,603 — 
Balance at end of year
$236,603 $— 
Schedule of Change in Fair Value of Warrant Liabilities
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$2,830 $11,586 $3,096 $31,997 
Exercises(2,830)— (2,830)— 
Change in fair value of convertible preferred stock warrants— (4,202)(266)(24,613)
Balance at end of period$— $7,384 $— $7,384 
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$31,997 $25,799 
Issuances— — 
Exercises— (26,592)
Change in fair value of convertible preferred stock warrants(28,901)32,790 
Balance at end of year
$3,096 $31,997 
Schedule of Offsetting Assets The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized Liabilities
Net Amounts Presented in the Condensed Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
September 30, 2023:$3,525 $(19)$3,506 
December 31, 2022$3,263 $(531)$2,732 
Offsetting of Forward Commitments - Liabilities
Balance as of:
September 30, 2023:$— $— $— 
December 31, 2022$— $— $— 
The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized LiabilitiesNet Amounts Presented in the Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
December 31, 2022:
$3,263 $(531)$2,732 
December 31, 2021
$2,598 $(1,786)$812 
Offsetting of Forward Commitments - Liabilities
Balance as of:
December 31, 2022:
$— $— $— 
December 31, 2021
$282 $(1,748)$(1,466)
Schedule of Offsetting Liabilities The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized Liabilities
Net Amounts Presented in the Condensed Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
September 30, 2023:$3,525 $(19)$3,506 
December 31, 2022$3,263 $(531)$2,732 
Offsetting of Forward Commitments - Liabilities
Balance as of:
September 30, 2023:$— $— $— 
December 31, 2022$— $— $— 
The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized LiabilitiesNet Amounts Presented in the Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
December 31, 2022:
$3,263 $(531)$2,732 
December 31, 2021
$2,598 $(1,786)$812 
Offsetting of Forward Commitments - Liabilities
Balance as of:
December 31, 2022:
$— $— $— 
December 31, 2021
$282 $(1,748)$(1,466)
Schedule of Quantitative Information about Significant Unobservable Inputs The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
September 30, 2023
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
10.27% - 97.49%
85.1 %
December 31, 2022
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% - 96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94% - 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24 - 5.74
4.8
Fair value of common stock
$0.00 - $6.60
$1.60 
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes-Merton option-pricing model and their respective terms, as can be seen below:
(Amounts in thousands, except per share amounts)December 31, 2022
IssuanceFair value per shareFair Value
September 2018$0.54 $1,256 
February 2019$0.54 84 
March 2019$0.35 397 
April 2019$0.35 1,240 
March 2020$0.29 119 
Total$3,096 
The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
December 31, 2022
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% -96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94%- 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24- 5.74
4.8 
Fair value of common stock
$0.00 - $6.60
$1.60 
December 31, 2021
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
5.01% - 99.43%
83.5 %
Convertible preferred stock warrants
Risk free rate
0.19% - 0.73%
0.27 %
Volatility rate
32.8% - 120.3%
65.0 %
Expected term (years)
0.5 - 2.0
0.7 
Fair value of common stock
$6.80 - $29.42
$14.91 
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes option-pricing model and their respective terms, as can be seen below:
December 31,
(Amounts in thousands, except per share amounts)20222021
IssuanceFair value per shareFair ValueFair value per shareFair Value
September 2018$1.66 $1,256 $13.70 $10,364 
February 2019$1.66 84 $13.70 689 
March 2019$1.06 397 $12.54 4,703 
April 2019$1.06 1,240 $12.54 14,671 
March 2020$0.89 119 $11.70 1,570 
Total$3,096 $31,997 
Schedule of Carrying Amounts and Estimated Fair Value of Financial Instruments Measured at Fair Value on Recurring or Non-Recurring Basis The following table presents the carrying amounts and estimated fair value of financial instruments that are not recorded at fair value on a recurring or non-recurring basis:
September 30, 2023December 31, 2022
(Amounts in thousands)Fair Value LevelCarrying AmountFair ValueCarrying AmountFair Value
Short-term investmentsLevel 1$29,831 $29,884 $— $— 
Loans held for investmentLevel 3$4,163 $4,649 $— $— 
Post-Closing Convertible NotesLevel 3$513,001 $252,796 $— $— 
Loan commitment assetLevel 3$— $— $16,119 $54,654 
Pre-Closing Bridge NotesLevel 3$— $— $750,000 $269,067 
Corporate line of creditLevel 3$— $— $144,403 $145,323 
The following table presents the carrying amounts and estimated fair value of financial instruments that are not recorded at fair value on a recurring or non-recurring basis:
As of December 31,
20222021
(Amounts in thousands)Fair Value LevelCarrying AmountFair ValueCarrying AmountFair Value
Loan commitment assetLevel 3$16,119 $54,654 $121,723 $121,723 
Pre-Closing Bridge Notes
Level 3$750,000 $269,067 $477,333 $458,122 
Corporate line of creditLevel 3$144,403 $145,323 $149,022 $161,417 
v3.23.4
Convertible Preferred Stock (Tables)
 9 Months Ended
Sep. 30, 2023
Temporary Equity Disclosure [Abstract]  
Schedule of Convertible Preferred Stock and Warrants Outstanding
As of December 31, 2022, the Company had outstanding the following series of convertible preferred stock:
As of
December 31, 2022
(Amounts in thousands, except share amounts)Shares
Authorized		Shares Issued and
outstanding
Series D Preferred Stock26,178,57423,786,379
Series D-1 Preferred Stock26,178,574—
Series D-2 Preferred Stock21,305,75820,390,896
Series D-3 Preferred Stock914,862914,862
Series D-4 Preferred Stock1,062,0091,062,009
Series D-5 Preferred Stock1,062,009—
Series C Preferred Stock132,946,826100,138,544
Series C-1 Preferred Stock132,946,8268,939,693
Series C-2 Preferred Stock18,624,35414,018,524
Series C-3 Preferred Stock19,741,8188,367,368
Series C-4 Preferred Stock2,171,0642,171,064
Series C-5 Preferred Stock18,624,3544,605,830
Series C-6 Preferred Stock19,741,81811,374,450
Series C-7 Preferred Stock9,833,6604,469,846
Series B Preferred Stock39,753,02428,583,364
Series B-1 Preferred Stock12,531,94011,169,660
Series A Preferred Stock93,850,53369,267,349
Series A-1 Preferred Stock24,937,83823,054,899
Total convertible preferred stock602,405,839332,314,737
As of December 31, 2022, the Company had outstanding the following convertible preferred stock warrants:
No. Warrants
(Amounts in thousands, except no. warrants and strike prices)December 31, 2022StrikeValuation at Issuance
September 2018Series C Preferred9/28/20189/28/20282,312,296$0.59 $170 
February 2019Series C Preferred2/6/20199/28/2028153,807$0.59 $12 
March 2019Series C Preferred3/29/20193/29/20261,146,214$1.12 $87 
April 2019Series C Preferred4/17/20194/17/20293,575,879$1.12 $313 
March 2020Series C Preferred3/25/20203/25/2027410,228$1.64 $201 
Total7,598,424
The Company had outstanding the following series of convertible preferred stock:
As of December 31,
20222021
(Amounts in thousands, except share amounts)Shares
Authorized		Shares Issued and
outstanding		Shares
Authorized		Shares Issued and
outstanding
Series D Preferred Stock8,564,688 7,782,048 8,564,688 7,782,048 
Series D-1 Preferred Stock8,564,688 — 8,564,688 — 
Series D-2 Preferred Stock6,970,478 6,671,168 6,970,478 6,671,168 
Series D-3 Preferred Stock299,310 299,310 299,310 299,310 
Series D-4 Preferred Stock347,451 347,451 347,451 347,451 
Series D-5 Preferred Stock347,451 — 347,451 — 
Series C Preferred Stock43,495,421 32,761,731 43,495,421 32,761,731 
Series C-1 Preferred Stock43,495,421 2,924,746 43,495,421 2,924,746 
Series C-2 Preferred Stock6,093,219 4,586,357 6,093,219 4,586,357 
Series C-3 Preferred Stock6,458,813 2,737,502 6,458,813 2,737,502 
Series C-4 Preferred Stock710,294 710,294 710,294 710,294 
Series C-5 Preferred Stock6,093,219 1,506,862 6,093,219 1,506,862 
Series C-6 Preferred Stock6,458,813 3,721,311 6,458,813 3,721,311 
Series C-7 Preferred Stock3,217,220 1,462,373 3,217,220 1,462,373 
Series B Preferred Stock13,005,760 9,351,449 13,005,760 9,351,449 
Series B-1 Preferred Stock4,100,000 3,654,311 4,100,000 3,654,311 
Series A Preferred Stock30,704,520 22,661,786 30,704,520 22,661,786 
Series A-1 Preferred Stock8,158,764 7,542,734 8,158,764 7,542,734 
Total convertible preferred stock197,085,530 108,721,433 197,085,530 108,721,433 
Convertible Preferred Stock Warrants—The Company had outstanding the following convertible preferred stock warrants:
No. Warrants
(Amounts in thousands, except no. warrants and strike prices)As of December 31,
IssuanceShare ClassIssue DateExpiration Date20222021StrikeValuation at Issuance
September 2018Series C Preferred9/28/20189/28/2028756,500 756,500 $1.81 $170 
February 2019Series C Preferred2/6/20199/28/202850,320 50,320 $1.81 $12 
March 2019Series C Preferred3/29/20193/29/2026375,000 375,000 $3.42 $87 
April 2019Series C Preferred4/17/20194/17/20291,169,899 1,169,899 $3.42 $313 
March 2020Series C Preferred3/25/20203/25/2027134,212 134,212 $5.00 $201 
Total2,485,931 2,485,931 
Schedule of Assumptions Used to Value Warrants The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
September 30, 2023
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
10.27% - 97.49%
85.1 %
December 31, 2022
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% - 96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94% - 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24 - 5.74
4.8
Fair value of common stock
$0.00 - $6.60
$1.60 
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes-Merton option-pricing model and their respective terms, as can be seen below:
(Amounts in thousands, except per share amounts)December 31, 2022
IssuanceFair value per shareFair Value
September 2018$0.54 $1,256 
February 2019$0.54 84 
March 2019$0.35 397 
April 2019$0.35 1,240 
March 2020$0.29 119 
Total$3,096 
The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
December 31, 2022
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% -96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94%- 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24- 5.74
4.8 
Fair value of common stock
$0.00 - $6.60
$1.60 
December 31, 2021
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
5.01% - 99.43%
83.5 %
Convertible preferred stock warrants
Risk free rate
0.19% - 0.73%
0.27 %
Volatility rate
32.8% - 120.3%
65.0 %
Expected term (years)
0.5 - 2.0
0.7 
Fair value of common stock
$6.80 - $29.42
$14.91 
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes option-pricing model and their respective terms, as can be seen below:
December 31,
(Amounts in thousands, except per share amounts)20222021
IssuanceFair value per shareFair ValueFair value per shareFair Value
September 2018$1.66 $1,256 $13.70 $10,364 
February 2019$1.66 84 $13.70 689 
March 2019$1.06 397 $12.54 4,703 
April 2019$1.06 1,240 $12.54 14,671 
March 2020$0.89 119 $11.70 1,570 
Total$3,096 $31,997 
v3.23.4
Stockholders' Equity (Tables)
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
Schedule of Classes of Common Stock The Company's equity structure prior to the Closing consisted of different classes of common stock which is presented in the order of liquidation preference below:
As of December 31, 2022
(Amounts in thousands, except share amounts)Shares AuthorizedShares Issued and outstandingPar Value
Common A Stock24,452,56524,452,565$1 
Common B Stock588,261,164171,441,7805 
Common B-1 Stock236,938,220—— 
Common O Stock236,375,239103,889,0764 
Total common stock1,086,027,188299,783,421$10 
The Company's equity structure consists of different classes of common stock which is presented in the order of liquidation preference below:
As of December 31,
20222021
(Amounts in thousands, except share amounts)
Shares
Authorized
Shares Issued and
outstanding
Par
Value
Shares
Authorized
Shares Issued and
outstanding
Par
Value
Common A Stock8,000,000 8,000,000 $1 8,000,000 8,000,000 $1 
Common B Stock192,457,901 56,089,586 5 192,457,901 56,089,586 5 
Common B-1 Stock77,517,666 — — 77,517,666 — — 
Common O Stock77,333,479 33,988,770 4 77,333,479 34,977,573 4 
Total common stock355,309,046 98,078,356 $10 355,309,046 99,067,159 $10 
Schedule of Common Stock Warrants The Company had outstanding the following common stock warrants as of December 31, 2022:
(Amounts in thousands, except warrants, price, and per share amounts)
IssuanceShare
Class		Issue
Date		Expiration
Date		No.
Warrants		StrikeValuation at Issuance
March 2019Common B3/29/20193/29/20261,146,214$0.23 $179 
March 2020Common B3/25/20203/25/20274,584,856$1.12 $271 
Total equity warrants5,731,070
The Company had outstanding the following common stock warrants as of both December 31, 2022 and 2021, respectively:
(Amounts in thousands, except warrants, price, and per share amounts)
IssuanceShare
Class		Issue
Date		Expiration
Date		No.
Warrants		StrikeValuation at Issuance
March 2019Common B3/29/20193/29/2026375,000 $0.71 $179 
March 2020Common B3/25/20203/25/20271,500,000 $3.42 $271 
Total equity warrants1,875,000 
v3.23.4
Stock-Based Compensation (Tables)
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Schedule of Stock-Based Compensation Expense The total of all stock-based compensation expense related to employees are reported in the following line items within the condensed consolidated statements of operations and comprehensive loss:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Mortgage platform expenses4,176 1,491 5,905 4,941 
Other platform expenses1,493 426 1,837 675 
General and administrative expenses16,828 6,862 25,123 20,479 
Marketing expenses146 369 216 709 
Technology and product development expenses(1)
2,401 1,825 4,317 4,217 
Total stock-based compensation expense25,044 10,973 37,398 31,021 
__________________
(1)Technology and product development expense excludes $2.5 million and $0.8 million for the three months ended September 30, 2023 and 2022, respectively.Technology and product development expense excludes $3.9 million and $3.0 million of stock-based compensation expense for the nine months ended September 30, 2023 and 2022, which was capitalized (see Note 7).
The total of all stock-based compensation expense related to employees are reported in the following line items within the consolidated statements of operations and comprehensive loss:
Year Ended December 31,
(Amounts in thousands)20222021
Mortgage platform expenses$5,256 $13,671 
Other platform expenses908 1,654 
General and administrative expenses26,681 27,559 
Marketing expenses486 1,159 
Technology and product development expenses(1)
5,226 11,172 
Total stock-based compensation expense$38,557 $55,215 
__________________
(1)Technology and product development expense excludes $4.1 million and $9.0 million of stock-based compensation expense, which was capitalized (see Note 8) for the years ended December 31, 2022 and 2021, respectively
v3.23.4
BETTER 10K - ORGANIZATION AND NATURE OF THE BUSINESS (Tables)
 9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Error Corrections and Prior Period Adjustments
The corrections to our consolidated balance sheet as of December 31, 2021 were as follows:
December 31, 2021
(Amounts in thousands)As Previously ReportedCorrectionsAs Corrected
Assets
Mortgage loans held for sale, at fair value
$1,851,161 $3,274 $1,854,435 
Other receivables, net
51,246 2,916 54,162 
Prepaid expenses and other assets110,075 (19,077)90,998 
Total Assets
$3,312,604 $(12,887)$3,299,717 
Liabilities, Convertible Preferred Stock, and Stockholders’ Equity (Deficit)
Liabilities
Accounts payable and accrued expenses$148,767 $(15,511)$133,256 
Total Liabilities
2,638,788 (15,511)2,623,277 
Accumulated deficit(295,237)2,624 (292,613)
Total Stockholders’ Equity 237,536 2,624 240,160 
Total Liabilities, Convertible Preferred Stock, and Stockholders’ Equity
$3,312,604 $(12,887)$3,299,717 
The reclassifications and corrections to our consolidated statement of operations and comprehensive loss for the year ended December 31, 2021 were as follows:
Year Ended December 31, 2021
(Amounts in thousands, except per share amounts)As Previously ReportedReclassificationsCorrectionsAs Reclassified and Corrected
Revenues:
Mortgage platform revenue, net$1,081,421 $— $6,802 $1,088,223 
Cash offer program revenue— 39,361 39,361 
Other platform revenue133,749 (39,361)94,388 
Net interest income (expense)
Interest income88,965 — 662 89,627 
Net interest income19,036 — 662 19,698 
Total net revenues1,234,206 — 7,464 1,241,670 
Expenses:
Mortgage platform expenses 710,132 (11,636)1,617 700,113 
Cash offer program expenses— 39,505 39,505 
Other platform expenses140,479 (40,404)100,075 
General and administrative expenses 232,669 (2,517)1,068 231,220 
Marketing and advertising expenses249,275 (380)248,895 
Technology and product development expenses143,951 (1,616)2,155 144,490 
Restructuring and impairment expenses— 17,048 17,048 
Total expenses1,476,506 — 4,840 1,481,346 
Loss from operations(242,300)— 2,624 (239,676)
Loss before income tax expense (benefit)(306,135)— 2,624 (303,511)
Net loss$(303,752)$— $2,624 $(301,128)
Other comprehensive loss:
Comprehensive loss$(303,717)$— $2,624 $(301,093)
Per share data:
Basic$(3.49)$— $0.03 $(3.46)
Diluted$(3.49)$— $0.03 $(3.46)
v3.23.4
BETTER 10K - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Accounting Standards Update and Change in Accounting Principle The following table summarizes the impact of the modified retrospective adoption of ASC 842 on the Company’s consolidated balance sheet:
As of January 1, 2021
(Amounts in thousands)Balance as of December 31, 2020Adjustments due to ASC 842Balance as of January 1, 2021
Accounts Receivable$46,845 $5,915 $52,760 
Property and equipment, net20,718 6,736 27,454 
Right-of-use asset— 65,889 65,889 
Total Assets
$67,563 $78,540 $146,103 
Accounts payable and accrued expenses$123,849 $10,880 $134,729 
Other liabilities47,588 (2,898)44,690 
Lease liabilities— 69,566 69,566 
Total Liabilities
171,437 77,548 248,985 
Retained earnings7,522 993 8,515 
Total Stockholders’ Equity
$7,522 $993 $8,515 
v3.23.4
BETTER 10K - REVENUE AND SALES-TYPE LEASES (Tables)
 9 Months Ended
Sep. 30, 2023
Revenue [Abstract]  
Schedule of Disaggregation of Revenue
Revenue— The Company disaggregates revenue based on the following revenue streams:
Mortgage platform revenue, net consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Net gain (loss) on sale of loans$7,120 $(10,125)$36,689 $(59,105)
Integrated partnership revenue (loss)3,067 2,265 9,797 (8,526)
Changes in fair value of IRLCs and forward sale commitments4,019 18,947 8,441 174,217 
Total mortgage platform revenue, net$14,207 $11,087 $54,927 $106,586 
Cash offer program revenue consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Revenue related to ASC 606$— $749 $— $11,333 
Revenue related to ASC 842— 8,991 304 214,764 
Total cash offer program revenue$— $9,739 $304 $226,096 
Other platform revenue consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Real estate services$651 $3,983 $6,214 $20,735 
Title insurance13 220 45 6,975 
Settlement services2 130 15 4,190 
Other homeownership offerings668 1,355 3,082 3,723 
Total other platform revenue$1,333 $5,688 $9,355 $35,623 
Sales-type Leases—The following table presents the revenue and expenses recognized at the commencement date of sales-type leases for the periods indicated:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Cash offer program revenue$— $8,991 $304 $214,764 
Cash offer program expenses$— $8,944 $278 $215,972 
Mortgage platform revenue, net consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Net (loss) gain on sale of loans$(63,372)$937,611 
Integrated partnership (loss) revenue(9,166)84,135 
Changes in fair value of IRLCs and forward sale commitments178,196 66,477 
Total mortgage platform revenue, net$105,658 $1,088,223 
Cash offer program revenue consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Revenue related to ASC 606$12,313 $8,725 
Revenue related to ASC 842216,408 30,636 
Total cash offer program revenue$228,721 $39,361 
Other platform revenue consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Title insurance$7,010 $39,602 
Settlement services4,222 31,582 
Real estate services23,053 20,602 
Other homeownership offerings4,657 2,601 
Total other platform revenue$38,942 $94,388 
Sales-type Leases—The following table presents the revenue and expenses recognized at the commencement date of sales-type leases for the periods indicated:
Year Ended December 31,
(Amounts in thousands)20222021
Cash offer program revenue$216,408 $30,636 
Cash offer program expenses$217,609 $30,780 
v3.23.4
BETTER 10K - RESTRUCTURING AND IMPAIRMENTS (Tables)
 9 Months Ended
Sep. 30, 2023
Restructuring and Related Activities [Abstract]  
Restructuring and Related Costs
For the three and nine months ended September 30, 2023 and 2022, the Company’s restructuring and impairment expenses consists of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Employee one-time termination benefits$765 $5,277 $2,320 $99,291 
Impairment of loan commitment asset— 38,330 — 105,604 
Impairments of Right-of-Use Assets— 1,897 413 4,391 
Real estate restructuring loss— — 5,284 — 
(Gain) on lease settlement(86)— (1,063)— 
Impairment of property and equipment— 197 4,844 3,124 
Other impairments80 80 
Total Restructuring and Impairments$679 $45,781 $11,798 $212,490 
For the years ended December 31, 2022 and 2021, the Company’s restructuring and impairment expenses consists of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Impairment of Loan Commitment Asset$105,604 $— 
Employee one-time termination benefits102,261 17,048 
Impairments of Right-of-Use Assets—Real Estate3,707 — 
Impairments of Right-of-Use Assets—Equipment2,494 — 
Write-off of capitalized merger transaction costs27,287 — 
Impairments of intangible assets1,964 — 
Impairment of property and equipment 4,042 — 
Other impairments333 — 
Total Restructuring and Impairments$247,693 $17,048 
v3.23.4
BETTER 10K - MORTGAGE LOANS HELD FOR SALE AND WAREHOUSE LINES OF CREDIT (Tables)
 9 Months Ended
Sep. 30, 2023
Mortgage Loans Held For Sale And Warehouse Agreement Borrowings [Abstract]  
Schedule of Warehouse Lines Of Credit
The Company has the following outstanding warehouse lines of credit:
(Amounts in thousands)MaturityFacility SizeSeptember 30, 2023December 31, 2022
Funding Facility 1 (1)
October 31, 2023$100,000 $— $89,673 
Funding Facility 2 (2)
August 4, 2023— — 9,845 
Funding Facility 3 (3)
December 8, 2023149,000 73,536 44,531 
Funding Facility 4 (4)
August 3, 2024175,000 — — 
Total warehouse lines of credit$424,000 $73,536 $144,049 
__________________
(1)Interest charged under the facility is the greater of i) a) thirty day term SOFR plus three and one-eighth percent for each repurchase and non-qualifying mortgage loans, and b) interest rate charged on the note (“Note Rate”) minus one and one-half percent and ii) a) thirty day term SOFR plus two and one-eight percent for each mortgage loans that is not a non-qualifying or a repurchase mortgage loan, and b) the Note Rate minus one and one-eighth percent. Cash collateral deposit of $15.0 million is maintained and included in restricted cash. Subsequent to September 30, 2023, the facility matured on October 31, 2023 and the Company extended the maturity to November 30, 2023.
(2)Interest charged under the facility is at the one month SOFR plus 1.77%. There is no cash collateral deposit maintained as of September 30, 2023. The facility matured on August 4, 2023 and the Company did not extend beyond maturity.
(3)Interest charged under the facility is at the one month SOFR plus 1.60% - 2.25%. Cash collateral deposit of $3.8 million is maintained and included in restricted cash. The Company extended the maturity from September 8, 2023 to December 8, 2023 during the three months ended September 30, 2023.
(4)Interest charged under the facility is at the one month SOFR plus 1.75% - 3.75%. There is no cash collateral deposit maintained as of September 30, 2023.
The Company has the following outstanding warehouse lines of credit:
December 31,
(Amounts in thousands)MaturityFacility Size20222021
Funding Facility 1 (1)
July 10, 2023$500,000 $89,673 $286,804 
Funding Facility 2 (2)
October 31, 2022— — 171,649 
Funding Facility 3 (3)
September 30, 2022— — 55,622 
Funding Facility 4 (4)
January 30, 2023500,000 9,845 409,616 
Funding Facility 5 (5)
May 31, 2022— — 622,573 
Funding Facility 6 (6)
August 31, 2022— — 4,184 
Funding Facility 7 (7)
August 25, 2022— — 7,279 
Funding Facility 8 (8)
March 8, 2023500,000 44,531 94,181 
Funding Facility 9 (9)
April 6, 2022— — 1,433 
Funding Facility 10 (10)
July 5, 2022— — 14,576 
Total warehouse lines of credit$1,500,000 $144,049 $1,667,917 
__________________
(1)Interest charged under the facility is the greater of i) a) thirty day term SOFR plus three and one-eight percent for each repurchase and non-qualifying mortgage loans, and b) interest rate charged on the note (“Note Rate”) minus one and one-half percent and ii) a) thirty day term SOFR plus two and one-eight percent for each mortgage loans that is not a non-qualifying or a repurchase mortgage loan, and b) the Note Rate minus one and one-eighth percent. Cash collateral deposit of $10.0 million is maintained.
(2)Interest charged under the facility was at the one month SOFR plus 1.75%, with a floor rate of one month LIBOR at 1.00%, as defined in agreement. Cash collateral deposit of $2.5 million was maintained until maturity. Funding Facility 2 matured on October 31, 2022 and the company did not extend beyond maturity.
(3)Interest charged under the facility was at the respective one month LIBOR plus 1.75%, with a floor rate of 2.25%, as defined in the agreement. Cash collateral deposit of $4.5 million was maintained until maturity. Funding Facility 3 matured on September 30, 2022 and the company did not extend beyond maturity.
(4)Interest charged under the facility is at the one month SOFR plus 1.77%. There is no cash collateral deposit maintained as of December 31, 2022. Subsequent to December 31, 2022, the facility was amended to decrease capacity to $250.0 million and to extend maturity to June 6, 2023.
(5)Interest charged under the facility was at the one month LIBOR plus 1.76% - 2.25%, with a floor rate of 0.50%. There was no cash collateral deposit maintained. Funding Facility 5 matured on May 31, 2022 and the company did not extend beyond maturity.
(6)Interest charged under the facility was at the one month SOFR plus 1.50% - 1.75%. Cash collateral deposit of $4.5 million was maintained. Funding Facility 6 matured on August 31, 2022 and the company did not extend beyond maturity.
(7)Interest charged under the facility was at the Adjusted one month Term SOFR plus 1.75% - 2.25%, with a floor rate of one month LIBOR at 0.38%. There was no cash collateral deposit maintained. Funding Facility 7 matured on August 25, 2022 and the company did not extend beyond maturity.
(8)Interest charged under the facility is at the one month SOFR plus 1.60% - 1.85%. Cash collateral deposit of $5.0 million is maintained. Subsequent to December 31, 2022, the facility was amended to decrease capacity to $250.0 million and to extend the maturity to June 6, 2023.
(9)Interest charged under the facility was at the one month LIBOR plus 1.60%, with a floor rate of one month LIBOR at 0.50%, as defined in the agreement. There was no cash collateral deposit maintained. Funding Facility 9 matured on April 6, 2022 and the company did not extend beyond maturity.
(10)Interest charged under the facility was at the one month LIBOR plus 1.88%, with a floor rate of one month LIBOR at 0.25%, as defined in the agreement. There was no cash collateral deposit maintained. Funding Facility 10 matured on July 5, 2022 and the company did not extend beyond maturity.
Schedule Of Loans Held For Sale The Company’s LHFS are summarized below by those pledged as collateral and those fully funded by the Company:
(Amounts in thousands)September 30, 2023December 31, 2022
Funding Facility 1 $43,288 $101,598 
Funding Facility 2— 10,218 
Funding Facility 383,582 46,356 
Total LHFS pledged as collateral126,870 158,172 
Company-funded LHFS19,890 136,599 
Company-funded Home Equity Line of Credit19,335 8,320 
Total LHFS166,095 303,091 
Fair value adjustment(6,070)(54,265)
Total LHFS at fair value$160,025 $248,826 
The Company’s LHFS are summarized below by those pledged as collateral and those fully funded by the Company:
December 31,
(Amounts in thousands)20222021
Funding Facility 1$101,598 $309,003 
Funding Facility 2— 186,698 
Funding Facility 3— 67,106 
Funding Facility 410,218 439,767 
Funding Facility 5— 681,521 
Funding Facility 6— 5,016 
Funding Facility 7— 9,828 
Funding Facility 846,356 110,845 
Funding Facility 9— 4,420 
Funding Facility 10— 16,666 
Total LHFS pledged as collateral158,172 1,830,870 
Company-funded LHFS136,599 5,944 
Company-funded Home Equity Line of Credit8,320 — 
Total LHFS303,091 1,836,814 
Fair value adjustment(54,266)17,621 
Total LHFS at fair value$248,826 $1,854,435 
v3.23.4
BETTER 10K - PROPERTY AND EQUIPMENT (Tables)
 9 Months Ended
Sep. 30, 2023
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment
Property and equipment consists of the following:
As of December 31,
(Amounts in thousands)20222021
Computer and Hardware$18,688 $23,850 
Furniture and equipment3,105 4,559 
Land and buildings3,030 — 
Leasehold improvements21,661 19,866 
Finance lease assets3,761 3,761 
Total property and equipment50,245 52,035 
Less: Accumulated depreciation(19,741)(11,076)
Property and equipment, net$30,504 $40,959 
v3.23.4
BETTER 10K - LEASES (Tables)
 9 Months Ended
Sep. 30, 2023
Leases [Abstract]  
Assets And Liabilities, Lessee
The below table presents the lease related assets and liabilities recorded on the accompanying balance sheet:
As of December 31,
(Amounts in thousands)Balance Sheet Caption20222021
Assets:
Operating lease right-of-use assetsRight-of-use asset$41,979 $56,970 
Finance lease right-of-use assetsProperty and equipment, net2,162 2,683 
Total leased assets$44,141 $59,653 
Liabilities:
Operating lease liabilitiesLease liabilities$60,049 $73,657 
Finance lease liabilitiesOther liabilities1,062 2,184 
Total lease liabilities$61,111 $75,841 
Lease, Cost
The components of operating lease costs were as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Operating lease cost$18,245 $16,539 
Short-term lease cost544 406 
Variable lease cost2,713 3,209 
Total operating lease cost$21,502 $20,154 
Operating lease costs are reported in the following line items within the consolidated statements of operations and comprehensive loss:
Year Ended December 31,
(Amounts in thousands)20222021
Mortgage platform expenses$14,450 $13,363 
General and administrative expenses1,900 2,485 
Marketing and advertising expenses253 159 
Technology and product development expenses2,711 2,053 
Other platform expenses2,188 2,094 
Total operating lease costs$21,502 $20,154 
The components of finance lease costs were as follows:
Year Ended Year Ended December 31, 2022
(Amounts in thousands)Depreciation and AmortizationInterest ExpenseTotal
Total finance lease cost$520 $273 $793 
The components of finance lease costs were as follows:
Year Ended Year Ended December 31, 2021
(Amounts in thousands)Depreciation and AmortizationInterest ExpenseTotal
Total finance lease cost$520 $439 $959 
Supplemental cash flow and non-cash information related to leases were as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Cash paid for amounts included in measurement of operating lease liabilities$18,836 $15,177 
Right-of-use assets obtained in exchange for lease liabilities:
Upon adoption of ASC 842$— $65,889 
New leases entered into during the year$4,520 $15,834 
Supplemental balance sheet information related to leases was as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Operating leases
Weighted average remaining lease term (in years)6.66.1
Weighted average discount rate5.4 %5.1 %
Finance leases
Weighted average remaining lease term (in years)0.31.3
Weighted average discount rate16.2 %16.2 %
Lessee, Operating Lease, Liability, to be Paid, Maturity
As of December 31, 2022, the maturity analysis of finance and operating lease liabilities are as follows:
(Amounts in thousands)Finance LeasesOperating LeasesTotal
2023$1,101 $16,772 $17,872 
2024— 13,979 13,979 
2025— 11,680 11,680 
2026— 9,073 9,073 
2027— 5,460 5,460 
2028 and beyond— 12,156 12,156 
Total lease payments1,101 69,119 70,220 
Less amount representing interest(39)(9,070)(9,109)
Total lease liabilities$1,062 $60,049 $61,111 
Finance Lease, Liability, to be Paid, Maturity
As of December 31, 2022, the maturity analysis of finance and operating lease liabilities are as follows:
(Amounts in thousands)Finance LeasesOperating LeasesTotal
2023$1,101 $16,772 $17,872 
2024— 13,979 13,979 
2025— 11,680 11,680 
2026— 9,073 9,073 
2027— 5,460 5,460 
2028 and beyond— 12,156 12,156 
Total lease payments1,101 69,119 70,220 
Less amount representing interest(39)(9,070)(9,109)
Total lease liabilities$1,062 $60,049 $61,111 
Sales-type Lease, Lease Income The following table presents the revenue, expenses, and gross margin recognized at the commencement date of sales-type leases for the periods indicated:
Year Ended December 31,
(Amounts in thousands)20222021
Cash offer program revenue$216,408 $30,557 
Cash offer program expenses217,609 30,720 
Gross Margin$(1,201)$(163)
v3.23.4
BETTER 10K - GOODWILL AND INTERNAL USE SOFTWARE AND OTHER INTANGIBLE ASSETS, NET (Tables)
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$283 
Property and equipment20 
Indefinite lived intangibles - Licenses1,186 
Goodwill1,741 
Other assets (1)
65 
Accounts payable and accrued expenses (1)
(161)
Other liabilities (1)
(193)
Net assets acquired$2,941 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$2,907 
Accounts receivable (1)
60 
Short-term investments8,729 
Other assets7,530 
Property and equipment83 
Finite lived intangibles854 
Indefinite lived intangibles - Licenses31 
Goodwill12,300 
Accounts payable and accrued expenses (1)
(248)
Customer deposits(12,374)
Other liabilities (1)
(586)
Net assets acquired$19,286 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$781 
Finite lived intangibles - Intellectual property and other3,943 
Indefinite lived intangibles - Licenses and other277 
Goodwill3,317 
Other assets (1)
2,088 
Accounts payable and accrued expenses (1)
(5,512)
Other liabilities (1)
(3,510)
Total recognized assets and liabilities$1,384 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
In connection with this acquisition, the Company recognized the following assets and liabilities:
(Amounts in thousands)As of Acquisition Date
Cash and cash equivalents$1,739 
Finite lived intangibles - Intellectual property and other2,601 
Indefinite lived intangibles - Licenses and other1,038 
Goodwill4,420 
Other assets (1)
1,478 
Accounts payable and accrued expenses (1)
(1,172)
Total recognized assets and liabilities$10,104 
__________________
(1)Carrying value approximates fair value given their short-term maturity periods
Schedule of Goodwill
Changes in the carrying amount of goodwill, net consisted of the following:
Nine Months Ended September 30,
(Amounts in thousands)2023
Balance at beginning of period$18,525 
Goodwill acquired—Goodholm & Birmingham 14,041 
Effect of foreign currency exchange rate changes(74)
Balance at end of period$32,492 
Changes in the carrying amount of goodwill, net consisted of the following:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year$19,811 $10,995 
Goodwill acquired (Trussle and LHE)— 7,737 
Measurement period adjustment(375)1,269 
Effect of foreign currency exchange rate changes(911)(190)
Balance at end of year$18,525 $19,811 
Schedule of Indefinite-Lived Intangible Assets
Internal use software and other intangible assets, net consisted of the following:
As of September 30, 2023
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$136,092 $(94,835)$41,257 
Intellectual property and other6.24,322 (1,402)2,920 
Total Intangible assets with finite lives, net140,413 (96,237)44,176 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other2,410 — 2,410 
Total Internal use software and other intangible assets, net$144,643 $(96,237)$48,406 
As of December 31, 2022
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$123,734 $(67,319)$56,415 
Intellectual property and other7.53,449 (838)2,611 
Total Intangible assets with finite lives, net127,183 (68,157)59,026 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,150 — 1,150 
Total Internal use software and other intangible assets, net$130,153 $(68,157)$61,996 
Internal use software and other intangible assets, net consisted of the following:
As of December 31, 2022
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$123,734 $(67,319)$56,416 
Intellectual property and other7.53,449 (838)2,611 
Total Intangible assets with finite lives, net127,184 (68,157)59,026 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,150 — 1,150 
Total Internal use software and other intangible assets, net$130,153 $(68,157)$61,996 
As of December 31, 2021
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$96,155 $(32,832)$63,323 
Intellectual property and other7.56,384 (320)6,064 
Total Intangible assets with finite lives, net102,539 (33,152)69,387 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,282 — 1,282 
Total Internal use software and other intangible assets, net$105,641 $(33,152)$72,489 
Schedule of Finite-Lived Intangible Assets
Internal use software and other intangible assets, net consisted of the following:
As of September 30, 2023
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$136,092 $(94,835)$41,257 
Intellectual property and other6.24,322 (1,402)2,920 
Total Intangible assets with finite lives, net140,413 (96,237)44,176 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other2,410 — 2,410 
Total Internal use software and other intangible assets, net$144,643 $(96,237)$48,406 
As of December 31, 2022
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$123,734 $(67,319)$56,415 
Intellectual property and other7.53,449 (838)2,611 
Total Intangible assets with finite lives, net127,183 (68,157)59,026 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,150 — 1,150 
Total Internal use software and other intangible assets, net$130,153 $(68,157)$61,996 
Internal use software and other intangible assets, net consisted of the following:
As of December 31, 2022
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$123,734 $(67,319)$56,416 
Intellectual property and other7.53,449 (838)2,611 
Total Intangible assets with finite lives, net127,184 (68,157)59,026 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,150 — 1,150 
Total Internal use software and other intangible assets, net$130,153 $(68,157)$61,996 
As of December 31, 2021
(Amounts in thousands, except useful lives)Weighted Average Useful Lives (in years)Gross Carrying ValueAccumulated AmortizationNet Carrying Value
Intangible assets with finite lives
Internal use software and website development3.0$96,155 $(32,832)$63,323 
Intellectual property and other7.56,384 (320)6,064 
Total Intangible assets with finite lives, net102,539 (33,152)69,387 
Intangible assets with indefinite lives
Domain name1,820 — 1,820 
Licenses and other1,282 — 1,282 
Total Internal use software and other intangible assets, net$105,641 $(33,152)$72,489 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense
Amortization expense related to intangible assets as of December 31, 2022 is expected to be as follows:
(Amounts in thousands)Total
2023$34,554 
202420,338 
20253,296 
2026574 
2027 and thereafter264 
Total$59,026 
v3.23.4
BETTER 10K - PREPAID EXPENSES AND OTHER ASSETS (Tables)
 9 Months Ended
Sep. 30, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Schedule of Prepaid Expenses and Other Assets
Prepaid expenses and other assets consisted of the following:
As of September 30,As of December 31,
(Amounts in thousands)20232022
Prepaid expenses$27,095 $26,366 
Tax receivables9,717 18,139 
Security Deposits15,233 14,369 
Loans held for investment4,163 — 
Prepaid compensation asset— 5,615 
Inventory—Homes— 1,139 
Net investment in lease$— $944 
Total prepaid expenses and other assets$56,208 $66,572 
Prepaid expenses and other assets consisted of the following:
As of December 31,
(Amounts in thousands)20222021
Other prepaid expenses$26,366 $22,931 
Net investment in lease944 11,058 
Tax receivables18,139 20,250 
Prefunded loans in escrow — 12,148 
Merger transaction costs— 14,263 
Security Deposits14,369 9,226 
Prepaid compensation asset5,615 — 
Inventory—Homes
1,139 1,122 
Total prepaid expenses and other assets$66,572 $90,998 
v3.23.4
BETTER 10K - OTHER LIABILITIES (Tables)
 9 Months Ended
Sep. 30, 2023
Other Liabilities Disclosure [Abstract]  
Other Liabilities
Other liabilities consisted of the following:
As of December 31,
(Amounts in thousands)20222021
Deferred Revenue30,205 50,010 
Loan Repurchase Reserve26,745 17,540 
Other Liabilities2,982 8,608 
Total other liabilities$59,933 $76,158 
v3.23.4
BETTER 10K - RISKS AND UNCERTAINTIES (Tables)
 9 Months Ended
Sep. 30, 2023
Risks and Uncertainties [Abstract]  
Schedule of Loan Repurchase Reserve Activity The following presents the activity of the Company’s loan repurchase reserve:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Loan repurchase reserve at beginning of period$21,832 $21,070 $26,745 $17,540 
Provision866 11,683 178 25,125 
Charge-offs(945)(9,754)(5,170)(19,667)
Loan repurchase reserve at end of period$21,753 $22,999 $21,753 $22,999 
The following presents the activity of the Company’s loan repurchase reserve:
Year Ended December 31,
(Amounts in thousands)20222021
Loan repurchase reserve at beginning of year$17,540 $7,438 
Provision33,518 13,780 
Charge-offs(24,313)(3,678)
Loan repurchase reserve at end of year$26,745 $17,540 
v3.23.4
BETTER 10K - NET INCOME (LOSS) PER SHARE (Tables)
 9 Months Ended
Sep. 30, 2023
Earnings Per Share [Abstract]  
Schedule of Computation of Net Loss Per Share and Weighted Average Shares
The computation of net loss per share and weighted average shares of the Company's common stock outstanding during the periods presented is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands, except for share and per share amounts)2023202220232022
Basic net loss per share:
Net loss$(340,033)$(226,612)$(475,441)$(625,864)
Income allocated to participating securities— — — — 
Net loss attributable to common stockholders - Basic$(340,033)$(226,612)$(475,441)$(625,864)
Diluted net loss per share:
Net loss attributable to common stockholders - Basic$(340,033)$(226,612)$(475,441)$(625,864)
Interest expense and change in fair value of bifurcated derivatives on convertible notes— — — — 
Income allocated to participating securities— — — — 
Net loss income attributable to common stockholders - Diluted$(340,033)$(226,612)$(475,441)$(625,864)
Shares used in computation:
Weighted average common shares outstanding496,577,751292,660,334364,817,445289,934,149
Weighted-average effect of dilutive securities:——
Assumed exercise of stock options————
Assumed exercise of warrants————
Assumed conversion of convertible preferred stock————
Diluted weighted-average common shares outstanding496,577,751292,660,334364,817,445289,934,149
Earnings (loss) per share attributable to common stockholders:
Basic$(0.68)$(0.77)$(1.30)$(2.16)
Diluted$(0.68)$(0.77)$(1.30)$(2.16)
The computation of net loss per share and weighted average shares of the Company's common stock outstanding during the periods presented is as follows:
Year Ended December 31,
(Amounts in thousands, except for share and per share amounts)20222021
Basic net loss per share:
Net loss$(888,802)$(301,128)
Income allocated to participating securities— — 
Net loss attributable to common stockholders - Basic$(888,802)$(301,128)
Diluted net loss per share:
Net loss attributable to common stockholders - Basic$(888,802)$(301,128)
Interest expense and change in fair value of bifurcated derivatives on convertible notes— — 
Income allocated to participating securities— — 
Net loss income attributable to common stockholders - Diluted$(888,802)$(301,128)
Shares used in computation:
Weighted average common shares outstanding95,303,684 86,984,646 
Weighted-average effect of dilutive securities:
Assumed exercise of stock options— — 
Assumed exercise of warrants— — 
Assumed conversion of convertible preferred stock— — 
Diluted weighted-average common shares outstanding95,303,684 86,984,646 
Earnings (loss) per share attributable to common stockholders:
Basic$(9.33)$(3.46)
Diluted$(9.33)$(3.46)
Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share The Company excluded the following securities, presented based on amounts outstanding at each period end, from
the computation of diluted net loss per share attributable to common stockholders for the periods indicated as including them would have had an anti-dilutive effect:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Options to purchase common stock (1)
48,389 44,857 48,389 44,857 
Convertible preferred stock (2)
— 108,721 — 108,721 
Pre-Closing Bridge Notes
— 247,777 — 247,777 
Warrants to purchase convertible preferred stock (1)
— 6,649 — 6,649 
Total48,389 408,004 48,389 408,004 
__________________
(1)Securities have an antidilutive effect under the treasury stock method.
(2)Securities have an antidilutive effect under the if-converted method.
The Company excluded the following securities, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated as including them would have had an anti-dilutive effect:
Year Ended December 31,
(Amounts in thousands)20222021
Convertible preferred stock (2)
108,721 108,721 
Pre-Closing Bridge Notes
248,197 214,787 
Options to purchase common stock (1)
43,159 34,217 
Warrants to purchase convertible preferred stock (1)
4,774 3,948 
Warrants to purchase common stock(1)
1,875 1,875 
Total406,726 363,548 
__________________
(1)Securities have an antidilutive effect under the treasury stock method.
(2)Not applicable under the treasury stock method and therefore antidilutive.
v3.23.4
BETTER 10K - FAIR VALUE MEASUREMENTS (Tables)
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
September 30, 2023
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $160,025 $— $160,025 
Derivative assets, at fair value (1)
— 3,506 211 3,717 
Total Assets$— $163,531 $211 $163,742 
Derivative liabilities, at fair value (1)
$— $— $1,678 $1,678 
Warrants and equity related liabilities, at fair value
$577 $950 $— $1,527 
Total Liabilities$577 $950 $1,678 $3,205 
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative, at fair value— — 236,603 236,603 
Total Assets$— $251,558 $236,919 $488,477 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities$— $— $4,924 $4,924 
__________________
(1)As of September 30, 2023 and December 31, 2022, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative— — 236,603 236,603 
Total Assets
$— $251,558 $236,919 $488,478 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities
$— $— $4,924 $4,924 
December 31, 2021
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $1,854,435 $— $1,854,435 
Derivative assets, at fair value (1)
— 812 8,484 9,296 
Bifurcated derivative— — — — 
Total Assets
$— $1,855,247 $8,484 $1,863,731 
Derivative liabilities, at fair value (1)
$— $1,466 $916 $2,382 
Convertible preferred stock warrants (2)
— — 31,997 31,997 
Total Liabilities
$— $1,466 $32,913 $34,379 
__________________
(1)As of December 31, 2022 and 2021, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
Schedule of Notional and Fair Value of Derivative Financial Instruments The notional and fair value of derivative financial instruments not designated as hedging instruments were as follows:
(Amounts in thousands)Notional ValueDerivative AssetDerivative Liability
Balance as of September 30, 2023
IRLCs$211,897 $211 $1,678 
Forward commitments$294,000 3,506 — 
Total$3,717 $1,678 
Balance as of December 31, 2022
IRLCs$225,372 $316 $1,828 
Forward commitments$422,000 2,732 — 
Total$3,048 $1,828 
The notional and fair value of derivative financial instruments not designated as hedging instruments were as follows:
(Amounts in thousands)Notional ValueDerivative AssetDerivative Liability    
Balance as of December 31, 2022
IRLCs$225,372 $316 $1,828 
Forward commitments$422,000 2,732 — 
Total$3,048 $1,828 
Balance as of December 31, 2021
IRLCs$2,560,577 $8,484 $916 
Forward commitments$2,818,700 812 1,466 
Total$9,296 $2,382 
Schedule of Change in Fair Value of Derivative Liabilities
As of September 30, 2023 and December 31, 2022, Level 3 instruments include IRLCs, bifurcated derivative and convertible preferred stock warrants. The following table presents the rollforward of Level 3 IRLCs:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$(514)$197 $(1,513)$7,568 
Change in fair value of IRLCs(953)(6,976)46 (14,347)
Balance at end of period$(1,467)$(6,779)$(1,467)$(6,779)
The following table presents the rollforward of Level 3 bifurcated derivative:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$237,667 $277,777 $236,603 $— 
Change in fair value of bifurcated derivative(237,667)29,089 (236,603)306,866 
Balance at end of period$— $306,866 $— $306,866 
The following table presents the rollforward of Level 3 IRLCs:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$7,568 $39,972 
Change in fair value of IRLCs(9,081)(32,404)
Balance at end of year
$(1,513)$7,568 
The following table presents the rollforward of Level 3 bifurcated derivative:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$— $— 
Change in fair value of bifurcated derivative236,603 — 
Balance at end of year
$236,603 $— 
Schedule of Change in Fair Value of Warrant Liabilities
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$2,830 $11,586 $3,096 $31,997 
Exercises(2,830)— (2,830)— 
Change in fair value of convertible preferred stock warrants— (4,202)(266)(24,613)
Balance at end of period$— $7,384 $— $7,384 
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$31,997 $25,799 
Issuances— — 
Exercises— (26,592)
Change in fair value of convertible preferred stock warrants(28,901)32,790 
Balance at end of year
$3,096 $31,997 
Schedule of Offsetting Assets The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized Liabilities
Net Amounts Presented in the Condensed Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
September 30, 2023:$3,525 $(19)$3,506 
December 31, 2022$3,263 $(531)$2,732 
Offsetting of Forward Commitments - Liabilities
Balance as of:
September 30, 2023:$— $— $— 
December 31, 2022$— $— $— 
The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized LiabilitiesNet Amounts Presented in the Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
December 31, 2022:
$3,263 $(531)$2,732 
December 31, 2021
$2,598 $(1,786)$812 
Offsetting of Forward Commitments - Liabilities
Balance as of:
December 31, 2022:
$— $— $— 
December 31, 2021
$282 $(1,748)$(1,466)
Schedule of Offsetting Liabilities The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized Liabilities
Net Amounts Presented in the Condensed Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
September 30, 2023:$3,525 $(19)$3,506 
December 31, 2022$3,263 $(531)$2,732 
Offsetting of Forward Commitments - Liabilities
Balance as of:
September 30, 2023:$— $— $— 
December 31, 2022$— $— $— 
The table below presents gross amounts of recognized assets and liabilities subject to master netting agreements.
(Amounts in thousands)Gross Amount of Recognized AssetsGross Amount of Recognized LiabilitiesNet Amounts Presented in the Consolidated Balance Sheet
Offsetting of Forward Commitments - Assets
Balance as of:
December 31, 2022:
$3,263 $(531)$2,732 
December 31, 2021
$2,598 $(1,786)$812 
Offsetting of Forward Commitments - Liabilities
Balance as of:
December 31, 2022:
$— $— $— 
December 31, 2021
$282 $(1,748)$(1,466)
Schedule of Quantitative Information about Significant Unobservable Inputs The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
September 30, 2023
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
10.27% - 97.49%
85.1 %
December 31, 2022
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% - 96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94% - 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24 - 5.74
4.8
Fair value of common stock
$0.00 - $6.60
$1.60 
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes-Merton option-pricing model and their respective terms, as can be seen below:
(Amounts in thousands, except per share amounts)December 31, 2022
IssuanceFair value per shareFair Value
September 2018$0.54 $1,256 
February 2019$0.54 84 
March 2019$0.35 397 
April 2019$0.35 1,240 
March 2020$0.29 119 
Total$3,096 
The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
December 31, 2022
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% -96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94%- 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24- 5.74
4.8 
Fair value of common stock
$0.00 - $6.60
$1.60 
December 31, 2021
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
5.01% - 99.43%
83.5 %
Convertible preferred stock warrants
Risk free rate
0.19% - 0.73%
0.27 %
Volatility rate
32.8% - 120.3%
65.0 %
Expected term (years)
0.5 - 2.0
0.7 
Fair value of common stock
$6.80 - $29.42
$14.91 
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes option-pricing model and their respective terms, as can be seen below:
December 31,
(Amounts in thousands, except per share amounts)20222021
IssuanceFair value per shareFair ValueFair value per shareFair Value
September 2018$1.66 $1,256 $13.70 $10,364 
February 2019$1.66 84 $13.70 689 
March 2019$1.06 397 $12.54 4,703 
April 2019$1.06 1,240 $12.54 14,671 
March 2020$0.89 119 $11.70 1,570 
Total$3,096 $31,997 
Schedule of Carrying Amounts and Estimated Fair Value of Financial Instruments Measured at Fair Value on Recurring or Non-Recurring Basis The following table presents the carrying amounts and estimated fair value of financial instruments that are not recorded at fair value on a recurring or non-recurring basis:
September 30, 2023December 31, 2022
(Amounts in thousands)Fair Value LevelCarrying AmountFair ValueCarrying AmountFair Value
Short-term investmentsLevel 1$29,831 $29,884 $— $— 
Loans held for investmentLevel 3$4,163 $4,649 $— $— 
Post-Closing Convertible NotesLevel 3$513,001 $252,796 $— $— 
Loan commitment assetLevel 3$— $— $16,119 $54,654 
Pre-Closing Bridge NotesLevel 3$— $— $750,000 $269,067 
Corporate line of creditLevel 3$— $— $144,403 $145,323 
The following table presents the carrying amounts and estimated fair value of financial instruments that are not recorded at fair value on a recurring or non-recurring basis:
As of December 31,
20222021
(Amounts in thousands)Fair Value LevelCarrying AmountFair ValueCarrying AmountFair Value
Loan commitment assetLevel 3$16,119 $54,654 $121,723 $121,723 
Pre-Closing Bridge Notes
Level 3$750,000 $269,067 $477,333 $458,122 
Corporate line of creditLevel 3$144,403 $145,323 $149,022 $161,417 
v3.23.4
BETTER 10K - INCOME TAXES (Tables)
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Schedule of Components of Income (Loss) Before Income Tax Expense (Benefit) The components of income (loss) before income tax expense (benefit) are as follows:
Year Ended December 31,
(Amounts in thousands)20222021
U.S.$(863,807)$(301,081)
Foreign(23,895)(2,430)
Income (loss) before income tax expense$(887,702)$(303,511)
Schedule of Components of Income Taxes
The following table displays the components of the Company’s federal, state and local, and foreign income taxes.
Year Ended December 31,
(Amounts in thousands)20222021
Current Income Tax Expense (Benefit):
Federal$(658)$(6,145)
Foreign1,815 2,888 
State and local(130)1,118 
Total Current Income Tax Expense (Benefit)1,027 (2,139)
Deferred Income Tax Expense (Benefit):
Federal(140,025)(43,545)
Foreign(7,287)(2,556)
State and local(32,345)(15,613)
Valuation Allowance179,730 61,470 
Total Deferred Income Tax Expense (Benefit)73 (244)
Income Tax Expense (Benefit)$1,100 $(2,383)
Schedule of Effective Tax Rate Reconciliation
The following table displays the difference between the U.S. federal statutory corporate tax rate and the effective tax rate.
Year Ended December 31,
20222021
US federal statutory corporate tax rate21.00 %21.00 %
State and local tax2.87 %4.74 %
Stock-based compensation-0.67 %-2.38 %
Fair value of warrants6.30 %-2.25 %
Others0.03 %-0.41 %
Foreign tax rate differential0.10 %— %
R&D tax credit0.13 %2.25 %
Unrecognized tax benefits0.07 %-0.77 %
Interest - Pre-Closing Bridge Notes-6.47 %-1.32 %
Restructuring costs-3.15 %— %
Change in valuation allowance-20.33 %-20.08 %
Effective Tax Rate-0.12 %0.78 %
Schedule of Deferred Income Tax Assets and Deferred Income Tax Liabilities
The following table displays deferred income tax assets and deferred income tax liabilities:
As of December 31,
(Amounts in thousands)20222021
Deferred Income Tax Assets
Net operating loss$244,081 $86,009 
Non-qualified stock options3,624 4,341 
Reserves5,092 4,866 
Loan repurchase reserve12,991 4,656 
Restructuring reserve757 — 
Accruals112 3,447 
Deferred revenue7,688 5,311 
Other3,908 3,326 
Total Deferred Income Tax Assets278,253 111,956 
Deferred Income Tax Liabilities
Internal use software(3,167)(14,128)
Intangible assets(547)(1,259)
Depreciation(1,775)(3,193)
Other— (251)
Total Deferred Income Tax Liabilities(5,489)(18,831)
Net Deferred Tax Asset before Valuation Allowance272,764 93,125 
Less: Valuation Allowance(272,477)(92,766)
Deferred Income Tax Assets, Net$287 $359 
Schedule of Reconciliation of Gross Unrecognized Tax Benefits
A reconciliation of the beginning and ending balances of gross unrecognized tax benefits is as follows:
Year Ended December 31,
(Amounts in thousands)20222021
Unrecognized tax benefits - January 1
$4,070 $1,710 
Gross increases - tax positions in prior period— — 
Gross decreases - tax positions in prior period(2,717)(1,080)
Gross increases - tax positions in current period— 3,440 
Settlement— — 
Lapse of statute of limitations— — 
Unrecognized tax benefits - December 31
$1,353 $4,070 
v3.23.4
BETTER 10K - CONVERTIBLE PREFERRED STOCK (Tables)
 9 Months Ended
Sep. 30, 2023
Temporary Equity Disclosure [Abstract]  
Schedule of Convertible Preferred Stock and Warrants Outstanding
As of December 31, 2022, the Company had outstanding the following series of convertible preferred stock:
As of
December 31, 2022
(Amounts in thousands, except share amounts)Shares
Authorized		Shares Issued and
outstanding
Series D Preferred Stock26,178,57423,786,379
Series D-1 Preferred Stock26,178,574—
Series D-2 Preferred Stock21,305,75820,390,896
Series D-3 Preferred Stock914,862914,862
Series D-4 Preferred Stock1,062,0091,062,009
Series D-5 Preferred Stock1,062,009—
Series C Preferred Stock132,946,826100,138,544
Series C-1 Preferred Stock132,946,8268,939,693
Series C-2 Preferred Stock18,624,35414,018,524
Series C-3 Preferred Stock19,741,8188,367,368
Series C-4 Preferred Stock2,171,0642,171,064
Series C-5 Preferred Stock18,624,3544,605,830
Series C-6 Preferred Stock19,741,81811,374,450
Series C-7 Preferred Stock9,833,6604,469,846
Series B Preferred Stock39,753,02428,583,364
Series B-1 Preferred Stock12,531,94011,169,660
Series A Preferred Stock93,850,53369,267,349
Series A-1 Preferred Stock24,937,83823,054,899
Total convertible preferred stock602,405,839332,314,737
As of December 31, 2022, the Company had outstanding the following convertible preferred stock warrants:
No. Warrants
(Amounts in thousands, except no. warrants and strike prices)December 31, 2022StrikeValuation at Issuance
September 2018Series C Preferred9/28/20189/28/20282,312,296$0.59 $170 
February 2019Series C Preferred2/6/20199/28/2028153,807$0.59 $12 
March 2019Series C Preferred3/29/20193/29/20261,146,214$1.12 $87 
April 2019Series C Preferred4/17/20194/17/20293,575,879$1.12 $313 
March 2020Series C Preferred3/25/20203/25/2027410,228$1.64 $201 
Total7,598,424
The Company had outstanding the following series of convertible preferred stock:
As of December 31,
20222021
(Amounts in thousands, except share amounts)Shares
Authorized		Shares Issued and
outstanding		Shares
Authorized		Shares Issued and
outstanding
Series D Preferred Stock8,564,688 7,782,048 8,564,688 7,782,048 
Series D-1 Preferred Stock8,564,688 — 8,564,688 — 
Series D-2 Preferred Stock6,970,478 6,671,168 6,970,478 6,671,168 
Series D-3 Preferred Stock299,310 299,310 299,310 299,310 
Series D-4 Preferred Stock347,451 347,451 347,451 347,451 
Series D-5 Preferred Stock347,451 — 347,451 — 
Series C Preferred Stock43,495,421 32,761,731 43,495,421 32,761,731 
Series C-1 Preferred Stock43,495,421 2,924,746 43,495,421 2,924,746 
Series C-2 Preferred Stock6,093,219 4,586,357 6,093,219 4,586,357 
Series C-3 Preferred Stock6,458,813 2,737,502 6,458,813 2,737,502 
Series C-4 Preferred Stock710,294 710,294 710,294 710,294 
Series C-5 Preferred Stock6,093,219 1,506,862 6,093,219 1,506,862 
Series C-6 Preferred Stock6,458,813 3,721,311 6,458,813 3,721,311 
Series C-7 Preferred Stock3,217,220 1,462,373 3,217,220 1,462,373 
Series B Preferred Stock13,005,760 9,351,449 13,005,760 9,351,449 
Series B-1 Preferred Stock4,100,000 3,654,311 4,100,000 3,654,311 
Series A Preferred Stock30,704,520 22,661,786 30,704,520 22,661,786 
Series A-1 Preferred Stock8,158,764 7,542,734 8,158,764 7,542,734 
Total convertible preferred stock197,085,530 108,721,433 197,085,530 108,721,433 
Convertible Preferred Stock Warrants—The Company had outstanding the following convertible preferred stock warrants:
No. Warrants
(Amounts in thousands, except no. warrants and strike prices)As of December 31,
IssuanceShare ClassIssue DateExpiration Date20222021StrikeValuation at Issuance
September 2018Series C Preferred9/28/20189/28/2028756,500 756,500 $1.81 $170 
February 2019Series C Preferred2/6/20199/28/202850,320 50,320 $1.81 $12 
March 2019Series C Preferred3/29/20193/29/2026375,000 375,000 $3.42 $87 
April 2019Series C Preferred4/17/20194/17/20291,169,899 1,169,899 $3.42 $313 
March 2020Series C Preferred3/25/20203/25/2027134,212 134,212 $5.00 $201 
Total2,485,931 2,485,931 
Schedule of Assumptions Used to Value Warrants The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
September 30, 2023
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
10.27% - 97.49%
85.1 %
December 31, 2022
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% - 96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94% - 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24 - 5.74
4.8
Fair value of common stock
$0.00 - $6.60
$1.60 
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes-Merton option-pricing model and their respective terms, as can be seen below:
(Amounts in thousands, except per share amounts)December 31, 2022
IssuanceFair value per shareFair Value
September 2018$0.54 $1,256 
February 2019$0.54 84 
March 2019$0.35 397 
April 2019$0.35 1,240 
March 2020$0.29 119 
Total$3,096 
The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
December 31, 2022
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% -96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94%- 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24- 5.74
4.8 
Fair value of common stock
$0.00 - $6.60
$1.60 
December 31, 2021
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
5.01% - 99.43%
83.5 %
Convertible preferred stock warrants
Risk free rate
0.19% - 0.73%
0.27 %
Volatility rate
32.8% - 120.3%
65.0 %
Expected term (years)
0.5 - 2.0
0.7 
Fair value of common stock
$6.80 - $29.42
$14.91 
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes option-pricing model and their respective terms, as can be seen below:
December 31,
(Amounts in thousands, except per share amounts)20222021
IssuanceFair value per shareFair ValueFair value per shareFair Value
September 2018$1.66 $1,256 $13.70 $10,364 
February 2019$1.66 84 $13.70 689 
March 2019$1.06 397 $12.54 4,703 
April 2019$1.06 1,240 $12.54 14,671 
March 2020$0.89 119 $11.70 1,570 
Total$3,096 $31,997 
v3.23.4
BETTER 10K - STOCKHOLDERS' EQUITY (Tables)
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
Schedule of Classes of Common Stock The Company's equity structure prior to the Closing consisted of different classes of common stock which is presented in the order of liquidation preference below:
As of December 31, 2022
(Amounts in thousands, except share amounts)Shares AuthorizedShares Issued and outstandingPar Value
Common A Stock24,452,56524,452,565$1 
Common B Stock588,261,164171,441,7805 
Common B-1 Stock236,938,220—— 
Common O Stock236,375,239103,889,0764 
Total common stock1,086,027,188299,783,421$10 
The Company's equity structure consists of different classes of common stock which is presented in the order of liquidation preference below:
As of December 31,
20222021
(Amounts in thousands, except share amounts)
Shares
Authorized
Shares Issued and
outstanding
Par
Value
Shares
Authorized
Shares Issued and
outstanding
Par
Value
Common A Stock8,000,000 8,000,000 $1 8,000,000 8,000,000 $1 
Common B Stock192,457,901 56,089,586 5 192,457,901 56,089,586 5 
Common B-1 Stock77,517,666 — — 77,517,666 — — 
Common O Stock77,333,479 33,988,770 4 77,333,479 34,977,573 4 
Total common stock355,309,046 98,078,356 $10 355,309,046 99,067,159 $10 
Schedule of Common Stock Warrants The Company had outstanding the following common stock warrants as of December 31, 2022:
(Amounts in thousands, except warrants, price, and per share amounts)
IssuanceShare
Class		Issue
Date		Expiration
Date		No.
Warrants		StrikeValuation at Issuance
March 2019Common B3/29/20193/29/20261,146,214$0.23 $179 
March 2020Common B3/25/20203/25/20274,584,856$1.12 $271 
Total equity warrants5,731,070
The Company had outstanding the following common stock warrants as of both December 31, 2022 and 2021, respectively:
(Amounts in thousands, except warrants, price, and per share amounts)
IssuanceShare
Class		Issue
Date		Expiration
Date		No.
Warrants		StrikeValuation at Issuance
March 2019Common B3/29/20193/29/2026375,000 $0.71 $179 
March 2020Common B3/25/20203/25/20271,500,000 $3.42 $271 
Total equity warrants1,875,000 
v3.23.4
BETTER 10K - STOCK-BASED COMPENSATION (Tables)
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Summary of Stock Option Activity The following is a summary of stock option activity during the year ended December 31, 2022:
(Amounts in thousands, except options, prices, and averages)
Number of
Options
Weighted
Average
Exercise
Price
Intrinsic
Value
Weighted
Average
Remaining
Term
Outstanding—January 1, 202226,635,326 $8.23 
Options granted1,583,680 $13.63 
Options exercised(998,529)$1.76 
Options cancelled (forfeited)(8,322,168)$11.12 
Options cancelled (expired)(4,469,530)$5.99 
Outstanding—December 31, 202214,428,779 $8.47 $6,701 7.0
Vested and exercisable—December 31, 20227,399,689 $9.90 $6,021 6.3
Options expected to vest2,711,958 $5.20 $874 8.4
Options vested and expected to vest—December 31, 202210,111,647 $8.60 $6,895 6.9
Schedule of Fair Value Assumptions The assumptions used to estimate the fair value of stock options granted are as follows:
Year Ended December 31,
20222021
(Amounts in dollars, except percentages)RangeWeighted AverageRangeWeighted Average
Fair value of Common O Stock
$3.41 - $14.8
$4.43 
$10.66 - $26.46
$15.46 
Expected volatility
72.58% - 76.74%
76.4 %
63.42 - 73.69%
65.8 %
Expected term (years)
5 - 6.02
6.0
5.0 - 6.3
6.0
Risk-free interest rate
1.96% - 4.22%
3.75 %
0.43% - 1.19%
0.73 %
Summary of RSU Activity The following is a summary of RSU activity during the year ended December 31, 2022:
(Amounts in thousands, except shares and averages)
Number of
Shares
Weighted Average Grant Date Fair Value
Unvested—December 31, 20217,754,620 $25.35 
RSUs granted8,520,321 $8.69 
RSUs settled(4,464)$26.46 
RSUs vested(835,714)$0.01 
RSUs cancelled (expired)(8,234,474)$21.62 
RSUs cancelled (forfeited)(331,068)$26.46 
Unvested—December 31, 20226,869,221 $12.19 
Schedule of Stock-Based Compensation Expense The total of all stock-based compensation expense related to employees are reported in the following line items within the condensed consolidated statements of operations and comprehensive loss:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Mortgage platform expenses4,176 1,491 5,905 4,941 
Other platform expenses1,493 426 1,837 675 
General and administrative expenses16,828 6,862 25,123 20,479 
Marketing expenses146 369 216 709 
Technology and product development expenses(1)
2,401 1,825 4,317 4,217 
Total stock-based compensation expense25,044 10,973 37,398 31,021 
__________________
(1)Technology and product development expense excludes $2.5 million and $0.8 million for the three months ended September 30, 2023 and 2022, respectively.Technology and product development expense excludes $3.9 million and $3.0 million of stock-based compensation expense for the nine months ended September 30, 2023 and 2022, which was capitalized (see Note 7).
The total of all stock-based compensation expense related to employees are reported in the following line items within the consolidated statements of operations and comprehensive loss:
Year Ended December 31,
(Amounts in thousands)20222021
Mortgage platform expenses$5,256 $13,671 
Other platform expenses908 1,654 
General and administrative expenses26,681 27,559 
Marketing expenses486 1,159 
Technology and product development expenses(1)
5,226 11,172 
Total stock-based compensation expense$38,557 $55,215 
__________________
(1)Technology and product development expense excludes $4.1 million and $9.0 million of stock-based compensation expense, which was capitalized (see Note 8) for the years ended December 31, 2022 and 2021, respectively
v3.23.4
AURORA 10Q - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 9 Months Ended
Sep. 30, 2023
Summary of Significant Accounting Policies [Line Items]  
Schedule of reconciliation of Class A ordinary shares reflected in the balance sheet
As of December 31, 2022, the Company had outstanding the following series of convertible preferred stock:
As of
December 31, 2022
(Amounts in thousands, except share amounts)Shares
Authorized		Shares Issued and
outstanding
Series D Preferred Stock26,178,57423,786,379
Series D-1 Preferred Stock26,178,574—
Series D-2 Preferred Stock21,305,75820,390,896
Series D-3 Preferred Stock914,862914,862
Series D-4 Preferred Stock1,062,0091,062,009
Series D-5 Preferred Stock1,062,009—
Series C Preferred Stock132,946,826100,138,544
Series C-1 Preferred Stock132,946,8268,939,693
Series C-2 Preferred Stock18,624,35414,018,524
Series C-3 Preferred Stock19,741,8188,367,368
Series C-4 Preferred Stock2,171,0642,171,064
Series C-5 Preferred Stock18,624,3544,605,830
Series C-6 Preferred Stock19,741,81811,374,450
Series C-7 Preferred Stock9,833,6604,469,846
Series B Preferred Stock39,753,02428,583,364
Series B-1 Preferred Stock12,531,94011,169,660
Series A Preferred Stock93,850,53369,267,349
Series A-1 Preferred Stock24,937,83823,054,899
Total convertible preferred stock602,405,839332,314,737
As of December 31, 2022, the Company had outstanding the following convertible preferred stock warrants:
No. Warrants
(Amounts in thousands, except no. warrants and strike prices)December 31, 2022StrikeValuation at Issuance
September 2018Series C Preferred9/28/20189/28/20282,312,296$0.59 $170 
February 2019Series C Preferred2/6/20199/28/2028153,807$0.59 $12 
March 2019Series C Preferred3/29/20193/29/20261,146,214$1.12 $87 
April 2019Series C Preferred4/17/20194/17/20293,575,879$1.12 $313 
March 2020Series C Preferred3/25/20203/25/2027410,228$1.64 $201 
Total7,598,424
The Company had outstanding the following series of convertible preferred stock:
As of December 31,
20222021
(Amounts in thousands, except share amounts)Shares
Authorized		Shares Issued and
outstanding		Shares
Authorized		Shares Issued and
outstanding
Series D Preferred Stock8,564,688 7,782,048 8,564,688 7,782,048 
Series D-1 Preferred Stock8,564,688 — 8,564,688 — 
Series D-2 Preferred Stock6,970,478 6,671,168 6,970,478 6,671,168 
Series D-3 Preferred Stock299,310 299,310 299,310 299,310 
Series D-4 Preferred Stock347,451 347,451 347,451 347,451 
Series D-5 Preferred Stock347,451 — 347,451 — 
Series C Preferred Stock43,495,421 32,761,731 43,495,421 32,761,731 
Series C-1 Preferred Stock43,495,421 2,924,746 43,495,421 2,924,746 
Series C-2 Preferred Stock6,093,219 4,586,357 6,093,219 4,586,357 
Series C-3 Preferred Stock6,458,813 2,737,502 6,458,813 2,737,502 
Series C-4 Preferred Stock710,294 710,294 710,294 710,294 
Series C-5 Preferred Stock6,093,219 1,506,862 6,093,219 1,506,862 
Series C-6 Preferred Stock6,458,813 3,721,311 6,458,813 3,721,311 
Series C-7 Preferred Stock3,217,220 1,462,373 3,217,220 1,462,373 
Series B Preferred Stock13,005,760 9,351,449 13,005,760 9,351,449 
Series B-1 Preferred Stock4,100,000 3,654,311 4,100,000 3,654,311 
Series A Preferred Stock30,704,520 22,661,786 30,704,520 22,661,786 
Series A-1 Preferred Stock8,158,764 7,542,734 8,158,764 7,542,734 
Total convertible preferred stock197,085,530 108,721,433 197,085,530 108,721,433 
Convertible Preferred Stock Warrants—The Company had outstanding the following convertible preferred stock warrants:
No. Warrants
(Amounts in thousands, except no. warrants and strike prices)As of December 31,
IssuanceShare ClassIssue DateExpiration Date20222021StrikeValuation at Issuance
September 2018Series C Preferred9/28/20189/28/2028756,500 756,500 $1.81 $170 
February 2019Series C Preferred2/6/20199/28/202850,320 50,320 $1.81 $12 
March 2019Series C Preferred3/29/20193/29/2026375,000 375,000 $3.42 $87 
April 2019Series C Preferred4/17/20194/17/20291,169,899 1,169,899 $3.42 $313 
March 2020Series C Preferred3/25/20203/25/2027134,212 134,212 $5.00 $201 
Total2,485,931 2,485,931 
Schedule of basic and diluted net earnings (loss) per common shares
The computation of net loss per share and weighted average shares of the Company's common stock outstanding during the periods presented is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands, except for share and per share amounts)2023202220232022
Basic net loss per share:
Net loss$(340,033)$(226,612)$(475,441)$(625,864)
Income allocated to participating securities— — — — 
Net loss attributable to common stockholders - Basic$(340,033)$(226,612)$(475,441)$(625,864)
Diluted net loss per share:
Net loss attributable to common stockholders - Basic$(340,033)$(226,612)$(475,441)$(625,864)
Interest expense and change in fair value of bifurcated derivatives on convertible notes— — — — 
Income allocated to participating securities— — — — 
Net loss income attributable to common stockholders - Diluted$(340,033)$(226,612)$(475,441)$(625,864)
Shares used in computation:
Weighted average common shares outstanding496,577,751292,660,334364,817,445289,934,149
Weighted-average effect of dilutive securities:——
Assumed exercise of stock options————
Assumed exercise of warrants————
Assumed conversion of convertible preferred stock————
Diluted weighted-average common shares outstanding496,577,751292,660,334364,817,445289,934,149
Earnings (loss) per share attributable to common stockholders:
Basic$(0.68)$(0.77)$(1.30)$(2.16)
Diluted$(0.68)$(0.77)$(1.30)$(2.16)
The computation of net loss per share and weighted average shares of the Company's common stock outstanding during the periods presented is as follows:
Year Ended December 31,
(Amounts in thousands, except for share and per share amounts)20222021
Basic net loss per share:
Net loss$(888,802)$(301,128)
Income allocated to participating securities— — 
Net loss attributable to common stockholders - Basic$(888,802)$(301,128)
Diluted net loss per share:
Net loss attributable to common stockholders - Basic$(888,802)$(301,128)
Interest expense and change in fair value of bifurcated derivatives on convertible notes— — 
Income allocated to participating securities— — 
Net loss income attributable to common stockholders - Diluted$(888,802)$(301,128)
Shares used in computation:
Weighted average common shares outstanding95,303,684 86,984,646 
Weighted-average effect of dilutive securities:
Assumed exercise of stock options— — 
Assumed exercise of warrants— — 
Assumed conversion of convertible preferred stock— — 
Diluted weighted-average common shares outstanding95,303,684 86,984,646 
Earnings (loss) per share attributable to common stockholders:
Basic$(9.33)$(3.46)
Diluted$(9.33)$(3.46)
Aurora Acquisition Corp  
Summary of Significant Accounting Policies [Line Items]  
Schedule of reconciliation of Class A ordinary shares reflected in the balance sheet
Class A ordinary shares subject to possible redemption
Class A ordinary shares subject to redemption – December 31, 2022
$246,628,487 
Plus:
Reclass of permanent equity to temporary equity16,999,995 
Interest adjustment to redemption value1,676,767 
Less: 
Shares redeemed by public(246,123,596)
Shares redeemed by Sponsor(16,999,995)
Class A ordinary shares subject to redemption – March 31, 2023
$2,181,658 
Adjustment to redemption value19,954 
Class A ordinary shares subject to redemption – June 30, 2023
$2,201,612 
At December 31, 2022 and 2021, the Class A ordinary shares reflected in the condensed balance sheets are reconciled in the following table:
Class A ordinary shares subject to possible redemption
Gross proceeds$243,002,870 
Less: 
Proceeds allocated to Public Warrants(299,536)
Class A ordinary shares issuance costs(13,647,105)
Plus: 
Accretion of carrying value to redemption value12,681,484 
Accretion of carrying value to redemption value – Over-Allotment1,265,157 
Class A ordinary shares subject to redemption – December 31, 2021
243,002,870 
Remeasurement of Class A ordinary shares subject to redemption:3,625,617 
Class A ordinary shares subject to redemption – December 31, 2022
$246,628,487 
Schedule of basic and diluted net earnings (loss) per common shares
The following table reflects the calculation of basic and diluted net earnings (loss) per common share (in dollars, except per share amounts):
Three Months Ended
June 30, 2023June 30, 2022
Class A Common Stock subject to possible redemption
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption$(19,635)$1,248,851 
Net earnings (losses) attributable to Class A Common Stock subject to possible redemption$(19,635)$1,248,851 
Denominator: Weighted average Class A Common Stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption212,59824,300,287
Basic and diluted net income (loss) per share, Class A Common Stock subject to possible redemption$(0.09)$0.05 
Non-Redeemable Class A and Class B Common Stock
Numerator: Net income (loss) minus net earnings
Net income (loss)$(811,496)$537,055 
Less: Net earnings (losses) attributable to Class A Common Stock subject to possible redemption— — 
Non-redeemable net income (loss)$(811,496)$537,055 
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock8,786,31210,450,072
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B Common Stock$(0.09)$0.05 
Six Months Ended
June 30, 2023June 30, 2022
Class A Common Stock subject to possible redemption
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption$(429,904)$1,955,153 
Net earnings (losses) attributable to Class A Common Stock subject to possible redemption$(429,904)$1,955,153 
Denominator: Weighted average Class A Common Stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption7,541,25424,300,287
Basic and diluted net income (loss) per share, Class A Common Stock subject to possible redemption$(0.06)$0.08 
Non-Redeemable Class A and Class B Common Stock
Numerator: Net income (loss) minus net earnings
Net income (loss)$(529,182)$840,793 
Less: Net earnings (losses) attributable to Class A Common Stock subject to possible redemption— — 
Non-redeemable net income (loss)$(529,182)$840,793 
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock9,282,72410,450,072
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B Common Stock$(0.06)$0.08 
The following table reflects the calculation of basic and diluted net earnings (loss) per ordinary share (in dollars, except per share amounts):
Year Ended
December 31, 2022December 31, 2021
Class A ordinary shares subject to possible redemption
Numerator: Earnings (losses) attributable to Class A ordinary shares subject to possible redemption$6,108,604 $(4,399,283)
Net earnings (losses) attributable to Class A ordinary shares subject to possible redemption$6,108,604 $(4,399,283)
Denominator: Weighted average Class A ordinary shares subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption24,300,287 19,827,082 
Basic and diluted net income (loss) per share, Class A ordinary shares subject to possible redemption$0.25 $(0.22)
Non-Redeemable Class A and Class B ordinary shares
Numerator: Net income (loss) minus net earnings
Net income (loss)$2,626,938 $(2,127,892)
Less: Net earnings (losses) attributable to Class A ordinary shares subject to possible redemption$— $— 
Non-redeemable net income (loss)$2,626,938 $(2,127,892)
Denominator: Weighted average Non-Redeemable Class A and Class B ordinary shares
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B ordinary shares10,450,072 9,590,182 
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B ordinary shares$0.25 $(0.22)
v3.23.4
AURORA 10Q - FAIR VALUE MEASUREMENTS (Tables)
 9 Months Ended
Sep. 30, 2023
Fair Value, Option, Quantitative Disclosures [Line Items]  
Schedule of financial assets and liabilities measured at fair value
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
September 30, 2023
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $160,025 $— $160,025 
Derivative assets, at fair value (1)
— 3,506 211 3,717 
Total Assets$— $163,531 $211 $163,742 
Derivative liabilities, at fair value (1)
$— $— $1,678 $1,678 
Warrants and equity related liabilities, at fair value
$577 $950 $— $1,527 
Total Liabilities$577 $950 $1,678 $3,205 
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative, at fair value— — 236,603 236,603 
Total Assets$— $251,558 $236,919 $488,477 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities$— $— $4,924 $4,924 
__________________
(1)As of September 30, 2023 and December 31, 2022, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative— — 236,603 236,603 
Total Assets
$— $251,558 $236,919 $488,478 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities
$— $— $4,924 $4,924 
December 31, 2021
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $1,854,435 $— $1,854,435 
Derivative assets, at fair value (1)
— 812 8,484 9,296 
Bifurcated derivative— — — — 
Total Assets
$— $1,855,247 $8,484 $1,863,731 
Derivative liabilities, at fair value (1)
$— $1,466 $916 $2,382 
Convertible preferred stock warrants (2)
— — 31,997 31,997 
Total Liabilities
$— $1,466 $32,913 $34,379 
__________________
(1)As of December 31, 2022 and 2021, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
Schedule of quantitative information regarding Level 3 fair value measurements inputs The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
September 30, 2023
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
10.27% - 97.49%
85.1 %
December 31, 2022
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% - 96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94% - 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24 - 5.74
4.8
Fair value of common stock
$0.00 - $6.60
$1.60 
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes-Merton option-pricing model and their respective terms, as can be seen below:
(Amounts in thousands, except per share amounts)December 31, 2022
IssuanceFair value per shareFair Value
September 2018$0.54 $1,256 
February 2019$0.54 84 
March 2019$0.35 397 
April 2019$0.35 1,240 
March 2020$0.29 119 
Total$3,096 
The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
December 31, 2022
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% -96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94%- 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24- 5.74
4.8 
Fair value of common stock
$0.00 - $6.60
$1.60 
December 31, 2021
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
5.01% - 99.43%
83.5 %
Convertible preferred stock warrants
Risk free rate
0.19% - 0.73%
0.27 %
Volatility rate
32.8% - 120.3%
65.0 %
Expected term (years)
0.5 - 2.0
0.7 
Fair value of common stock
$6.80 - $29.42
$14.91 
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes option-pricing model and their respective terms, as can be seen below:
December 31,
(Amounts in thousands, except per share amounts)20222021
IssuanceFair value per shareFair ValueFair value per shareFair Value
September 2018$1.66 $1,256 $13.70 $10,364 
February 2019$1.66 84 $13.70 689 
March 2019$1.06 397 $12.54 4,703 
April 2019$1.06 1,240 $12.54 14,671 
March 2020$0.89 119 $11.70 1,570 
Total$3,096 $31,997 
Schedule of change in the fair value of the warrant liabilities
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$2,830 $11,586 $3,096 $31,997 
Exercises(2,830)— (2,830)— 
Change in fair value of convertible preferred stock warrants— (4,202)(266)(24,613)
Balance at end of period$— $7,384 $— $7,384 
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$31,997 $25,799 
Issuances— — 
Exercises— (26,592)
Change in fair value of convertible preferred stock warrants(28,901)32,790 
Balance at end of year
$3,096 $31,997 
Aurora Acquisition Corp  
Fair Value, Option, Quantitative Disclosures [Line Items]  
Schedule of financial assets and liabilities measured at fair value
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2023 by level within the fair value hierarchy:
Quoted Prices inSignificant OtherSignificant Other
Active MarketsObservable InputsUnobservable
(Level 1)(Level 2)Inputs (Level 3)
Assets:
Investments held in Trust Account – cash and cash equivalents$21,317,257 $— $— 
Liabilities:  
Derivative public warrant liabilities153,699 — — 
Derivative private warrant liabilities— — 326,902 
Total Fair Value$21,470,956 $— $326,902 
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2022 by level within the fair value hierarchy:
Quoted Prices inSignificant OtherSignificant Other
Active MarketsObservable InputsUnobservable
(Level 1)(Level 2)Inputs (Level 3)
Assets:
Investments held in Trust Account – money market funds$282,284,619 $— $— 
Liabilities: 
Derivative public warrant liabilities91,126 — — 
Derivative private warrant liabilities— — 381,386 
Total Fair Value$282,375,745 $— $381,386 
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2022 by level within the fair value hierarchy:
Quoted Prices in
Active Markets
(Level 1)		Significant Other
Observable Inputs
(Level 2)		Significant Other
Unobservable Inputs
(Level 3)
Assets:
Investments held in Trust Account – money market funds$282,284,619 $— $— 
Liabilities:   
Derivative public warrant liabilities91,126 — — 
Derivative private warrant liabilities— — 381,386 
Total Fair Value$282,375,745 $— $381,386 
Schedule of quantitative information regarding Level 3 fair value measurements inputs
The following table provides the significant unobservable inputs used in the Modified Black Scholes model to measure the fair value of the Private Placement Warrants(1):
At March 8, 2021 (Initial
Measurement) 		As of December 31,
2022		As of June 30,
2023
Stock price10.02 10.09 10.45 
Strike price11.50 11.50 11.50 
Probability of completing a Business Combination90.00 %40.00 %60.00 %
Remaining term (in years)5.52.891.13
Volatility15.00 %3.00 %5.00 %
Risk-free rate0.96 %4.20 %5.26 %
Fair value of warrants0.86 0.07 0.06 
The following table provides the significant unobservable inputs used in the Modified Black Scholes model to measure the fair value of the Private Placement Warrants(1):
At March 8, 2021 (Initial Measurement) As of December 31, 2021As of December 31, 2022
Stock price10.02 9.90 10.09 
Strike price11.50 11.50 11.50 
Probability of completing a Business Combination90.00 %100.00 %40.00 %
Remaining term (in years)5.50 5.00 2.89 
Volatility15.00 %22.00 %3.00 %
Risk-free rate0.96 %1.26 %4.20 %
Fair value of warrants0.86 1.59 0.07 
___________________
(1)The expected term of the Private Placement Warrants has been adjusted to 2.89 as of December 31, 2022 due to multiple factors, including an expected additional 3-6 months duration of the Private Placement Warrants as a result of the extension of the date by which the Company has to consummate a business combination from March 8, 2023 to September 30, 2023. Additionally, weighted probability factors contribute to the decrease in term from the remaining 5 years per the previous date valued at December 31, 2021.
Schedule of change in the fair value of the warrant liabilities
The following tables provides a summary of the changes in the fair value of the Company’s financial instruments that are measured at fair value on a recurring basis:
As of June 30, 2023
Level 1Level 3Warrant Liabilities
Fair value as of December 31, 202291,126 381,386 472,512 
Change in valuation inputs or other assumptions261,227 — 261,227 
Fair value as of March 31, 2023352,353 381,386 733,739 
Change in valuation inputs or other assumptions(198,654)(54,484)(253,138)
Fair value as of June 30, 2023153,699 326,902 480,601 
As of June 30, 2022
Level 1Level 3Warrant Liabilities
Fair value as of December 31, 20214,677,805 8,662,912 13,340,717 
Change in valuation inputs or other assumptions(2,187,034)108,967 (2,078,067)
Fair value as of March 31, 20222,490,771 8,771,879 11,262,650 
Change in valuation inputs or other assumptions(1,579,513)(2,233,833)(3,813,346)
Fair value as of June 30, 2022911,258 6,538,046 7,449,304 
The following table provides a summary of the changes in the fair value of the Company’s financial instruments that are measured at fair value on a recurring basis:
Level 3Level 1Warrant Liabilities
Fair value as of December 31, 2020$— $— $— 
Initial measurement at March 8, 20219,152,167 4,730,000 13,882,167 
Initial measurement of over-allotment warrants545,935 488,811 1,034,746 
Change in valuation inputs or other assumptions(1,035,190)(541,006)(1,576,196)
Fair value as of December 31, 20218,662,912 4,677,805 13,340,717 
Change in valuation inputs or other assumptions(8,281,526)(4,586,679)(12,868,205)
Fair value as of December 31, 2022$381,386 $91,126 $472,512 
v3.23.4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 9 Months Ended
Sep. 30, 2023
Schedule of reconciliation of Class A ordinary shares reflected in the balance sheet
As of December 31, 2022, the Company had outstanding the following series of convertible preferred stock:
As of
December 31, 2022
(Amounts in thousands, except share amounts)Shares
Authorized		Shares Issued and
outstanding
Series D Preferred Stock26,178,57423,786,379
Series D-1 Preferred Stock26,178,574—
Series D-2 Preferred Stock21,305,75820,390,896
Series D-3 Preferred Stock914,862914,862
Series D-4 Preferred Stock1,062,0091,062,009
Series D-5 Preferred Stock1,062,009—
Series C Preferred Stock132,946,826100,138,544
Series C-1 Preferred Stock132,946,8268,939,693
Series C-2 Preferred Stock18,624,35414,018,524
Series C-3 Preferred Stock19,741,8188,367,368
Series C-4 Preferred Stock2,171,0642,171,064
Series C-5 Preferred Stock18,624,3544,605,830
Series C-6 Preferred Stock19,741,81811,374,450
Series C-7 Preferred Stock9,833,6604,469,846
Series B Preferred Stock39,753,02428,583,364
Series B-1 Preferred Stock12,531,94011,169,660
Series A Preferred Stock93,850,53369,267,349
Series A-1 Preferred Stock24,937,83823,054,899
Total convertible preferred stock602,405,839332,314,737
As of December 31, 2022, the Company had outstanding the following convertible preferred stock warrants:
No. Warrants
(Amounts in thousands, except no. warrants and strike prices)December 31, 2022StrikeValuation at Issuance
September 2018Series C Preferred9/28/20189/28/20282,312,296$0.59 $170 
February 2019Series C Preferred2/6/20199/28/2028153,807$0.59 $12 
March 2019Series C Preferred3/29/20193/29/20261,146,214$1.12 $87 
April 2019Series C Preferred4/17/20194/17/20293,575,879$1.12 $313 
March 2020Series C Preferred3/25/20203/25/2027410,228$1.64 $201 
Total7,598,424
The Company had outstanding the following series of convertible preferred stock:
As of December 31,
20222021
(Amounts in thousands, except share amounts)Shares
Authorized		Shares Issued and
outstanding		Shares
Authorized		Shares Issued and
outstanding
Series D Preferred Stock8,564,688 7,782,048 8,564,688 7,782,048 
Series D-1 Preferred Stock8,564,688 — 8,564,688 — 
Series D-2 Preferred Stock6,970,478 6,671,168 6,970,478 6,671,168 
Series D-3 Preferred Stock299,310 299,310 299,310 299,310 
Series D-4 Preferred Stock347,451 347,451 347,451 347,451 
Series D-5 Preferred Stock347,451 — 347,451 — 
Series C Preferred Stock43,495,421 32,761,731 43,495,421 32,761,731 
Series C-1 Preferred Stock43,495,421 2,924,746 43,495,421 2,924,746 
Series C-2 Preferred Stock6,093,219 4,586,357 6,093,219 4,586,357 
Series C-3 Preferred Stock6,458,813 2,737,502 6,458,813 2,737,502 
Series C-4 Preferred Stock710,294 710,294 710,294 710,294 
Series C-5 Preferred Stock6,093,219 1,506,862 6,093,219 1,506,862 
Series C-6 Preferred Stock6,458,813 3,721,311 6,458,813 3,721,311 
Series C-7 Preferred Stock3,217,220 1,462,373 3,217,220 1,462,373 
Series B Preferred Stock13,005,760 9,351,449 13,005,760 9,351,449 
Series B-1 Preferred Stock4,100,000 3,654,311 4,100,000 3,654,311 
Series A Preferred Stock30,704,520 22,661,786 30,704,520 22,661,786 
Series A-1 Preferred Stock8,158,764 7,542,734 8,158,764 7,542,734 
Total convertible preferred stock197,085,530 108,721,433 197,085,530 108,721,433 
Convertible Preferred Stock Warrants—The Company had outstanding the following convertible preferred stock warrants:
No. Warrants
(Amounts in thousands, except no. warrants and strike prices)As of December 31,
IssuanceShare ClassIssue DateExpiration Date20222021StrikeValuation at Issuance
September 2018Series C Preferred9/28/20189/28/2028756,500 756,500 $1.81 $170 
February 2019Series C Preferred2/6/20199/28/202850,320 50,320 $1.81 $12 
March 2019Series C Preferred3/29/20193/29/2026375,000 375,000 $3.42 $87 
April 2019Series C Preferred4/17/20194/17/20291,169,899 1,169,899 $3.42 $313 
March 2020Series C Preferred3/25/20203/25/2027134,212 134,212 $5.00 $201 
Total2,485,931 2,485,931 
Schedule of basic and diluted net earnings (loss) per common shares
The computation of net loss per share and weighted average shares of the Company's common stock outstanding during the periods presented is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands, except for share and per share amounts)2023202220232022
Basic net loss per share:
Net loss$(340,033)$(226,612)$(475,441)$(625,864)
Income allocated to participating securities— — — — 
Net loss attributable to common stockholders - Basic$(340,033)$(226,612)$(475,441)$(625,864)
Diluted net loss per share:
Net loss attributable to common stockholders - Basic$(340,033)$(226,612)$(475,441)$(625,864)
Interest expense and change in fair value of bifurcated derivatives on convertible notes— — — — 
Income allocated to participating securities— — — — 
Net loss income attributable to common stockholders - Diluted$(340,033)$(226,612)$(475,441)$(625,864)
Shares used in computation:
Weighted average common shares outstanding496,577,751292,660,334364,817,445289,934,149
Weighted-average effect of dilutive securities:——
Assumed exercise of stock options————
Assumed exercise of warrants————
Assumed conversion of convertible preferred stock————
Diluted weighted-average common shares outstanding496,577,751292,660,334364,817,445289,934,149
Earnings (loss) per share attributable to common stockholders:
Basic$(0.68)$(0.77)$(1.30)$(2.16)
Diluted$(0.68)$(0.77)$(1.30)$(2.16)
The computation of net loss per share and weighted average shares of the Company's common stock outstanding during the periods presented is as follows:
Year Ended December 31,
(Amounts in thousands, except for share and per share amounts)20222021
Basic net loss per share:
Net loss$(888,802)$(301,128)
Income allocated to participating securities— — 
Net loss attributable to common stockholders - Basic$(888,802)$(301,128)
Diluted net loss per share:
Net loss attributable to common stockholders - Basic$(888,802)$(301,128)
Interest expense and change in fair value of bifurcated derivatives on convertible notes— — 
Income allocated to participating securities— — 
Net loss income attributable to common stockholders - Diluted$(888,802)$(301,128)
Shares used in computation:
Weighted average common shares outstanding95,303,684 86,984,646 
Weighted-average effect of dilutive securities:
Assumed exercise of stock options— — 
Assumed exercise of warrants— — 
Assumed conversion of convertible preferred stock— — 
Diluted weighted-average common shares outstanding95,303,684 86,984,646 
Earnings (loss) per share attributable to common stockholders:
Basic$(9.33)$(3.46)
Diluted$(9.33)$(3.46)
Aurora Acquisition Corp  
Schedule of reconciliation of Class A ordinary shares reflected in the balance sheet
Class A ordinary shares subject to possible redemption
Class A ordinary shares subject to redemption – December 31, 2022
$246,628,487 
Plus:
Reclass of permanent equity to temporary equity16,999,995 
Interest adjustment to redemption value1,676,767 
Less: 
Shares redeemed by public(246,123,596)
Shares redeemed by Sponsor(16,999,995)
Class A ordinary shares subject to redemption – March 31, 2023
$2,181,658 
Adjustment to redemption value19,954 
Class A ordinary shares subject to redemption – June 30, 2023
$2,201,612 
At December 31, 2022 and 2021, the Class A ordinary shares reflected in the condensed balance sheets are reconciled in the following table:
Class A ordinary shares subject to possible redemption
Gross proceeds$243,002,870 
Less: 
Proceeds allocated to Public Warrants(299,536)
Class A ordinary shares issuance costs(13,647,105)
Plus: 
Accretion of carrying value to redemption value12,681,484 
Accretion of carrying value to redemption value – Over-Allotment1,265,157 
Class A ordinary shares subject to redemption – December 31, 2021
243,002,870 
Remeasurement of Class A ordinary shares subject to redemption:3,625,617 
Class A ordinary shares subject to redemption – December 31, 2022
$246,628,487 
Schedule of basic and diluted net earnings (loss) per common shares
The following table reflects the calculation of basic and diluted net earnings (loss) per common share (in dollars, except per share amounts):
Three Months Ended
June 30, 2023June 30, 2022
Class A Common Stock subject to possible redemption
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption$(19,635)$1,248,851 
Net earnings (losses) attributable to Class A Common Stock subject to possible redemption$(19,635)$1,248,851 
Denominator: Weighted average Class A Common Stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption212,59824,300,287
Basic and diluted net income (loss) per share, Class A Common Stock subject to possible redemption$(0.09)$0.05 
Non-Redeemable Class A and Class B Common Stock
Numerator: Net income (loss) minus net earnings
Net income (loss)$(811,496)$537,055 
Less: Net earnings (losses) attributable to Class A Common Stock subject to possible redemption— — 
Non-redeemable net income (loss)$(811,496)$537,055 
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock8,786,31210,450,072
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B Common Stock$(0.09)$0.05 
Six Months Ended
June 30, 2023June 30, 2022
Class A Common Stock subject to possible redemption
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption$(429,904)$1,955,153 
Net earnings (losses) attributable to Class A Common Stock subject to possible redemption$(429,904)$1,955,153 
Denominator: Weighted average Class A Common Stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption7,541,25424,300,287
Basic and diluted net income (loss) per share, Class A Common Stock subject to possible redemption$(0.06)$0.08 
Non-Redeemable Class A and Class B Common Stock
Numerator: Net income (loss) minus net earnings
Net income (loss)$(529,182)$840,793 
Less: Net earnings (losses) attributable to Class A Common Stock subject to possible redemption— — 
Non-redeemable net income (loss)$(529,182)$840,793 
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock9,282,72410,450,072
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B Common Stock$(0.06)$0.08 
The following table reflects the calculation of basic and diluted net earnings (loss) per ordinary share (in dollars, except per share amounts):
Year Ended
December 31, 2022December 31, 2021
Class A ordinary shares subject to possible redemption
Numerator: Earnings (losses) attributable to Class A ordinary shares subject to possible redemption$6,108,604 $(4,399,283)
Net earnings (losses) attributable to Class A ordinary shares subject to possible redemption$6,108,604 $(4,399,283)
Denominator: Weighted average Class A ordinary shares subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption24,300,287 19,827,082 
Basic and diluted net income (loss) per share, Class A ordinary shares subject to possible redemption$0.25 $(0.22)
Non-Redeemable Class A and Class B ordinary shares
Numerator: Net income (loss) minus net earnings
Net income (loss)$2,626,938 $(2,127,892)
Less: Net earnings (losses) attributable to Class A ordinary shares subject to possible redemption$— $— 
Non-redeemable net income (loss)$2,626,938 $(2,127,892)
Denominator: Weighted average Non-Redeemable Class A and Class B ordinary shares
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B ordinary shares10,450,072 9,590,182 
Basic and diluted net income (loss) per share, Non-Redeemable Class A and Class B ordinary shares$0.25 $(0.22)
v3.23.4
FAIR VALUE MEASUREMENTS (Tables)
 9 Months Ended
Sep. 30, 2023
Fair Value, Option, Quantitative Disclosures [Line Items]  
Schedule of financial assets and liabilities measured at fair value
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
September 30, 2023
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $160,025 $— $160,025 
Derivative assets, at fair value (1)
— 3,506 211 3,717 
Total Assets$— $163,531 $211 $163,742 
Derivative liabilities, at fair value (1)
$— $— $1,678 $1,678 
Warrants and equity related liabilities, at fair value
$577 $950 $— $1,527 
Total Liabilities$577 $950 $1,678 $3,205 
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative, at fair value— — 236,603 236,603 
Total Assets$— $251,558 $236,919 $488,477 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities$— $— $4,924 $4,924 
__________________
(1)As of September 30, 2023 and December 31, 2022, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
The Company’s financial instruments measured at fair value on a recurring basis are summarized below:
December 31, 2022
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $248,826 $— $248,826 
Derivative assets, at fair value (1)
— 2,732 316 3,048 
Bifurcated derivative— — 236,603 236,603 
Total Assets
$— $251,558 $236,919 $488,478 
Derivative liabilities, at fair value (1)
$— $— $1,828 $1,828 
Convertible preferred stock warrants (2)
— — 3,096 3,096 
Total Liabilities
$— $— $4,924 $4,924 
December 31, 2021
(Amounts in thousands)Level 1Level 2Level 3Total
Mortgage loans held for sale, at fair value
$— $1,854,435 $— $1,854,435 
Derivative assets, at fair value (1)
— 812 8,484 9,296 
Bifurcated derivative— — — — 
Total Assets
$— $1,855,247 $8,484 $1,863,731 
Derivative liabilities, at fair value (1)
$— $1,466 $916 $2,382 
Convertible preferred stock warrants (2)
— — 31,997 31,997 
Total Liabilities
$— $1,466 $32,913 $34,379 
__________________
(1)As of December 31, 2022 and 2021, derivative assets and liabilities represent both IRLCs and forward sale commitments.
(2)Fair value is based on the intrinsic value of the Company’s underlying stock price at each balance sheet date and includes certain assumptions with regard to volatility.
Schedule of quantitative information regarding Level 3 fair value measurements inputs The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
September 30, 2023
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
10.27% - 97.49%
85.1 %
December 31, 2022
(Amounts in dollars, except percentages)RangeWeighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% - 96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94% - 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24 - 5.74
4.8
Fair value of common stock
$0.00 - $6.60
$1.60 
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes-Merton option-pricing model and their respective terms, as can be seen below:
(Amounts in thousands, except per share amounts)December 31, 2022
IssuanceFair value per shareFair Value
September 2018$0.54 $1,256 
February 2019$0.54 84 
March 2019$0.35 397 
April 2019$0.35 1,240 
March 2020$0.29 119 
Total$3,096 
The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
December 31, 2022
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
14.66% -96.57%
79.6 %
Bifurcated derivative
Risk free rate4.69%4.69 %
Expected term (years)0.750.75
Fair value of new preferred or common stock
$10.63 - $19.05
$9.77 
Convertible preferred stock warrants
Risk free rate
3.94%- 4.04%
4.00 %
Volatility rate
40.4% - 123.8%
65.0 %
Expected term (years)
4.24- 5.74
4.8 
Fair value of common stock
$0.00 - $6.60
$1.60 
December 31, 2021
(Amounts in dollars, except percentages)
Range
Weighted Average
Level 3 Financial Instruments:
IRLCs
Pull-through factor
5.01% - 99.43%
83.5 %
Convertible preferred stock warrants
Risk free rate
0.19% - 0.73%
0.27 %
Volatility rate
32.8% - 120.3%
65.0 %
Expected term (years)
0.5 - 2.0
0.7 
Fair value of common stock
$6.80 - $29.42
$14.91 
The Company valued these warrants at issuance and at each reporting period, using the Black-Scholes option-pricing model and their respective terms, as can be seen below:
December 31,
(Amounts in thousands, except per share amounts)20222021
IssuanceFair value per shareFair ValueFair value per shareFair Value
September 2018$1.66 $1,256 $13.70 $10,364 
February 2019$1.66 84 $13.70 689 
March 2019$1.06 397 $12.54 4,703 
April 2019$1.06 1,240 $12.54 14,671 
March 2020$0.89 119 $11.70 1,570 
Total$3,096 $31,997 
Schedule of change in the fair value of the warrant liabilities
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Three Months Ended September 30,Nine Months Ended September 30,
(Amounts in thousands)2023202220232022
Balance at beginning of period$2,830 $11,586 $3,096 $31,997 
Exercises(2,830)— (2,830)— 
Change in fair value of convertible preferred stock warrants— (4,202)(266)(24,613)
Balance at end of period$— $7,384 $— $7,384 
The following table presents the rollforward of Level 3 convertible preferred stock warrants:
Year Ended December 31,
(Amounts in thousands)20222021
Balance at beginning of year
$31,997 $25,799 
Issuances— — 
Exercises— (26,592)
Change in fair value of convertible preferred stock warrants(28,901)32,790 
Balance at end of year
$3,096 $31,997 
Aurora Acquisition Corp  
Fair Value, Option, Quantitative Disclosures [Line Items]  
Schedule of financial assets and liabilities measured at fair value
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2023 by level within the fair value hierarchy:
Quoted Prices inSignificant OtherSignificant Other
Active MarketsObservable InputsUnobservable
(Level 1)(Level 2)Inputs (Level 3)
Assets:
Investments held in Trust Account – cash and cash equivalents$21,317,257 $— $— 
Liabilities:  
Derivative public warrant liabilities153,699 — — 
Derivative private warrant liabilities— — 326,902 
Total Fair Value$21,470,956 $— $326,902 
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2022 by level within the fair value hierarchy:
Quoted Prices inSignificant OtherSignificant Other
Active MarketsObservable InputsUnobservable
(Level 1)(Level 2)Inputs (Level 3)
Assets:
Investments held in Trust Account – money market funds$282,284,619 $— $— 
Liabilities: 
Derivative public warrant liabilities91,126 — — 
Derivative private warrant liabilities— — 381,386 
Total Fair Value$282,375,745 $— $381,386 
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2022 by level within the fair value hierarchy:
Quoted Prices in
Active Markets
(Level 1)		Significant Other
Observable Inputs
(Level 2)		Significant Other
Unobservable Inputs
(Level 3)
Assets:
Investments held in Trust Account – money market funds$282,284,619 $— $— 
Liabilities:   
Derivative public warrant liabilities91,126 — — 
Derivative private warrant liabilities— — 381,386 
Total Fair Value$282,375,745 $— $381,386 
Schedule of quantitative information regarding Level 3 fair value measurements inputs
The following table provides the significant unobservable inputs used in the Modified Black Scholes model to measure the fair value of the Private Placement Warrants(1):
At March 8, 2021 (Initial
Measurement) 		As of December 31,
2022		As of June 30,
2023
Stock price10.02 10.09 10.45 
Strike price11.50 11.50 11.50 
Probability of completing a Business Combination90.00 %40.00 %60.00 %
Remaining term (in years)5.52.891.13
Volatility15.00 %3.00 %5.00 %
Risk-free rate0.96 %4.20 %5.26 %
Fair value of warrants0.86 0.07 0.06 
The following table provides the significant unobservable inputs used in the Modified Black Scholes model to measure the fair value of the Private Placement Warrants(1):
At March 8, 2021 (Initial Measurement) As of December 31, 2021As of December 31, 2022
Stock price10.02 9.90 10.09 
Strike price11.50 11.50 11.50 
Probability of completing a Business Combination90.00 %100.00 %40.00 %
Remaining term (in years)5.50 5.00 2.89 
Volatility15.00 %22.00 %3.00 %
Risk-free rate0.96 %1.26 %4.20 %
Fair value of warrants0.86 1.59 0.07 
___________________
(1)The expected term of the Private Placement Warrants has been adjusted to 2.89 as of December 31, 2022 due to multiple factors, including an expected additional 3-6 months duration of the Private Placement Warrants as a result of the extension of the date by which the Company has to consummate a business combination from March 8, 2023 to September 30, 2023. Additionally, weighted probability factors contribute to the decrease in term from the remaining 5 years per the previous date valued at December 31, 2021.
Schedule of change in the fair value of the warrant liabilities
The following tables provides a summary of the changes in the fair value of the Company’s financial instruments that are measured at fair value on a recurring basis:
As of June 30, 2023
Level 1Level 3Warrant Liabilities
Fair value as of December 31, 202291,126 381,386 472,512 
Change in valuation inputs or other assumptions261,227 — 261,227 
Fair value as of March 31, 2023352,353 381,386 733,739 
Change in valuation inputs or other assumptions(198,654)(54,484)(253,138)
Fair value as of June 30, 2023153,699 326,902 480,601 
As of June 30, 2022
Level 1Level 3Warrant Liabilities
Fair value as of December 31, 20214,677,805 8,662,912 13,340,717 
Change in valuation inputs or other assumptions(2,187,034)108,967 (2,078,067)
Fair value as of March 31, 20222,490,771 8,771,879 11,262,650 
Change in valuation inputs or other assumptions(1,579,513)(2,233,833)(3,813,346)
Fair value as of June 30, 2022911,258 6,538,046 7,449,304 
The following table provides a summary of the changes in the fair value of the Company’s financial instruments that are measured at fair value on a recurring basis:
Level 3Level 1Warrant Liabilities
Fair value as of December 31, 2020$— $— $— 
Initial measurement at March 8, 20219,152,167 4,730,000 13,882,167 
Initial measurement of over-allotment warrants545,935 488,811 1,034,746 
Change in valuation inputs or other assumptions(1,035,190)(541,006)(1,576,196)
Fair value as of December 31, 20218,662,912 4,677,805 13,340,717 
Change in valuation inputs or other assumptions(8,281,526)(4,586,679)(12,868,205)
Fair value as of December 31, 2022$381,386 $91,126 $472,512 
v3.23.4
Summary of Significant Accounting Policies (Details)
 9 Months Ended 12 Months Ended
Sep. 30, 2023
segment
Dec. 31, 2022
Segment
Accounting Policies [Abstract]    
Number of reportable segments 1 1
v3.23.4
Business Combination - Narrative (Details)
 3 Months Ended 6 Months Ended 9 Months Ended 12 Months Ended
Aug. 22, 2023
USD ($)
$ / shares
shares
Nov. 09, 2021
May 10, 2021
$ / shares
Sep. 30, 2023
USD ($)
Jun. 30, 2023
shares
Sep. 30, 2023
USD ($)
Dec. 31, 2022
USD ($)
shares
Dec. 31, 2021
USD ($)
Oct. 11, 2023
USD ($)
Aug. 24, 2023
Nov. 30, 2021
USD ($)
Reverse Recapitalization [Line Items]                      
Recapitalization exchange ratio                   3.06  
Warrants outstanding (in shares) | shares             7,598,424        
Funds held in trust, amount $ 21,400,000                    
Cash received from operating cash account 200,000                    
Transaction costs related to the Business Combination       $ 21,437,000   $ 21,437,000          
Additional Paid-in Capital                      
Reverse Recapitalization [Line Items]                      
Transaction costs related to the Business Combination       $ 21,437,000   $ 21,437,000          
Post-Closing Convertible Notes | Convertible Debt                      
Reverse Recapitalization [Line Items]                      
Aggregate principal amount $ 528,600,000                   $ 750,000,000
Post-Closing Convertible Notes | Subsequent event | Convertible Debt                      
Reverse Recapitalization [Line Items]                      
Aggregate principal amount                 $ 528,600,000    
Aurora Acquisition Corp                      
Reverse Recapitalization [Line Items]                      
Sponsor agreement, forfeiture by sponsor upon closing of private warrants   50.00% 50.00%                
Sponsor locked up shares percentage   20.00% 20.00%                
Proceeds from sale of Private Placement Units             $ 0 $ 35,000,000      
Aurora Acquisition Corp | Class A Ordinary Share Exceeds $12.50 per share                      
Reverse Recapitalization [Line Items]                      
Vesting percentage     33.34%                
Threshold number of specified trading days for release of sponsor shares     20 days                
Threshold number of specified consecutive trading days for stock price trigger considered for release of sponsor shares     30 days                
The minimum trading price for the reporting entity's stock which must be achieved as a condition to release shares | $ / shares     $ 12.50                
Aurora Acquisition Corp | Class A Ordinary Share Exceeds $15.00 per share                      
Reverse Recapitalization [Line Items]                      
Vesting percentage     33.34%                
Threshold number of specified trading days for release of sponsor shares     20 days                
Threshold number of specified consecutive trading days for stock price trigger considered for release of sponsor shares     30 days                
The minimum trading price for the reporting entity's stock which must be achieved as a condition to release shares | $ / shares     $ 15.00                
Aurora Acquisition Corp | Class A Ordinary Share Exceeds $17.50 per share                      
Reverse Recapitalization [Line Items]                      
Vesting percentage     33.34%                
Threshold number of specified trading days for release of sponsor shares     20 days                
Threshold number of specified consecutive trading days for stock price trigger considered for release of sponsor shares     30 days                
The minimum trading price for the reporting entity's stock which must be achieved as a condition to release shares | $ / shares     $ 17.50                
Public Warrants | Aurora Acquisition Corp                      
Reverse Recapitalization [Line Items]                      
Warrants outstanding (in shares) | shares 6,075,047       6,075,049   6,075,050        
Warrant exercise period condition one         30 days   30 days        
Public Warrants expiration term         5 years   5 years        
Private Warrants | Aurora Acquisition Corp                      
Reverse Recapitalization [Line Items]                      
Warrants outstanding (in shares) | shares 3,733,358                    
Warrants forfeited (in shares) | shares 1,715,014                    
Warrants forfeited, percent 50.00%                    
Aurora Acquisition Corp | Public Warrants and Private Placement Warrants | Class A ordinary share                      
Reverse Recapitalization [Line Items]                      
Number of shares per warrant | shares 1                    
Exercise price of warrants (in dollars per share) | $ / shares $ 11.50                    
Warrant exercise period condition one 30 days                    
Public Warrants expiration term 5 years                    
Sponsor                      
Reverse Recapitalization [Line Items]                      
Proceeds from sale of Private Placement Units $ 17,000,000                    
Issuance of common stock (in shares) | shares 1,700,000                    
v3.23.4
Business Combination - Schedule of Shares of Common Stock Issued Immediately Following Business Combination (Details) - shares
Sep. 30, 2023
Aug. 24, 2023
Dec. 31, 2022
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares) 737,585,438   299,783,421
Class A ordinary share      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   91,300,735 24,452,565
Class B ordinary shares      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   574,407,420 171,441,780
Common Class C      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   71,877,283  
Legacy Better Stockholders | Class A ordinary share      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   40,601,825  
Legacy Better Stockholders | Class B ordinary shares      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   574,407,420  
Legacy Better Stockholders | Common Class C      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   6,877,283  
Legacy Aurora Shareholders | Class A ordinary share      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   210,098  
Legacy Aurora Shareholders | Class B ordinary shares      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   0  
Legacy Aurora Shareholders | Common Class C      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   0  
Sponsor and affiliates of Aurora | Class A ordinary share      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   10,488,812  
Sponsor and affiliates of Aurora | Class B ordinary shares      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   0  
Sponsor and affiliates of Aurora | Common Class C      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   0  
Pre-Closing Bridge Note Investors | Class A ordinary share      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   40,000,000  
Pre-Closing Bridge Note Investors | Class B ordinary shares      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   0  
Pre-Closing Bridge Note Investors | Common Class C      
Reverse Recapitalization [Line Items]      
Common stock, issued (in shares)   65,000,000  
v3.23.4
Revenue and Sales-Type Leases - Mortgage Platform Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Disaggregation of Revenue [Line Items]            
Gain (Loss) on Sales of Loans, Net $ 7,120 $ (10,125) $ 36,689 $ (59,105) $ (63,372) $ 937,611
Integrated Partnership Gain (Loss) 3,067 2,265 9,797 (8,526) (9,166) 84,135
Unrealized Gain (Loss) On Interest Rate and Forward Sale Commitments 4,019 18,947 8,441 174,217 178,196 66,477
Mortgage Platform            
Disaggregation of Revenue [Line Items]            
Revenues $ 14,207 $ 11,087 $ 54,927 $ 106,586 $ 105,658 $ 1,088,223
v3.23.4
Revenue and Sales-Type Leases - Cash Offer Program Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Disaggregation of Revenue [Line Items]            
Revenue from Contract with Customer, Excluding Assessed Tax $ 0 $ 749 $ 0 $ 11,333 $ 12,313 $ 8,725
Sales-type Lease, Revenue 0 8,991 304 214,764 216,408 30,636
Cash Offer Program            
Disaggregation of Revenue [Line Items]            
Revenues $ 0 $ 9,739 $ 304 $ 226,096 $ 228,721 $ 39,361
v3.23.4
Revenue and Sales-Type Leases - Other Platform Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Other Platform            
Disaggregation of Revenue [Line Items]            
Revenues $ 1,333 $ 5,688 $ 9,355 $ 35,623 $ 38,942 $ 94,388
Other Platform, Real Estate Services            
Disaggregation of Revenue [Line Items]            
Revenues 651 3,983 6,214 20,735 7,010 39,602
Other Platform, Title Insurance            
Disaggregation of Revenue [Line Items]            
Revenues 13 220 45 6,975 4,222 31,582
Other Platform, Settlement Services            
Disaggregation of Revenue [Line Items]            
Revenues 2 130 15 4,190 23,053 20,602
Other Platform, Other Homeownership Offerings            
Disaggregation of Revenue [Line Items]            
Revenues $ 668 $ 1,355 $ 3,082 $ 3,723 $ 4,657 $ 2,601
v3.23.4
Revenue and Sales-Type Leases - Cash Offer Program Revenue and Expenses (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Revenue [Abstract]            
Sales-type Lease, Revenue $ 0 $ 8,991 $ 304 $ 214,764 $ 216,408 $ 30,636
Sales-type Lease, Initial Direct Cost Expense, Commencement $ 0 $ 8,944 $ 278 $ 215,972 $ 217,609 $ 30,780
v3.23.4
Restructuring and Impairments - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Feb. 28, 2023
Restructuring Cost and Reserve [Line Items]              
Restructuring costs $ 679 $ 45,781 $ 11,798 $ 212,490 $ 247,693 $ 17,048  
Contract Termination              
Restructuring Cost and Reserve [Line Items]              
Restructuring costs 0 0 5,284 0      
Employee one-time termination benefits              
Restructuring Cost and Reserve [Line Items]              
Restructuring costs 765 5,277 2,320 99,291 102,261 17,048  
Cumulative restructuring liability 121,600   121,600        
Impairment of Loan Commitment Asset              
Restructuring Cost and Reserve [Line Items]              
Restructuring costs 0 38,330 0 105,604 105,604 0  
Cumulative restructuring liability 105,600   105,600        
Impairment Of Right Of Use Asset              
Restructuring Cost and Reserve [Line Items]              
Restructuring costs 0 1,897 413 4,391      
Cumulative restructuring liability 6,600   6,600        
Impairment of property and equipment              
Restructuring Cost and Reserve [Line Items]              
Restructuring costs 0 197 4,844 3,124 $ 4,042 $ 0  
Cumulative restructuring liability 8,900   8,900        
Operational Restructuring Program              
Restructuring Cost and Reserve [Line Items]              
Impairment of property and equipment $ 0 $ 200 4,800 $ 3,100      
Operational Restructuring Program | Contract Termination              
Restructuring Cost and Reserve [Line Items]              
Impairment of right of use assets             $ 13,000
Operating lease liability removed             $ 13,000
Restructuring costs     5,300        
Operational Restructuring Program | Contract Termination, Cash Payments To Third Party              
Restructuring Cost and Reserve [Line Items]              
Restructuring costs     4,700        
Operational Restructuring Program | Contract Termination, Other Related Fees              
Restructuring Cost and Reserve [Line Items]              
Restructuring costs     $ 600        
v3.23.4
Restructuring and Impairments - Schedule of Restructuring and Impairment Expenses (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]            
Restructuring costs $ 679 $ 45,781 $ 11,798 $ 212,490 $ 247,693 $ 17,048
Employee one-time termination benefits            
Restructuring Cost and Reserve [Line Items]            
Restructuring costs 765 5,277 2,320 99,291 102,261 17,048
Impairment of loan commitment asset            
Restructuring Cost and Reserve [Line Items]            
Restructuring costs 0 38,330 0 105,604 105,604 0
Impairment Of Right Of Use Asset            
Restructuring Cost and Reserve [Line Items]            
Restructuring costs 0 1,897 413 4,391    
Real estate restructuring loss            
Restructuring Cost and Reserve [Line Items]            
Restructuring costs 0 0 5,284 0    
Gain on Lease Settlement            
Restructuring Cost and Reserve [Line Items]            
Restructuring costs (86) 0 (1,063) 0    
Impairment of property and equipment            
Restructuring Cost and Reserve [Line Items]            
Restructuring costs $ 0 197 $ 4,844 3,124 4,042 0
Other impairments            
Restructuring Cost and Reserve [Line Items]            
Restructuring costs   $ 80   $ 80 $ 333 $ 0
v3.23.4
Mortgage Loans Held for Sale and Warehouse Lines of Credit - Schedule of Outstanding Warehouse Lines of Credit (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2023
Dec. 31, 2021
Short-Term Debt [Line Items]        
Maximum borrowing capacity $ 424,000 $ 1,500,000    
Warehouse Agreement Borrowings 73,536 144,049 $ 73,536 $ 1,667,917
Warehouse Agreement Borrowings | Funding Facility 1        
Short-Term Debt [Line Items]        
Maximum borrowing capacity 100,000      
Warehouse Agreement Borrowings 0 89,673    
Cash collateral deposit 15,000      
Warehouse Agreement Borrowings | Funding Facility 2        
Short-Term Debt [Line Items]        
Maximum borrowing capacity 0      
Warehouse Agreement Borrowings $ 0 9,845    
Warehouse Agreement Borrowings | Funding Facility 2 | Secured Overnight Financing Rate (SOFR)        
Short-Term Debt [Line Items]        
Variable interest rate (as a percent) 1.77%      
Warehouse Agreement Borrowings | Funding Facility 3        
Short-Term Debt [Line Items]        
Maximum borrowing capacity $ 149,000      
Warehouse Agreement Borrowings 73,536 44,531    
Cash collateral deposit $ 3,800      
Warehouse Agreement Borrowings | Funding Facility 3 | Secured Overnight Financing Rate (SOFR) | Minimum        
Short-Term Debt [Line Items]        
Variable interest rate (as a percent) 1.60%      
Warehouse Agreement Borrowings | Funding Facility 3 | Secured Overnight Financing Rate (SOFR) | Maximum        
Short-Term Debt [Line Items]        
Variable interest rate (as a percent) 2.25%      
Warehouse Agreement Borrowings | Funding Facility 4        
Short-Term Debt [Line Items]        
Maximum borrowing capacity $ 175,000      
Warehouse Agreement Borrowings $ 0 0    
Warehouse Agreement Borrowings | Funding Facility 4 | Secured Overnight Financing Rate (SOFR) | Minimum        
Short-Term Debt [Line Items]        
Variable interest rate (as a percent) 1.75%      
Warehouse Agreement Borrowings | Funding Facility 4 | Secured Overnight Financing Rate (SOFR) | Maximum        
Short-Term Debt [Line Items]        
Variable interest rate (as a percent) 3.75%      
Warehouse Agreement Borrowings | Funding Facility 1        
Short-Term Debt [Line Items]        
Maximum borrowing capacity   500,000    
Warehouse Agreement Borrowings   89,673   $ 286,804
Cash collateral deposit   $ 10,000    
Warehouse Agreement Borrowings | Funding Facility 1 | Secured Overnight Financing Rate (SOFR) | Mortgage Loan Interest Scenario One        
Short-Term Debt [Line Items]        
Variable interest rate (as a percent) 3.125% 3.125%    
Warehouse Agreement Borrowings | Funding Facility 1 | Secured Overnight Financing Rate (SOFR) | Mortgage Loan Interest Scenario Two        
Short-Term Debt [Line Items]        
Variable interest rate (as a percent) 2.125% 2.125%    
Warehouse Agreement Borrowings | Funding Facility 1 | Note Rate | Mortgage Loan Interest Scenario One        
Short-Term Debt [Line Items]        
Variable interest rate (as a percent) 1.50% 1.50%    
Warehouse Agreement Borrowings | Funding Facility 1 | Note Rate | Mortgage Loan Interest Scenario Two        
Short-Term Debt [Line Items]        
Variable interest rate (as a percent) 1.125% 1.125%    
v3.23.4
Mortgage Loans Held for Sale and Warehouse Lines of Credit - Narrative (Details)
$ in Thousands
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Jul. 31, 2023
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
Sep. 30, 2023
USD ($)
loan
Sep. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
loan
Dec. 31, 2021
USD ($)
Dec. 31, 2023
USD ($)
Short-Term Debt [Line Items]                
Mortgage loans held for sale, at fair value   $ 160,025   $ 160,025   $ 248,826 $ 1,854,435 $ 160,025
Cash remitted directly to lender $ 98,400              
Proceeds from Sale, Loan, Mortgage, Held-for-Sale 14,800     $ 2,685,341 $ 11,390,991 $ 12,035,915 $ 51,791,633  
Collateral Pledged                
Short-Term Debt [Line Items]                
Average days loans held for sale   21 days 21 days 14 days 17 days 18 days 20 days  
Collateral Pledged | Financial Asset, Equal to or Greater than 90 Days Past Due                
Short-Term Debt [Line Items]                
Mortgage loans held for sale, at fair value   $ 1,600   $ 1,600   $ 3,000    
Number of loans 90 days past due or non-performing | loan       4   7    
Uncollateralized | Company Fund Loans Held For Investment [Member]                
Short-Term Debt [Line Items]                
Total sales price of LHFS $ 113,200              
Warehouse Agreement Borrowings                
Short-Term Debt [Line Items]                
Weighted average interest rate (as a percent)       6.92% 4.94% 6.00% 2.36%  
Compensating balances   $ 18,800   $ 18,800   $ 15,000 $ 29,000  
v3.23.4
Mortgage Loans Held for Sale and Warehouse Lines of Credit - Schedule of Loans Held For Sale (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross   $ 166,095 $ 303,091 $ 1,836,814
Loan, Mortgage, Held For Sale, Fair Value Adjustment   (6,070) (54,265) 17,621
Mortgage loans held for sale, at fair value $ 160,025 160,025 248,826 1,854,435
Collateral Pledged        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross   126,870 158,172 1,830,870
Collateral Pledged | Funding Facility 1        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross   43,288 101,598  
Collateral Pledged | Funding Facility 2        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross   0 10,218  
Collateral Pledged | Funding Facility 3        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross   83,582 46,356  
Uncollateralized | Company Fund Loans Held For Investment [Member]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross   19,890 136,599 5,944
Uncollateralized | Home Equity Line of Credit [Member]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross   $ 19,335 $ 8,320 $ 0
v3.23.4
Goodwill and Internal Use Software and Other Intangible Assets, Net - Narrative (Details) - USD ($)
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Apr. 30, 2023
Jan. 31, 2023
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Business Acquisition [Line Items]                
Goodwill impairment     $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Capitalized software     5,000,000 3,000,000 12,400,000 22,800,000 27,600,000 61,900,000
Capitalized stock-based compensation costs     2,500,000 800,000 3,874,000 2,967,000 4,051,000 8,972,000
Amortization of Intangible Assets     9,300,000 9,000,000 28,098,000 26,078,000 35,368,000 19,573,000
Impairment of intangibles     $ 0 $ 0 $ 0 $ 0 $ 2,000,000 $ 0
Goodholm Finance Ltd                
Business Acquisition [Line Items]                
Cash paid for business acquisition   $ 2,900,000            
Birmingham Bank Ltd                
Business Acquisition [Line Items]                
Cash paid for business acquisition $ 15,900,000              
Voting interest acquired (as a percent) 100.00%              
Total consideration transferred $ 19,300,000              
Deferred consideration $ 3,400,000              
v3.23.4
Goodwill and Internal Use Software and Other Intangible Assets, Net - Schedule of Assets and Liabilities Acquired (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Apr. 30, 2023
Jan. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Business Acquisition [Line Items]              
Goodwill $ 32,492 $ 32,492     $ 18,525 $ 19,811 $ 10,995
Goodholm Finance Ltd              
Business Acquisition [Line Items]              
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents       $ 283      
Other assets       65      
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment       20      
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets       1,186      
Goodwill       1,741      
Accounts payable and accrued expenses       (161)      
Other liabilities       (193)      
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net, Total       $ 2,941      
Birmingham Bank Ltd              
Business Acquisition [Line Items]              
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents     $ 2,907        
Accounts receivable     60        
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Short-term Investments     8,729        
Other assets     7,530        
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment     83        
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles     854        
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets     31        
Goodwill     12,300        
Accounts payable and accrued expenses     (248)        
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Customer Deposits     (12,374)        
Other liabilities     (586)        
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net, Total     $ 19,286        
v3.23.4
Goodwill and Internal Use Software and Other Intangible Assets, Net - Schedule of Changes in Goodwill (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Goodwill [Roll Forward]      
Goodwill, Beginning Balance $ 18,525 $ 19,811 $ 10,995
Goodwill acquired 14,041 0 7,737
Goodwill, Foreign Currency Translation Gain (Loss) (74) (911) (190)
Goodwill, Ending Balance $ 32,492 $ 18,525 $ 19,811
v3.23.4
Goodwill and Internal Use Software and Other Intangible Assets, Net - Schedule of Finite and Indefinite-Lived Intangibles (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]        
Finite-Lived Intangible Assets, Gross   $ 140,413 $ 127,184 $ 102,539
Total Internal use software and other intangible assets, net, gross carrying value   144,643 130,153 105,641
Finite-Lived Intangible Assets, Accumulated Amortization   (96,237) (68,157) (33,152)
Finite-Lived Intangible Assets, Net, Total   44,176 59,026 69,387
Total Internal use software and other intangible assets, net, gross carrying value   144,643 130,153 105,641
Intangible Assets, Net (Excluding Goodwill), Total $ 48,406 $ 48,406 $ 61,996 $ 72,489
Computer Software        
Finite-Lived Intangible Assets [Line Items]        
Finite-Lived Intangible Asset, Useful Life   3 years 3 years 3 years
Finite-Lived Intangible Assets, Gross   $ 136,092 $ 123,734 $ 96,155
Finite-Lived Intangible Assets, Accumulated Amortization   (94,835) (67,319) (32,832)
Finite-Lived Intangible Assets, Net, Total   $ 41,257 $ 56,415 $ 63,323
Intellectual Property And Other Intangibles        
Finite-Lived Intangible Assets [Line Items]        
Finite-Lived Intangible Asset, Useful Life   6 years 2 months 12 days 7 years 6 months 7 years 6 months
Finite-Lived Intangible Assets, Gross   $ 4,322 $ 3,449 $ 6,384
Finite-Lived Intangible Assets, Accumulated Amortization   (1,402) (838) (320)
Finite-Lived Intangible Assets, Net, Total   2,920 2,611 $ 6,064
Internet Domain Names        
Finite-Lived Intangible Assets [Line Items]        
Indefinite-Lived Intangible Assets (Excluding Goodwill)   1,820 1,820  
Licenses and Other Intangibles        
Finite-Lived Intangible Assets [Line Items]        
Indefinite-Lived Intangible Assets (Excluding Goodwill)   $ 2,410 $ 1,150  
v3.23.4
Prepaid Expenses and Other Assets - Schedule of Prepaid Expenses and Other Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]        
Prepaid Expense   $ 27,095 $ 26,366  
Income Taxes Receivable   9,717 18,139 $ 20,250
Security Deposit   15,233 14,369 9,226
Financing Receivable, after Allowance for Credit Loss   4,163 0  
Prepaid Compensation Assets   0 5,615 0
Inventory, Net   0 1,139 1,122
Net Investment in Lease, Nonaccrual   0 944 11,058
Prepaid Expense and Other Assets $ 56,208 $ 56,208 $ 66,572 $ 90,998
v3.23.4
Prepaid Expenses and Other Assets - Narrative (Details) - USD ($)
$ in Thousands
 1 Months Ended 3 Months Ended 9 Months Ended
Aug. 18, 2022
Aug. 31, 2023
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
RELATED PARTY TRANSACTIONS            
Forgiveness of note receivable   $ 46,400     $ 46,350  
Prepaid Compensation Asset With CFO | Mr. Ryan, CFO            
RELATED PARTY TRANSACTIONS            
Annual payments $ 6,000          
Annual compounding interest rate (as a percent) 3.50%          
Forgivable amount, percent 25.00%          
Period from termination that principal and interest become due 24 months          
Forgiveness of note receivable   6,000        
Forgiveness of note receivable, accrued interest   $ 200        
Compensation expense related to retention bonus     $ 4,800 $ 100 5,500 $ 100
Withholding Taxes Incurred With CFO | Mr. Ryan, CFO            
RELATED PARTY TRANSACTIONS            
Compensation expense related to retention bonus     $ 3,900   $ 3,900  
v3.23.4
Customer Deposits - Average Balances and Weighted Average Rates (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Deposits [Abstract]        
Average balance, Notice $ 2,190 $ 0 $ 2,842 $ 0
Average balance, Term 2,962 0 2,402 0
Average balance, Savings 4,991 0 5,511 0
Average balance, total deposits $ 10,143 $ 0 $ 10,755 $ 0
Average paid rate, Notice 2.92% 0.00% 2.62% 0.00%
Average paid rate, Term 2.13% 0.00% 1.66% 0.00%
Average paid rate, Savings 2.18% 0.00% 1.97% 0.00%
Average paid rate, total deposits 2.41% 0.00% 2.08% 0.00%
v3.23.4
Customer Deposits - Maturities (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Deposits [Abstract]    
Demand deposits $ 4,795  
Maturities of Time Deposits [Abstract]    
2023 2,608  
2024 2,299  
2025 206  
2026 0  
2027 0  
Thereafter 0  
Total $ 9,908 $ 0
v3.23.4
Customer Deposits - Interest Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Deposits [Abstract]        
Interest Expense Foreign Deposit Liabilities, Notice of Withdrawal $ 22 $ 0 $ 43 $ 0
Interest Expense Foreign Deposit Liabilities, Time Deposit 4 0 10 0
Interest Expense Foreign Deposit Liabilities, Savings 26 0 54 0
Interest Expense, Foreign Deposits $ 52 $ 0 $ 107 $ 0
v3.23.4
Customer Deposits - Narrative (Details) - Sep. 30, 2023
GBP (£)
USD ($)
Deposits [Abstract]    
Deposits, FSCS Insured Amount £ 85,000 $ 103,700
Deposits over the insured amount   $ 1,000,000
v3.23.4
Corporate Line of Credit and Preclosing Bridge Notes - Corporate Line of Credit and Amended Corporate Line of Credit (Details) - USD ($)
$ in Thousands
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Aug. 31, 2023
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2023
Nov. 30, 2021
Line of Credit Facility [Line Items]                  
Outstanding borrowings           $ 144,403 $ 149,022 $ 0  
Amortization of deferred debt issuance costs and discount and other debt servicing fees       $ 6,043 $ 213,534 273,048 19,592    
Line of Credit | Revolving Credit Facility                  
Line of Credit Facility [Line Items]                  
Outstanding borrowings   $ 0   0   144,400 151,400    
Unamortized debt discount and debt issuance costs   0   0   2,000 2,400    
Fixed interest rate                 8.00%
Repayment of principal       144,400          
Payment of make-whole amount $ 4,500                
Amortization of unamortized debt issuance costs       5,100          
Interest expense on debt   11,300 $ 2,800 17,600 9,600 13,200 11,400    
Interest expense, line of credit   6,100 2,400 11,500 8,500 12,100 10,200    
Amortization of deferred debt issuance costs and discount and other debt servicing fees   5,200 $ 300 6,000 $ 800 $ 1,100 $ 1,000    
Line of Credit | Revolving Credit Facility | 2023 Credit Facility, Tranche AB                  
Line of Credit Facility [Line Items]                  
Outstanding borrowings   $ 96,700   $ 96,700          
Fixed interest rate   8.50%   8.50%          
Line of Credit | Revolving Credit Facility | 2023 Credit Facility, Tranche C                  
Line of Credit Facility [Line Items]                  
Outstanding borrowings   $ 26,900   $ 26,900          
Line of Credit | Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) | 2023 Credit Facility, Tranche C                  
Line of Credit Facility [Line Items]                  
Variable interest rate (as a percent)       9.50%          
v3.23.4
Corporate Line of Credit and Preclosing Bridge Notes - Pre-Closing Bridge Notes (Details) - USD ($)
$ / shares in Units, shares in Millions
 3 Months Ended 9 Months Ended 12 Months Ended
Aug. 22, 2023
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2023
Aug. 26, 2022
Debt Instrument [Line Items]                  
Bridge Loan           $ 750,000,000 $ 477,333,000 $ 0  
Pre-Closing Bridge Notes                  
Debt Instrument [Line Items]                  
Bridge Loan             750,000,000    
Interest expense on debt   $ 0 $ 80,099,000 $ 0 $ 213,513,000 272,667,000 19,211,000    
Pre-Closing Bridge Notes | SoftBank                  
Debt Instrument [Line Items]                  
Aggregate principal amount             650,000,000    
Pre-Closing Bridge Notes | Sponsor                  
Debt Instrument [Line Items]                  
Aggregate principal amount             100,000,000    
Pre-Closing Bridge Notes | Bridge Loan                  
Debt Instrument [Line Items]                  
Aggregate principal amount                 $ 100,000,000
Interest expense on debt   $ 0 $ 80,100,000 $ 0 $ 213,500,000 $ 272,700,000 $ 19,200,000    
Conversion price (in dollars per share)             $ 10    
Pre-Closing Bridge Notes | Bridge Loan | SoftBank                  
Debt Instrument [Line Items]                  
Amount converted $ 650,000,000                
Conversion price (in dollars per share) $ 10.00                
Debt Conversion, Converted Instrument, Shares Issued 65.0                
Pre-Closing Bridge Notes | Bridge Loan | Sponsor                  
Debt Instrument [Line Items]                  
Amount converted $ 100,000,000                
Debt Conversion, Converted Instrument, Shares Issued 40.0                
v3.23.4
Corporate Line of Credit and Preclosing Bridge Notes - Issuance of Post-Closing Convertible Notes (Details)
 3 Months Ended 9 Months Ended 12 Months Ended
Aug. 22, 2023
USD ($)
day
$ / shares
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2023
USD ($)
Oct. 11, 2023
USD ($)
Nov. 30, 2021
USD ($)
Debt Instrument [Line Items]                    
Funds held in trust, amount $ 21,400,000                  
Loan Commitment, Asset           $ 16,119,000 $ 121,723,000 $ 0    
Post-Closing Convertible Notes (issued to a related party. See Note 10)           0   $ 513,001,000    
Interest expense   $ 2,758,000 $ 2,838,000 $ 9,544,000 $ 14,775,000 17,059,000 $ 69,929,000      
Convertible Debt | Post-Closing Convertible Notes                    
Debt Instrument [Line Items]                    
Aggregate principal amount 528,600,000                 $ 750,000,000
Carrying amount $ 550,000,000                  
Fixed interest rate 1.00%                  
Loan Commitment, Asset           $ 16,100,000        
Post-Closing Convertible Notes (issued to a related party. See Note 10)   513,000,000.0   513,000,000.0            
First anniversary VWAP 115.00%                  
VWAP threshold, minimum | $ / shares $ 8.00                  
VWAP threshold, maximum | $ / shares $ 12.00                  
Redemption price percentage 115.00%                  
Threshold percentage stock price trigger 130.00%                  
Threshold trading days | day 20                  
Threshold consecutive trading days | day 30                  
Amount able to designate as senior $ 150,000,000                  
Interest expense   $ 500,000   $ 500,000            
Convertible Debt | Post-Closing Convertible Notes | Subsequent event                    
Debt Instrument [Line Items]                    
Aggregate principal amount                 $ 528,600,000  
v3.23.4
Related Party Transactions (Details)
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Aug. 31, 2023
USD ($)
Oct. 31, 2021
USD ($)
Jul. 31, 2020
$ / shares
shares
Jan. 31, 2018
shares
Sep. 30, 2023
USD ($)
Mar. 31, 2023
USD ($)
Sep. 30, 2022
USD ($)
shares
Jun. 30, 2022
USD ($)
shares
Mar. 31, 2022
USD ($)
shares
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
Dec. 31, 2023
USD ($)
Jan. 31, 2022
USD ($)
Jan. 01, 2021
USD ($)
Dec. 31, 2020
USD ($)
RELATED PARTY TRANSACTIONS                                  
General and administrative expenses         $ 59,189,000   $ 46,499,000     $ 113,392,000 $ 161,293,000 $ 194,565,000 $ 231,220,000        
Total other liabilities                       $ 59,933,000 76,158,000 $ 40,278,000   $ 44,690,000 $ 47,588,000
Options granted (in shares) | shares                       1,583,680          
Options granted, exercise price (in dollars per share) | $ / shares                       $ 13.63          
Marketing and Advertising Expense         5,128,000   9,948,000     17,122,000 59,801,000 $ 69,021,000 248,895,000        
Mortgage loans held for sale, at fair value         160,025,000         160,025,000   248,826,000 1,854,435,000 160,025,000      
Stockholders' Equity Note, Subscriptions Receivable         10,400,000         10,400,000   53,900,000 38,633,000 $ 10,404,000      
Interest Income, Operating         3,667,000   4,977,000     12,527,000 22,918,000 26,714,000 89,627,000        
Forgiveness of note receivable $ 46,400,000                 46,350,000              
Mortgage Platform                                  
RELATED PARTY TRANSACTIONS                                  
Expenses         19,166,000   55,545,000     70,809,000 292,915,000 327,815,000 700,113,000        
Related party                                  
RELATED PARTY TRANSACTIONS                                  
General and administrative expenses                       583,000 1,585,000        
Total other liabilities         460,000         460,000   440,000 411,000        
Marketing and Advertising Expense                       55,000 575,000        
Mortgage loans held for sale, at fair value                       8,320,000 0        
Related party | Mortgage Platform                                  
RELATED PARTY TRANSACTIONS                                  
Expenses                       1,940,000 396,000        
Directors and Officers                                  
RELATED PARTY TRANSACTIONS                                  
Stockholders' Equity Note, Subscriptions Receivable                       43,600,000 33,900,000        
Interest Income, Operating         500,000   $ 100,000     $ 300,000 300,000 $ 700,000 300,000        
Directors and Officers | Minimum                                  
RELATED PARTY TRANSACTIONS                                  
Interest rate                   0.50%   0.50%          
Directors and Officers | Maximum                                  
RELATED PARTY TRANSACTIONS                                  
Interest rate                   2.50%   2.50%          
Director                                  
RELATED PARTY TRANSACTIONS                                  
Repurchase of common stock (in shares) | shares                 33,995                
Repurchase of common stock                 $ 254,154                
General Counsel and Chief Compliance Officer                                  
RELATED PARTY TRANSACTIONS                                  
Repurchase of common stock (in shares) | shares             82,527 27,000                  
Repurchase of common stock             $ 399,600 $ 399,600                  
Chief Executive Officer                                  
RELATED PARTY TRANSACTIONS                                  
Stockholders' Equity Note, Subscriptions Receivable                       $ 40,200,000 29,900,000        
Executive Officer                                  
RELATED PARTY TRANSACTIONS                                  
Compensation expense                   $ 400,000              
Employee and Expense Allocation Agreement                                  
RELATED PARTY TRANSACTIONS                                  
Related party expenses         (27,000)   (187,300)     6,400 386,800 500,000 1,500,000        
Reduction of expenses         0   0     0 18,200 18,200 200,000        
Employee and Expense Allocation Agreement | Related party                                  
RELATED PARTY TRANSACTIONS                                  
Reduction of expenses         27,000   187,300                    
General and administrative expenses                   6,400 368,600 400,000 1,300,000        
Total other liabilities         144,400         144,400   177,000          
Technology Integration and License Agreement | Related party                                  
RELATED PARTY TRANSACTIONS                                  
Total other liabilities         204,300         204,300   232,000 0        
Technology Integration and License Agreement | Related party | Mortgage Platform                                  
RELATED PARTY TRANSACTIONS                                  
Expenses         66,900   617,700     438,000 1,123,000 1,400,000 100,000        
Consulting Agreement | Related party                                  
RELATED PARTY TRANSACTIONS                                  
General and administrative expenses         0   37,500     0 137,500 100,000 300,000        
Total other liabilities         0         0   0 50,000        
Options granted (in shares) | shares     764,143 603,024                          
Vesting period       4 years                          
Fair value of company multiplier       2                          
Term of award     10 years                            
Options granted, exercise price (in dollars per share) | $ / shares     $ 5.14                            
Vesting percentage upon change in control     100.00%                            
Private Label and Consumer Lending Program Agreement                                  
RELATED PARTY TRANSACTIONS                                  
Related party expenses                       100,000 600,000        
Private Label and Consumer Lending Program Agreement | Related party                                  
RELATED PARTY TRANSACTIONS                                  
Total other liabilities         10,000         10,000   15,000 300,000        
Expenses             74,300       74,300            
Marketing and Advertising Expense             31,900       31,900 55,300 600,000        
Private Label and Consumer Lending Program Agreement | Related party | Mortgage Platform                                  
RELATED PARTY TRANSACTIONS                                  
Expenses         16,300   42,400     38,500 42,400 42,900 0        
Amount paid per loan   $ 600       $ 600                      
Fixed period to pay back loan   3 years                              
Master Loan Purchase Agreement | Related party                                  
RELATED PARTY TRANSACTIONS                                  
Mortgage loans held for sale, at fair value         6,800,000         6,800,000   8,300,000          
Master Loan Purchase Agreement | Related party | Better Trust I                                  
RELATED PARTY TRANSACTIONS                                  
Master loan purchase agreement, amount                             $ 20,000,000    
Data Analytics Services Agreement | Related party                                  
RELATED PARTY TRANSACTIONS                                  
Total other liabilities         101,200         101,200   16,200 19,200        
Data Analytics Services Agreement | Related party | Mortgage Platform                                  
RELATED PARTY TRANSACTIONS                                  
Expenses         $ 8,600   $ 414,300     $ 7,400 $ 414,300 $ 500,000 $ 300,000        
v3.23.4
Commitments and Contingencies (Details) - USD ($)
$ in Thousands
 1 Months Ended 3 Months Ended 4 Months Ended 5 Months Ended 9 Months Ended 12 Months Ended
Oct. 31, 2023
Apr. 30, 2023
Sep. 30, 2023
Sep. 30, 2022
Apr. 30, 2023
Dec. 31, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2023
Aug. 01, 2022
Loss Contingencies [Line Items]                        
Loss contingency, estimated liability     $ 9,300       $ 9,300          
Deferred revenue     12,900     $ 30,000 12,900   $ 30,000     $ 50,000
Repayment/revenue recognized         $ 15,000 20,000            
Restricted Cash     27,806 $ 29,443   28,106 27,806 $ 29,443 28,106 $ 40,555 $ 27,806  
Deposits, excluded from balance sheet     0     300 0   300 2,000    
Customer deposits     9,908     0 9,908   0      
Contract With Customer, Liability, Tranche One                        
Loss Contingencies [Line Items]                        
Deferred revenue     20,000       20,000          
Repayment/revenue recognized           12,900            
Contract With Customer, Liability, Tranche Two                        
Loss Contingencies [Line Items]                        
Deferred revenue     15,000       15,000          
Repayment/revenue recognized   $ 12,700                    
Contract With Customer, Liability, Tranche Three                        
Loss Contingencies [Line Items]                        
Deferred revenue     15,000       15,000          
Contract With Customer, Liability, Tranche Three | Subsequent event                        
Loss Contingencies [Line Items]                        
Repayment/revenue recognized $ 12,900                      
Commitment to Fund Mortgage Loans                        
Loss Contingencies [Line Items]                        
Other commitment     211,900     225,400 211,900   225,400      
Escrow deposits                        
Loss Contingencies [Line Items]                        
Restricted Cash     $ 3,200     8,000 $ 3,200   $ 8,000 $ 11,600    
LHFS originated | Geographic Concentration Risk | Texas                        
Loss Contingencies [Line Items]                        
Concentration risk percentage             12.00%   11.00%      
LHFS originated | Geographic Concentration Risk | Florida                        
Loss Contingencies [Line Items]                        
Concentration risk percentage             11.00%   10.00%      
LHFS originated | Geographic Concentration Risk | California                        
Loss Contingencies [Line Items]                        
Concentration risk percentage                 11.00% 15.00%    
Loan Purchaser One | Loans sold | Customer concentration risk                        
Loss Contingencies [Line Items]                        
Concentration risk percentage     56.00% 59.00%     68.00% 65.00%        
Loan Purchaser Two | Loans sold | Customer concentration risk                        
Loss Contingencies [Line Items]                        
Concentration risk percentage     22.00%                  
Loan Purchaser Three | Loans sold | Customer concentration risk                        
Loss Contingencies [Line Items]                        
Concentration risk percentage     11.00%                  
Forward Contracts                        
Loss Contingencies [Line Items]                        
Notional amounts     $ 294,000     422,000 $ 294,000   $ 422,000 $ 2,818,700    
Employee related labor dispute                        
Loss Contingencies [Line Items]                        
Loss contingency, estimated liability     8,400     8,400 8,400   8,400 5,900    
Regulatory matters                        
Loss Contingencies [Line Items]                        
Loss contingency, estimated liability           $ 11,900     $ 11,900 $ 13,200    
Loss contingency, (gain) loss in period     $ (3,000)       $ (2,700)          
v3.23.4
Risks and Uncertainties - Narrative (Details)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
USD ($)
loan
Sep. 30, 2022
USD ($)
loan
Sep. 30, 2023
USD ($)
loan
Sep. 30, 2022
USD ($)
loan
Dec. 31, 2022
USD ($)
loan
Dec. 31, 2021
USD ($)
loan
Jun. 30, 2023
USD ($)
Jun. 30, 2022
USD ($)
Dec. 31, 2020
USD ($)
Risks and Uncertainties [Abstract]                  
Unpaid principal balance of loans repurchased $ 3,600 $ 37,900 $ 20,800 $ 97,000 $ 110,600 $ 29,100      
Number of loans repurchased | loan 11 82 52 221 262 95      
Loan repurchase reserve $ 21,753 $ 22,999 $ 21,753 $ 22,999 $ 26,745 $ 17,540 $ 21,832 $ 21,070 $ 7,438
v3.23.4
Risks and Uncertainties - Loan Repurchase Reserve Activity (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Loan Repurchase Reserve [Roll Forward]            
Loan Repurchase Reserve $ 21,832 $ 21,070 $ 26,745 $ 17,540 $ 17,540 $ 7,438
Provision (Recovery) For Loan Repurchase Reserve 866 11,683 178 25,125 33,518 13,780
Loan Repurchase Reserve, Write Offs (945) (9,754) (5,170) (19,667) (24,313) (3,678)
Loan Repurchase Reserve $ 21,753 $ 22,999 $ 21,753 $ 22,999 $ 26,745 $ 17,540
v3.23.4
Net Loss Per Share - Computation (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Earnings Per Share, Basic [Abstract]            
Net loss $ (340,033) $ (226,612) $ (475,441) $ (625,864) $ (888,802) $ (301,128)
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic 0 0 0 0 0 0
Net Income (Loss) Available to Common Stockholders, Basic, Total (340,033) (226,612) (475,441) (625,864) (888,802) (301,128)
Earnings Per Share, Diluted [Abstract]            
Net Income (Loss) Available to Common Stockholders, Basic (340,033) (226,612) (475,441) (625,864) (888,802) (301,128)
Dilutive Securities, Effect on Basic Earnings Per Share 0 0 0 0 0 0
Participating Securities, Distributed and Undistributed Earnings (Loss), Diluted 0 0 0 0 0 0
Net Income (Loss) Available to Common Stockholders, Diluted, Total $ (340,033) $ (226,612) $ (475,441) $ (625,864) $ (888,802) $ (301,128)
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]            
Weighted average common shares outstanding (in shares) 496,577,751 292,660,334 364,817,445 289,934,149 95,303,684 86,984,646
Weighted Average Number of Shares Outstanding, Diluted, Adjustment [Abstract]            
Assumed exercise of stock options (in shares) 0 0 0 0 0 0
Assumed exercise of warrants (in shares) 0 0 0 0 0 0
Assumed conversion of convertible preferred stock (in shares) 0 0 0 0 0 0
Diluted weighted-average common shares outstanding (in shares) 496,577,751 292,660,334 364,817,445 289,934,149 95,303,684 86,984,646
Earnings Per Share, Basic and Diluted EPS [Abstract]            
Basic (in dollars per share) $ (0.68) $ (0.77) $ (1.30) $ (2.16) $ (9.33) $ (3.46)
Diluted (in dollars per share) $ (0.68) $ (0.77) $ (1.30) $ (2.16) $ (9.33) $ (3.46)
v3.23.4
Net Loss Per Share - Antidilutive Securities (Details) - shares
shares in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]            
Total (in shares) 48,389 408,004 48,389 408,004 406,726 363,548
Options to purchase common stock            
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]            
Total (in shares) 48,389 44,857 48,389 44,857 43,159 34,217
Convertible preferred stock            
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]            
Total (in shares) 0 108,721 0 108,721 108,721 108,721
Bridge Loan            
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]            
Total (in shares) 0 247,777 0 247,777 248,197 214,787
Warrants | Warrants to purchase convertible preferred stock            
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]            
Total (in shares) 0 6,649 0 6,649 4,774 3,948
v3.23.4
Fair Value Measurements - Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
FAIR VALUE MEASUREMENTS        
Mortgage loans held for sale, at fair value $ 160,025 $ 160,025 $ 248,826 $ 1,854,435
Derivative Asset 3,717 3,717 3,048 9,296
Embedded Derivative, Fair Value of Embedded Derivative Asset 0   236,603 0
Assets, Fair Value Disclosure, Total   163,742 488,477 1,863,731
Derivative Liability 1,678 1,678 1,828 2,382
Warrants and equity related liabilities, at fair value   1,527    
Convertible preferred stock warrants $ 0   3,096 31,997
Liabilities, Fair Value Disclosure, Total   3,205 4,924 34,379
Fair Value, Inputs, Level 1        
FAIR VALUE MEASUREMENTS        
Mortgage loans held for sale, at fair value   0 0 0
Derivative Asset   0 0  
Embedded Derivative, Fair Value of Embedded Derivative Asset     0 0
Assets, Fair Value Disclosure, Total   0 0 0
Derivative Liability   0 0 0
Warrants and equity related liabilities, at fair value   577    
Convertible preferred stock warrants     0 0
Liabilities, Fair Value Disclosure, Total   577 0 0
Fair Value, Inputs, Level 2        
FAIR VALUE MEASUREMENTS        
Mortgage loans held for sale, at fair value   160,025 248,826 1,854,435
Derivative Asset   3,506 2,732 812
Embedded Derivative, Fair Value of Embedded Derivative Asset     0 0
Assets, Fair Value Disclosure, Total   163,531 251,558 1,855,247
Derivative Liability   0 0 1,466
Warrants and equity related liabilities, at fair value   950    
Convertible preferred stock warrants     0 0
Liabilities, Fair Value Disclosure, Total   950 0 1,466
Fair Value, Inputs, Level 3        
FAIR VALUE MEASUREMENTS        
Mortgage loans held for sale, at fair value   0 0 0
Derivative Asset   211 316 8,484
Embedded Derivative, Fair Value of Embedded Derivative Asset     236,603 0
Assets, Fair Value Disclosure, Total   211 236,919 8,484
Derivative Liability   1,678 1,828 916
Warrants and equity related liabilities, at fair value   0    
Convertible preferred stock warrants     3,096 31,997
Liabilities, Fair Value Disclosure, Total   $ 1,678 $ 4,924 $ 32,913
v3.23.4
Fair Value Measurements - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
FAIR VALUE MEASUREMENTS            
Unrealized gain (loss) on derivatives     $ 819 $ (291) $ (5,695) $ (7,744)
IRLs            
FAIR VALUE MEASUREMENTS            
Issuances (purchases) of derivative instruments $ (100) $ (2,400) 600 (5,000) $ (4,300) $ 50,700
Derivative term         60 days 60 days
Gain (loss) on derivatives (900) (7,000) $ 100 (14,300) $ (9,100) $ (32,400)
Forward Contracts            
FAIR VALUE MEASUREMENTS            
Derivative term     60 days      
Gain (loss) on derivatives 5,000 26,200 $ 8,400 188,600 187,300 95,400
Unrealized gain (loss) on derivatives $ 800 $ 14,100 $ 1,500 $ 13,200 $ 3,400 $ 24,700
v3.23.4
Fair Value Measurements - Notional and Fair Value of Derivative Financial Instruments (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Dec. 31, 2021
Derivative [Line Items]          
Derivative Asset $ 3,717 $ 3,717 $ 3,048   $ 9,296
Derivative Liability $ 1,678 1,678 1,828   2,382
IRLs          
Derivative [Line Items]          
Notional amounts   211,897 225,372   2,560,577
Derivative Asset   211 316   8,484
Derivative Liability   1,678 1,828   916
Forward Contracts          
Derivative [Line Items]          
Notional amounts   294,000 422,000   2,818,700
Derivative Asset   3,506 2,732   812
Derivative Liability   $ 0 $ 0 $ 0 $ 1,466
v3.23.4
Fair Value Measurements - Change in Fair Value of Derivative Liabilities (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
IRLs            
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]            
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs, Beginning Balance $ (514) $ 197 $ (1,513) $ 7,568 $ 7,568 $ 39,972
Change in fair value (953) (6,976) 46 (14,347) (9,081) (32,404)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs, Ending Balance (1,467) (6,779) (1,467) (6,779) (1,513) 7,568
Bifurcated derivative            
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]            
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs, Beginning Balance 237,667 277,777 236,603 0 0 0
Change in fair value (237,667) 29,089 (236,603) 306,866 236,603 0
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs, Ending Balance $ 0 $ 306,866 $ 0 $ 306,866 $ 236,603 $ 0
v3.23.4
Fair Value Measurements - Change in Fair Value of Warrant Liabilities (Details) - Warrants - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]            
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Beginning Balance $ 2,830 $ 11,586 $ 3,096 $ 31,997 $ 31,997 $ 25,799
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Settlements (2,830) 0 (2,830) 0 0 (26,592)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings 0 (4,202) (266) (24,613) (28,901) 32,790
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance $ 0 $ 7,384 $ 0 $ 7,384 $ 3,096 $ 31,997
v3.23.4
Fair Value Measurements - Offsetting Derivatives (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Dec. 31, 2021
Offsetting Derivative Assets [Abstract]          
Derivative Asset, Total $ 3,717 $ 3,717 $ 3,048   $ 9,296
Offsetting Derivative Liabilities [Abstract]          
Derivative Liability, Total $ 1,678 1,678 1,828   2,382
Forward Contracts          
Offsetting Derivative Assets [Abstract]          
Derivative Asset, Subject to Master Netting Arrangement, before Offset   3,525 3,263   2,598
Derivative Asset, Subject to Master Netting Arrangement, Liability Offset   (19) (531)   (1,786)
Derivative Asset, Total   3,506 2,732   812
Offsetting Derivative Liabilities [Abstract]          
Gross Amount of Recognized Assets     0 $ 0 282
Gross Amount of Recognized Liabilities     0 0 (1,748)
Derivative Liability, Total   $ 0 $ 0 $ 0 $ 1,466
v3.23.4
Fair Value Measurements - Quantitative Information about Significant Unobservable Inputs (Details) - Fair Value, Inputs, Level 3
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2022
Year
Dec. 31, 2021
Year
Measurement Input, Risk Free Interest Rate        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, bifurcated derivatives   0.0469    
Measurement Input, Expected Term        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, bifurcated derivatives   0.75    
Minimum | Measurement Input, Risk Free Interest Rate        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, warrants   0.0394   0.0019
Minimum | Measurement Input, Price Volatility        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, warrants   0.404   0.328
Minimum | Measurement Input, Expected Term        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, warrants   4.24 4.24 0.5
Minimum | Fair value        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, bifurcated derivatives   10.63    
Measurement input, warrants   0.00   6.80
Minimum | IRLs | Measurement Input, Pull Through Factor        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, derivatives 0.1027 0.1466   0.0501
Maximum | Measurement Input, Risk Free Interest Rate        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, warrants   0.0404   0.0073
Maximum | Measurement Input, Price Volatility        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, warrants   1.238   1.203
Maximum | Measurement Input, Expected Term        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, warrants   5.74 5.74 2.0
Maximum | Fair value        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, bifurcated derivatives   19.05    
Measurement input, warrants   6.60   29.42
Maximum | IRLs | Measurement Input, Pull Through Factor        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, derivatives 0.9749 0.9657   0.9943
Weighted average | Measurement Input, Risk Free Interest Rate        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, bifurcated derivatives   0.0469    
Measurement input, warrants   0.0400   0.0027
Weighted average | Measurement Input, Price Volatility        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, warrants   0.650   0.650
Weighted average | Measurement Input, Expected Term        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, bifurcated derivatives   0.75    
Measurement input, warrants   4.8 4.8 0.7
Weighted average | Fair value        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, bifurcated derivatives   9.77    
Measurement input, warrants   1.60   14.91
Weighted average | IRLs | Measurement Input, Pull Through Factor        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, derivatives 0.851 0.796   0.835
v3.23.4
Fair Value Measurements - Recurring and Non-Recurring (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
FAIR VALUE MEASUREMENTS        
Short-Term Investments $ 29,831   $ 0  
Fair Value, Inputs, Level 1 | Reported Value Measurement        
FAIR VALUE MEASUREMENTS        
Short-Term Investments   $ 29,831 0  
Fair Value, Inputs, Level 1 | Estimate of Fair Value Measurement        
FAIR VALUE MEASUREMENTS        
Short-Term Investments   29,884 0  
Fair Value, Inputs, Level 3 | Reported Value Measurement        
FAIR VALUE MEASUREMENTS        
Loans Receivable, Fair Value Disclosure   4,163 0  
Post-Closing Convertible Notes   513,001 0  
Loan Commitment Asset, Fair Value Disclosure   0 16,119 $ 121,723
Fair Value, Inputs, Level 3 | Estimate of Fair Value Measurement        
FAIR VALUE MEASUREMENTS        
Loans Receivable, Fair Value Disclosure   4,649 0  
Post-Closing Convertible Notes   252,796 0  
Loan Commitment Asset, Fair Value Disclosure   0 54,654 121,723
Fair Value, Inputs, Level 3 | Pre-Closing Bridge Notes | Reported Value Measurement | Bridge Loan        
FAIR VALUE MEASUREMENTS        
Debt instrument   0 750,000 477,333
Fair Value, Inputs, Level 3 | Pre-Closing Bridge Notes | Estimate of Fair Value Measurement | Bridge Loan        
FAIR VALUE MEASUREMENTS        
Debt instrument   0 269,067 458,122
Fair Value, Inputs, Level 3 | Line of Credit | Revolving Credit Facility | Reported Value Measurement        
FAIR VALUE MEASUREMENTS        
Debt instrument   0 144,403 149,022
Fair Value, Inputs, Level 3 | Line of Credit | Revolving Credit Facility | Estimate of Fair Value Measurement        
FAIR VALUE MEASUREMENTS        
Debt instrument   $ 0 $ 145,323 $ 161,417
v3.23.4
Income Taxes (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]            
Income Tax Expense (Benefit) $ 659 $ (52) $ 2,539 $ 1,450 $ 1,100 $ (2,383)
Effective tax rate (0.19%) 0.02% (0.53%) (0.23%) (0.12%) 0.78%
v3.23.4
Convertible Preferred Stock - Narrative (Details)
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Aug. 31, 2023
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2023
USD ($)
Aug. 24, 2023
Class of Warrant or Right [Line Items]                  
Recapitalization exchange ratio                 3.06
Exercise of convertible preferred stock warrants   $ 1,500,000   $ 1,460,000 $ 0        
Sale of Private Placement Warrants   4,290,000   4,290,000          
Convertible preferred stock warrants           $ 3,096,000 $ 31,997,000 $ 0  
Fair Value Adjustment of Warrants   (861,000) $ 0 (861,000) 0 (28,901,000) 32,790,000    
Preferred Stock Warrants                  
Class of Warrant or Right [Line Items]                  
Sale of Private Placement Warrants $ 2,800,000                
Convertible preferred stock warrants           3,100,000 32,000,000    
Fair Value Adjustment of Warrants   $ 0 $ 4,200,000 $ 300,000 $ 24,600,000 $ (28,900,000) $ 32,800,000    
v3.23.4
Convertible Preferred Stock - Convertible Preferred Stock (Details) - shares
Sep. 30, 2023
Jun. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Jun. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Temporary Equity [Line Items]              
Shares Authorized (in shares) 0   602,405,839        
Shares Issued (in shares)     332,314,737        
Shares Outstanding (in shares) 0 332,314,737 332,314,737 332,314,737 332,314,737 108,721,433 107,634,678
Series D Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     26,178,574        
Shares Issued (in shares)     23,786,379        
Shares Outstanding (in shares)     23,786,379        
Series D-1 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     26,178,574        
Shares Issued (in shares)     0        
Shares Outstanding (in shares)     0        
Series D-2 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     21,305,758        
Shares Issued (in shares)     20,390,896        
Shares Outstanding (in shares)     20,390,896        
Series D-3 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     914,862        
Shares Issued (in shares)     914,862        
Shares Outstanding (in shares)     914,862        
Series D-4 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     1,062,009        
Shares Issued (in shares)     1,062,009        
Shares Outstanding (in shares)     1,062,009        
Series D-5 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     1,062,009        
Shares Issued (in shares)     0        
Shares Outstanding (in shares)     0        
Series C Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     132,946,826        
Shares Issued (in shares)     100,138,544        
Shares Outstanding (in shares)     100,138,544        
Series C-1 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     132,946,826        
Shares Issued (in shares)     8,939,693        
Shares Outstanding (in shares)     8,939,693        
Series C-2 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     18,624,354        
Shares Issued (in shares)     14,018,524        
Shares Outstanding (in shares)     14,018,524        
Series C-3 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     19,741,818        
Shares Issued (in shares)     8,367,368        
Shares Outstanding (in shares)     8,367,368        
Series C-4 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     2,171,064        
Shares Issued (in shares)     2,171,064        
Shares Outstanding (in shares)     2,171,064        
Series C-5 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     18,624,354        
Shares Issued (in shares)     4,605,830        
Shares Outstanding (in shares)     4,605,830        
Series C-6 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     19,741,818        
Shares Issued (in shares)     11,374,450        
Shares Outstanding (in shares)     11,374,450        
Series C-7 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     9,833,660        
Shares Issued (in shares)     4,469,846        
Shares Outstanding (in shares)     4,469,846        
Series B Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     39,753,024        
Shares Issued (in shares)     28,583,364        
Shares Outstanding (in shares)     28,583,364        
Series B-1 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     12,531,940        
Shares Issued (in shares)     11,169,660        
Shares Outstanding (in shares)     11,169,660        
Series A Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     93,850,533        
Shares Issued (in shares)     69,267,349        
Shares Outstanding (in shares)     69,267,349        
Series A-1 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     24,937,838        
Shares Issued (in shares)     23,054,899        
Shares Outstanding (in shares)     23,054,899        
v3.23.4
Convertible Preferred Stock - Convertible Preferred Stock Warrants (Details) - USD ($)
$ / shares in Units, $ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Mar. 31, 2020
Apr. 30, 2019
Mar. 31, 2019
Feb. 28, 2019
Sep. 30, 2018
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   7,598,424            
Warrants and Rights Outstanding $ 0 $ 3,096 $ 31,997          
Preferred Stock Warrants Issued September 2018                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   2,312,296            
Strike (in dollars per share)   $ 0.59            
Warrants and Rights Outstanding   $ 1,256 10,364         $ 170
Preferred Stock Warrants Issued February 2019                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   153,807            
Strike (in dollars per share)   $ 0.59            
Warrants and Rights Outstanding   $ 84 689       $ 12  
Preferred Stock Warrants Issued March 2019                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   1,146,214            
Strike (in dollars per share)   $ 1.12            
Warrants and Rights Outstanding   $ 397 4,703     $ 87    
Preferred Stock Warrants Issued April 2019                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   3,575,879            
Strike (in dollars per share)   $ 1.12            
Warrants and Rights Outstanding   $ 1,240 14,671   $ 313      
Preferred Stock Warrants Issued March 2020                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   410,228            
Strike (in dollars per share)   $ 1.64            
Warrants and Rights Outstanding   $ 119 $ 1,570 $ 201        
v3.23.4
Convertible Preferred Stock - Fair Value Assumptions (Details)
$ in Thousands
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2022
Dec. 31, 2022
$ / shares
Dec. 31, 2021
USD ($)
$ / shares
Mar. 31, 2020
USD ($)
Apr. 30, 2019
USD ($)
Mar. 31, 2019
USD ($)
Feb. 28, 2019
USD ($)
Sep. 30, 2018
USD ($)
Class of Warrant or Right [Line Items]                    
Convertible preferred stock warrants $ 0 $ 3,096     $ 31,997          
Preferred Stock Warrants Issued September 2018                    
Class of Warrant or Right [Line Items]                    
Convertible preferred stock warrants   1,256     $ 10,364         $ 170
Preferred Stock Warrants Issued September 2018 | Stock price                    
Class of Warrant or Right [Line Items]                    
Measurement input, warrants     0.54 1.66 13.70          
Preferred Stock Warrants Issued February 2019                    
Class of Warrant or Right [Line Items]                    
Convertible preferred stock warrants   84     $ 689       $ 12  
Preferred Stock Warrants Issued February 2019 | Stock price                    
Class of Warrant or Right [Line Items]                    
Measurement input, warrants     0.54 1.66 13.70          
Preferred Stock Warrants Issued March 2019                    
Class of Warrant or Right [Line Items]                    
Convertible preferred stock warrants   397     $ 4,703     $ 87    
Preferred Stock Warrants Issued March 2019 | Stock price                    
Class of Warrant or Right [Line Items]                    
Measurement input, warrants     0.35 1.06 12.54          
Preferred Stock Warrants Issued April 2019                    
Class of Warrant or Right [Line Items]                    
Convertible preferred stock warrants   1,240     $ 14,671   $ 313      
Preferred Stock Warrants Issued April 2019 | Stock price                    
Class of Warrant or Right [Line Items]                    
Measurement input, warrants     0.35 1.06 12.54          
Preferred Stock Warrants Issued March 2020                    
Class of Warrant or Right [Line Items]                    
Convertible preferred stock warrants   $ 119     $ 1,570 $ 201        
Preferred Stock Warrants Issued March 2020 | Stock price                    
Class of Warrant or Right [Line Items]                    
Measurement input, warrants     0.29 0.89 11.70          
v3.23.4
Stockholders' Equity - Narrative (Details)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
USD ($)
vote
$ / shares
shares
Sep. 30, 2022
USD ($)
Sep. 30, 2023
USD ($)
vote
$ / shares
shares
Sep. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
vote
$ / shares
shares
Dec. 31, 2021
USD ($)
Dec. 31, 2023
USD ($)
Aug. 24, 2023
SHAREHOLDERS' EQUITY                
Recapitalization exchange ratio               3.06
Common stock, authorized (in shares) | shares 3,300,000,000   3,300,000,000   1,086,027,188      
Common stock, par value (in dollars per share) | $ / shares $ 0.0001   $ 0.0001   $ 0.0001      
Common stock, votes per share | vote         1      
Warrants         $ 3,096,000 $ 31,997,000 $ 0  
Fair Value Adjustment of Warrants $ (861,000) $ 0 $ (861,000) $ 0 (28,901,000) 32,790,000    
Outstanding promissory notes         65,200,000 67,800,000    
Stockholders' Equity Note, Subscriptions Receivable 10,400,000   10,400,000   53,900,000 38,633,000 $ 10,404,000  
Notes receivable from stockholders, stock options not yet vested         11,300,000 $ 29,200,000    
Receivables from Stockholder                
SHAREHOLDERS' EQUITY                
Outstanding promissory notes 19,100,000   19,100,000   65,200,000      
Stockholders' Equity Note, Subscriptions Receivable 10,500,000   10,500,000   53,900,000      
Notes receivable from stockholders, stock options not yet vested 8,500,000   8,500,000   12,300,000      
Private and Public Warrants                
SHAREHOLDERS' EQUITY                
Warrants 1,100,000   1,100,000   0      
Fair Value Adjustment of Warrants 210,000   210,000          
Sponsor Locked-up Shares                
SHAREHOLDERS' EQUITY                
Warrants 500,000   500,000   $ 0      
Fair Value Adjustment of Warrants $ 650,000   $ 650,000          
Common Class A                
SHAREHOLDERS' EQUITY                
Common stock, authorized (in shares) | shares 1,800,000,000   1,800,000,000   24,452,565      
Common stock, par value (in dollars per share) | $ / shares $ 0.0001   $ 0.0001          
Common stock, votes per share | vote 1   1          
Class B ordinary shares                
SHAREHOLDERS' EQUITY                
Common stock, authorized (in shares) | shares 700,000,000   700,000,000   588,261,164      
Common stock, par value (in dollars per share) | $ / shares $ 0.0001   $ 0.0001          
Common stock, votes per share | vote 3   3          
Class C common stock                
SHAREHOLDERS' EQUITY                
Common stock, authorized (in shares) | shares 800,000,000   800,000,000          
Common stock, par value (in dollars per share) | $ / shares $ 0.0001   $ 0.0001          
v3.23.4
Stockholders' Equity - Classes of Common Stock (Details) - $ / shares
Sep. 30, 2023
Aug. 24, 2023
Dec. 31, 2022
SHAREHOLDERS' EQUITY      
Shares Authorized (in shares) 3,300,000,000   1,086,027,188
Shares Issued (in shares) 737,585,438   299,783,421
Shares Outstanding (in shares) 737,585,438   299,783,421
Par Value (in dollars per share)     $ 10
Common Class A      
SHAREHOLDERS' EQUITY      
Shares Authorized (in shares) 1,800,000,000   24,452,565
Shares Issued (in shares)   91,300,735 24,452,565
Shares Outstanding (in shares)     24,452,565
Par Value (in dollars per share)     $ 1
Common Class B      
SHAREHOLDERS' EQUITY      
Shares Authorized (in shares) 700,000,000   588,261,164
Shares Issued (in shares)   574,407,420 171,441,780
Shares Outstanding (in shares)     171,441,780
Par Value (in dollars per share)     $ 5
Common Class B-1      
SHAREHOLDERS' EQUITY      
Shares Authorized (in shares)     236,938,220
Shares Issued (in shares)     0
Shares Outstanding (in shares)     0
Par Value (in dollars per share)     $ 0
Common Class O      
SHAREHOLDERS' EQUITY      
Shares Authorized (in shares)     236,375,239
Shares Issued (in shares)     103,889,076
Shares Outstanding (in shares)     103,889,076
Par Value (in dollars per share)     $ 4
v3.23.4
Stockholders' Equity - Common Stock Warrants (Details) - USD ($)
$ / shares in Units, $ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Mar. 31, 2020
Mar. 31, 2019
Class of Warrant or Right [Line Items]          
Warrants outstanding (in shares)   7,598,424      
Warrants and Rights Outstanding $ 0 $ 3,096 $ 31,997    
Common Stock Warrants          
Class of Warrant or Right [Line Items]          
Warrants outstanding (in shares)   5,731,070      
Common Stock Warrants Issued March 2019          
Class of Warrant or Right [Line Items]          
Warrants outstanding (in shares)   1,146,214      
Strike (in dollars per share)   $ 0.23      
Warrants and Rights Outstanding         $ 179
Common Stock Warrants Issued March 2020          
Class of Warrant or Right [Line Items]          
Warrants outstanding (in shares)   4,584,856      
Strike (in dollars per share)   $ 1.12      
Warrants and Rights Outstanding       $ 271  
v3.23.4
Stock-Based Compensation - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Aug. 22, 2023
May 15, 2017
Nov. 03, 2016
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                  
Stock-based compensation expense       $ 25,044 $ 10,973 $ 37,398 $ 31,021 $ 38,557 $ 55,215
2016 Equity Incentive Plan                  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                  
Shares issuable (in shares)       1,212,059   1,212,059      
2017 Equity Incentive Plan                  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                  
Shares issuable (in shares)       77,053,345   77,053,345      
2023 Incentive Equity Plan                  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                  
Common stock, reserved for issuance (in shares) 88,626,665                
Initial reserve, automatic increase, percentage 5.00%                
Common stock, reserved for issuance, maximum (in shares) 614,343,928                
2023 Employee Stock Purchase Plan                  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                  
Common stock, reserved for issuance (in shares) 16,113,939                
Initial reserve, automatic increase, percentage 1.00%                
Common stock, reserved for issuance, maximum (in shares) 120,854,543                
Stock options                  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                  
Vesting period               4 years  
Stock options | 2016 Equity Incentive Plan                  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                  
Vesting, percentage     25.00%            
Stock options | 2017 Equity Incentive Plan                  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                  
Vesting, percentage   25.00%              
v3.23.4
Stock-Based Compensation - Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]            
Share-Based Payment Arrangement, Expense $ 25,044 $ 10,973 $ 37,398 $ 31,021 $ 38,557 $ 55,215
Capitalized stock-based compensation costs 2,500 800 3,874 2,967 4,051 8,972
Cost of revenue | Mortgage Platform            
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]            
Share-Based Payment Arrangement, Expense 4,176 1,491 5,905 4,941 5,256 13,671
Cost of revenue | Other Platform            
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]            
Share-Based Payment Arrangement, Expense 1,493 426 1,837 675 908 1,654
General and Administrative Expense            
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]            
Share-Based Payment Arrangement, Expense 16,828 6,862 25,123 20,479 26,681 27,559
Selling and Marketing Expense            
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]            
Share-Based Payment Arrangement, Expense 146 369 216 709 486 1,159
Technology and product development expenses            
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]            
Share-Based Payment Arrangement, Expense $ 2,401 $ 1,825 $ 4,317 $ 4,217 $ 5,226 $ 11,172
v3.23.4
Regulatory Requirements (Details)
$ in Millions
Jul. 24, 2023
USD ($)
Mortgage Banking [Abstract]  
Banking Regulation, Additional Cash Collateral Requirement $ 5.0
v3.23.4
Subsequent Events (Details) - $ / shares
Sep. 30, 2023
Dec. 31, 2022
Subsequent Events [Abstract]    
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
v3.23.4
BETTER 10K - ORGANIZATION AND NATURE OF THE BUSINESS - Narrative (Details) - USD ($)
 1 Months Ended 2 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Mar. 08, 2023
Jan. 02, 2023
Aug. 26, 2022
Nov. 30, 2021
May 31, 2021
Mar. 08, 2023
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2023
Oct. 11, 2023
Aug. 22, 2023
Jan. 01, 2021
Dec. 31, 2020
Reverse Recapitalization [Line Items]                                  
Stock consideration for reverse recapitalization (in shares)         690,000,000                        
Proceeds from issuance of PIPE, replaced through amendment       $ 1,500,000,000                          
Payment for purchase of shares of existing stockholders, replaced through amendment       950,000,000                          
Bridge Loan                     $ 750,000,000 $ 477,333,000 $ 0        
Net income (loss)             $ (340,033,000) $ (226,612,000) $ (475,441,000) $ (625,864,000) (888,802,000) (301,128,000)          
Cash used                 (208,506,000) 551,394,000 632,809,000 (597,089,000)          
Retained earnings (accumulated deficit)                     (1,181,415,000) (292,613,000) (1,656,856,000)     $ 8,515,000 $ 7,522,000
Cash and Cash Equivalents, at Carrying Value             $ 526,765,000 $ 398,037,000 $ 526,765,000 $ 398,037,000 317,959,000 938,319,000 $ 526,765,000        
Pre-Closing Bridge Notes                                  
Reverse Recapitalization [Line Items]                                  
Bridge Loan                       $ 750,000,000          
Pre-Closing Bridge Notes | Bridge Loan                                  
Reverse Recapitalization [Line Items]                                  
Aggregate principal amount     $ 100,000,000                            
Conversion price (in dollars per share)                       $ 10          
Sponsor funding obligation     550,000,000                            
Post-Closing Convertible Notes | Convertible Debt                                  
Reverse Recapitalization [Line Items]                                  
Aggregate principal amount       $ 750,000,000                     $ 528,600,000    
Post-Closing Convertible Notes | Convertible Debt | Subsequent event                                  
Reverse Recapitalization [Line Items]                                  
Aggregate principal amount                           $ 528,600,000      
Sponsor | Pre-Closing Bridge Notes                                  
Reverse Recapitalization [Line Items]                                  
Aggregate principal amount                       $ 100,000,000          
SoftBank | Pre-Closing Bridge Notes                                  
Reverse Recapitalization [Line Items]                                  
Aggregate principal amount                       $ 650,000,000          
SoftBank | Pre-Closing Bridge Notes | Bridge Loan                                  
Reverse Recapitalization [Line Items]                                  
Conversion price (in dollars per share)                             $ 10.00    
Aurora Acquisition Corp                                  
Reverse Recapitalization [Line Items]                                  
Repayment of expenses, maximum     $ 15,000,000                            
Repayment of expenses $ 3,800,000 $ 3,800,000       $ 7,500,000         $ 7,500,000            
Repayment period                     5 days            
v3.23.4
BETTER 10K - ORGANIZATION AND NATURE OF THE BUSINESS - Schedule of Error Corrections and Restatements (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2023
Jun. 30, 2023
Jun. 30, 2022
Jan. 01, 2021
Dec. 31, 2020
Condensed Balance Sheets:                      
Mortgage loans held for sale, at fair value $ 160,025   $ 160,025   $ 248,826 $ 1,854,435 $ 160,025        
Other Receivables         16,285 54,162 10,449        
Prepaid Expense and Other Assets 56,208   56,208   66,572 90,998 56,208        
Assets         1,086,522 3,299,717 937,055     $ 146,103 $ 67,563
Accounts Payable and Accrued Liabilities         88,983 133,256 103,435     134,729 123,849
Total Liabilities         1,260,342 2,623,277 779,823     248,985 171,437
Retained earnings (accumulated deficit)         (1,181,415) (292,613) (1,656,856)     8,515 7,522
Equity, Attributable to Parent 157,232 $ (355,088) 157,232 $ (355,088) (610,100) 240,160 157,232 $ (732,248) $ (139,216) $ 8,515 $ 49,326
Liabilities and Equity         1,086,522 3,299,717 $ 937,055        
Interest Income (Expense), Net [Abstract]                      
Interest Income, Operating 3,667 4,977 12,527 22,918 26,714 89,627          
Interest Income (Expense), Net 909 2,139 2,983 8,143 9,655 19,698          
Revenues, Net of Interest Expense 16,449 28,653 67,569 376,448 382,976 1,241,670          
Operating Expenses [Abstract]                      
General and administrative expenses 59,189 46,499 113,392 161,293 194,565 231,220          
Marketing and Advertising Expense 5,128 9,948 17,122 59,801 69,021 248,895          
Research and Development Expense 20,732 29,414 66,639 100,354 124,912 144,490          
Restructuring, Settlement and Impairment Provisions 679 45,781 11,798 212,490 247,693 17,048          
Costs and Expenses, Total 108,055 205,951 291,945 1,109,612 1,253,806 1,481,346          
Operating Income (Loss), Total (91,606) (177,298) (224,376) (733,164) (870,830) (239,676)          
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest (339,374) (226,664) (472,902) (624,414) (887,702) (303,511)          
Net income (loss) (340,033) (226,612) (475,441) (625,864) (888,802) (301,128)          
Comprehensive Income (Loss), Net of Tax, Attributable to Parent $ (340,731) $ (226,767) $ (476,448) $ (626,628) $ (890,120) $ (301,093)          
Basic net income (loss) per share $ (0.68) $ (0.77) $ (1.30) $ (2.16) $ (9.33) $ (3.46)          
Diluted net income (loss) per share $ (0.68) $ (0.77) $ (1.30) $ (2.16) $ (9.33) $ (3.46)          
Mortgage Platform                      
Revenues [Abstract]                      
Revenues $ 14,207 $ 11,087 $ 54,927 $ 106,586 $ 105,658 $ 1,088,223          
Operating Expenses [Abstract]                      
Expenses 19,166 55,545 70,809 292,915 327,815 700,113          
Cash Offer Program                      
Revenues [Abstract]                      
Revenues 0 9,739 304 226,096 228,721 39,361          
Operating Expenses [Abstract]                      
Expenses 0 9,813 398 227,509 230,144 39,505          
Other Platform                      
Revenues [Abstract]                      
Revenues 1,333 5,688 9,355 35,623 38,942 94,388          
Operating Expenses [Abstract]                      
Expenses $ 3,161 $ 8,951 $ 11,787 $ 55,250 59,656 100,075          
As Previously Reported                      
Condensed Balance Sheets:                      
Mortgage loans held for sale, at fair value           1,851,161          
Other Receivables           51,246          
Prepaid Expense and Other Assets           110,075          
Assets           3,312,604          
Accounts Payable and Accrued Liabilities           148,767          
Total Liabilities           2,638,788          
Retained earnings (accumulated deficit)           (295,237)          
Equity, Attributable to Parent         $ (610,100) 240,160   $ (732,248) $ (139,216)    
Liabilities and Equity           3,312,604          
Interest Income (Expense), Net [Abstract]                      
Interest Income, Operating           88,965          
Interest Income (Expense), Net           19,036          
Revenues, Net of Interest Expense           1,234,206          
Operating Expenses [Abstract]                      
General and administrative expenses           232,669          
Marketing and Advertising Expense           249,275          
Research and Development Expense           143,951          
Restructuring, Settlement and Impairment Provisions           0          
Costs and Expenses, Total           1,476,506          
Operating Income (Loss), Total           (242,300)          
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest           (306,135)          
Net income (loss)           (303,752)          
Comprehensive Income (Loss), Net of Tax, Attributable to Parent           $ (303,717)          
Basic net income (loss) per share           $ (3.49)          
Diluted net income (loss) per share           $ (3.49)          
As Previously Reported | Mortgage Platform                      
Revenues [Abstract]                      
Revenues           $ 1,081,421          
Operating Expenses [Abstract]                      
Expenses           710,132          
As Previously Reported | Cash Offer Program                      
Revenues [Abstract]                      
Revenues           0          
Operating Expenses [Abstract]                      
Expenses           0          
As Previously Reported | Other Platform                      
Revenues [Abstract]                      
Revenues           133,749          
Operating Expenses [Abstract]                      
Expenses           140,479          
Corrections                      
Condensed Balance Sheets:                      
Mortgage loans held for sale, at fair value           3,274          
Other Receivables           2,916          
Prepaid Expense and Other Assets           (19,077)          
Assets           (12,887)          
Accounts Payable and Accrued Liabilities           (15,511)          
Total Liabilities           (15,511)          
Retained earnings (accumulated deficit)           2,624          
Equity, Attributable to Parent           2,624          
Liabilities and Equity           (12,887)          
Interest Income (Expense), Net [Abstract]                      
Interest Income, Operating           662          
Interest Income (Expense), Net           662          
Revenues, Net of Interest Expense           7,464          
Operating Expenses [Abstract]                      
General and administrative expenses           1,068          
Marketing and Advertising Expense                    
Research and Development Expense           2,155          
Restructuring, Settlement and Impairment Provisions                    
Costs and Expenses, Total           4,840          
Operating Income (Loss), Total           2,624          
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest           2,624          
Net income (loss)           2,624          
Comprehensive Income (Loss), Net of Tax, Attributable to Parent           $ 2,624          
Basic net income (loss) per share           $ 0.03          
Diluted net income (loss) per share           $ 0.03          
Corrections | Mortgage Platform                      
Revenues [Abstract]                      
Revenues           $ 6,802          
Operating Expenses [Abstract]                      
Expenses           1,617          
Corrections | Cash Offer Program                      
Operating Expenses [Abstract]                      
Expenses                    
Corrections | Other Platform                      
Operating Expenses [Abstract]                      
Expenses                    
Reclassifications                      
Operating Expenses [Abstract]                      
General and administrative expenses           (2,517)          
Marketing and Advertising Expense           (380)          
Research and Development Expense           (1,616)          
Restructuring, Settlement and Impairment Provisions           17,048          
Reclassifications | Mortgage Platform                      
Revenues [Abstract]                      
Revenues           0          
Operating Expenses [Abstract]                      
Expenses           (11,636)          
Reclassifications | Cash Offer Program                      
Revenues [Abstract]                      
Revenues           39,361          
Operating Expenses [Abstract]                      
Expenses           39,505          
Reclassifications | Other Platform                      
Revenues [Abstract]                      
Revenues           (39,361)          
Operating Expenses [Abstract]                      
Expenses           $ (40,404)          
v3.23.4
BETTER 10K - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2022
USD ($)
Jun. 30, 2022
USD ($)
Sep. 30, 2023
USD ($)
segment
Dec. 31, 2022
USD ($)
Segment
reportingUnit
Dec. 31, 2021
USD ($)
Dec. 31, 2023
USD ($)
Feb. 28, 2023
USD ($)
Jan. 01, 2021
USD ($)
Dec. 31, 2020
USD ($)
Line of Credit Facility [Line Items]                  
Cash, FDIC insured amount       $ 1,700 $ 3,300        
Restricted Cash $ 29,443   $ 27,806 $ 28,106 40,555 $ 27,806      
Number of reporting units | reportingUnit       1          
Loan Commitment, Asset       $ 16,119 121,723 0      
Net investment in sales-type lease       900 11,100        
Embedded Derivative, Fair Value of Embedded Derivative Asset       $ 236,603 0 0      
Number of reportable segments     1 1          
Operating Lease, Right-of-Use Asset       $ 41,979 56,970 23,550   $ 65,889 $ 0
Operating Lease, Liability       $ 60,049 73,657 $ 33,307 $ 13,000 $ 69,566 $ 0
Minimum                  
Line of Credit Facility [Line Items]                  
Lease term       1 year          
Minimum | Computer and Hardware                  
Line of Credit Facility [Line Items]                  
Property and equipment useful life     3 years            
Minimum | Furniture and equipment                  
Line of Credit Facility [Line Items]                  
Property and equipment useful life     4 years            
Maximum                  
Line of Credit Facility [Line Items]                  
Lease term       10 years          
Maximum | Computer and Hardware                  
Line of Credit Facility [Line Items]                  
Property and equipment useful life     5 years            
Maximum | Furniture and equipment                  
Line of Credit Facility [Line Items]                  
Property and equipment useful life     7 years            
Impairment of Loan Commitment Asset | Operational Restructuring Program                  
Line of Credit Facility [Line Items]                  
Asset Impairment Charges $ 38,300 $ 67,300   $ 105,600 $ 0        
Computer Software                  
Line of Credit Facility [Line Items]                  
Finite-Lived Intangible Asset, Useful Life     3 years 3 years 3 years        
Pre-Closing Bridge Notes                  
Line of Credit Facility [Line Items]                  
Discount on bridge notes         $ 291,900        
v3.23.4
BETTER 10K - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Adjustments For Change in Accounting Principle (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Feb. 28, 2023
Dec. 31, 2022
Sep. 30, 2022
Jun. 30, 2022
Dec. 31, 2021
Jan. 01, 2021
Dec. 31, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]                    
Accounts Receivable, after Allowance for Credit Loss                 $ 52,760 $ 46,845
Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization $ 17,806       $ 30,504     $ 40,959 27,454 20,718
Operating Lease, Right-of-Use Asset 23,550       41,979     56,970 65,889 0
Assets 937,055       1,086,522     3,299,717 146,103 67,563
Accounts Payable and Accrued Liabilities 103,435       88,983     133,256 134,729 123,849
Total other liabilities 40,278       59,933     76,158 44,690 47,588
Operating Lease, Liability 33,307     $ 13,000 60,049     73,657 69,566 0
Total Liabilities 779,823       1,260,342     2,623,277 248,985 171,437
Retained earnings (1,656,856)       (1,181,415)     (292,613) 8,515 7,522
Equity, Attributable to Parent $ 157,232 $ 157,232 $ (732,248)   $ (610,100) $ (355,088) $ (139,216) 240,160 8,515 49,326
Accumulated Deficit                    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]                    
Equity, Attributable to Parent   $ (1,656,856) $ (1,316,823)     $ (918,477) $ (691,865) $ (292,613)   7,522
Cumulative Effect, Period of Adoption, Adjustment                    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]                    
Accounts Receivable, after Allowance for Credit Loss                 5,915  
Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization                 6,736  
Operating Lease, Right-of-Use Asset                 65,889  
Assets                 78,540  
Accounts Payable and Accrued Liabilities                 10,880  
Total other liabilities                 (2,898)  
Operating Lease, Liability                 69,566  
Total Liabilities                 77,548  
Retained earnings                 993  
Equity, Attributable to Parent                 $ 993 993
Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit                    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]                    
Equity, Attributable to Parent                   $ 993
v3.23.4
BETTER 10K - REVENUE AND SALES-TYPE LEASES - Mortgage Platform Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Disaggregation of Revenue [Line Items]            
Gain (Loss) on Sales of Loans, Net $ 7,120 $ (10,125) $ 36,689 $ (59,105) $ (63,372) $ 937,611
Integrated Partnership Gain (Loss) 3,067 2,265 9,797 (8,526) (9,166) 84,135
Unrealized Gain (Loss) On Interest Rate and Forward Sale Commitments 4,019 18,947 8,441 174,217 178,196 66,477
Mortgage Platform            
Disaggregation of Revenue [Line Items]            
Revenues $ 14,207 $ 11,087 $ 54,927 $ 106,586 $ 105,658 $ 1,088,223
v3.23.4
BETTER 10K - REVENUE AND SALES-TYPE LEASES - Cash Offer Program Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Disaggregation of Revenue [Line Items]            
Revenue from Contract with Customer, Excluding Assessed Tax $ 0 $ 749 $ 0 $ 11,333 $ 12,313 $ 8,725
Sales-type Lease, Revenue 0 8,991 304 214,764 216,408 30,636
Cash Offer Program            
Disaggregation of Revenue [Line Items]            
Revenues $ 0 $ 9,739 $ 304 $ 226,096 $ 228,721 $ 39,361
v3.23.4
BETTER 10K - REVENUE AND SALES-TYPE LEASES - Other Platform Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Other Platform            
Disaggregation of Revenue [Line Items]            
Revenues $ 1,333 $ 5,688 $ 9,355 $ 35,623 $ 38,942 $ 94,388
Other Platform, Real Estate Services            
Disaggregation of Revenue [Line Items]            
Revenues 651 3,983 6,214 20,735 7,010 39,602
Other Platform, Title Insurance            
Disaggregation of Revenue [Line Items]            
Revenues 13 220 45 6,975 4,222 31,582
Other Platform, Settlement Services            
Disaggregation of Revenue [Line Items]            
Revenues 2 130 15 4,190 23,053 20,602
Other Platform, Other Homeownership Offerings            
Disaggregation of Revenue [Line Items]            
Revenues $ 668 $ 1,355 $ 3,082 $ 3,723 $ 4,657 $ 2,601
v3.23.4
BETTER 10K - REVENUE AND SALES-TYPE LEASES - Cash Offer Program Revenue and Expenses (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Revenue [Abstract]            
Sales-type Lease, Revenue $ 0 $ 8,991 $ 304 $ 214,764 $ 216,408 $ 30,636
Sales-type Lease, Initial Direct Cost Expense, Commencement $ 0 $ 8,944 $ 278 $ 215,972 $ 217,609 $ 30,780
v3.23.4
BETTER 10K - RESTRUCTURING AND IMPAIRMENTS - Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
Sep. 30, 2022
Jun. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Operational Restructuring Program | Impairment of Loan Commitment Asset        
Restructuring Cost and Reserve [Line Items]        
Asset Impairment Charges $ 38.3 $ 67.3 $ 105.6 $ 0.0
v3.23.4
BETTER 10K - RESTRUCTURING AND IMPAIRMENTS - Schedule of Restructuring and Impairment Expenses (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]            
Restructuring, Settlement and Impairment Provisions $ 679 $ 45,781 $ 11,798 $ 212,490 $ 247,693 $ 17,048
Impairment of Loan Commitment Asset            
Restructuring Cost and Reserve [Line Items]            
Restructuring, Settlement and Impairment Provisions 0 38,330 0 105,604 105,604 0
Employee one-time termination benefits            
Restructuring Cost and Reserve [Line Items]            
Restructuring, Settlement and Impairment Provisions 765 5,277 2,320 99,291 102,261 17,048
Impairments of Right-of-Use Assets—Real Estate            
Restructuring Cost and Reserve [Line Items]            
Restructuring, Settlement and Impairment Provisions         3,707 0
Impairments of Right-of-Use Assets—Equipment            
Restructuring Cost and Reserve [Line Items]            
Restructuring, Settlement and Impairment Provisions         2,494 0
Write-off of capitalized merger transaction costs            
Restructuring Cost and Reserve [Line Items]            
Restructuring, Settlement and Impairment Provisions         27,287 0
Impairments of intangible assets            
Restructuring Cost and Reserve [Line Items]            
Restructuring, Settlement and Impairment Provisions         1,964 0
Impairment of property and equipment            
Restructuring Cost and Reserve [Line Items]            
Restructuring, Settlement and Impairment Provisions $ 0 197 $ 4,844 3,124 4,042 0
Other impairments            
Restructuring Cost and Reserve [Line Items]            
Restructuring, Settlement and Impairment Provisions   $ 80   $ 80 $ 333 $ 0
v3.23.4
BETTER 10K - MORTGAGE LOANS HELD FOR SALE AND WAREHOUSE LINES OF CREDIT - Schedule of Outstanding Warehouse Lines of Credit (Details) - USD ($)
 9 Months Ended 12 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2023
Mar. 31, 2023
Short-Term Debt [Line Items]          
Maximum borrowing capacity $ 424,000,000 $ 1,500,000,000      
Warehouse Agreement Borrowings $ 73,536,000 144,049,000 $ 1,667,917,000 $ 73,536,000  
Warehouse Agreement Borrowings | Funding Facility 1          
Short-Term Debt [Line Items]          
Maximum borrowing capacity   500,000,000      
Warehouse Agreement Borrowings   89,673,000 286,804,000    
Cash collateral deposit   $ 10,000,000      
Warehouse Agreement Borrowings | Funding Facility 1 | Secured Overnight Financing Rate (SOFR) | Mortgage Loan Interest Scenario One          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent) 3.125% 3.125%      
Warehouse Agreement Borrowings | Funding Facility 1 | Secured Overnight Financing Rate (SOFR) | Mortgage Loan Interest Scenario Two          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent) 2.125% 2.125%      
Warehouse Agreement Borrowings | Funding Facility 1 | Note Rate | Mortgage Loan Interest Scenario One          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent) 1.50% 1.50%      
Warehouse Agreement Borrowings | Funding Facility 1 | Note Rate | Mortgage Loan Interest Scenario Two          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent) 1.125% 1.125%      
Warehouse Agreement Borrowings | Funding Facility 2          
Short-Term Debt [Line Items]          
Maximum borrowing capacity   $ 0      
Warehouse Agreement Borrowings   0 171,649,000    
Cash collateral deposit     $ 2,500,000    
Warehouse Agreement Borrowings | Funding Facility 2 | Secured Overnight Financing Rate (SOFR)          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent)     1.75%    
Warehouse Agreement Borrowings | Funding Facility 2 | London Inter-Bank Offered Rate (LIBOR)          
Short-Term Debt [Line Items]          
Floor rate (as a percent)     1.00%    
Warehouse Agreement Borrowings | Funding Facility 3          
Short-Term Debt [Line Items]          
Maximum borrowing capacity   0      
Warehouse Agreement Borrowings   0 $ 55,622,000    
Cash collateral deposit     $ 4,500,000    
Warehouse Agreement Borrowings | Funding Facility 3 | London Inter-Bank Offered Rate (LIBOR)          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent)     1.75%    
Floor rate (as a percent)     2.25%    
Warehouse Agreement Borrowings | Funding Facility 4          
Short-Term Debt [Line Items]          
Maximum borrowing capacity   500,000,000     $ 250,000,000
Warehouse Agreement Borrowings   $ 9,845,000 $ 409,616,000    
Warehouse Agreement Borrowings | Funding Facility 4 | Secured Overnight Financing Rate (SOFR)          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent)   1.77%      
Warehouse Agreement Borrowings | Funding Facility 5          
Short-Term Debt [Line Items]          
Maximum borrowing capacity   $ 0      
Warehouse Agreement Borrowings   0 $ 622,573,000    
Warehouse Agreement Borrowings | Funding Facility 5 | London Inter-Bank Offered Rate (LIBOR)          
Short-Term Debt [Line Items]          
Floor rate (as a percent)     0.50%    
Warehouse Agreement Borrowings | Funding Facility 5 | London Inter-Bank Offered Rate (LIBOR) | Minimum          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent)     1.76%    
Warehouse Agreement Borrowings | Funding Facility 5 | London Inter-Bank Offered Rate (LIBOR) | Maximum          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent)     2.25%    
Warehouse Agreement Borrowings | Funding Facility 6          
Short-Term Debt [Line Items]          
Maximum borrowing capacity   0      
Warehouse Agreement Borrowings   0 $ 4,184,000    
Cash collateral deposit     $ 4,500,000    
Warehouse Agreement Borrowings | Funding Facility 6 | Secured Overnight Financing Rate (SOFR) | Minimum          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent)     1.50%    
Warehouse Agreement Borrowings | Funding Facility 6 | Secured Overnight Financing Rate (SOFR) | Maximum          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent)     1.75%    
Warehouse Agreement Borrowings | Funding Facility 7          
Short-Term Debt [Line Items]          
Maximum borrowing capacity   0      
Warehouse Agreement Borrowings   0 $ 7,279,000    
Warehouse Agreement Borrowings | Funding Facility 7 | Secured Overnight Financing Rate (SOFR) | Minimum          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent)     1.75%    
Warehouse Agreement Borrowings | Funding Facility 7 | Secured Overnight Financing Rate (SOFR) | Maximum          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent)     2.25%    
Warehouse Agreement Borrowings | Funding Facility 7 | London Inter-Bank Offered Rate (LIBOR)          
Short-Term Debt [Line Items]          
Floor rate (as a percent)     0.38%    
Warehouse Agreement Borrowings | Funding Facility 8          
Short-Term Debt [Line Items]          
Maximum borrowing capacity   500,000,000     $ 250,000,000
Warehouse Agreement Borrowings   44,531,000 $ 94,181,000    
Cash collateral deposit   $ 5,000,000      
Warehouse Agreement Borrowings | Funding Facility 8 | Secured Overnight Financing Rate (SOFR) | Minimum          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent)   1.60%      
Warehouse Agreement Borrowings | Funding Facility 8 | Secured Overnight Financing Rate (SOFR) | Maximum          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent)   1.85%      
Warehouse Agreement Borrowings | Funding Facility 9          
Short-Term Debt [Line Items]          
Maximum borrowing capacity   $ 0      
Warehouse Agreement Borrowings   0 $ 1,433,000    
Warehouse Agreement Borrowings | Funding Facility 9 | London Inter-Bank Offered Rate (LIBOR)          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent)     1.60%    
Floor rate (as a percent)     0.50%    
Warehouse Agreement Borrowings | Funding Facility 10          
Short-Term Debt [Line Items]          
Maximum borrowing capacity   0      
Warehouse Agreement Borrowings   $ 0 $ 14,576,000    
Warehouse Agreement Borrowings | Funding Facility 10 | London Inter-Bank Offered Rate (LIBOR)          
Short-Term Debt [Line Items]          
Variable interest rate (as a percent)     1.88%    
Floor rate (as a percent)     0.25%    
v3.23.4
BETTER 10K - MORTGAGE LOANS HELD FOR SALE AND WAREHOUSE LINES OF CREDIT - Narrative (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Collateral Pledged            
Short-Term Debt [Line Items]            
Average days loans held for sale 21 days 21 days 14 days 17 days 18 days 20 days
Warehouse Agreement Borrowings            
Short-Term Debt [Line Items]            
Weighted average interest rate (as a percent)     6.92% 4.94% 6.00% 2.36%
Compensating balances $ 18.8   $ 18.8   $ 15.0 $ 29.0
v3.23.4
BETTER 10K - MORTGAGE LOANS HELD FOR SALE AND WAREHOUSE LINES OF CREDIT - Schedule of Loans Held For Sale (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross   $ 166,095 $ 303,091 $ 1,836,814
Loan, Mortgage, Held For Sale, Fair Value Adjustment   (6,070) (54,265) 17,621
Mortgage loans held for sale, at fair value $ 160,025 160,025 248,826 1,854,435
Collateral Pledged        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross   126,870 158,172 1,830,870
Collateral Pledged | Funding Facility 1        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross     101,598 309,003
Collateral Pledged | Funding Facility 2        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross     0 186,698
Collateral Pledged | Funding Facility 3        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross     0 67,106
Collateral Pledged | Funding Facility 4        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross     10,218 439,767
Collateral Pledged | Funding Facility 5        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross     0 681,521
Collateral Pledged | Funding Facility 6        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross     0 5,016
Collateral Pledged | Funding Facility 7        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross     0 9,828
Collateral Pledged | Funding Facility 8        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross     46,356 110,845
Collateral Pledged | Funding Facility 9        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross     0 4,420
Collateral Pledged | Funding Facility 10        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross     0 16,666
Uncollateralized | Company Fund Loans Held For Investment [Member]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross   19,890 136,599 5,944
Uncollateralized | Home Equity Line of Credit [Member]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Loan, Mortgage, Held For Sale, Gross   $ 19,335 $ 8,320 $ 0
v3.23.4
BETTER 10K - PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Jan. 01, 2021
Dec. 31, 2020
Property, Plant and Equipment [Line Items]          
Finance lease assets   $ 3,761 $ 3,761    
Total property and equipment   50,245 52,035    
Less: Accumulated depreciation   (19,741) (11,076)    
Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization, Total $ 17,806 30,504 40,959 $ 27,454 $ 20,718
Computer and Hardware          
Property, Plant and Equipment [Line Items]          
Total property and equipment, gross   18,688 23,850    
Furniture and equipment          
Property, Plant and Equipment [Line Items]          
Total property and equipment, gross   3,105 4,559    
Land and buildings          
Property, Plant and Equipment [Line Items]          
Total property and equipment, gross   3,030 0    
Leasehold improvements          
Property, Plant and Equipment [Line Items]          
Total property and equipment, gross   $ 21,661 $ 19,866    
v3.23.4
BETTER 10K - PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Property, Plant and Equipment [Line Items]    
Depreciation expense $ 13.7 $ 7.6
Computer and Hardware    
Property, Plant and Equipment [Line Items]    
Impairment of property and equipment $ 3.0 $ 0.0
v3.23.4
BETTER 10K - LEASES - Balance Sheet (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Feb. 28, 2023
Dec. 31, 2022
Dec. 31, 2021
Jan. 01, 2021
Dec. 31, 2020
Leases [Abstract]            
Operating Lease, Right-of-Use Asset $ 23,550   $ 41,979 $ 56,970 $ 65,889 $ 0
Finance lease right-of-use assets     2,162 2,683    
Lease, Right-of-Use Asset     $ 44,141 $ 59,653    
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]     Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization    
Operating Lease, Liability $ 33,307 $ 13,000 $ 60,049 $ 73,657 $ 69,566 $ 0
Total lease liabilities     1,062 2,184    
Lease, Liability     $ 61,111 $ 75,841    
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]     Total other liabilities Total other liabilities    
v3.23.4
BETTER 10K - LEASES - Operating Lease Cost (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Leases [Abstract]    
Operating lease cost $ 18,245 $ 16,539
Short-term lease cost 544 406
Variable lease cost 2,713 3,209
Total operating lease cost 21,502 20,154
Lessee, Lease, Description [Line Items]    
Total operating lease costs 21,502 20,154
Cost of revenue | Mortgage Platform    
Leases [Abstract]    
Total operating lease cost 14,450 13,363
Lessee, Lease, Description [Line Items]    
Total operating lease costs 14,450 13,363
Cost of revenue | Other Platform    
Leases [Abstract]    
Total operating lease cost 2,188 2,094
Lessee, Lease, Description [Line Items]    
Total operating lease costs 2,188 2,094
General and Administrative Expense    
Leases [Abstract]    
Total operating lease cost 1,900 2,485
Lessee, Lease, Description [Line Items]    
Total operating lease costs 1,900 2,485
Selling and Marketing Expense    
Leases [Abstract]    
Total operating lease cost 253 159
Lessee, Lease, Description [Line Items]    
Total operating lease costs 253 159
Technology and product development expenses    
Leases [Abstract]    
Total operating lease cost 2,711 2,053
Lessee, Lease, Description [Line Items]    
Total operating lease costs $ 2,711 $ 2,053
v3.23.4
BETTER 10K - LEASES - Finance Lease Cost (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Leases [Abstract]    
Depreciation and Amortization $ 520 $ 520
Interest Expense 273 439
Total $ 793 $ 959
v3.23.4
BETTER 10K - LEASES - Supplemental Cash Flow and Non-Cash Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Lessee, Lease, Description [Line Items]    
Cash paid for amounts included in measurement of operating lease liabilities $ 18,836 $ 15,177
Right-of-use assets obtained in exchange for lease liabilities: 4,520 15,834
Cumulative Effect, Period of Adoption, Adjustment    
Lessee, Lease, Description [Line Items]    
Right-of-use assets obtained in exchange for lease liabilities: $ 0 $ 65,889
v3.23.4
BETTER 10K - LEASES - Supplemental Balance Sheet Information (Details)
Dec. 31, 2022
Dec. 31, 2021
Operating leases    
Weighted average remaining lease term (in years) 6 years 7 months 6 days 6 years 1 month 6 days
Weighted average discount rate 5.40% 5.10%
Finance leases    
Weighted average remaining lease term (in years) 3 months 18 days 1 year 3 months 18 days
Weighted average discount rate 16.20% 16.20%
v3.23.4
BETTER 10K - LEASES - Schedule of Maturities of Operating and Finance Leases (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Feb. 28, 2023
Dec. 31, 2022
Dec. 31, 2021
Jan. 01, 2021
Dec. 31, 2020
Finance Leases            
2023     $ 1,101      
2024     0      
2025     0      
2026     0      
2027     0      
2028 and beyond     0      
Total lease payments     1,101      
Less amount representing interest     (39)      
Total lease liabilities     1,062 $ 2,184    
Operating Leases            
2023     16,772      
2024     13,979      
2025     11,680      
2026     9,073      
2027     5,460      
2028 and beyond     12,156      
Total lease payments     69,119      
Less amount representing interest     (9,070)      
Operating Lease, Liability $ 33,307 $ 13,000 60,049 $ 73,657 $ 69,566 $ 0
Total            
2023     17,872      
2024     13,979      
2025     11,680      
2026     9,073      
2027     5,460      
2028 and beyond     12,156      
Total lease payments     70,220      
Less amount representing interest     (9,109)      
Total lease liabilities     $ 61,111      
v3.23.4
BETTER 10K - LEASES - Sales Type Leases (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Leases [Abstract]            
Sales-type Lease, Revenue $ 0 $ 8,991 $ 304 $ 214,764 $ 216,408 $ 30,636
Sales-type Lease, Initial Direct Cost Expense, Commencement $ 0 $ 8,944 $ 278 $ 215,972 217,609 30,780
Gross Margin         $ (1,201) $ (163)
v3.23.4
BETTER 10K - LEASES - Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Leases [Abstract]    
Net investment in sales-type lease $ 0.9 $ 11.1
Future maturity of payments, period 180 days 180 days
v3.23.4
BETTER 10K - GOODWILL AND INTERNAL USE SOFTWARE AND OTHER INTANGIBLE ASSETS, NET - Narrative (Details)
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Apr. 01, 2023
USD ($)
Dec. 31, 2022
USD ($)
Jun. 30, 2022
USD ($)
Sep. 30, 2021
USD ($)
business
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Business Acquisition [Line Items]                    
Number of businesses acquired | business       2            
Restructuring, Settlement and Impairment Provisions         $ 679,000 $ 45,781,000 $ 11,798,000 $ 212,490,000 $ 247,693,000 $ 17,048,000
Goodwill impairment         0 0 0 0 0 0
Capitalized software         5,000,000 3,000,000 12,400,000 22,800,000 27,600,000 61,900,000
Capitalized stock-based compensation costs         2,500,000 800,000 3,874,000 2,967,000 4,051,000 8,972,000
Amortization of Intangible Assets         9,300,000 9,000,000 28,098,000 26,078,000 35,368,000 19,573,000
Impairment of intangibles         $ 0 $ 0 $ 0 $ 0 2,000,000 0
Trussle Lab Ltd                    
Business Acquisition [Line Items]                    
Cash paid for business acquisition       $ 1,400,000            
LHE Holdings Limited                    
Business Acquisition [Line Items]                    
Cash paid for business acquisition       6,200,000            
Total consideration transferred       $ 10,100,000            
Deferred consideration                   $ 3,900,000
U.K. Banking Entity                    
Business Acquisition [Line Items]                    
Total consideration transferred $ 15,200,000   $ 15,200,000              
Equity investment in banking entity                 $ 2,400,000  
Restructuring, Settlement and Impairment Provisions   $ 300,000                
v3.23.4
BETTER 10K - GOODWILL AND INTERNAL USE SOFTWARE AND OTHER INTANGIBLE ASSETS, NET - Schedule of Assets and Liabilities Acquired (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Dec. 31, 2020
Business Acquisition [Line Items]            
Goodwill $ 32,492 $ 32,492 $ 18,525 $ 19,811   $ 10,995
Trussle Lab Ltd            
Business Acquisition [Line Items]            
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents         $ 781  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles         3,943  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets         277  
Goodwill         3,317  
Other assets         2,088  
Accounts payable and accrued expenses         (5,512)  
Other liabilities         (3,510)  
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net, Total         1,384  
LHE Holdings Limited            
Business Acquisition [Line Items]            
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents         1,739  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles         2,601  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets         1,038  
Goodwill         4,420  
Other assets         1,478  
Accounts payable and accrued expenses         (1,172)  
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net, Total         $ 10,104  
v3.23.4
BETTER 10K - GOODWILL AND INTERNAL USE SOFTWARE AND OTHER INTANGIBLE ASSETS, NET - Schedule of Changes in Goodwill (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Goodwill [Roll Forward]      
Goodwill, Beginning Balance $ 18,525 $ 19,811 $ 10,995
Goodwill acquired 14,041 0 7,737
Measurement period adjustment   (375) 1,269
Goodwill, Foreign Currency Translation Gain (Loss) (74) (911) (190)
Goodwill, Ending Balance $ 32,492 $ 18,525 $ 19,811
v3.23.4
BETTER 10K - GOODWILL AND INTERNAL USE SOFTWARE AND OTHER INTANGIBLE ASSETS, NET - Schedule of Finite and Indefinite-Lived Intangibles (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]        
Finite-Lived Intangible Assets, Gross   $ 140,413 $ 127,184 $ 102,539
Finite-Lived Intangible Assets, Accumulated Amortization   (96,237) (68,157) (33,152)
Finite-Lived Intangible Assets, Net, Total   44,176 59,026 69,387
Indefinite-Lived Intangible Assets [Line Items]        
Total Internal use software and other intangible assets, net, gross carrying value   144,643 130,153 105,641
Intangible Assets, Net (Excluding Goodwill), Total $ 48,406 $ 48,406 61,996 72,489
Internet Domain Names        
Indefinite-Lived Intangible Assets [Line Items]        
Indefinite-Lived Intangible Assets (Excluding Goodwill)     1,820 1,820
Licenses and Other Intangibles        
Indefinite-Lived Intangible Assets [Line Items]        
Indefinite-Lived Intangible Assets (Excluding Goodwill)     $ 1,150 $ 1,282
Computer Software        
Finite-Lived Intangible Assets [Line Items]        
Finite-Lived Intangible Asset, Useful Life   3 years 3 years 3 years
Finite-Lived Intangible Assets, Gross   $ 136,092 $ 123,734 $ 96,155
Finite-Lived Intangible Assets, Accumulated Amortization   (94,835) (67,319) (32,832)
Finite-Lived Intangible Assets, Net, Total   $ 41,257 $ 56,415 $ 63,323
Intellectual Property And Other Intangibles        
Finite-Lived Intangible Assets [Line Items]        
Finite-Lived Intangible Asset, Useful Life   6 years 2 months 12 days 7 years 6 months 7 years 6 months
Finite-Lived Intangible Assets, Gross   $ 4,322 $ 3,449 $ 6,384
Finite-Lived Intangible Assets, Accumulated Amortization   (1,402) (838) (320)
Finite-Lived Intangible Assets, Net, Total   $ 2,920 $ 2,611 $ 6,064
v3.23.4
BETTER 10K - GOODWILL AND INTERNAL USE SOFTWARE AND OTHER INTANGIBLE ASSETS, NET - Schedule of Expected Amortization Expense (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]      
2023   $ 34,554  
2024   20,338  
2025   3,296  
2026   574  
2027 and thereafter   264  
Finite-Lived Intangible Assets, Net, Total $ 44,176 $ 59,026 $ 69,387
v3.23.4
BETTER 10K - PREPAID EXPENSES AND OTHER ASSETS - Schedule of Prepaid Expenses and Other Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]        
Other prepaid expenses     $ 26,366 $ 22,931
Net Investment in Lease, Nonaccrual   $ 0 944 11,058
Income Taxes Receivable   9,717 18,139 20,250
Prefunded loans in escrow     0 12,148
Reverse Recapitalization, Accrued Transaction Costs     0 14,263
Security Deposit   15,233 14,369 9,226
Prepaid Compensation Assets   0 5,615 0
Inventory, Net   0 1,139 1,122
Prepaid Expense and Other Assets $ 56,208 $ 56,208 $ 66,572 $ 90,998
v3.23.4
BETTER 10K - PREPAID EXPENSES AND OTHER ASSETS - Narrative (Details) - Prepaid Compensation Asset With CFO - Mr. Ryan, CFO
$ in Millions
Aug. 18, 2022
USD ($)
RELATED PARTY TRANSACTIONS  
Annual payments $ 6.0
Annual compounding interest rate (as a percent) 3.50%
v3.23.4
BETTER 10K - OTHER LIABILITIES - Schedule of Other Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Jun. 30, 2022
Dec. 31, 2021
Jan. 01, 2021
Dec. 31, 2020
Other Liabilities Disclosure [Abstract]                  
Deferred Revenue       $ 30,205     $ 50,010    
Loan repurchase reserve   $ 21,753 $ 21,832 26,745 $ 22,999 $ 21,070 17,540   $ 7,438
Other Liabilities       2,982     8,608    
Total other liabilities $ 40,278     $ 59,933     $ 76,158 $ 44,690 $ 47,588
v3.23.4
BETTER 10K - OTHER LIABILITIES - Narrative (Details) - USD ($)
$ in Millions
 1 Months Ended 4 Months Ended 5 Months Ended 6 Months Ended
Dec. 31, 2022
Apr. 30, 2023
Dec. 31, 2022
Oct. 31, 2023
Sep. 30, 2023
Aug. 01, 2022
Dec. 31, 2021
Other Liabilities [Line Items]              
Advance included in deferred revenue             $ 50.0
Repayment/revenue recognized   $ 15.0 $ 20.0        
Repayment of deferred revenue $ 12.9            
Deferred revenue $ 30.0   $ 30.0   $ 12.9 $ 50.0  
Forecast              
Other Liabilities [Line Items]              
Repayment/revenue recognized       $ 15.0      
v3.23.4
BETTER 10K - CORPORATE LINE OF CREDIT AND PRECLOSING BRIDGE NOTES - Corporate Line of Credit and Amended Corporate Line of Credit (Details) - USD ($)
$ in Thousands
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Nov. 30, 2021
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2023
Line of Credit Facility [Line Items]                
Maximum borrowing capacity   $ 424,000   $ 424,000   $ 1,500,000    
Outstanding borrowings           144,403 $ 149,022 $ 0
Amounts borrowed           0 80,000  
Principal repayments       146,449 $ 5,000 5,000 0  
Amortization of deferred debt issuance costs and discount and other debt servicing fees       6,043 213,534 273,048 19,592  
Line of Credit | Revolving Credit Facility                
Line of Credit Facility [Line Items]                
Maximum borrowing capacity $ 150,000              
Fixed interest rate 8.00%              
Interest rate - in kind 9.50%              
Unused commitment fee 0.50%              
Make-whole payable           5,200 17,200  
Outstanding borrowings   0   0   144,400 151,400  
Interest in kind included in principal balance           1,400 1,400  
Unamortized debt discount and debt issuance costs   0   0   2,000 2,400  
Amounts borrowed           0 80,000  
Principal repayments           5,000 0  
Interest expense on debt   11,300 $ 2,800 17,600 9,600 13,200 11,400  
Interest expense, line of credit   6,100 2,400 11,500 8,500 12,100 10,200  
Amortization of deferred debt issuance costs and discount and other debt servicing fees   $ 5,200 $ 300 $ 6,000 $ 800 $ 1,100 1,000  
Interest expense from unused commitment fee             $ 200  
v3.23.4
BETTER 10K - CORPORATE LINE OF CREDIT AND PRECLOSING BRIDGE NOTES - Pre-Closing Bridge Notes (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2023
Debt Instrument [Line Items]              
Bridge Loan         $ 750,000 $ 477,333 $ 0
Pre-Closing Bridge Notes              
Debt Instrument [Line Items]              
Interest expense on debt $ 0 $ 80,099 $ 0 $ 213,513 272,667 19,211  
Bridge Loan           750,000  
Pre-Closing Bridge Notes | Bridge Loan              
Debt Instrument [Line Items]              
Interest expense on debt $ 0 $ 80,100 $ 0 $ 213,500 $ 272,700 $ 19,200  
Conversion price (in dollars per share)           $ 10  
v3.23.4
BETTER 10K - CORPORATE LINE OF CREDIT AND PRECLOSING BRIDGE NOTES - Letter Agreements (Details) - Bridge Loan - Pre-Closing Bridge Notes - USD ($)
Feb. 07, 2023
Aug. 26, 2022
Short-Term Debt [Line Items]    
Amount to be exchanged for common stock   $ 75,000,000
Aggregate principal amount   $ 100,000,000
Exchange discount percentage   75.00%
Pre-money equity valuation $ 6,900,000,000 $ 6,900,000,000
Amount to be exchanged for preferred stock   25,000,000
Sponsor funding obligation   $ 550,000,000
Preferred Stock    
Short-Term Debt [Line Items]    
Exchange discount percentage 50.00%  
Common Stock    
Short-Term Debt [Line Items]    
Exchange discount percentage 75.00%  
v3.23.4
BETTER 10K - RELATED PARTY TRANSACTIONS (Details)
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Oct. 31, 2021
USD ($)
Nov. 30, 2020
USD ($)
Jul. 31, 2020
$ / shares
shares
Jan. 31, 2018
shares
Sep. 30, 2023
USD ($)
Mar. 31, 2023
USD ($)
Sep. 30, 2022
USD ($)
shares
Jun. 30, 2022
USD ($)
shares
Mar. 31, 2022
USD ($)
shares
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
Dec. 31, 2023
USD ($)
Jan. 31, 2022
USD ($)
Jan. 01, 2021
USD ($)
Dec. 31, 2020
USD ($)
RELATED PARTY TRANSACTIONS                                  
General and administrative expenses         $ 59,189,000   $ 46,499,000     $ 113,392,000 $ 161,293,000 $ 194,565,000 $ 231,220,000        
Total other liabilities                       59,933,000 76,158,000 $ 40,278,000   $ 44,690,000 $ 47,588,000
Other Receivables                       $ 16,285,000 54,162,000 10,449,000      
Options granted (in shares) | shares                       1,583,680          
Options granted, exercise price (in dollars per share) | $ / shares                       $ 13.63          
Marketing and Advertising Expense         5,128,000   9,948,000     17,122,000 59,801,000 $ 69,021,000 248,895,000        
Mortgage loans held for sale, at fair value         160,025,000         160,025,000   248,826,000 1,854,435,000 160,025,000      
Stockholders' Equity Note, Subscriptions Receivable         10,400,000         10,400,000   53,900,000 38,633,000 $ 10,404,000      
Interest Income, Operating         3,667,000   4,977,000     12,527,000 22,918,000 26,714,000 89,627,000        
Mortgage Platform                                  
RELATED PARTY TRANSACTIONS                                  
Expenses         19,166,000   55,545,000     70,809,000 292,915,000 327,815,000 700,113,000        
Related party                                  
RELATED PARTY TRANSACTIONS                                  
General and administrative expenses                       583,000 1,585,000        
Total other liabilities         460,000         460,000   440,000 411,000        
Other Receivables                       0 37,000        
Marketing and Advertising Expense                       55,000 575,000        
Mortgage loans held for sale, at fair value                       8,320,000 0        
Related party | Mortgage Platform                                  
RELATED PARTY TRANSACTIONS                                  
Expenses                       1,940,000 396,000        
Directors and Officers                                  
RELATED PARTY TRANSACTIONS                                  
Stockholders' Equity Note, Subscriptions Receivable                       43,600,000 33,900,000        
Interest Income, Operating         500,000   $ 100,000     300,000 300,000 700,000 300,000        
Director                                  
RELATED PARTY TRANSACTIONS                                  
Repurchase of common stock (in shares) | shares                 33,995                
Repurchase of common stock                 $ 254,154                
Director | Stock Repurchased Excluding Effects Of Exchange Ratio                                  
RELATED PARTY TRANSACTIONS                                  
Repurchase of common stock (in shares) | shares                 11,122                
General Counsel and Chief Compliance Officer                                  
RELATED PARTY TRANSACTIONS                                  
Repurchase of common stock (in shares) | shares             82,527 27,000                  
Repurchase of common stock             $ 399,600 $ 399,600                  
Chief Executive Officer                                  
RELATED PARTY TRANSACTIONS                                  
Stockholders' Equity Note, Subscriptions Receivable                       40,200,000 29,900,000        
Employee and Expense Allocation Agreement                                  
RELATED PARTY TRANSACTIONS                                  
Related party expenses         (27,000)   (187,300)     6,400 386,800 500,000 1,500,000        
Reduction of expenses         0   0     0 18,200 18,200 200,000        
Employee and Expense Allocation Agreement | Related party                                  
RELATED PARTY TRANSACTIONS                                  
General and administrative expenses                   6,400 368,600 400,000 1,300,000        
Total other liabilities         144,400         144,400   177,000          
Other Receivables                         6,100        
Technology Integration and License Agreement | Related party                                  
RELATED PARTY TRANSACTIONS                                  
Total other liabilities         204,300         204,300   232,000 0        
Technology Integration and License Agreement | Related party | Mortgage Platform                                  
RELATED PARTY TRANSACTIONS                                  
Expenses         66,900   617,700     438,000 1,123,000 1,400,000 100,000        
Consulting Agreement | Related party                                  
RELATED PARTY TRANSACTIONS                                  
General and administrative expenses         0   37,500     0 137,500 100,000 300,000        
Total other liabilities         0         0   $ 0 50,000        
Options granted (in shares) | shares     764,143 603,024                          
Vesting period       4 years                          
Fair value of company multiplier       2                          
Term of award     10 years                            
Options granted, exercise price (in dollars per share) | $ / shares     $ 5.14                            
Vesting percentage upon change in control     100.00%                            
Consulting Agreement | Related party | Holy Machine                                  
RELATED PARTY TRANSACTIONS                                  
Options granted (in shares) | shares     250,000                            
Term of award     10 years                            
Options granted, exercise price (in dollars per share) | $ / shares     $ 15.71                            
Vesting percentage upon change in control     100.00%                            
License Agreement | Related party                                  
RELATED PARTY TRANSACTIONS                                  
General and administrative expenses                         80,700        
Lease term   15 months                              
Annual fee   $ 127,000                              
License Agreement | Related party | Vishal Garg and Spouse | Embark                                  
RELATED PARTY TRANSACTIONS                                  
Ownership interest                       25.80%          
Private Label and Consumer Lending Program Agreement                                  
RELATED PARTY TRANSACTIONS                                  
Related party expenses                       $ 100,000 600,000        
Private Label and Consumer Lending Program Agreement | Related party                                  
RELATED PARTY TRANSACTIONS                                  
Total other liabilities         10,000         10,000   15,000 300,000        
Expenses             74,300       74,300            
Marketing and Advertising Expense             31,900       31,900 55,300 600,000        
Private Label and Consumer Lending Program Agreement | Related party | Mortgage Platform                                  
RELATED PARTY TRANSACTIONS                                  
Expenses         16,300   42,400     38,500 42,400 42,900 0        
Amount paid per loan $ 600         $ 600                      
Master Loan Purchase Agreement | Related party                                  
RELATED PARTY TRANSACTIONS                                  
Mortgage loans held for sale, at fair value         6,800,000         6,800,000   8,300,000          
Master Loan Purchase Agreement | Related party | Better Trust I                                  
RELATED PARTY TRANSACTIONS                                  
Master loan purchase agreement, amount                             $ 20,000,000    
Data Analytics Services Agreement | Related party                                  
RELATED PARTY TRANSACTIONS                                  
Total other liabilities         101,200         101,200   16,200 19,200        
Data Analytics Services Agreement | Related party | Mortgage Platform                                  
RELATED PARTY TRANSACTIONS                                  
Expenses         $ 8,600   $ 414,300     $ 7,400 $ 414,300 $ 500,000 $ 300,000        
v3.23.4
BETTER 10K - COMMITMENTS AND CONTINGENCIES (Details) - USD ($)
shares in Millions
 1 Months Ended 9 Months Ended 12 Months Ended
Nov. 01, 2021
Jul. 31, 2021
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2023
Sep. 30, 2022
Loss Contingencies [Line Items]              
Loss contingency, estimated liability     $ 9,300,000        
Restricted Cash     27,806,000 $ 28,106,000 $ 40,555,000 $ 27,806,000 $ 29,443,000
Escrow liability       8,000,000 11,600,000    
Deposits, excluded from balance sheet     0 300,000 2,000,000    
Silicon Valley Bank              
Loss Contingencies [Line Items]              
Cash       900,000      
Letter of credit       6,500,000      
Escrow deposits              
Loss Contingencies [Line Items]              
Restricted Cash     $ 3,200,000 $ 8,000,000 $ 11,600,000    
LHFS originated | Geographic Concentration Risk | Florida              
Loss Contingencies [Line Items]              
Concentration risk percentage     11.00% 10.00%      
LHFS originated | Geographic Concentration Risk | Texas              
Loss Contingencies [Line Items]              
Concentration risk percentage     12.00% 11.00%      
LHFS originated | Geographic Concentration Risk | California              
Loss Contingencies [Line Items]              
Concentration risk percentage       11.00% 15.00%    
One loan purchaser | Loans sold | Customer concentration risk              
Loss Contingencies [Line Items]              
Concentration risk percentage       65.00% 60.00%    
IRLs              
Loss Contingencies [Line Items]              
Notional amounts     $ 211,897,000 $ 225,372,000 $ 2,560,577,000    
Forward Contracts              
Loss Contingencies [Line Items]              
Notional amounts     294,000,000 422,000,000 2,818,700,000    
Employee related labor dispute              
Loss Contingencies [Line Items]              
Loss contingency, estimated liability     $ 8,400,000 8,400,000 5,900,000    
Investor legal matter              
Loss Contingencies [Line Items]              
Side letter provision, repurchase of common stock (in shares)   1.9          
Side letter provision, repurchase of common stock, price   $ 1          
Side letter provision, purchase right entitled to exercise, percent 50.00%            
Regulatory matters              
Loss Contingencies [Line Items]              
Loss contingency, estimated liability       11,900,000 13,200,000    
Reduction of liability       $ 1,300,000      
Litigation expense         $ 13,200,000    
v3.23.4
BETTER 10K - RISKS AND UNCERTAINTIES - Narrative (Details)
$ in Millions
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
USD ($)
loan
Sep. 30, 2022
USD ($)
loan
Sep. 30, 2023
USD ($)
loan
Sep. 30, 2022
USD ($)
loan
Dec. 31, 2022
USD ($)
loan
Dec. 31, 2021
USD ($)
loan
Risks and Uncertainties [Abstract]            
Unpaid principal balance of loans repurchased | $ $ 3.6 $ 37.9 $ 20.8 $ 97.0 $ 110.6 $ 29.1
Number of loans repurchased | loan 11 82 52 221 262 95
v3.23.4
BETTER 10K - RISKS AND UNCERTAINTIES - Loan Repurchase Reserve Activity (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Loan Repurchase Reserve [Roll Forward]            
Loan Repurchase Reserve $ 21,832 $ 21,070 $ 26,745 $ 17,540 $ 17,540 $ 7,438
Provision (Recovery) For Loan Repurchase Reserve 866 11,683 178 25,125 33,518 13,780
Loan Repurchase Reserve, Write Offs (945) (9,754) (5,170) (19,667) (24,313) (3,678)
Loan Repurchase Reserve $ 21,753 $ 22,999 $ 21,753 $ 22,999 $ 26,745 $ 17,540
v3.23.4
BETTER 10K - NET INCOME (LOSS) PER SHARE - Computation (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Earnings Per Share, Basic [Abstract]            
Net income (loss) $ (340,033) $ (226,612) $ (475,441) $ (625,864) $ (888,802) $ (301,128)
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic 0 0 0 0 0 0
Net Income (Loss) Available to Common Stockholders, Basic, Total (340,033) (226,612) (475,441) (625,864) (888,802) (301,128)
Earnings Per Share, Diluted [Abstract]            
Net Income (Loss) Available to Common Stockholders, Basic (340,033) (226,612) (475,441) (625,864) (888,802) (301,128)
Dilutive Securities, Effect on Basic Earnings Per Share 0 0 0 0 0 0
Participating Securities, Distributed and Undistributed Earnings (Loss), Diluted 0 0 0 0 0 0
Net Income (Loss) Available to Common Stockholders, Diluted, Total $ (340,033) $ (226,612) $ (475,441) $ (625,864) $ (888,802) $ (301,128)
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]            
Weighted average common shares outstanding (in shares) 496,577,751 292,660,334 364,817,445 289,934,149 95,303,684 86,984,646
Weighted Average Number of Shares Outstanding, Diluted, Adjustment [Abstract]            
Assumed exercise of stock options (in shares) 0 0 0 0 0 0
Assumed exercise of warrants (in shares) 0 0 0 0 0 0
Assumed conversion of convertible preferred stock (in shares) 0 0 0 0 0 0
Diluted weighted-average common shares outstanding (in shares) 496,577,751 292,660,334 364,817,445 289,934,149 95,303,684 86,984,646
Earnings Per Share, Basic and Diluted EPS [Abstract]            
Basic (in dollars per share) $ (0.68) $ (0.77) $ (1.30) $ (2.16) $ (9.33) $ (3.46)
Diluted (in dollars per share) $ (0.68) $ (0.77) $ (1.30) $ (2.16) $ (9.33) $ (3.46)
v3.23.4
BETTER 10K - NET INCOME (LOSS) PER SHARE - Antidilutive Securities (Details) - shares
shares in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]            
Total (in shares) 48,389 408,004 48,389 408,004 406,726 363,548
Convertible preferred stock            
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]            
Total (in shares) 0 108,721 0 108,721 108,721 108,721
Bridge Loan            
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]            
Total (in shares) 0 247,777 0 247,777 248,197 214,787
Options to purchase common stock            
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]            
Total (in shares) 48,389 44,857 48,389 44,857 43,159 34,217
Warrants | Warrants to purchase convertible preferred stock            
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]            
Total (in shares) 0 6,649 0 6,649 4,774 3,948
Warrants | Warrants to purchase common stock            
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]            
Total (in shares)         1,875 1,875
v3.23.4
BETTER 10K - FAIR VALUE MEASUREMENTS - Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
FAIR VALUE MEASUREMENTS        
Mortgage loans held for sale, at fair value $ 160,025 $ 160,025 $ 248,826 $ 1,854,435
Derivative Asset 3,717 3,717 3,048 9,296
Embedded Derivative, Fair Value of Embedded Derivative Asset 0   236,603 0
Assets, Fair Value Disclosure, Total   163,742 488,477 1,863,731
Derivative Liability 1,678 1,678 1,828 2,382
Convertible preferred stock warrants $ 0   3,096 31,997
Liabilities, Fair Value Disclosure, Total   3,205 4,924 34,379
Fair Value, Inputs, Level 1        
FAIR VALUE MEASUREMENTS        
Mortgage loans held for sale, at fair value   0 0 0
Derivative Asset   0 0  
Embedded Derivative, Fair Value of Embedded Derivative Asset     0 0
Assets, Fair Value Disclosure, Total   0 0 0
Derivative Liability   0 0 0
Convertible preferred stock warrants     0 0
Liabilities, Fair Value Disclosure, Total   577 0 0
Fair Value, Inputs, Level 2        
FAIR VALUE MEASUREMENTS        
Mortgage loans held for sale, at fair value   160,025 248,826 1,854,435
Derivative Asset   3,506 2,732 812
Embedded Derivative, Fair Value of Embedded Derivative Asset     0 0
Assets, Fair Value Disclosure, Total   163,531 251,558 1,855,247
Derivative Liability   0 0 1,466
Convertible preferred stock warrants     0 0
Liabilities, Fair Value Disclosure, Total   950 0 1,466
Fair Value, Inputs, Level 3        
FAIR VALUE MEASUREMENTS        
Mortgage loans held for sale, at fair value   0 0 0
Derivative Asset   211 316 8,484
Embedded Derivative, Fair Value of Embedded Derivative Asset     236,603 0
Assets, Fair Value Disclosure, Total   211 236,919 8,484
Derivative Liability   1,678 1,828 916
Convertible preferred stock warrants     3,096 31,997
Liabilities, Fair Value Disclosure, Total   $ 1,678 $ 4,924 $ 32,913
v3.23.4
BETTER 10K - FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
FAIR VALUE MEASUREMENTS            
Unrealized gain (loss) on derivatives     $ 819 $ (291) $ (5,695) $ (7,744)
IRLs            
FAIR VALUE MEASUREMENTS            
Issuances (purchases) of derivative instruments $ (100) $ (2,400) 600 (5,000) $ (4,300) $ 50,700
Derivative term         60 days 60 days
Gain (loss) on derivatives (900) (7,000) $ 100 (14,300) $ (9,100) $ (32,400)
Forward Contracts            
FAIR VALUE MEASUREMENTS            
Derivative term     60 days      
Gain (loss) on derivatives 5,000 26,200 $ 8,400 188,600 187,300 95,400
Unrealized gain (loss) on derivatives $ 800 $ 14,100 $ 1,500 $ 13,200 $ 3,400 $ 24,700
v3.23.4
BETTER 10K - FAIR VALUE MEASUREMENTS - Notional and Fair Value of Derivative Financial Instruments (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Dec. 31, 2021
Derivative [Line Items]          
Derivative Asset $ 3,717 $ 3,717 $ 3,048   $ 9,296
Derivative Liability $ 1,678 1,678 1,828   2,382
IRLs          
Derivative [Line Items]          
Derivative, Notional Amount   211,897 225,372   2,560,577
Derivative Asset   211 316   8,484
Derivative Liability   1,678 1,828   916
Forward Contracts          
Derivative [Line Items]          
Derivative, Notional Amount   294,000 422,000   2,818,700
Derivative Asset   3,506 2,732   812
Derivative Liability   $ 0 $ 0 $ 0 $ 1,466
v3.23.4
BETTER 10K - FAIR VALUE MEASUREMENTS - Change in Fair Value of Derivative Liabilities (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
IRLs            
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]            
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs, Beginning Balance $ (514) $ 197 $ (1,513) $ 7,568 $ 7,568 $ 39,972
Change in fair value (953) (6,976) 46 (14,347) (9,081) (32,404)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs, Ending Balance (1,467) (6,779) (1,467) (6,779) (1,513) 7,568
Bifurcated derivative            
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]            
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs, Beginning Balance 237,667 277,777 236,603 0 0 0
Change in fair value (237,667) 29,089 (236,603) 306,866 236,603 0
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs, Ending Balance $ 0 $ 306,866 $ 0 $ 306,866 $ 236,603 $ 0
v3.23.4
BETTER 10K - FAIR VALUE MEASUREMENTS - Change in Fair Value of Warrant Liabilities (Details) - Warrants - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]            
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Beginning Balance $ 2,830 $ 11,586 $ 3,096 $ 31,997 $ 31,997 $ 25,799
Issuances         0 0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Settlements (2,830) 0 (2,830) 0 0 (26,592)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings 0 (4,202) (266) (24,613) (28,901) 32,790
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance $ 0 $ 7,384 $ 0 $ 7,384 $ 3,096 $ 31,997
v3.23.4
BETTER 10K - FAIR VALUE MEASUREMENTS - Offsetting Derivatives (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Dec. 31, 2021
Offsetting Derivative Assets [Abstract]          
Derivative Asset, Total $ 3,717 $ 3,717 $ 3,048   $ 9,296
Offsetting Derivative Liabilities [Abstract]          
Derivative Liability $ (1,678) (1,678) (1,828)   (2,382)
Forward Contracts          
Offsetting Derivative Assets [Abstract]          
Derivative Asset, Subject to Master Netting Arrangement, before Offset   3,525 3,263   2,598
Derivative Asset, Subject to Master Netting Arrangement, Liability Offset   (19) (531)   (1,786)
Derivative Asset, Total   3,506 2,732   812
Offsetting Derivative Liabilities [Abstract]          
Gross Amount of Recognized Assets     0 $ 0 282
Gross Amount of Recognized Liabilities     0 0 (1,748)
Derivative Liability   $ 0 $ 0 $ 0 $ (1,466)
v3.23.4
BETTER 10K - FAIR VALUE MEASUREMENTS - Quantitative Information about Significant Unobservable Inputs (Details) - Fair Value, Inputs, Level 3
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2022
Year
Dec. 31, 2021
Year
Measurement Input, Risk Free Interest Rate        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, bifurcated derivatives   0.0469    
Measurement Input, Expected Term        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, bifurcated derivatives   0.75    
Minimum | Measurement Input, Pull Through Factor | IRLs        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, derivatives 0.1027 0.1466   0.0501
Minimum | Measurement Input, Risk Free Interest Rate        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, warrants   0.0394   0.0019
Minimum | Measurement Input, Price Volatility        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, warrants   0.404   0.328
Minimum | Measurement Input, Expected Term        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, warrants   4.24 4.24 0.5
Minimum | Fair value        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, bifurcated derivatives   10.63    
Measurement input, warrants   0.00   6.80
Maximum | Measurement Input, Pull Through Factor | IRLs        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, derivatives 0.9749 0.9657   0.9943
Maximum | Measurement Input, Risk Free Interest Rate        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, warrants   0.0404   0.0073
Maximum | Measurement Input, Price Volatility        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, warrants   1.238   1.203
Maximum | Measurement Input, Expected Term        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, warrants   5.74 5.74 2.0
Maximum | Fair value        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, bifurcated derivatives   19.05    
Measurement input, warrants   6.60   29.42
Weighted average | Measurement Input, Pull Through Factor | IRLs        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, derivatives 0.851 0.796   0.835
Weighted average | Measurement Input, Risk Free Interest Rate        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, bifurcated derivatives   0.0469    
Measurement input, warrants   0.0400   0.0027
Weighted average | Measurement Input, Price Volatility        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, warrants   0.650   0.650
Weighted average | Measurement Input, Expected Term        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, bifurcated derivatives   0.75    
Measurement input, warrants   4.8 4.8 0.7
Weighted average | Fair value        
Fair Value Measurement Inputs and Valuation Techniques [Line Items]        
Measurement input, bifurcated derivatives   9.77    
Measurement input, warrants   1.60   14.91
v3.23.4
BETTER 10K - FAIR VALUE MEASUREMENTS - Recurring and Non-Recurring (Details) - Fair Value, Inputs, Level 3 - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Reported Value Measurement      
FAIR VALUE MEASUREMENTS      
Loan Commitment Asset, Fair Value Disclosure $ 0 $ 16,119 $ 121,723
Estimate of Fair Value Measurement      
FAIR VALUE MEASUREMENTS      
Loan Commitment Asset, Fair Value Disclosure 0 54,654 121,723
Pre-Closing Bridge Notes | Reported Value Measurement | Bridge Loan      
FAIR VALUE MEASUREMENTS      
Debt instrument 0 750,000 477,333
Pre-Closing Bridge Notes | Estimate of Fair Value Measurement | Bridge Loan      
FAIR VALUE MEASUREMENTS      
Debt instrument 0 269,067 458,122
Line of Credit | Revolving Credit Facility | Reported Value Measurement      
FAIR VALUE MEASUREMENTS      
Debt instrument 0 144,403 149,022
Line of Credit | Revolving Credit Facility | Estimate of Fair Value Measurement      
FAIR VALUE MEASUREMENTS      
Debt instrument $ 0 $ 145,323 $ 161,417
v3.23.4
BETTER 10K - INCOME TAXES - Components of Income (Loss) Before Income Tax Expense (Benefit) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]            
U.S.         $ (863,807) $ (301,081)
Foreign         (23,895) (2,430)
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total $ (339,374) $ (226,664) $ (472,902) $ (624,414) $ (887,702) $ (303,511)
v3.23.4
BETTER 10K - INCOME TAXES - Components of Income Taxes (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Current Income Tax Expense (Benefit):            
Federal         $ (658) $ (6,145)
Foreign         1,815 2,888
State and local         (130) 1,118
Total Current Income Tax Expense (Benefit)         1,027 (2,139)
Deferred Income Tax Expense (Benefit):            
Federal         (140,025) (43,545)
Foreign         (7,287) (2,556)
State and local         (32,345) (15,613)
Valuation Allowance         179,730 61,470
Total Deferred Income Tax Expense (Benefit)         73 (244)
Income Tax Expense (Benefit) $ 659 $ (52) $ 2,539 $ 1,450 $ 1,100 $ (2,383)
v3.23.4
BETTER 10K - INCOME TAXES - Effective Tax Rate Reconciliation (Details)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]            
US federal statutory corporate tax rate         21.00% 21.00%
State and local tax         2.87% 4.74%
Stock-based compensation         (0.67%) (2.38%)
Fair value of warrants         6.30% (2.25%)
Others         0.03% (0.41%)
Foreign tax rate differential         0.10% 0.00%
R&D tax credit         0.13% 2.25%
Unrecognized tax benefits         0.07% (0.77%)
Interest - Pre-Closing Bridge Notes         (6.47%) (1.32%)
Restructuring costs         (3.15%) 0.00%
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent         (20.33%) (20.08%)
Effective Tax Rate (0.19%) 0.02% (0.53%) (0.23%) (0.12%) 0.78%
v3.23.4
BETTER 10K - INCOME TAXES - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]      
Valuation allowance on deferred tax assets, percent 100.00% 100.00%  
Operating Loss Carryforwards [Line Items]      
Gross increases - tax positions in current period $ 0 $ 3,440  
Gross decreases - tax positions in prior period 2,717 1,080  
Unrecognized tax benefits 1,353 4,070 $ 1,710
Interest and penalties on uncertain tax positions 0 0  
Change in uncertain tax positions in next 12 months 0    
Federal      
Operating Loss Carryforwards [Line Items]      
Net operating loss carryforwards 843,400 228,800  
State      
Operating Loss Carryforwards [Line Items]      
Net operating loss carryforwards 741,500 357,400  
Foreign      
Operating Loss Carryforwards [Line Items]      
Net operating loss carryforwards $ 96,200 $ 70,000  
v3.23.4
BETTER 10K - INCOME TAXES - Deferred Income Tax Assets and Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Deferred Income Tax Assets    
Net operating loss $ 244,081 $ 86,009
Non-qualified stock options 3,624 4,341
Reserves 5,092 4,866
Loan repurchase reserve 12,991 4,656
Restructuring reserve 757 0
Accruals 112 3,447
Deferred revenue 7,688 5,311
Other 3,908 3,326
Total Deferred Income Tax Assets 278,253 111,956
Deferred Income Tax Liabilities    
Internal use software (3,167) (14,128)
Intangible assets (547) (1,259)
Depreciation (1,775) (3,193)
Other 0 (251)
Total Deferred Income Tax Liabilities (5,489) (18,831)
Net Deferred Tax Asset before Valuation Allowance 272,764 93,125
Less: Valuation Allowance (272,477) (92,766)
Deferred Income Tax Assets, Net $ 287 $ 359
v3.23.4
BETTER 10K - INCOME TAXES - Gross Unrecognized Tax Benefits (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]    
Unrecognized tax benefits - January 1 $ 4,070 $ 1,710
Gross increases - tax positions in prior period 0 0
Gross decreases - tax positions in prior period (2,717) (1,080)
Gross increases - tax positions in current period 0 3,440
Settlement 0 0
Lapse of statute of limitations 0 0
Unrecognized tax benefits - December 31 $ 1,353 $ 4,070
v3.23.4
BETTER 10K - CONVERTIBLE PREFERRED STOCK - Convertible Preferred Stock (Details) - shares
Sep. 30, 2023
Jun. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Jun. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Temporary Equity [Line Items]              
Shares Authorized (in shares) 0   602,405,839        
Shares Issued (in shares)     332,314,737        
Shares Outstanding (in shares) 0 332,314,737 332,314,737 332,314,737 332,314,737 108,721,433 107,634,678
Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     197,085,530     197,085,530  
Shares Issued (in shares)     108,721,433     108,721,433  
Shares Outstanding (in shares)     108,721,433     108,721,433  
Series D Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     26,178,574        
Shares Issued (in shares)     23,786,379        
Shares Outstanding (in shares)     23,786,379        
Series D Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     8,564,688     8,564,688  
Shares Issued (in shares)     7,782,048     7,782,048  
Shares Outstanding (in shares)     7,782,048     7,782,048  
Series D-1 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     26,178,574        
Shares Issued (in shares)     0        
Shares Outstanding (in shares)     0        
Series D-1 Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     8,564,688     8,564,688  
Shares Issued (in shares)     0     0  
Shares Outstanding (in shares)     0     0  
Series D-2 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     21,305,758        
Shares Issued (in shares)     20,390,896        
Shares Outstanding (in shares)     20,390,896        
Series D-2 Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     6,970,478     6,970,478  
Shares Issued (in shares)     6,671,168     6,671,168  
Shares Outstanding (in shares)     6,671,168     6,671,168  
Series D-3 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     914,862        
Shares Issued (in shares)     914,862        
Shares Outstanding (in shares)     914,862        
Series D-3 Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     299,310     299,310  
Shares Issued (in shares)     299,310     299,310  
Shares Outstanding (in shares)     299,310     299,310  
Series D-4 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     1,062,009        
Shares Issued (in shares)     1,062,009        
Shares Outstanding (in shares)     1,062,009        
Series D-4 Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     347,451     347,451  
Shares Issued (in shares)     347,451     347,451  
Shares Outstanding (in shares)     347,451     347,451  
Series D-5 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     1,062,009        
Shares Issued (in shares)     0        
Shares Outstanding (in shares)     0        
Series D-5 Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     347,451     347,451  
Shares Issued (in shares)     0     0  
Shares Outstanding (in shares)     0     0  
Series C Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     132,946,826        
Shares Issued (in shares)     100,138,544        
Shares Outstanding (in shares)     100,138,544        
Series C Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     43,495,421     43,495,421  
Shares Issued (in shares)     32,761,731     32,761,731  
Shares Outstanding (in shares)     32,761,731     32,761,731  
Series C-1 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     132,946,826        
Shares Issued (in shares)     8,939,693        
Shares Outstanding (in shares)     8,939,693        
Series C-1 Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     43,495,421     43,495,421  
Shares Issued (in shares)     2,924,746     2,924,746  
Shares Outstanding (in shares)     2,924,746     2,924,746  
Series C-2 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     18,624,354        
Shares Issued (in shares)     14,018,524        
Shares Outstanding (in shares)     14,018,524        
Series C-2 Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     6,093,219     6,093,219  
Shares Issued (in shares)     4,586,357     4,586,357  
Shares Outstanding (in shares)     4,586,357     4,586,357  
Series C-3 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     19,741,818        
Shares Issued (in shares)     8,367,368        
Shares Outstanding (in shares)     8,367,368        
Series C-3 Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     6,458,813     6,458,813  
Shares Issued (in shares)     2,737,502     2,737,502  
Shares Outstanding (in shares)     2,737,502     2,737,502  
Series C-4 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     2,171,064        
Shares Issued (in shares)     2,171,064        
Shares Outstanding (in shares)     2,171,064        
Series C-4 Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     710,294     710,294  
Shares Issued (in shares)     710,294     710,294  
Shares Outstanding (in shares)     710,294     710,294  
Series C-5 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     18,624,354        
Shares Issued (in shares)     4,605,830        
Shares Outstanding (in shares)     4,605,830        
Series C-5 Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     6,093,219     6,093,219  
Shares Issued (in shares)     1,506,862     1,506,862  
Shares Outstanding (in shares)     1,506,862     1,506,862  
Series C-6 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     19,741,818        
Shares Issued (in shares)     11,374,450        
Shares Outstanding (in shares)     11,374,450        
Series C-6 Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     6,458,813     6,458,813  
Shares Issued (in shares)     3,721,311     3,721,311  
Shares Outstanding (in shares)     3,721,311     3,721,311  
Series C-7 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     9,833,660        
Shares Issued (in shares)     4,469,846        
Shares Outstanding (in shares)     4,469,846        
Series C-7 Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     3,217,220     3,217,220  
Shares Issued (in shares)     1,462,373     1,462,373  
Shares Outstanding (in shares)     1,462,373     1,462,373  
Series B Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     39,753,024        
Shares Issued (in shares)     28,583,364        
Shares Outstanding (in shares)     28,583,364        
Series B Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     13,005,760     13,005,760  
Shares Issued (in shares)     9,351,449     9,351,449  
Shares Outstanding (in shares)     9,351,449     9,351,449  
Series B-1 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     12,531,940        
Shares Issued (in shares)     11,169,660        
Shares Outstanding (in shares)     11,169,660        
Series B-1 Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     4,100,000     4,100,000  
Shares Issued (in shares)     3,654,311     3,654,311  
Shares Outstanding (in shares)     3,654,311     3,654,311  
Series A Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     93,850,533        
Shares Issued (in shares)     69,267,349        
Shares Outstanding (in shares)     69,267,349        
Series A Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     30,704,520     30,704,520  
Shares Issued (in shares)     22,661,786     22,661,786  
Shares Outstanding (in shares)     22,661,786     22,661,786  
Series A-1 Preferred Stock              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     24,937,838        
Shares Issued (in shares)     23,054,899        
Shares Outstanding (in shares)     23,054,899        
Series A-1 Preferred Stock | Preferred Stock, Convertible              
Temporary Equity [Line Items]              
Shares Authorized (in shares)     8,158,764     8,158,764  
Shares Issued (in shares)     7,542,734     7,542,734  
Shares Outstanding (in shares)     7,542,734     7,542,734  
v3.23.4
BETTER 10K - CONVERTIBLE PREFERRED STOCK - Narrative (Details)
$ / shares in Units, shares in Millions
 2 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
May 31, 2021
USD ($)
$ / shares
shares
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
$ / shares
Dec. 31, 2021
USD ($)
Dec. 31, 2023
USD ($)
Class of Warrant or Right [Line Items]                
Preferred stock conversion price multiplier, period one           1.25    
Preferred stock conversion price multiplier, period two           1.5    
Capital contribution receivable, percent of return on investment 25.00%              
Convertible preferred stock warrants | $           $ 3,096,000 $ 31,997,000 $ 0
Loss (gain) on warrants | $   $ (861,000) $ 0 $ (861,000) $ 0 (28,901,000) 32,790,000  
Preferred Stock Warrants                
Class of Warrant or Right [Line Items]                
Warrants exercised (in shares) | shares 1.4              
Stock issued upon exercise of warrants (in shares) | shares 1.1              
Convertible preferred stock warrants | $           3,100,000 32,000,000  
Loss (gain) on warrants | $   $ 0 $ 4,200,000 $ 300,000 $ 24,600,000 $ (28,900,000) $ 32,800,000  
Preferred Stock Warrant, Tranche One                
Class of Warrant or Right [Line Items]                
Number of shares of common stock to be issued (in shares) | shares 1.2              
Exercise price of warrants (in dollars per share) $ 3.42              
Preferred Stock Warrant, Tranche Two                
Class of Warrant or Right [Line Items]                
Number of shares of common stock to be issued (in shares) | shares 0.8              
Exercise price of warrants (in dollars per share) $ 1.81              
Preferred Stock Warrant, Tranche Three                
Class of Warrant or Right [Line Items]                
Number of shares of common stock to be issued (in shares) | shares 1.5              
Exercise price of warrants (in dollars per share) $ 3.42              
Series A Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           $ 1.00    
Series A-1 Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           1.00    
Series B Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           2.00    
Series B-1 Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           2.00    
Series C Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           3.42    
Series C-1 Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           3.42    
Series C-7 Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           3.42    
Series C-2 Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           2.46    
Series C-5 Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           2.46    
Series C-3 Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           2.74    
Series C-6 Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           2.74    
Series C-4 Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           2.39    
Series D Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           16.93    
Series D-1 Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           16.93    
Series D-2 Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           8.72    
Series D-4 Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           14.39    
Series D-5 Preferred Stock                
Class of Warrant or Right [Line Items]                
Preferred stock conversion price (in dollars per share)           $ 14.39    
Company Investors                
Class of Warrant or Right [Line Items]                
Consideration | $ $ 496,900,000              
Sale of stock, price (in dollars per share) $ 24.47              
Company Investors | Series A Preferred Stock                
Class of Warrant or Right [Line Items]                
Stock issued (in shares) | shares 0.6              
Company Investors | Series A-1 Preferred Stock                
Class of Warrant or Right [Line Items]                
Stock issued (in shares) | shares 7.5              
Company Investors | Series B Preferred Stock                
Class of Warrant or Right [Line Items]                
Stock issued (in shares) | shares 0.4              
Company Investors | Series B-1 Preferred Stock                
Class of Warrant or Right [Line Items]                
Stock issued (in shares) | shares 2.0              
Company Investors | Series C Preferred Stock                
Class of Warrant or Right [Line Items]                
Stock issued (in shares) | shares 1.1              
Company Investors | Series C-1 Preferred Stock                
Class of Warrant or Right [Line Items]                
Stock issued (in shares) | shares 1.8              
Company Investors | Series C-2 Preferred Stock                
Class of Warrant or Right [Line Items]                
Stock issued (in shares) | shares 0.7              
Company Investors | Class B ordinary shares                
Class of Warrant or Right [Line Items]                
Stock issued (in shares) | shares 5.6              
Company Investors | Common Class O                
Class of Warrant or Right [Line Items]                
Stock issued (in shares) | shares 0.5              
v3.23.4
BETTER 10K - CONVERTIBLE PREFERRED STOCK - Convertible Preferred Stock Warrants (Details) - USD ($)
$ / shares in Units, $ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Mar. 31, 2020
Apr. 30, 2019
Mar. 31, 2019
Feb. 28, 2019
Sep. 30, 2018
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   7,598,424            
Warrants and Rights Outstanding $ 0 $ 3,096 $ 31,997          
Preferred Stock Warrants                
Class of Warrant or Right [Line Items]                
Warrants and Rights Outstanding   $ 3,100 $ 32,000          
Preferred Stock Warrants | Period Prior To Reverse Recapitalization                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   2,485,931 2,485,931          
Preferred Stock Warrants Issued September 2018                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   2,312,296            
Strike (in dollars per share)   $ 0.59            
Warrants and Rights Outstanding   $ 1,256 $ 10,364         $ 170
Preferred Stock Warrants Issued September 2018 | Period Prior To Reverse Recapitalization                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   756,500 756,500          
Strike (in dollars per share)   $ 1.81 $ 1.81          
Warrants and Rights Outstanding               $ 170
Preferred Stock Warrants Issued February 2019                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   153,807            
Strike (in dollars per share)   $ 0.59            
Warrants and Rights Outstanding   $ 84 $ 689       $ 12  
Preferred Stock Warrants Issued February 2019 | Period Prior To Reverse Recapitalization                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   50,320 50,320          
Strike (in dollars per share)   $ 1.81 $ 1.81          
Warrants and Rights Outstanding             $ 12  
Preferred Stock Warrants Issued March 2019                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   1,146,214            
Strike (in dollars per share)   $ 1.12            
Warrants and Rights Outstanding   $ 397 $ 4,703     $ 87    
Preferred Stock Warrants Issued March 2019 | Period Prior To Reverse Recapitalization                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   375,000 375,000          
Strike (in dollars per share)   $ 3.42 $ 3.42          
Warrants and Rights Outstanding           $ 87    
Preferred Stock Warrants Issued April 2019                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   3,575,879            
Strike (in dollars per share)   $ 1.12            
Warrants and Rights Outstanding   $ 1,240 $ 14,671   $ 313      
Preferred Stock Warrants Issued April 2019 | Period Prior To Reverse Recapitalization                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   1,169,899 1,169,899          
Strike (in dollars per share)   $ 3.42 $ 3.42          
Warrants and Rights Outstanding         $ 313      
Preferred Stock Warrants Issued March 2020                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   410,228            
Strike (in dollars per share)   $ 1.64            
Warrants and Rights Outstanding   $ 119 $ 1,570 $ 201        
Preferred Stock Warrants Issued March 2020 | Period Prior To Reverse Recapitalization                
Class of Warrant or Right [Line Items]                
Warrants outstanding (in shares)   134,212 134,212          
Strike (in dollars per share)   $ 5.00 $ 5.00          
Warrants and Rights Outstanding       $ 201        
v3.23.4
BETTER 10K - CONVERTIBLE PREFERRED STOCK - Fair Value Assumptions (Details)
$ in Thousands
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2022
Dec. 31, 2022
$ / shares
Dec. 31, 2021
USD ($)
$ / shares
Mar. 31, 2020
USD ($)
Apr. 30, 2019
USD ($)
Mar. 31, 2019
USD ($)
Feb. 28, 2019
USD ($)
Sep. 30, 2018
USD ($)
Class of Warrant or Right [Line Items]                    
Convertible preferred stock warrants $ 0 $ 3,096     $ 31,997          
Preferred Stock Warrants Issued September 2018                    
Class of Warrant or Right [Line Items]                    
Convertible preferred stock warrants   1,256     $ 10,364         $ 170
Preferred Stock Warrants Issued September 2018 | Stock price                    
Class of Warrant or Right [Line Items]                    
Measurement input, warrants     0.54 1.66 13.70          
Preferred Stock Warrants Issued February 2019                    
Class of Warrant or Right [Line Items]                    
Convertible preferred stock warrants   84     $ 689       $ 12  
Preferred Stock Warrants Issued February 2019 | Stock price                    
Class of Warrant or Right [Line Items]                    
Measurement input, warrants     0.54 1.66 13.70          
Preferred Stock Warrants Issued March 2019                    
Class of Warrant or Right [Line Items]                    
Convertible preferred stock warrants   397     $ 4,703     $ 87    
Preferred Stock Warrants Issued March 2019 | Stock price                    
Class of Warrant or Right [Line Items]                    
Measurement input, warrants     0.35 1.06 12.54          
Preferred Stock Warrants Issued April 2019                    
Class of Warrant or Right [Line Items]                    
Convertible preferred stock warrants   1,240     $ 14,671   $ 313      
Preferred Stock Warrants Issued April 2019 | Stock price                    
Class of Warrant or Right [Line Items]                    
Measurement input, warrants     0.35 1.06 12.54          
Preferred Stock Warrants Issued March 2020                    
Class of Warrant or Right [Line Items]                    
Convertible preferred stock warrants   $ 119     $ 1,570 $ 201        
Preferred Stock Warrants Issued March 2020 | Stock price                    
Class of Warrant or Right [Line Items]                    
Measurement input, warrants     0.29 0.89 11.70          
v3.23.4
BETTER 10K - STOCKHOLDERS' EQUITY - Classes of Common Stock (Details) - $ / shares
Sep. 30, 2023
Aug. 24, 2023
Dec. 31, 2022
Dec. 31, 2021
SHAREHOLDERS' EQUITY        
Shares Authorized (in shares) 3,300,000,000   1,086,027,188  
Shares Issued (in shares) 737,585,438   299,783,421  
Shares Outstanding (in shares) 737,585,438   299,783,421  
Par Value (in dollars per share)     $ 10  
Period Prior To Reverse Recapitalization        
SHAREHOLDERS' EQUITY        
Shares Authorized (in shares)     355,309,046 355,309,046
Shares Issued (in shares)     98,078,356 99,067,159
Shares Outstanding (in shares)     98,078,356 99,067,159
Par Value (in dollars per share)     $ 10 $ 10
Common Class A        
SHAREHOLDERS' EQUITY        
Shares Authorized (in shares) 1,800,000,000   24,452,565  
Shares Issued (in shares)   91,300,735 24,452,565  
Shares Outstanding (in shares)     24,452,565  
Par Value (in dollars per share)     $ 1  
Common Class A | Period Prior To Reverse Recapitalization        
SHAREHOLDERS' EQUITY        
Shares Authorized (in shares)     8,000,000 8,000,000
Shares Issued (in shares)     8,000,000 8,000,000
Shares Outstanding (in shares)     8,000,000 8,000,000
Par Value (in dollars per share)     $ 1 $ 1
Common Class B        
SHAREHOLDERS' EQUITY        
Shares Authorized (in shares) 700,000,000   588,261,164  
Shares Issued (in shares)   574,407,420 171,441,780  
Shares Outstanding (in shares)     171,441,780  
Par Value (in dollars per share)     $ 5  
Common Class B | Period Prior To Reverse Recapitalization        
SHAREHOLDERS' EQUITY        
Shares Authorized (in shares)     192,457,901 192,457,901
Shares Issued (in shares)     56,089,586 56,089,586
Shares Outstanding (in shares)     56,089,586 56,089,586
Par Value (in dollars per share)     $ 5 $ 5
Common Class B-1        
SHAREHOLDERS' EQUITY        
Shares Authorized (in shares)     236,938,220  
Shares Issued (in shares)     0  
Shares Outstanding (in shares)     0  
Par Value (in dollars per share)     $ 0  
Common Class B-1 | Period Prior To Reverse Recapitalization        
SHAREHOLDERS' EQUITY        
Shares Authorized (in shares)     77,517,666 77,517,666
Shares Issued (in shares)     0 0
Shares Outstanding (in shares)     0 0
Par Value (in dollars per share)     $ 0 $ 0
Common Class O        
SHAREHOLDERS' EQUITY        
Shares Authorized (in shares)     236,375,239  
Shares Issued (in shares)     103,889,076  
Shares Outstanding (in shares)     103,889,076  
Par Value (in dollars per share)     $ 4  
Common Class O | Period Prior To Reverse Recapitalization        
SHAREHOLDERS' EQUITY        
Shares Authorized (in shares)     77,333,479 77,333,479
Shares Issued (in shares)     33,988,770 34,977,573
Shares Outstanding (in shares)     33,988,770 34,977,573
Par Value (in dollars per share)     $ 4 $ 4
v3.23.4
BETTER 10K - STOCKHOLDERS' EQUITY - Common Stock Warrants (Details) - USD ($)
$ / shares in Units, $ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Mar. 31, 2020
Mar. 31, 2019
Class of Warrant or Right [Line Items]          
Warrants outstanding (in shares)   7,598,424      
Warrants and Rights Outstanding $ 0 $ 3,096 $ 31,997    
Common Stock Warrants          
Class of Warrant or Right [Line Items]          
Warrants outstanding (in shares)   5,731,070      
Common Stock Warrants | Period Prior To Reverse Recapitalization          
Class of Warrant or Right [Line Items]          
Warrants outstanding (in shares)   1,875,000 1,875,000    
Common Stock Warrants Issued March 2019          
Class of Warrant or Right [Line Items]          
Warrants outstanding (in shares)   1,146,214      
Strike (in dollars per share)   $ 0.23      
Warrants and Rights Outstanding         $ 179
Common Stock Warrants Issued March 2019 | Period Prior To Reverse Recapitalization          
Class of Warrant or Right [Line Items]          
Warrants outstanding (in shares)   375,000 375,000    
Strike (in dollars per share)   $ 0.71 $ 0.71    
Warrants and Rights Outstanding         $ 179
Common Stock Warrants Issued March 2020          
Class of Warrant or Right [Line Items]          
Warrants outstanding (in shares)   4,584,856      
Strike (in dollars per share)   $ 1.12      
Warrants and Rights Outstanding       $ 271  
Common Stock Warrants Issued March 2020 | Period Prior To Reverse Recapitalization          
Class of Warrant or Right [Line Items]          
Warrants outstanding (in shares)   1,500,000 1,500,000    
Strike (in dollars per share)   $ 3.42 $ 3.42    
Warrants and Rights Outstanding       $ 271  
v3.23.4
BETTER 10K - STOCKHOLDERS' EQUITY - Narrative (Details)
$ in Thousands
Dec. 31, 2023
USD ($)
Sep. 30, 2023
USD ($)
Dec. 31, 2022
USD ($)
vote
Dec. 31, 2021
USD ($)
Equity [Abstract]        
Outstanding promissory notes     $ 65,200 $ 67,800
Ordinary shares, votes per share | vote     1  
Stockholders' Equity Note, Subscriptions Receivable $ 10,404 $ 10,400 $ 53,900 38,633
Notes receivable from stockholders, stock options not yet vested     $ 11,300 $ 29,200
v3.23.4
BETTER 10K - STOCK-BASED COMPENSATION - Narrative (Details) - USD ($)
$ / shares in Units, $ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
May 31, 2017
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Cumulative stock options granted (in shares)     1,859,781
Stock authorized for grant (in shares)     31,871,248
Cost not yet recognized, stock options $ 19.4    
Intrinsic value of stock options exercised $ 8.6 $ 157.9  
Weighted average grant-date fair value of stock options granted (in dollars per share) $ 8.37 $ 10.20  
Grant date fair value of stock options vested $ 26.7 $ 40.0  
Stock options exercised, not vested, restricted, liability $ 1.7 $ 6.1  
Stock options, exercised, not vested, restricted (in shares) 1,944,049 3,872,691  
Stock options      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Term of award 10 years    
Vesting period 4 years    
Cost not yet recognized, period for recognition 2 years 2 months 26 days    
RSUs      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Vesting period 4 years    
Cost not yet recognized, period for recognition 2 years 8 months 19 days    
Cost not yet recognized, other awards $ 33.5    
v3.23.4
BETTER 10K - STOCK-BASED COMPENSATION - Stock Option Activity (Details)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2022
USD ($)
$ / shares
shares
Number of Options  
Outstanding, beginning balance (in shares) | shares 26,635,326
Options granted (in shares) | shares 1,583,680
Options exercised (in shares) | shares (998,529)
Options cancelled (forfeited) (in shares) | shares (8,322,168)
Options cancelled (expired) (in shares) | shares (4,469,530)
Outstanding, ending balance (in shares) | shares 14,428,779
Vested and exercisable (in shares) | shares 7,399,689
Options expected to vest (in shares) | shares 2,711,958
Options vested and expected to vest (in shares) | shares 10,111,647
Weighted Average Exercise Price  
Outstanding, beginning balance (in dollars per share) | $ / shares $ 8.23
Options granted (in dollars per share) | $ / shares 13.63
Options exercised (in dollars per share) | $ / shares 1.76
Options cancelled (forfeited) (in dollars per share) | $ / shares 11.12
Options cancelled (expired) (in dollars per share) | $ / shares 5.99
Outstanding, ending balance (in dollars per share) | $ / shares 8.47
Vested and exercisable (in dollars per share) | $ / shares 9.90
Options expected to vest (in dollars per share) | $ / shares 5.20
Options vested and expected to vest (in dollars per share) | $ / shares $ 8.60
Outstanding, intrinsic value | $ $ 6,701
Vested and exercisable, intrinsic value | $ 6,021
Options expected to vest, intrinsic value | $ 874
Options vested and expected to vest, intrinsic value | $ $ 6,895
Outstanding, weighted average remaining term 7 years
Vested and exercisable, weighted average remaining term 6 years 3 months 18 days
Options expected to vest, weighted average remaining term 8 years 4 months 24 days
Options vested and expected to vest, weighted average remaining term 6 years 10 months 24 days
v3.23.4
BETTER 10K - STOCK-BASED COMPENSATION - Fair Value Assumptions (Details) - $ / shares
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Minimum | Common Class O    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Fair value of Common O Stock (in dollars per share) $ 3.41 $ 10.66
Maximum | Common Class O    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Fair value of Common O Stock (in dollars per share) 14.8 26.46
Weighted average | Common Class O    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Fair value of Common O Stock (in dollars per share) $ 4.43 $ 15.46
Stock options | Minimum    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Expected volatility 72.58% 63.42%
Expected term (years) 5 years 5 years
Risk-free interest rate 1.96% 0.43%
Stock options | Maximum    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Expected volatility 76.74% 73.69%
Expected term (years) 6 years 7 days 6 years 3 months 18 days
Risk-free interest rate 4.22% 1.19%
Stock options | Weighted average    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Expected volatility 76.40% 65.80%
Expected term (years) 6 years 6 years
Risk-free interest rate 3.75% 0.73%
v3.23.4
BETTER 10K - STOCK-BASED COMPENSATION - RSU Activity (Details)
 12 Months Ended
Dec. 31, 2022
$ / shares
shares
Number of Shares  
Unvested, beginning balance (in shares) | shares 7,754,620
RSUs granted (in shares) | shares 8,520,321
RSUs settled (in shares) | shares (4,464)
RSUs vested (in shares) | shares (835,714)
RSUs cancelled (expired) (in shares) | shares (8,234,474)
RSUs cancelled (forfeited) (in shares) | shares (331,068)
Unvested, ending balance (in shares) | shares 6,869,221
Weighted Average Grant Date Fair Value  
Unvested, beginning balance (in dollars per share) | $ / shares $ 25.35
RSUs granted (in dollars per share) | $ / shares 8.69
RSUs settled (in dollars per share) | $ / shares 26.46
RSUs vested (in dollars per share) | $ / shares 0.01
RSUs cancelled (expired) (in dollars per share) | $ / shares 21.62
RSUs cancelled (forfeited) (in dollars per share) | $ / shares 26.46
Unvested, ending balance (in dollars per share) | $ / shares $ 12.19
v3.23.4
BETTER 10K - STOCK-BASED COMPENSATION - Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]            
Share-Based Payment Arrangement, Expense $ 25,044 $ 10,973 $ 37,398 $ 31,021 $ 38,557 $ 55,215
Capitalized stock-based compensation costs 2,500 800 3,874 2,967 4,051 8,972
Cost of revenue | Mortgage Platform            
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]            
Share-Based Payment Arrangement, Expense 4,176 1,491 5,905 4,941 5,256 13,671
Cost of revenue | Other Platform            
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]            
Share-Based Payment Arrangement, Expense 1,493 426 1,837 675 908 1,654
General and Administrative Expense            
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]            
Share-Based Payment Arrangement, Expense 16,828 6,862 25,123 20,479 26,681 27,559
Selling and Marketing Expense            
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]            
Share-Based Payment Arrangement, Expense 146 369 216 709 486 1,159
Technology and product development expenses            
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]            
Share-Based Payment Arrangement, Expense $ 2,401 $ 1,825 $ 4,317 $ 4,217 $ 5,226 $ 11,172
v3.23.4
BETTER 10K - REGULATORY REQUIREMENTS (Details)
$ in Millions
Dec. 31, 2022
USD ($)
Mortgage Banking [Abstract]  
Minimum net worth $ 1.0
Minimum liquidity $ 0.2
Minimum capital ratio 6.00%
v3.23.4
BETTER 10K - SUBSEQUENT EVENTS (Details) - USD ($)
$ in Thousands
 1 Months Ended 9 Months Ended 12 Months Ended
Apr. 01, 2023
Feb. 28, 2023
Jun. 30, 2022
Oct. 11, 2023
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2023
Nov. 30, 2021
Jan. 01, 2021
Dec. 31, 2020
Subsequent Event [Line Items]                        
Principal repayments         $ 146,449 $ 5,000 $ 5,000 $ 0        
Long-Term Line of Credit             144,403 149,022 $ 0      
Operating Lease, Liability   $ 13,000         60,049 73,657 $ 33,307   $ 69,566 $ 0
Fees to reassign lease   $ 4,700                    
U.K. Banking Entity                        
Subsequent Event [Line Items]                        
Total consideration transferred $ 15,200   $ 15,200                  
Revolving Credit Facility | Line of Credit                        
Subsequent Event [Line Items]                        
Principal repayments             5,000 0        
Long-Term Line of Credit         $ 0   $ 144,400 $ 151,400        
Fixed interest rate                   8.00%    
Term         45 days              
Revolving Credit Facility | Line of Credit | Subsequent event                        
Subsequent Event [Line Items]                        
Principal repayments       $ 20,000                
Long-Term Line of Credit       126,400                
Revolving Credit Facility | 2023 Credit Facility, Tranche C | Line of Credit                        
Subsequent Event [Line Items]                        
Long-Term Line of Credit         $ 26,900              
Monthly payment if commitments to raise equity or debt obtained         5,000              
Commitments to raise equity or debt, period one         250,000              
Commitments to raise equity or debt, period two         200,000              
Monthly payment if commitments to raise equity or debt not obtained         $ 12,500              
Revolving Credit Facility | 2023 Credit Facility, Tranche C | Line of Credit | Subsequent event                        
Subsequent Event [Line Items]                        
Long-Term Line of Credit       26,500                
Revolving Credit Facility | 2023 Credit Facility, Tranche C | Line of Credit | Secured Overnight Financing Rate (SOFR)                        
Subsequent Event [Line Items]                        
Variable interest rate (as a percent)         9.50%              
Revolving Credit Facility | 2023 Credit Facility, Tranche AB | Line of Credit                        
Subsequent Event [Line Items]                        
Long-Term Line of Credit         $ 96,700              
Fixed interest rate         8.50%              
Revolving Credit Facility | 2023 Credit Facility, Tranche AB | Line of Credit | Subsequent event                        
Subsequent Event [Line Items]                        
Long-Term Line of Credit       $ 99,900                
v3.23.4
AURORA 10Q - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details)
 3 Months Ended 6 Months Ended 9 Months Ended 12 Months Ended
Jun. 21, 2023
USD ($)
Jun. 11, 2023
USD ($)
Apr. 24, 2023
shares
Feb. 24, 2023
USD ($)
$ / shares
shares
Feb. 08, 2023
USD ($)
Feb. 06, 2023
USD ($)
Aug. 03, 2021
USD ($)
$ / shares
shares
Mar. 10, 2021
USD ($)
$ / shares
shares
Mar. 08, 2021
USD ($)
$ / shares
shares
Oct. 07, 2020
item
Oct. 07, 2020
business
Jun. 30, 2023
USD ($)
shares
Jun. 30, 2022
USD ($)
Jun. 30, 2023
USD ($)
$ / shares
shares
Jun. 30, 2022
USD ($)
Sep. 30, 2023
USD ($)
$ / shares
shares
Dec. 31, 2022
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
shares
Dec. 31, 2023
USD ($)
Sep. 01, 2023
USD ($)
Aug. 24, 2023
shares
Jun. 23, 2023
shares
Jun. 22, 2023
shares
Jun. 01, 2023
USD ($)
Sep. 30, 2022
USD ($)
Aug. 26, 2022
USD ($)
Aug. 03, 2022
USD ($)
Feb. 23, 2022
USD ($)
May 10, 2021
USD ($)
Dec. 09, 2020
USD ($)
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Ordinary shares issued | shares                               737,585,438 299,783,421                          
Ordinary shares outstanding | shares                               737,585,438 299,783,421                          
Operating bank account                               $ 526,765,000 $ 317,959,000 $ 938,319,000 $ 526,765,000           $ 398,037,000          
Maximum borrowing capacity                               424,000,000 1,500,000,000                          
Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Condition for future business combination number of businesses minimum                   1 1                                      
Sale of units (in shares) | shares                                   24,300,287                        
Gross proceeds                 $ 255,000,000                                          
Proceeds from sale of Private Placement Warrants                                 0 $ 6,860,057                        
Transaction Costs                 13,946,641                                          
Underwriting fees                 4,860,057                                          
Deferred underwriting fee payable               $ 22,542,813 8,505,100               0 8,505,100                        
Other offering costs                 581,484                                          
Interest income                               2,156,230 4,262,222                          
Aggregate proceeds held in the Trust Account                               $ 21,317,257 $ 282,284,619                          
Condition for future business combination use of proceeds percentage                           80.00%     80.00%                          
Condition for future business combination threshold Percentage Ownership                           50.00%     50.00%                          
Redemption of shares calculated based on business days prior to consummation of business combination (in days)                           2 days     2 days                          
Minimum net tangible assets upon consummation of business combination                       $ 5,000,001   $ 5,000,001     $ 5,000,001                          
Redemption limit percentage without prior consent                           20.00%     20.00%                          
Obligation to redeem Public Shares if entity does not complete a Business Combination (as a percent)                           100.00%     100.00%                          
Months to complete acquisition                           24 months     24 months                          
Redemption period upon closure                           10 days     10 days                          
Reimbursement of first payment for transaction expenses not yet received                       1,250,000   $ 1,250,000                                
First payment of transaction expenses receivable                       1,250,000   1,250,000                                
Repayment amount         $ 2,400,000                                                  
Amount outstanding         412,395             412,395   $ 412,395                                
Surrender and cancellation of Founder Shares       $ 263,123,592                           0                        
Surrender and cancellation of Founder Shares (in dollars per share) | $ / shares                           $ 10.2178                                
Minimum number of shares required for listing | shares     500,000                                                      
Number of consecutive trading days prior to the continued listing considered for market value requirement 30 days                                                          
Compliance period to regain market value standard from the date of notice 180 days                                                          
Market value requirement for minimum number of consecutive business days as per notice 10 days                                                          
Number of Consecutive Trading Days Prior to the Continued Listing Considered for Market Value Requirement 30 days                                                          
Minimum Market Value Requirement for Continued Listing $ 35,000,000                                                          
Operating bank account                       1,228,847   $ 1,228,847     $ 285,307 $ 37,645                        
Working capital deficit                       17,712,429   17,712,429     $ 14,605,202                          
Agreed reduction in vendor and legal advisor fees   $ 560,000                                                        
Vendor and legal advisor fees   350,000                                                        
Payment to legal advisor fees   2,000,000                                                        
Legal advisor fees outstanding   910,000                                                        
Gain on extinguishment of debt   $ 560,000                   $ 560,368 $ 0 $ 560,368 $ 0                              
Subsequent event | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Repayment amount         2,400,000                                                  
Amount outstanding         412,395                                                  
Surrender and cancellation of Founder Shares       $ 263,123,592                                                    
Class A ordinary share                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Ordinary shares issued | shares                                 24,452,565       91,300,735                  
Ordinary shares outstanding | shares                                 24,452,565                          
Class B ordinary shares                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Ordinary shares issued | shares                                 171,441,780       574,407,420                  
Ordinary shares outstanding | shares                                 171,441,780                          
Class B ordinary shares | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Ordinary shares issued | shares                       6,950,072   6,950,072     6,950,072 6,950,072                        
Ordinary shares outstanding | shares                       6,950,072   6,950,072     6,950,072 6,950,072                        
Series D Preferred Stock | Subsequent event | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Percent of discount                       50.00%   50.00%   50.00%     50.00%                      
Public Shares | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Maximum allowed dissolution expenses                           $ 100,000     $ 100,000                          
Merger Agreement | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Aggregate principal amount                                                       $ 12,000,000    
Merger Agreement | Subsequent event | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Proceeds from transaction expenses reimbursed           $ 3,750,000                                                
Amendment No. 6 to the Merger Agreement | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Authority to issue number of shares by the combined company | shares                                           3,400,000,000 3,250,000,000              
Amendment No. 6 to the Merger Agreement | Class A ordinary share | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Authority to issue number of shares by the combined company | shares                                           1,800,000,000 1,750,000,000              
Amendment No. 6 to the Merger Agreement | Class B ordinary shares | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Authority to issue number of shares by the combined company | shares                                           700,000,000 600,000,000              
Better HoldCo, Inc | Subsequent event | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Percent of discount                       50.00%   50.00%                                
Better HoldCo, Inc | Class A ordinary share | Subsequent event | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Amount of pre-money equity valuation                       $ 6,900,000,000   $ 6,900,000,000                                
Better HoldCo, Inc | Class B ordinary shares | Subsequent event | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Percent of discount                       75.00%   75.00%                                
Amount of pre-money equity valuation                       $ 6,900,000,000   $ 6,900,000,000                                
Better HoldCo, Inc | Merger Agreement | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Maximum transaction expenses to be reimbursed                                 15,000,000             $ 2,500,000            
Reimbursement of first payment for transaction expenses not yet received                       1,250,000   1,250,000                                
First payment of transaction expenses receivable                       1,250,000   1,250,000                                
Proceeds from transaction expenses reimbursed                           3,750,000     7,500,000                          
Better HoldCo, Inc | Merger Agreement | Subsequent event | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Maximum transaction expenses to be reimbursed                                       $ 2,500,000                    
Proceeds from transaction expenses reimbursed           $ 3,750,000                                                
Public shareholders | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Surrender and cancellation of Founder Shares (in shares) | shares       24,087,689                                                    
Public shareholders | Subsequent event | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Surrender and cancellation of Founder Shares (in shares) | shares       24,087,689                                                    
Novator Capital Ltd. | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Surrender and cancellation of Founder Shares (in shares) | shares       1,663,760                                                    
Novator Capital Ltd. | Subsequent event | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Surrender and cancellation of Founder Shares (in shares) | shares       1,663,760                                                    
Sponsor | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Aggregate principal amount                       $ 15,000,000   $ 15,000,000     4,000,000                          
Sponsor | Sponsor | Class A ordinary share | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Ordinary shares issued | shares                       2,048,838   2,048,838                                
Sponsor | Novator Capital Ltd. | Class A ordinary share | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Ordinary shares outstanding | shares                       2,048,838   2,048,838                                
Promissory Note With Related Party | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Repayment amount         $ 2,400,000                                                  
Aggregate principal amount                                                       4,000,000 $ 2,000,000 $ 300,000
Aggregate cap of notes to cover operating costs                       $ 12,000,000   $ 12,000,000     12,000,000                   $ 12,000,000 $ 4,000,000    
Maximum borrowing capacity                                                   $ 4,000,000        
Promissory Note With Related Party | Better HoldCo, Inc | Merger Agreement | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Proceeds from transaction expenses reimbursed                           $ 11,250,000                                
Private Placement Warrants | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Purchase price, in dollars per unit | $ / shares               $ 1.50                                            
Proceeds from sale of Private Placement Warrants                 $ 6,400,000                                          
Private Placement Warrants | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Sale of units (in shares) | shares                 3,500,000                                          
Purchase price, in dollars per unit | $ / shares                 $ 10.00                                          
Gross proceeds                 $ 35,000,000             $ 35,000,000 $ 35,000,000                          
Sale of Private Placement Units (in shares) | shares                               3,500,000 3,500,000                          
Price of warrant | $ / shares                               $ 10.00 $ 10.00                          
Private Placement Warrants | Sponsor and certain of Company's directors and officers | Class A ordinary share | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Price of warrant | $ / shares             $ 11.50                                              
Initial Public Offering | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Sale of units (in shares) | shares               24,300,287 22,000,000                                          
Purchase price, in dollars per unit | $ / shares                 $ 10.00                                          
Gross proceeds                 $ 220,000,000                                          
Underwriting fees                                 $ 4,860,057                          
Other offering costs                 $ 581,484                                          
Private Placement | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Sale of Private Placement Units (in shares) | shares                                   3,500,000                        
Surrender and cancellation of Founder Shares       $ 263,123,592                                                    
Surrender and cancellation of Founder Shares (in dollars per share) | $ / shares       $ 10.2178                                                    
Private Placement | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Sale of units (in shares) | shares                 3,500,000                                          
Purchase price, in dollars per unit | $ / shares                 $ 10.00                                          
Gross proceeds                 $ 35,000,000                                          
Private Placement | Public shareholders | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Surrender and cancellation of Founder Shares (in shares) | shares       24,087,689                                                    
Private Placement | Novator Capital Ltd. | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Surrender and cancellation of Founder Shares (in shares) | shares       1,663,760                                                    
Private Placement | Private Placement Warrants | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Purchase price, in dollars per unit | $ / shares                 $ 1.50                                          
Sale of Private Placement Units (in shares) | shares             4,266,667   4,266,667                                          
Proceeds from sale of Private Placement Warrants             $ 6,400,000   $ 6,400,000                                          
Price of warrant | $ / shares             $ 1.50   $ 1.50                                          
Private Placement | Private Placement Warrants | Sponsor | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Proceeds from sale of Private Placement Warrants                 $ 6,400,000                                          
Over-allotment Option | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Sale of units (in shares) | shares               2,300,287 3,300,000               3,300,000                          
Purchase price, in dollars per unit | $ / shares               $ 10.00 $ 10.00                                          
Gross proceeds               $ 23,002,870 $ 23,002,870                                          
Net Proceeds               $ 22,542,813                                            
Over-allotment Option | Private Placement Warrants | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Sale of Private Placement Units (in shares) | shares               306,705                                            
Proceeds from sale of Private Placement Warrants               $ 460,057                                            
Over-allotment Option | Private Placement Warrants | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                                                            
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                                            
Sale of Private Placement Units (in shares) | shares             440,000 306,705 440,000                                          
Proceeds from sale of Private Placement Warrants             $ 660,000 $ 460,057 $ 660,000                                          
v3.23.4
AURORA 10Q - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)
 3 Months Ended 6 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Jun. 30, 2023
Sep. 30, 2022
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Aug. 22, 2023
Jun. 22, 2022
Dec. 31, 2020
Summary of Significant Accounting Policies [Line Items]                          
Warrants outstanding (in shares)                 7,598,424        
Unrecognized tax benefits                 $ 1,353,000 $ 4,070,000     $ 1,710,000
Shares excluded from calculation of diluted loss per share 48,389,000   408,004,000       48,389,000 408,004,000 406,726,000 363,548,000      
Aurora Acquisition Corp                          
Summary of Significant Accounting Policies [Line Items]                          
Cash equivalents $ 0           $ 0   $ 0 $ 0      
Deferred underwriting fee waived                 8,505,100     $ 8,505,100  
Unrecognized tax benefits $ 0           $ 0   0 0      
Unrecognized tax benefits accrued for interest and penalties   $ 0     $ 0       $ 0 0      
Shares excluded from calculation of diluted loss per share         11,523,421       11,523,444        
Gain on deferred underwriting fee   $ 0   $ 182,658 $ 0 $ 182,658     $ 182,658 $ 0      
Aurora Acquisition Corp | Public Warrants                          
Summary of Significant Accounting Policies [Line Items]                          
Warrants outstanding (in shares)   6,075,049     6,075,049       6,075,050   6,075,047    
Aurora Acquisition Corp | Private Placement Warrants                          
Summary of Significant Accounting Policies [Line Items]                          
Warrants outstanding (in shares)   5,448,372     5,448,372                
v3.23.4
AURORA 10Q - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Class A Ordinary Share (Details) - USD ($)
 3 Months Ended 6 Months Ended 12 Months Ended
Feb. 23, 2023
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Temporary Equity [Line Items]              
Beginning balance     $ 436,280,000 $ 436,280,000 $ 436,280,000 $ 436,280,000 $ 409,688,000
Ending balance   $ 436,280,000   436,280,000 436,280,000 436,280,000 436,280,000
Aurora Acquisition Corp              
Temporary Equity [Line Items]              
Reclass of permanent equity to temporary equity     16,999,995 16,999,995 287,884 3,625,617 0
Interest adjustment to redemption value     1,676,767        
Class A ordinary shares subject to possible redemption | Aurora Acquisition Corp              
Temporary Equity [Line Items]              
Beginning balance   2,181,658 246,628,487 246,628,487 $ 243,002,870 243,002,870  
Reclass of permanent equity to temporary equity $ 166 19,954 16,999,995       12,681,484
Interest adjustment to redemption value     1,676,767        
Ending balance   $ 2,201,612 2,181,658 $ 2,201,612   $ 246,628,487 $ 243,002,870
Class A ordinary shares subject to possible redemption | Aurora Acquisition Corp | Public              
Temporary Equity [Line Items]              
Shares redeemed by public and sponsor     (246,123,596)        
Class A ordinary shares subject to possible redemption | Aurora Acquisition Corp | Sponsor              
Temporary Equity [Line Items]              
Shares redeemed by public and sponsor     $ (16,999,995)        
v3.23.4
AURORA 10Q - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Calculation of basic and diluted net earnings (loss) per common share (Details) - USD ($)
 3 Months Ended 6 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Jun. 30, 2023
Jun. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption                        
Net income (loss) $ (340,033,000)     $ (226,612,000)         $ (475,441,000) $ (625,864,000) $ (888,802,000) $ (301,128,000)
Net Income (Loss) Available to Common Stockholders, Basic, Total $ (340,033,000)     $ (226,612,000)         $ (475,441,000) $ (625,864,000) $ (888,802,000) $ (301,128,000)
Denominator: Weighted average Class A Common Stock subject to possible redemption                        
Basic weighted average shares outstanding 496,577,751     292,660,334         364,817,445 289,934,149 95,303,684 86,984,646
Diluted weighted average shares outstanding 496,577,751     292,660,334         364,817,445 289,934,149 95,303,684 86,984,646
Basic net income (loss) per share $ (0.68)     $ (0.77)         $ (1.30) $ (2.16) $ (9.33) $ (3.46)
Diluted net income (loss) per share $ (0.68)     $ (0.77)         $ (1.30) $ (2.16) $ (9.33) $ (3.46)
Aurora Acquisition Corp                        
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption                        
Net income (loss)   $ (831,131) $ (127,955)   $ 1,785,906 $ 1,010,040 $ (959,086) $ 2,795,946     $ 8,735,542 $ (6,527,175)
Class A Common Stock subject to possible redemption | Aurora Acquisition Corp                        
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption                        
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption   (19,635)     1,248,851   (429,904) 1,955,153     6,108,604 (4,399,283)
Less: Net earnings (losses) attributable to Class A ordinary shares subject to possible redemption   $ (19,635)     $ 1,248,851   $ (429,904) $ 1,955,153        
Net Income (Loss) Available to Common Stockholders, Basic, Total                     $ 6,108,604 $ (4,399,283)
Denominator: Weighted average Class A Common Stock subject to possible redemption                        
Basic weighted average shares outstanding   212,598     24,300,287   7,541,254 24,300,287     24,300,287 19,827,082
Diluted weighted average shares outstanding   212,598     24,300,287   7,541,254 24,300,287     24,300,287 19,827,082
Basic net income (loss) per share   $ (0.09)     $ 0.05   $ (0.06) $ 0.08     $ 0.25 $ (0.22)
Diluted net income (loss) per share   $ (0.09)     $ 0.05   $ (0.06) $ 0.08     $ 0.25 $ (0.22)
Non-Redeemable Class A and Class B Common Stock | Aurora Acquisition Corp                        
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption                        
Net income (loss)   $ (811,496)     $ 537,055   $ (529,182) $ 840,793     $ 2,626,938 $ (2,127,892)
Less: Net earnings (losses) attributable to Class A ordinary shares subject to possible redemption                     0 0
Net Income (Loss) Available to Common Stockholders, Basic, Total   $ (811,496)     $ 537,055   $ (529,182) $ 840,793     $ 2,626,938 $ (2,127,892)
Denominator: Weighted average Class A Common Stock subject to possible redemption                        
Basic weighted average shares outstanding   8,786,312     10,450,072   9,282,724 10,450,072     10,450,072 9,590,182
Diluted weighted average shares outstanding   8,786,312     10,450,072   9,282,724 10,450,072     10,450,072 9,590,182
Basic net income (loss) per share   $ (0.09)     $ 0.05   $ (0.06) $ 0.08     $ 0.25 $ (0.22)
Diluted net income (loss) per share   $ (0.09)     $ 0.05   $ (0.06) $ 0.08     $ 0.25 $ (0.22)
v3.23.4
AURORA 10Q - PRIVATE PLACEMENTS (Details) - USD ($)
 6 Months Ended 12 Months Ended
Feb. 24, 2023
Nov. 09, 2021
Aug. 03, 2021
May 10, 2021
Mar. 10, 2021
Mar. 08, 2021
Jun. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Sep. 30, 2023
Aug. 24, 2023
PRIVATE PLACEMENTS                      
Ordinary shares outstanding               299,783,421   737,585,438  
Ordinary shares issued               299,783,421   737,585,438  
Aurora Acquisition Corp                      
PRIVATE PLACEMENTS                      
Proceeds from sale of Private Placement Warrants               $ 0 $ 6,860,057    
Sponsor agreement, forfeiture by sponsor upon closing of private warrants   50.00%   50.00%              
Sponsor locked up shares percentage   20.00%   20.00%              
Surrender and cancellation of Founder Shares $ 263,123,592               $ 0    
Surrender and cancellation of Founder Shares (in dollars per share)             $ 10.2178        
Aurora Acquisition Corp | Public shareholders                      
PRIVATE PLACEMENTS                      
Surrender and cancellation of Founder Shares (in shares) 24,087,689                    
Class A ordinary share                      
PRIVATE PLACEMENTS                      
Ordinary shares outstanding               24,452,565      
Ordinary shares issued               24,452,565     91,300,735
Private Placement | Aurora Acquisition Corp                      
PRIVATE PLACEMENTS                      
Number of shares of common stock to be issued (in shares)                 3,500,000    
Surrender and cancellation of Founder Shares $ 263,123,592                    
Surrender and cancellation of Founder Shares (in dollars per share) $ 10.2178                    
Private Placement | Aurora Acquisition Corp | Public shareholders                      
PRIVATE PLACEMENTS                      
Surrender and cancellation of Founder Shares (in shares) 24,087,689                    
Sponsor | Aurora Acquisition Corp | Public shareholders                      
PRIVATE PLACEMENTS                      
Surrender and cancellation of Founder Shares (in shares) 24,087,689                    
Sponsor | Class A ordinary share | Aurora Acquisition Corp                      
PRIVATE PLACEMENTS                      
Ordinary shares outstanding             2,048,838        
Ordinary shares issued             2,048,838        
Novator Private Placement Share | Aurora Acquisition Corp                      
PRIVATE PLACEMENTS                      
Proceeds from sale of Private Placement Warrants           $ 35,000,000          
Private Placement Warrants | Aurora Acquisition Corp                      
PRIVATE PLACEMENTS                      
Proceeds from sale of Private Placement Warrants           $ 6,400,000          
Private Placement Warrants | Over-allotment Option | Aurora Acquisition Corp                      
PRIVATE PLACEMENTS                      
Number of shares of common stock to be issued (in shares)         306,705            
Proceeds from sale of Private Placement Warrants         $ 460,057            
Private Placement Warrants | Sponsor | Aurora Acquisition Corp                      
PRIVATE PLACEMENTS                      
Surrender and cancellation of Founder Shares (in shares) 1,663,760                    
Sponsor and certain of Company's directors and officers | Novator Private Placement Units | Aurora Acquisition Corp                      
PRIVATE PLACEMENTS                      
Number of shares of common stock to be issued (in shares)     3,500,000     3,500,000          
Price of warrants     $ 10.00     $ 10.00          
Proceeds from sale of Private Placement Warrants     $ 35,000,000     $ 35,000,000          
Sponsor and certain of Company's directors and officers | Novator Private Placement Share | Aurora Acquisition Corp                      
PRIVATE PLACEMENTS                      
Number of shares per warrant     1     1          
Sponsor and certain of Company's directors and officers | Novator Private Placement Share | Private Placement | Aurora Acquisition Corp                      
PRIVATE PLACEMENTS                      
Number of shares of common stock to be issued (in shares)           3,500,000          
Price of warrants           $ 10.00          
Sponsor and certain of Company's directors and officers | Private Placement Warrants                      
PRIVATE PLACEMENTS                      
Number of shares per warrant           0.25          
Sponsor and certain of Company's directors and officers | Private Placement Warrants | Aurora Acquisition Corp                      
PRIVATE PLACEMENTS                      
Number of shares of common stock to be issued (in shares)               3,500,000   3,500,000  
Price of warrants               $ 10.00   $ 10.00  
Number of shares per warrant     1       1        
Sponsor and certain of Company's directors and officers | Private Placement Warrants | Class A ordinary share | Aurora Acquisition Corp                      
PRIVATE PLACEMENTS                      
Price of warrants     $ 11.50                
Number of shares per warrant     1   1            
Exercise price of warrant         $ 11.50 $ 11.50          
Sponsor and certain of Company's directors and officers | Private Placement Warrants | Private Placement | Aurora Acquisition Corp                      
PRIVATE PLACEMENTS                      
Number of shares of common stock to be issued (in shares)     4,266,667     4,266,667          
Price of warrants     $ 1.50     $ 1.50          
Proceeds from sale of Private Placement Warrants     $ 6,400,000     $ 6,400,000          
Sponsor and certain of Company's directors and officers | Private Placement Warrants | Over-allotment Option | Aurora Acquisition Corp                      
PRIVATE PLACEMENTS                      
Number of shares of common stock to be issued (in shares)     440,000   306,705 440,000          
Proceeds from sale of Private Placement Warrants     $ 660,000   $ 460,057 $ 660,000          
v3.23.4
AURORA 10Q - RELATED PARTY TRANSACTIONS - Founder Shares (Details)
 12 Months Ended
Aug. 03, 2021
USD ($)
$ / shares
shares
Mar. 10, 2021
USD ($)
shares
Mar. 08, 2021
USD ($)
$ / shares
shares
Mar. 02, 2021
USD ($)
shares
Feb. 03, 2021
USD ($)
shares
Dec. 09, 2020
D
$ / shares
Dec. 31, 2022
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
shares
Sep. 30, 2023
$ / shares
shares
RELATED PARTY TRANSACTIONS                  
Fair value of shares price             $ 6,021,000    
Aurora Acquisition Corp                  
RELATED PARTY TRANSACTIONS                  
Proceeds from sale of Private Placement Warrants             $ 0 $ 6,860,057  
Aurora Acquisition Corp | Independent directors                  
RELATED PARTY TRANSACTIONS                  
Fair value of shares price       $ 6,955,000 $ 6,955,000        
Aurora Acquisition Corp | Private Placement                  
RELATED PARTY TRANSACTIONS                  
Number of shares of common stock to be issued (in shares) | shares               3,500,000  
Aurora Acquisition Corp | Novator Private Placement Share                  
RELATED PARTY TRANSACTIONS                  
Proceeds from sale of Private Placement Warrants     $ 35,000,000            
Aurora Acquisition Corp | Private Placement Warrants                  
RELATED PARTY TRANSACTIONS                  
Proceeds from sale of Private Placement Warrants     $ 6,400,000            
Aurora Acquisition Corp | Private Placement Warrants | Over-allotment Option                  
RELATED PARTY TRANSACTIONS                  
Number of shares of common stock to be issued (in shares) | shares   306,705              
Proceeds from sale of Private Placement Warrants   $ 460,057              
Aurora Acquisition Corp | Sponsor and certain of Company's directors and officers | Novator Private Placement Units                  
RELATED PARTY TRANSACTIONS                  
Number of shares of common stock to be issued (in shares) | shares 3,500,000   3,500,000            
Price of warrant | $ / shares $ 10.00   $ 10.00            
Proceeds from sale of Private Placement Warrants $ 35,000,000   $ 35,000,000            
Aurora Acquisition Corp | Sponsor and certain of Company's directors and officers | Novator Private Placement Share | Private Placement                  
RELATED PARTY TRANSACTIONS                  
Number of shares of common stock to be issued (in shares) | shares     3,500,000            
Price of warrant | $ / shares     $ 10.00            
Aurora Acquisition Corp | Sponsor and certain of Company's directors and officers | Private Placement Warrants                  
RELATED PARTY TRANSACTIONS                  
Number of shares of common stock to be issued (in shares) | shares             3,500,000   3,500,000
Price of warrant | $ / shares             $ 10.00   $ 10.00
Aurora Acquisition Corp | Sponsor and certain of Company's directors and officers | Private Placement Warrants | Private Placement                  
RELATED PARTY TRANSACTIONS                  
Number of shares of common stock to be issued (in shares) | shares 4,266,667   4,266,667            
Price of warrant | $ / shares $ 1.50   $ 1.50            
Proceeds from sale of Private Placement Warrants $ 6,400,000   $ 6,400,000            
Aurora Acquisition Corp | Sponsor and certain of Company's directors and officers | Private Placement Warrants | Over-allotment Option                  
RELATED PARTY TRANSACTIONS                  
Number of shares of common stock to be issued (in shares) | shares 440,000 306,705 440,000            
Proceeds from sale of Private Placement Warrants $ 660,000 $ 460,057 $ 660,000            
Sponsor | Class B ordinary shares | Aurora Acquisition Corp                  
RELATED PARTY TRANSACTIONS                  
Number of shares transferred | shares       1,407,813 1,407,813        
Founder Shares | Sponsor | Class B ordinary shares | Aurora Acquisition Corp                  
RELATED PARTY TRANSACTIONS                  
Restrictions on transfer period of time after business combination completion           1 year      
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ / shares           $ 12.00      
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D           20      
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D           30      
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences           150 days      
v3.23.4
AURORA 10Q - RELATED PARTY TRANSACTIONS - Pre-Closing Bridge Notes (Details)
Nov. 02, 2021
USD ($)
Feb. 11, 2021
USD ($)
Dec. 31, 2023
USD ($)
Sep. 30, 2023
USD ($)
Jun. 30, 2023
USD ($)
Jun. 23, 2023
shares
Jun. 22, 2023
shares
Feb. 07, 2023
USD ($)
Better HoldCo, Inc. | Class B ordinary shares | Subsequent event                
RELATED PARTY TRANSACTIONS                
Amount of pre-money equity valuation         $ 6,900,000,000      
Aurora Acquisition Corp | Subsequent event | Better HoldCo, Inc.                
RELATED PARTY TRANSACTIONS                
Percent of discount         75.00%      
Amount of pre-money equity valuation         $ 6,900,000,000      
Aurora Acquisition Corp | Subsequent event | Better HoldCo, Inc. | Common Stock                
RELATED PARTY TRANSACTIONS                
Percent of discount         75.00%      
Amount of pre-money equity valuation     $ 6,900,000,000 $ 6,900,000,000 $ 6,900,000,000      
Aurora Acquisition Corp | Class B ordinary shares | Subsequent event | Better HoldCo, Inc.                
RELATED PARTY TRANSACTIONS                
Percent of discount     75.00% 75.00% 75.00%     75.00%
Amount of pre-money equity valuation       $ 6,900,000,000       $ 6,900,000,000
Aurora Acquisition Corp | Class B ordinary shares | Subsequent event | Better HoldCo, Inc. | Common Stock                
RELATED PARTY TRANSACTIONS                
Amount of pre-money equity valuation       $ 6,900,000,000 $ 6,900,000,000      
Aurora Acquisition Corp | Series D Preferred Stock | Subsequent event                
RELATED PARTY TRANSACTIONS                
Percent of discount     50.00% 50.00% 50.00%      
Bridge Note Purchase Agreement | SB Northstar LP                
RELATED PARTY TRANSACTIONS                
Bridge notes purchased $ 650,000,000              
Bridge Note Purchase Agreement | Sponsor                
RELATED PARTY TRANSACTIONS                
Bridge notes purchased 100,000,000              
Bridge Note Purchase Agreement | Better HoldCo, Inc.                
RELATED PARTY TRANSACTIONS                
Bridge notes issued $ 750,000,000 $ 750,000,000            
Conversion rate of bridge notes into Better Class A common stock 1              
Consideration amount per one share $ 10              
Bridge Note Purchase Agreement | Aurora Acquisition Corp | SB Northstar LP                
RELATED PARTY TRANSACTIONS                
Bridge notes purchased 650,000,000 $ 650,000,000            
Bridge Note Purchase Agreement | Aurora Acquisition Corp | Better HoldCo, Inc.                
RELATED PARTY TRANSACTIONS                
Conversion rate of bridge notes into Better Class A common stock   1            
Consideration amount per one share   $ 10            
Bridge Note Purchase Agreement | Aurora Acquisition Corp | Sponsor                
RELATED PARTY TRANSACTIONS                
Bridge notes purchased $ 100,000,000 $ 100,000,000            
Amendment No. 6 to the Merger Agreement | Aurora Acquisition Corp                
RELATED PARTY TRANSACTIONS                
Authority to issue number of shares by the combined company | shares           3,400,000,000 3,250,000,000  
Amendment No. 6 to the Merger Agreement | Aurora Acquisition Corp | Common Class A                
RELATED PARTY TRANSACTIONS                
Authority to issue number of shares by the combined company | shares           1,800,000,000 1,750,000,000  
Amendment No. 6 to the Merger Agreement | Aurora Acquisition Corp | Class B ordinary shares                
RELATED PARTY TRANSACTIONS                
Authority to issue number of shares by the combined company | shares           700,000,000 600,000,000  
v3.23.4
AURORA 10Q - RELATED PARTY TRANSACTIONS - Director Services Agreement (Details) - USD ($)
 3 Months Ended 6 Months Ended 9 Months Ended 12 Months Ended
Apr. 04, 2023
Mar. 21, 2023
Feb. 06, 2023
Aug. 26, 2022
Oct. 15, 2021
Mar. 21, 2021
Sep. 30, 2023
Sep. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Feb. 07, 2023
Nov. 09, 2021
Oct. 27, 2021
RELATED PARTY TRANSACTIONS                                  
Share-Based Payment Arrangement, Expense             $ 25,044,000 $ 10,973,000     $ 37,398,000 $ 31,021,000 $ 38,557,000 $ 55,215,000      
Ms. Harding, CFO                                  
RELATED PARTY TRANSACTIONS                                  
Incremental hourly fee                         $ 500        
Aurora Acquisition Corp                                  
RELATED PARTY TRANSACTIONS                                  
Percentage of holders under lockup provisions                 1.00%       1.00%       1.00%
Percentage of holders under elimination of lockup provisions                               1.00%  
Reimbursement of first payment for transaction expenses not yet received                 $ 1,250,000                
First payment of transaction expenses receivable                 1,250,000                
Aurora Acquisition Corp | Merger Agreement | Better HoldCo, Inc.                                  
RELATED PARTY TRANSACTIONS                                  
Maximum transaction expenses to be reimbursed       $ 15,000,000                     $ 2,500,000    
Minimum number of days from amendment date with in which payment should made       5 days                          
Proceeds from transaction expenses reimbursed $ 3,750,000   $ 3,750,000 $ 7,500,000                          
Aurora Acquisition Corp | Ms. Harding, CFO                                  
RELATED PARTY TRANSACTIONS                                  
Incremental hourly fee                 500                
Expenses per month                 10,000       $ 10,000        
Expenses per year                 15,000       15,000        
Share-Based Payment Arrangement, Expense   $ 75,000       $ 50,000                      
Director Services Agreement | Aurora Acquisition Corp                                  
RELATED PARTY TRANSACTIONS                                  
Forgivable loan to CFO         $ 50,000                        
Incremental hourly fee         $ 500                        
Accrued services expenses                 300,000       87,875 100,000      
Services expenses                 $ 492,500 $ 117,500     $ 222,875 $ 390,000      
v3.23.4
AURORA 10Q - RELATED PARTY TRANSACTIONS - Promissory Note from Related Party (Details) - Aurora Acquisition Corp - USD ($)
Feb. 08, 2023
Jun. 30, 2023
Dec. 31, 2022
Aug. 03, 2022
Feb. 23, 2022
May 10, 2021
Dec. 09, 2020
RELATED PARTY TRANSACTIONS              
Repayment amount $ 2,400,000            
Amount outstanding 412,395 $ 412,395          
Merger Agreement              
RELATED PARTY TRANSACTIONS              
Aggregate principal amount         $ 12,000,000    
Promissory note              
RELATED PARTY TRANSACTIONS              
Aggregate principal amount         4,000,000 $ 2,000,000 $ 300,000
Aggregate cap of notes to cover operating costs   12,000,000 $ 12,000,000 $ 12,000,000 $ 4,000,000    
Repayment amount $ 2,400,000            
Notes Payable, Current   $ 412,395 $ 2,812,395        
v3.23.4
AURORA 10Q - COMMITMENTS AND CONTINGENCIES (Details)
 12 Months Ended
Mar. 10, 2021
USD ($)
$ / shares
shares
Mar. 08, 2021
USD ($)
shares
Dec. 31, 2022
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
shares
Jun. 30, 2023
USD ($)
$ / shares
Jun. 22, 2022
USD ($)
Mar. 03, 2021
item
COMMITMENTS AND CONTINGENCIES              
Payment of underwriting fee     $ 0        
Aurora Acquisition Corp              
COMMITMENTS AND CONTINGENCIES              
Maximum number of demands for registration of securities | item             3
Deferred fee per unit | $ / shares     $ 0.35   $ 0.35    
Number of units sold | shares       24,300,287      
Net proceeds $ 22,542,813 $ 8,505,100 $ 0 $ 8,505,100      
Gross proceeds $ 23,002,870            
Underwriting fee (in percentage) 2            
Deferred underwriting fee waived     $ 8,505,100     $ 8,505,100  
Payment of underwriting fee         $ 0    
Aurora Acquisition Corp | Over-allotment Option              
COMMITMENTS AND CONTINGENCIES              
Number of units sold | shares 2,300,287 3,300,000 3,300,000        
Share price (in dollars per share) | $ / shares $ 10.00            
v3.23.4
AURORA 10Q - COMMITMENTS AND CONTINGENCIES - Pre-Closing Bridge Notes and Litigation Matters (Details)
 6 Months Ended 12 Months Ended
Nov. 02, 2021
USD ($)
Feb. 11, 2021
USD ($)
Jun. 30, 2023
USD ($)
item
Dec. 31, 2022
letter
lawsuit
Dec. 31, 2023
USD ($)
Sep. 30, 2023
USD ($)
Feb. 07, 2023
USD ($)
Oct. 27, 2021
Better HoldCo, Inc. | Class B ordinary shares | Subsequent event                
COMMITMENTS AND CONTINGENCIES                
Amount of pre-money equity valuation     $ 6,900,000,000          
Aurora Acquisition Corp                
COMMITMENTS AND CONTINGENCIES                
Percentage of holders under lockup provisions     1.00% 1.00%       1.00%
Lockup period for transfer of shares post merger     6 months 6 months        
Number of demand letters received     2 2        
Number of lawsuits filed     0 0        
Aurora Acquisition Corp | Series D Preferred Stock | Subsequent event                
COMMITMENTS AND CONTINGENCIES                
Percent of discount     50.00%   50.00% 50.00%    
Aurora Acquisition Corp | Better HoldCo, Inc. | Subsequent event                
COMMITMENTS AND CONTINGENCIES                
Percent of discount     75.00%          
Amount of pre-money equity valuation     $ 6,900,000,000          
Aurora Acquisition Corp | Better HoldCo, Inc. | Subsequent event | Common Stock                
COMMITMENTS AND CONTINGENCIES                
Percent of discount     75.00%          
Amount of pre-money equity valuation     $ 6,900,000,000   $ 6,900,000,000 $ 6,900,000,000    
Aurora Acquisition Corp | Better HoldCo, Inc. | Class B ordinary shares | Subsequent event                
COMMITMENTS AND CONTINGENCIES                
Percent of discount     75.00%   75.00% 75.00% 75.00%  
Amount of pre-money equity valuation           $ 6,900,000,000 $ 6,900,000,000  
Aurora Acquisition Corp | Better HoldCo, Inc. | Class B ordinary shares | Subsequent event | Common Stock                
COMMITMENTS AND CONTINGENCIES                
Amount of pre-money equity valuation     $ 6,900,000,000     $ 6,900,000,000    
Bridge Note Purchase Agreement | Sponsor                
COMMITMENTS AND CONTINGENCIES                
Bridge notes purchased $ 100,000,000              
Bridge Note Purchase Agreement | SB Northstar LP                
COMMITMENTS AND CONTINGENCIES                
Bridge notes purchased 650,000,000              
Bridge Note Purchase Agreement | Better HoldCo, Inc.                
COMMITMENTS AND CONTINGENCIES                
Bridge notes issued $ 750,000,000 $ 750,000,000            
Conversion rate of bridge notes into Better Class A common stock 1              
Consideration amount per one share $ 10              
Bridge Note Purchase Agreement | Aurora Acquisition Corp | Sponsor                
COMMITMENTS AND CONTINGENCIES                
Bridge notes purchased 100,000,000 100,000,000            
Bridge Note Purchase Agreement | Aurora Acquisition Corp | SB Northstar LP                
COMMITMENTS AND CONTINGENCIES                
Bridge notes purchased $ 650,000,000 $ 650,000,000            
Bridge Note Purchase Agreement | Aurora Acquisition Corp | Better HoldCo, Inc.                
COMMITMENTS AND CONTINGENCIES                
Conversion rate of bridge notes into Better Class A common stock   1            
Consideration amount per one share   $ 10            
v3.23.4
AURORA 10Q - SHAREHOLDERS' EQUITY - Preference Shares (Details) - Aurora Acquisition Corp - $ / shares
Jun. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Class of Stock [Line Items]      
Preference shares, shares authorized 5,000,000 5,000,000 5,000,000
Preference shares, par value, (per share) $ 0.0001 $ 0.0001 $ 0.0001
Preference shares, shares issued 0 0 0
Preference shares, shares outstanding 0 0 0
v3.23.4
AURORA 10Q - SHAREHOLDERS' EQUITY - Ordinary Shares (Details)
 3 Months Ended 6 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
USD ($)
vote
$ / shares
shares
Feb. 24, 2023
USD ($)
shares
Feb. 23, 2023
USD ($)
shares
Jun. 30, 2023
USD ($)
vote
$ / shares
shares
Mar. 31, 2023
USD ($)
shares
Jun. 30, 2023
USD ($)
vote
$ / shares
shares
Jun. 30, 2022
USD ($)
shares
Sep. 30, 2023
USD ($)
vote
$ / shares
shares
Dec. 31, 2022
USD ($)
Vote
vote
$ / shares
shares
Dec. 31, 2021
USD ($)
$ / shares
shares
Dec. 31, 2023
USD ($)
$ / shares
Aug. 24, 2023
shares
Feb. 07, 2023
USD ($)
Sep. 30, 2022
shares
Dec. 31, 2020
shares
Class of Stock [Line Items]                              
Ordinary shares, shares authorized (in shares) 3,300,000,000             3,300,000,000 1,086,027,188            
Common stock, par value (in dollars per share) | $ / shares $ 0.0001             $ 0.0001 $ 0.0001            
Ordinary shares, votes per share | vote                 1            
Common stock, issued (in shares) 737,585,438             737,585,438 299,783,421            
Common stock, outstanding (in shares) 737,585,438             737,585,438 299,783,421            
Class A ordinary stock subject to possible redemption, outstanding (in shares) 0     332,314,737   332,314,737 332,314,737 0 332,314,737 108,721,433       332,314,737 107,634,678
Common Stock                              
Class of Stock [Line Items]                              
Common stock, outstanding (in shares) 737,585,438     300,676,355   300,676,355 300,541,695 737,585,438   99,067,159       300,818,541 81,239,084
Aurora Acquisition Corp                              
Class of Stock [Line Items]                              
Adjustment to redemption value | $         $ 16,999,995 $ 16,999,995 $ 287,884   $ 3,625,617 $ 0          
Surrender and cancellation of Founder Shares | $   $ 263,123,592               0          
Aurora Acquisition Corp | Private Placement                              
Class of Stock [Line Items]                              
Surrender and cancellation of Founder Shares | $   263,123,592                          
Aurora Acquisition Corp | Subsequent event                              
Class of Stock [Line Items]                              
Surrender and cancellation of Founder Shares | $   $ 263,123,592                          
Consideration | $ $ 35,000,000                            
Aurora Acquisition Corp | Subsequent event | Better HoldCo, Inc.                              
Class of Stock [Line Items]                              
Percent of discount       75.00%   75.00%                  
Amount of pre-money equity valuation | $       $ 6,900,000,000   $ 6,900,000,000                  
Aurora Acquisition Corp | Additional Paid-in Capital                              
Class of Stock [Line Items]                              
Adjustment to redemption value | $     $ 16,637,434   16,637,434                    
Surrender and cancellation of Founder Shares | $                   $ (25)          
Aurora Acquisition Corp | Accumulated Deficit                              
Class of Stock [Line Items]                              
Adjustment to redemption value | $     $ 362,395   $ 362,395                    
Aurora Acquisition Corp | Common Stock                              
Class of Stock [Line Items]                              
Redemption of Class A ordinary share (in shares)     1,663,760                        
Adjustment to redemption value | $     $ 16,999,995                        
Aurora Acquisition Corp | Common Stock | Subsequent event | Better HoldCo, Inc.                              
Class of Stock [Line Items]                              
Percent of discount       75.00%   75.00%                  
Amount of pre-money equity valuation | $ $ 6,900,000,000     $ 6,900,000,000   $ 6,900,000,000   $ 6,900,000,000     $ 6,900,000,000        
Aurora Acquisition Corp | Public shareholders                              
Class of Stock [Line Items]                              
Surrender and cancellation of Founder Shares (in shares)   24,087,689                          
Aurora Acquisition Corp | Public shareholders | Private Placement                              
Class of Stock [Line Items]                              
Surrender and cancellation of Founder Shares (in shares)   24,087,689                          
Aurora Acquisition Corp | Public shareholders | Subsequent event                              
Class of Stock [Line Items]                              
Surrender and cancellation of Founder Shares (in shares)   24,087,689                          
Aurora Acquisition Corp | Novator Capital Ltd.                              
Class of Stock [Line Items]                              
Surrender and cancellation of Founder Shares (in shares)   1,663,760                          
Aurora Acquisition Corp | Novator Capital Ltd. | Private Placement                              
Class of Stock [Line Items]                              
Surrender and cancellation of Founder Shares (in shares)   1,663,760                          
Aurora Acquisition Corp | Novator Capital Ltd. | Subsequent event                              
Class of Stock [Line Items]                              
Surrender and cancellation of Founder Shares (in shares)   1,663,760                          
Aurora Acquisition Corp | Novator Capital Ltd. | Limited waiver                              
Class of Stock [Line Items]                              
Aggregate redemption amount | $     17,000,000                        
Aurora Acquisition Corp | Novator Capital Ltd. | Limited waiver | Subsequent event                              
Class of Stock [Line Items]                              
Aggregate redemption amount | $     17,000,000                        
Share price (in dollars per share) | $ / shares       $ 10.00   $ 10.00         $ 10.00        
Class A ordinary share                              
Class of Stock [Line Items]                              
Ordinary shares, shares authorized (in shares) 1,800,000,000             1,800,000,000 24,452,565            
Common stock, par value (in dollars per share) | $ / shares $ 0.0001             $ 0.0001              
Ordinary shares, votes per share | vote 1             1              
Common stock, issued (in shares)                 24,452,565     91,300,735      
Common stock, outstanding (in shares)                 24,452,565            
Class A ordinary share | Aurora Acquisition Corp                              
Class of Stock [Line Items]                              
Ordinary shares, shares authorized (in shares)       500,000,000   500,000,000     500,000,000 500,000,000          
Common stock, par value (in dollars per share) | $ / shares       $ 0.0001   $ 0.0001     $ 0.0001 $ 0.0001          
Ordinary shares, votes per share | Vote                 1            
Class A ordinary share | Aurora Acquisition Corp | Common Stock                              
Class of Stock [Line Items]                              
Redemption of Class A ordinary share (in shares)         1,663,760                    
Adjustment to redemption value | $         $ 166                    
Class A ordinary shares subject to possible redemption | Aurora Acquisition Corp                              
Class of Stock [Line Items]                              
Class A ordinary stock subject to possible redemption, outstanding (in shares)       212,598   212,598     24,300,287 24,300,287          
Adjustment to redemption value | $     $ 166 $ 19,954 $ 16,999,995         $ 12,681,484          
Class A ordinary shares not subject to possible redemption | Aurora Acquisition Corp                              
Class of Stock [Line Items]                              
Ordinary shares, shares authorized (in shares)       500,000,000   500,000,000     500,000,000            
Common stock, par value (in dollars per share) | $ / shares       $ 0.0001   $ 0.0001     $ 0.0001            
Ordinary shares, votes per share | vote       1   1                  
Common stock, issued (in shares)       1,836,240   1,836,240     3,500,000 3,500,000          
Common stock, outstanding (in shares)       1,836,240   1,836,240     3,500,000 3,500,000          
Class B ordinary shares                              
Class of Stock [Line Items]                              
Ordinary shares, shares authorized (in shares) 700,000,000             700,000,000 588,261,164            
Common stock, par value (in dollars per share) | $ / shares $ 0.0001             $ 0.0001              
Ordinary shares, votes per share | vote 3             3              
Common stock, issued (in shares)                 171,441,780     574,407,420      
Common stock, outstanding (in shares)                 171,441,780            
Class B ordinary shares | Aurora Acquisition Corp                              
Class of Stock [Line Items]                              
Ordinary shares, shares authorized (in shares)       50,000,000   50,000,000     50,000,000 50,000,000          
Common stock, par value (in dollars per share) | $ / shares       $ 0.0001   $ 0.0001     $ 0.0001 $ 0.0001          
Ordinary shares, votes per share       1   1     1            
Common stock, issued (in shares)       6,950,072   6,950,072     6,950,072 6,950,072          
Common stock, outstanding (in shares)       6,950,072   6,950,072     6,950,072 6,950,072          
Shares subject to forfeiture       249,928   249,928     249,928            
Adjustment one of redemption price of stock based on market value and newly issued price (as a percent)           20.00%     20.00%            
Ratio to be applied to the stock in the conversion           20   20 20            
Class B ordinary shares | Aurora Acquisition Corp | Subsequent event | Better HoldCo, Inc.                              
Class of Stock [Line Items]                              
Percent of discount 75.00%     75.00%   75.00%   75.00%     75.00%   75.00%    
Amount of pre-money equity valuation | $ $ 6,900,000,000             $ 6,900,000,000         $ 6,900,000,000    
Class B ordinary shares | Aurora Acquisition Corp | Common Stock                              
Class of Stock [Line Items]                              
Surrender and cancellation of Founder Shares (in shares)                   249,928          
Surrender and cancellation of Founder Shares | $                   $ 25          
Class B ordinary shares | Aurora Acquisition Corp | Common Stock | Subsequent event | Better HoldCo, Inc.                              
Class of Stock [Line Items]                              
Amount of pre-money equity valuation | $ $ 6,900,000,000     $ 6,900,000,000   $ 6,900,000,000   $ 6,900,000,000              
Series D Preferred Stock                              
Class of Stock [Line Items]                              
Class A ordinary stock subject to possible redemption, outstanding (in shares)                 23,786,379            
Series D Preferred Stock | Aurora Acquisition Corp | Subsequent event                              
Class of Stock [Line Items]                              
Percent of discount 50.00%     50.00%   50.00%   50.00%     50.00%        
v3.23.4
AURORA 10Q - SHAREHOLDERS' EQUITY - Warrants (Details) - Aurora Acquisition Corp
 6 Months Ended 12 Months Ended
Jun. 30, 2023
D
$ / shares
Dec. 31, 2022
D
$ / shares
Warrants    
Class of Warrant or Right [Line Items]    
Maximum period after business combination in which to file registration statement 30 days 30 days
Public Warrants    
Class of Warrant or Right [Line Items]    
Warrant exercise period condition one 30 days 30 days
Warrant exercise period condition two 12 months 12 months
Public Warrants expiration term 5 years 5 years
Share price trigger used to measure dilution of warrant $ 9.20 $ 9.20
Percentage of gross new proceeds to total equity proceeds used to measure dilution of warrant 60 60
Trading period after business combination used to measure dilution of warrant | D 10 10
Warrant exercise price adjustment multiple 115 115
Warrant redemption price adjustment multiple 180 180
Restrictions on transfer period of time after business combination completion 30 days 30 days
Public Warrants | Class A Ordinary Share Equals or Exceeds $18.00    
Class of Warrant or Right [Line Items]    
Warrant redemption condition minimum share price $ 18.00  
Redemption price per public warrant (in dollars per share) $ 0.01  
Threshold trading days for redemption of public warrants 20 days  
Threshold consecutive trading days for redemption of public warrants 30 days  
Redemption period 30 days  
Public Warrants | Class A Ordinary Share Equals or Exceeds $10.00    
Class of Warrant or Right [Line Items]    
Warrant redemption condition minimum share price $ 10.00  
Redemption price per public warrant (in dollars per share) $ 0.10  
Minimum threshold written notice period for redemption of public warrants 90 days  
Threshold trading days for redemption of public warrants 20 days  
Threshold consecutive trading days for redemption of public warrants 30 days  
Threshold number of business days before sending notice of redemption to warrant holders | D 3  
Redemption period 30 days  
v3.23.4
AURORA 10Q - FAIR VALUE MEASUREMENTS (Details) - Aurora Acquisition Corp
Jun. 30, 2023
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
FAIR VALUE MEASUREMENTS      
Investments held in Trust Account - cash and cash equivalents $ 21,317,257 $ 282,284,619 $ 278,022,397
Fair Value, Inputs, Level 3 | Dividend rate      
FAIR VALUE MEASUREMENTS      
Measurement input, derivatives 0 0  
Money market funds | U.S. Treasury Securities      
FAIR VALUE MEASUREMENTS      
Investments held in Trust Account - cash and cash equivalents $ 21,317,257 $ 282,284,619  
v3.23.4
AURORA 10Q - FAIR VALUE MEASUREMENTS - Recurring Basis (Details) - Aurora Acquisition Corp - USD ($)
Jun. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
FAIR VALUE MEASUREMENTS      
Investments held in Trust Account - cash and cash equivalents $ 21,317,257 $ 282,284,619 $ 278,022,397
Derivative warrant liabilities 480,601 472,512 $ 13,340,717
Recurring | Public Warrants      
FAIR VALUE MEASUREMENTS      
Derivative warrant liabilities    
Recurring | Private Placement Warrants      
FAIR VALUE MEASUREMENTS      
Derivative warrant liabilities    
Fair Value, Inputs, Level 1 | Recurring      
FAIR VALUE MEASUREMENTS      
Investments held in Trust Account - cash and cash equivalents 21,317,257 282,284,619  
Total Fair Value 21,470,956 282,375,745  
Fair Value, Inputs, Level 1 | Recurring | Public Warrants      
FAIR VALUE MEASUREMENTS      
Derivative warrant liabilities 153,699 91,126  
Fair Value, Inputs, Level 1 | Recurring | Private Placement Warrants      
FAIR VALUE MEASUREMENTS      
Derivative warrant liabilities   0  
Fair Value, Inputs, Level 3 | Recurring      
FAIR VALUE MEASUREMENTS      
Investments held in Trust Account - cash and cash equivalents   0  
Total Fair Value 326,902 381,386  
Fair Value, Inputs, Level 3 | Recurring | Public Warrants      
FAIR VALUE MEASUREMENTS      
Derivative warrant liabilities   0  
Fair Value, Inputs, Level 3 | Recurring | Private Placement Warrants      
FAIR VALUE MEASUREMENTS      
Derivative warrant liabilities $ 326,902 $ 381,386  
v3.23.4
AURORA 10Q - FAIR VALUE MEASUREMENTS - Unobservable inputs (Details) - Private Placement Warrants - Fair Value, Inputs, Level 3 - Aurora Acquisition Corp
Jun. 30, 2023
$ / shares
Y
Dec. 31, 2022
Dec. 31, 2022
$ / shares
Dec. 31, 2022
Y
Dec. 31, 2022
USD ($)
Dec. 31, 2021
$ / shares
Y
Mar. 08, 2021
Mar. 08, 2021
$ / shares
Mar. 08, 2021
Y
Mar. 08, 2021
USD ($)
Stock price                    
FAIR VALUE MEASUREMENTS                    
Measurement input, derivatives 10.45   10.09     9.90   10.02    
Strike price                    
FAIR VALUE MEASUREMENTS                    
Measurement input, derivatives 11.50   11.50     11.50   11.50    
Probability of completing a Business Combination                    
FAIR VALUE MEASUREMENTS                    
Measurement input, derivatives 0.6000 0.4000       1.0000 0.9000      
Measurement Input, Expected Term                    
FAIR VALUE MEASUREMENTS                    
Measurement input, derivatives 1.13 0.0289   2.89 2.89 5.00     5.5 5.50
Measurement Input, Price Volatility                    
FAIR VALUE MEASUREMENTS                    
Measurement input, derivatives 0.0500 0.0300       0.2200 0.1500      
Measurement Input, Risk Free Interest Rate                    
FAIR VALUE MEASUREMENTS                    
Measurement input, derivatives 0.0526 0.0420       0.0126 0.0096      
Fair value of warrants                    
FAIR VALUE MEASUREMENTS                    
Measurement input, derivatives 0.06   0.07     1.59   0.86    
v3.23.4
AURORA 10Q - FAIR VALUE MEASUREMENTS - Change in the Fair Value of the Warrant Liabilities (Details) - Recurring - Aurora Acquisition Corp - USD ($)
 3 Months Ended 12 Months Ended
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2022
Dec. 31, 2021
Warrants            
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]            
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Beginning Balance $ 733,739 $ 472,512 $ 11,262,650 $ 13,340,717 $ 13,340,717 $ 0
Change in valuation inputs or other assumptions (253,138) 261,227 (3,813,346) (2,078,067) (12,868,205) (1,576,196)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance 480,601 733,739 7,449,304 11,262,650 472,512 13,340,717
Fair Value, Inputs, Level 1            
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]            
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Beginning Balance 352,353 91,126 2,490,771 4,677,805 4,677,805 0
Change in valuation inputs or other assumptions (198,654) 261,227 (1,579,513) (2,187,034) (4,586,679) (541,006)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance 153,699 352,353 911,258 2,490,771 91,126 4,677,805
Fair Value, Inputs, Level 3            
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]            
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Beginning Balance 381,386 381,386 8,771,879 8,662,912 8,662,912 0
Change in valuation inputs or other assumptions (54,484)   (2,233,833) 108,967 (8,281,526) (1,035,190)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance $ 326,902 $ 381,386 $ 6,538,046 $ 8,771,879 $ 381,386 $ 8,662,912
v3.23.4
AURORA 10K - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details)
 6 Months Ended 9 Months Ended 12 Months Ended
Feb. 06, 2023
USD ($)
Aug. 03, 2021
USD ($)
$ / shares
shares
Mar. 10, 2021
USD ($)
$ / shares
shares
Mar. 08, 2021
USD ($)
$ / shares
shares
Oct. 07, 2020
item
Oct. 07, 2020
business
Jun. 30, 2023
USD ($)
Jun. 30, 2022
USD ($)
Sep. 30, 2023
USD ($)
$ / shares
shares
Dec. 31, 2022
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
shares
Dec. 31, 2023
USD ($)
Sep. 01, 2023
USD ($)
Jun. 01, 2023
USD ($)
Sep. 30, 2022
USD ($)
Aug. 03, 2022
USD ($)
Feb. 23, 2022
USD ($)
May 10, 2021
USD ($)
Dec. 09, 2020
USD ($)
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Operating bank account                 $ 526,765,000 $ 317,959,000 $ 938,319,000 $ 526,765,000     $ 398,037,000        
Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Condition for future business combination number of businesses minimum         1 1                          
Sale of units (in shares) | shares                     24,300,287                
Gross proceeds       $ 255,000,000                              
Investment of cash into Trust Account             $ 0 $ 443,751   0 $ 278,002,870                
Transaction Costs       13,946,641                              
Underwriting fees       4,860,057                              
Deferred underwriting fee payable     $ 22,542,813 8,505,100           0 8,505,100                
Other offering costs       581,484                              
Interest income                 2,156,230 4,262,222                  
Aggregate proceeds held in the Trust Account                 21,317,257 282,284,619                  
Proceeds from sale of Private Placement Warrants                   $ 0 6,860,057                
Condition for future business combination use of proceeds percentage             80.00%     80.00%                  
Condition for future business combination threshold Percentage Ownership             50.00%     50.00%                  
Redemption of shares calculated based on business days prior to consummation of business combination (in days)             2 days     2 days                  
Minimum net tangible assets upon consummation of business combination             $ 5,000,001     $ 5,000,001                  
Redemption limit percentage without prior consent             20.00%     20.00%                  
Obligation to redeem Public Shares if entity does not complete a Business Combination (as a percent)             100.00%     100.00%                  
Redemption period upon closure             10 days     10 days                  
Operating bank account             $ 1,228,847     $ 285,307 $ 37,645                
Working capital deficit             17,712,429     14,605,202                  
Public Shares | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Maximum allowed dissolution expenses             100,000     100,000                  
Merger Agreement | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Aggregate principal amount                                 $ 12,000,000    
Merger Agreement | Subsequent event | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Proceeds from transaction expenses reimbursed $ 3,750,000                                    
Better HoldCo, Inc | Merger Agreement | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Maximum transaction expenses to be reimbursed                   $ 15,000,000       $ 2,500,000          
Minimum number of days from amendment date with in which payment should made                   5 days                  
Proceeds from transaction expenses reimbursed             3,750,000     $ 7,500,000                  
Better HoldCo, Inc | Merger Agreement | Subsequent event | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Maximum transaction expenses to be reimbursed                         $ 2,500,000            
Proceeds from transaction expenses reimbursed $ 3,750,000                                    
Sponsor | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Aggregate principal amount             15,000,000     4,000,000                  
Promissory note | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Aggregate principal amount                                 4,000,000 $ 2,000,000 $ 300,000
Aggregate cap of notes to cover operating costs             12,000,000     12,000,000           $ 12,000,000 $ 4,000,000    
Promissory note | Better HoldCo, Inc | Merger Agreement | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Proceeds from transaction expenses reimbursed             $ 11,250,000                        
Private Placement Warrants | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Purchase price, in dollars per unit | $ / shares     $ 1.50                                
Proceeds from sale of Private Placement Warrants       $ 6,400,000                              
Private Placement Warrants | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Sale of units (in shares) | shares       3,500,000                              
Purchase price, in dollars per unit | $ / shares       $ 10.00                              
Gross proceeds       $ 35,000,000         $ 35,000,000 $ 35,000,000                  
Sale of Private Placement Units (in shares) | shares                 3,500,000 3,500,000                  
Price of warrant | $ / shares                 $ 10.00 $ 10.00                  
Initial Public Offering | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Sale of units (in shares) | shares     24,300,287 22,000,000                              
Purchase price, in dollars per unit | $ / shares       $ 10.00                              
Gross proceeds       $ 220,000,000                              
Underwriting fees                   $ 4,860,057                  
Other offering costs       $ 581,484                              
Private Placement | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Sale of Private Placement Units (in shares) | shares                     3,500,000                
Private Placement | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Sale of units (in shares) | shares       3,500,000                              
Purchase price, in dollars per unit | $ / shares       $ 10.00                              
Gross proceeds       $ 35,000,000                              
Private Placement | Private Placement Warrants | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Purchase price, in dollars per unit | $ / shares       $ 1.50                              
Sale of Private Placement Units (in shares) | shares   4,266,667   4,266,667                              
Price of warrant | $ / shares   $ 1.50   $ 1.50                              
Proceeds from sale of Private Placement Warrants   $ 6,400,000   $ 6,400,000                              
Private Placement | Private Placement Warrants | Sponsor | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Proceeds from sale of Private Placement Warrants       $ 6,400,000                              
Over-allotment Option | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Sale of units (in shares) | shares     2,300,287 3,300,000           3,300,000                  
Purchase price, in dollars per unit | $ / shares     $ 10.00 $ 10.00                              
Gross proceeds     $ 23,002,870 $ 23,002,870                              
Net Proceeds     $ 22,542,813                                
Over-allotment Option | Private Placement Warrants | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Sale of Private Placement Units (in shares) | shares     306,705                                
Proceeds from sale of Private Placement Warrants     $ 460,057                                
Over-allotment Option | Private Placement Warrants | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                                      
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS                                      
Sale of Private Placement Units (in shares) | shares   440,000 306,705 440,000                              
Proceeds from sale of Private Placement Warrants   $ 660,000 $ 460,057 $ 660,000                              
v3.23.4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)
 3 Months Ended 6 Months Ended 9 Months Ended 12 Months Ended
Mar. 08, 2021
Sep. 30, 2023
Jun. 30, 2023
Sep. 30, 2022
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Aug. 22, 2023
Jun. 22, 2022
Dec. 31, 2020
Warrants outstanding (in shares)                   7,598,424        
Offering costs               $ 16,634,000 $ 0          
Unrecognized tax benefits                   $ 1,353,000 $ 4,070,000     $ 1,710,000
Shares excluded from calculation of diluted loss per share   48,389,000   408,004,000       48,389,000 408,004,000 406,726,000 363,548,000      
Aurora Acquisition Corp                            
Cash equivalents   $ 0           $ 0   $ 0 $ 0      
Deferred underwriting fee waived                   8,505,100     $ 8,505,100  
Underwriting fees $ 4,860,057                          
Other offering costs 581,484                          
Gain on deferred underwriting fee     $ 0   $ 182,658 $ 0 $ 182,658     182,658 0      
Unrecognized tax benefits   $ 0           $ 0   0 0      
Unrecognized tax benefits accrued for interest and penalties     $ 0     $ 0       $ 0 $ 0      
Shares excluded from calculation of diluted loss per share           11,523,421       11,523,444        
Aurora Acquisition Corp | Class B ordinary shares                            
Shares subject to forfeiture     249,928     249,928       249,928        
Aurora Acquisition Corp | Initial Public Offering                            
Offering costs 13,946,641                          
Underwriting fees                   $ 4,860,057        
Deferred underwriting fees                   8,505,100        
Other offering costs $ 581,484                          
Offering costs charged to shareholders' equity                   $ 13,647,118        
Aurora Acquisition Corp | Public Warrants                            
Warrants outstanding (in shares)                   6,075,052 6,075,052      
Warrants outstanding (in shares)     6,075,049     6,075,049       6,075,050   6,075,047    
Aurora Acquisition Corp | Public Warrants | Initial Public Offering                            
Offering costs                   $ 299,523        
Aurora Acquisition Corp | Private Placement Warrants                            
Warrants outstanding (in shares)                   5,448,372 5,448,372      
Warrants outstanding (in shares)     5,448,372     5,448,372                
v3.23.4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Class A Ordinary Share (Details) - USD ($)
 3 Months Ended 6 Months Ended 12 Months Ended
Feb. 23, 2023
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Temporary Equity [Line Items]              
Beginning balance     $ 436,280,000 $ 436,280,000 $ 436,280,000 $ 436,280,000 $ 409,688,000
Ending balance   $ 436,280,000   436,280,000 436,280,000 436,280,000 436,280,000
Aurora Acquisition Corp              
Temporary Equity [Line Items]              
Adjustment to redemption value     16,999,995 16,999,995 287,884 3,625,617 0
Aurora Acquisition Corp | Class A Common Stock subject to possible redemption              
Temporary Equity [Line Items]              
Gross proceeds             243,002,870
Proceeds allocated to Public Warrants             (299,536)
Class A ordinary shares issuance costs             (13,647,105)
Adjustment to redemption value $ 166 19,954 16,999,995       12,681,484
Beginning balance   2,181,658 246,628,487 246,628,487 $ 243,002,870 243,002,870  
Remeasurement of Class A ordinary shares subject to redemption:           3,625,617  
Ending balance   $ 2,201,612 $ 2,181,658 $ 2,201,612   $ 246,628,487 243,002,870
Aurora Acquisition Corp | Class A Common Stock subject to possible redemption | Over-allotment Option              
Temporary Equity [Line Items]              
Adjustment to redemption value             $ 1,265,157
v3.23.4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of basic and diluted net earnings (loss) per ordinary share (Details) - USD ($)
 3 Months Ended 6 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Jun. 30, 2023
Jun. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption                        
Net income (loss) $ (340,033,000)     $ (226,612,000)         $ (475,441,000) $ (625,864,000) $ (888,802,000) $ (301,128,000)
Net Income (Loss) Available to Common Stockholders, Basic, Total $ (340,033,000)     $ (226,612,000)         $ (475,441,000) $ (625,864,000) $ (888,802,000) $ (301,128,000)
Denominator: Weighted average Class A Common Stock subject to possible redemption                        
Basic weighted average shares outstanding 496,577,751     292,660,334         364,817,445 289,934,149 95,303,684 86,984,646
Diluted weighted average shares outstanding 496,577,751     292,660,334         364,817,445 289,934,149 95,303,684 86,984,646
Basic net income (loss) per share $ (0.68)     $ (0.77)         $ (1.30) $ (2.16) $ (9.33) $ (3.46)
Diluted net income (loss) per share $ (0.68)     $ (0.77)         $ (1.30) $ (2.16) $ (9.33) $ (3.46)
Aurora Acquisition Corp                        
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption                        
Net income (loss)   $ (831,131) $ (127,955)   $ 1,785,906 $ 1,010,040 $ (959,086) $ 2,795,946     $ 8,735,542 $ (6,527,175)
Aurora Acquisition Corp | Class A ordinary shares subject to possible redemption                        
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption                        
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption   (19,635)     1,248,851   (429,904) 1,955,153     6,108,604 (4,399,283)
Less: Net earnings (losses) attributable to Class A ordinary shares subject to possible redemption   $ (19,635)     $ 1,248,851   $ (429,904) $ 1,955,153        
Net Income (Loss) Available to Common Stockholders, Basic, Total                     $ 6,108,604 $ (4,399,283)
Denominator: Weighted average Class A Common Stock subject to possible redemption                        
Basic weighted average shares outstanding   212,598     24,300,287   7,541,254 24,300,287     24,300,287 19,827,082
Diluted weighted average shares outstanding   212,598     24,300,287   7,541,254 24,300,287     24,300,287 19,827,082
Basic net income (loss) per share   $ (0.09)     $ 0.05   $ (0.06) $ 0.08     $ 0.25 $ (0.22)
Diluted net income (loss) per share   $ (0.09)     $ 0.05   $ (0.06) $ 0.08     $ 0.25 $ (0.22)
Aurora Acquisition Corp | Non-Redeemable Class A and Class B Common Stock                        
Numerator: Earnings (losses) attributable to Class A Common Stock subject to possible redemption                        
Net income (loss)   $ (811,496)     $ 537,055   $ (529,182) $ 840,793     $ 2,626,938 $ (2,127,892)
Less: Net earnings (losses) attributable to Class A ordinary shares subject to possible redemption                     0 0
Net Income (Loss) Available to Common Stockholders, Basic, Total   $ (811,496)     $ 537,055   $ (529,182) $ 840,793     $ 2,626,938 $ (2,127,892)
Denominator: Weighted average Class A Common Stock subject to possible redemption                        
Basic weighted average shares outstanding   8,786,312     10,450,072   9,282,724 10,450,072     10,450,072 9,590,182
Diluted weighted average shares outstanding   8,786,312     10,450,072   9,282,724 10,450,072     10,450,072 9,590,182
Basic net income (loss) per share   $ (0.09)     $ 0.05   $ (0.06) $ 0.08     $ 0.25 $ (0.22)
Diluted net income (loss) per share   $ (0.09)     $ 0.05   $ (0.06) $ 0.08     $ 0.25 $ (0.22)
v3.23.4
INITIAL PUBLIC OFFERING (Details) - Aurora Acquisition Corp - $ / shares
 12 Months Ended
Mar. 10, 2021
Mar. 08, 2021
Dec. 31, 2022
Dec. 31, 2021
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS        
Number of units sold       24,300,287
Initial Public Offering        
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS        
Number of units sold 24,300,287 22,000,000    
Purchase price, in dollars per unit   $ 10.00    
Initial Public Offering | Class A ordinary share        
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS        
Number of shares issued per unit 1      
Initial Public Offering | Public Warrants        
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS        
Number of shares issued per unit 0.25      
Number of shares per warrant     1  
Exercise price of warrants (in dollars per share)     $ 11.50  
Over-allotment Option        
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS        
Number of units sold 2,300,287 3,300,000 3,300,000  
Purchase price, in dollars per unit $ 10.00 $ 10.00    
Underwriter Option Period 45 days      
v3.23.4
PRIVATE PLACEMENTS (Details) - USD ($)
 12 Months Ended
Nov. 09, 2021
Aug. 03, 2021
May 10, 2021
Mar. 10, 2021
Mar. 08, 2021
Dec. 31, 2022
Dec. 31, 2021
Sep. 30, 2023
Jun. 30, 2023
Aurora Acquisition Corp                  
PRIVATE PLACEMENTS                  
Proceeds from sale of Private Placement Warrants           $ 0 $ 6,860,057    
Sponsor agreement, forfeiture by sponsor upon closing of private warrants 50.00%   50.00%            
Sponsor locked up shares percentage 20.00%   20.00%            
Novator Private Placement Units | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                  
PRIVATE PLACEMENTS                  
Number of shares of common stock to be issued (in shares)   3,500,000     3,500,000        
Price of warrants   $ 10.00     $ 10.00        
Proceeds from sale of Private Placement Warrants   $ 35,000,000     $ 35,000,000        
Novator Private Placement Share | Aurora Acquisition Corp                  
PRIVATE PLACEMENTS                  
Proceeds from sale of Private Placement Warrants         $ 35,000,000        
Novator Private Placement Share | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                  
PRIVATE PLACEMENTS                  
Number of shares per warrant   1     1        
Private Placement Warrants | Aurora Acquisition Corp                  
PRIVATE PLACEMENTS                  
Proceeds from sale of Private Placement Warrants         $ 6,400,000        
Private Placement Warrants | Sponsor and certain of Company's directors and officers                  
PRIVATE PLACEMENTS                  
Number of shares per warrant         0.25        
Private Placement Warrants | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                  
PRIVATE PLACEMENTS                  
Number of shares of common stock to be issued (in shares)           3,500,000   3,500,000  
Price of warrants           $ 10.00   $ 10.00  
Number of shares per warrant   1             1
Private Placement Warrants | Sponsor and certain of Company's directors and officers | Class A ordinary share | Aurora Acquisition Corp                  
PRIVATE PLACEMENTS                  
Price of warrants   $ 11.50              
Number of shares per warrant   1   1          
Exercise price of warrant       $ 11.50 $ 11.50        
Over-allotment Option | Private Placement Warrants | Aurora Acquisition Corp                  
PRIVATE PLACEMENTS                  
Number of shares of common stock to be issued (in shares)       306,705          
Proceeds from sale of Private Placement Warrants       $ 460,057          
Over-allotment Option | Private Placement Warrants | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                  
PRIVATE PLACEMENTS                  
Number of shares of common stock to be issued (in shares)   440,000   306,705 440,000        
Proceeds from sale of Private Placement Warrants   $ 660,000   $ 460,057 $ 660,000        
Private Placement | Aurora Acquisition Corp                  
PRIVATE PLACEMENTS                  
Number of shares of common stock to be issued (in shares)             3,500,000    
Private Placement | Novator Private Placement Share | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                  
PRIVATE PLACEMENTS                  
Number of shares of common stock to be issued (in shares)         3,500,000        
Price of warrants         $ 10.00        
Private Placement | Private Placement Warrants | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                  
PRIVATE PLACEMENTS                  
Number of shares of common stock to be issued (in shares)   4,266,667     4,266,667        
Price of warrants   $ 1.50     $ 1.50        
Proceeds from sale of Private Placement Warrants   $ 6,400,000     $ 6,400,000        
v3.23.4
RELATED PARTY TRANSACTIONS - Founder Shares (Details)
 1 Months Ended 12 Months Ended
Aug. 03, 2021
USD ($)
$ / shares
shares
May 10, 2021
USD ($)
shares
Mar. 10, 2021
USD ($)
shares
Mar. 08, 2021
USD ($)
$ / shares
shares
Mar. 02, 2021
USD ($)
shares
Feb. 03, 2021
USD ($)
shares
Dec. 09, 2020
USD ($)
D
$ / shares
shares
Mar. 31, 2021
shares
Feb. 28, 2021
shares
Dec. 31, 2022
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
shares
Sep. 30, 2023
$ / shares
shares
Aug. 24, 2023
shares
Jun. 30, 2023
shares
RELATED PARTY TRANSACTIONS                            
Ordinary shares outstanding                   299,783,421   737,585,438    
Ordinary shares issued                   299,783,421   737,585,438    
Fair value of shares price | $                   $ 6,021,000        
Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Proceeds from sale of Private Placement Warrants | $                   $ 0 $ 6,860,057      
Independent directors | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Fair value of shares price | $         $ 6,955,000 $ 6,955,000                
Private Placement | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Number of shares of common stock to be issued (in shares)                     3,500,000      
Class B ordinary shares                            
RELATED PARTY TRANSACTIONS                            
Ordinary shares outstanding                   171,441,780        
Ordinary shares issued                   171,441,780     574,407,420  
Class B ordinary shares | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Ordinary shares outstanding                   6,950,072 6,950,072     6,950,072
Ordinary shares issued                   6,950,072 6,950,072     6,950,072
Class B ordinary shares | Sponsor | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Number of shares surrender                 131,250          
Number of shares transferred         1,407,813 1,407,813                
Founder Shares | Class B ordinary shares | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Share dividend               575,000            
Ordinary shares outstanding                 6,625,000          
Ordinary shares issued                 6,625,000          
Founder Shares | Class B ordinary shares | Over-allotment Option | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Founder shares surrendered for cancellation   249,928                        
Consideration | $   $ 0                        
Founder Shares | Class B ordinary shares | Sponsor | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Consideration received | $             $ 25,000              
Consideration received, shares             5,750,000              
Share dividend                 1,006,250          
Percentage of issued and outstanding shares after the Initial Public Offering collectively held by initial stockholders   20.00%                        
Restrictions on transfer period of time after business combination completion             1 year              
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ / shares             $ 12.00              
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D             20              
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D             30              
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences             150 days              
Novator Private Placement Units | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Number of shares of common stock to be issued (in shares) 3,500,000     3,500,000                    
Price of warrant | $ / shares $ 10.00     $ 10.00                    
Proceeds from sale of Private Placement Warrants | $ $ 35,000,000     $ 35,000,000                    
Novator Private Placement Share | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Proceeds from sale of Private Placement Warrants | $       $ 35,000,000                    
Novator Private Placement Share | Private Placement | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Number of shares of common stock to be issued (in shares)       3,500,000                    
Price of warrant | $ / shares       $ 10.00                    
Private Placement Warrants | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Proceeds from sale of Private Placement Warrants | $       $ 6,400,000                    
Private Placement Warrants | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Number of shares of common stock to be issued (in shares)                   3,500,000   3,500,000    
Price of warrant | $ / shares                   $ 10.00   $ 10.00    
Private Placement Warrants | Private Placement | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Number of shares of common stock to be issued (in shares) 4,266,667     4,266,667                    
Price of warrant | $ / shares $ 1.50     $ 1.50                    
Proceeds from sale of Private Placement Warrants | $ $ 6,400,000     $ 6,400,000                    
Private Placement Warrants | Over-allotment Option | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Number of shares of common stock to be issued (in shares)     306,705                      
Proceeds from sale of Private Placement Warrants | $     $ 460,057                      
Private Placement Warrants | Over-allotment Option | Sponsor and certain of Company's directors and officers | Aurora Acquisition Corp                            
RELATED PARTY TRANSACTIONS                            
Number of shares of common stock to be issued (in shares) 440,000   306,705 440,000                    
Proceeds from sale of Private Placement Warrants | $ $ 660,000   $ 460,057 $ 660,000                    
v3.23.4
RELATED PARTY TRANSACTIONS - Pre-Closing Bridge Notes (Details)
Nov. 02, 2021
USD ($)
Feb. 11, 2021
USD ($)
Dec. 31, 2023
USD ($)
Sep. 30, 2023
USD ($)
Jun. 30, 2023
USD ($)
Feb. 07, 2023
USD ($)
Better HoldCo, Inc. | Class B ordinary shares | Subsequent event            
RELATED PARTY TRANSACTIONS            
Amount of pre-money equity valuation         $ 6,900,000,000  
Aurora Acquisition Corp | Subsequent event | Better HoldCo, Inc.            
RELATED PARTY TRANSACTIONS            
Percent of discount         75.00%  
Amount of pre-money equity valuation         $ 6,900,000,000  
Aurora Acquisition Corp | Subsequent event | Better HoldCo, Inc. | Common Stock            
RELATED PARTY TRANSACTIONS            
Percent of discount         75.00%  
Amount of pre-money equity valuation     $ 6,900,000,000 $ 6,900,000,000 $ 6,900,000,000  
Aurora Acquisition Corp | Class B ordinary shares | Subsequent event | Better HoldCo, Inc.            
RELATED PARTY TRANSACTIONS            
Percent of discount     75.00% 75.00% 75.00% 75.00%
Amount of pre-money equity valuation       $ 6,900,000,000   $ 6,900,000,000
Aurora Acquisition Corp | Class B ordinary shares | Subsequent event | Better HoldCo, Inc. | Common Stock            
RELATED PARTY TRANSACTIONS            
Amount of pre-money equity valuation       $ 6,900,000,000 $ 6,900,000,000  
Aurora Acquisition Corp | Series D Preferred Stock | Subsequent event            
RELATED PARTY TRANSACTIONS            
Percent of discount     50.00% 50.00% 50.00%  
Bridge Note Purchase Agreement | SB Northstar LP            
RELATED PARTY TRANSACTIONS            
Bridge notes purchased $ 650,000,000          
Bridge Note Purchase Agreement | Sponsor            
RELATED PARTY TRANSACTIONS            
Bridge notes purchased 100,000,000          
Bridge Note Purchase Agreement | Better HoldCo, Inc.            
RELATED PARTY TRANSACTIONS            
Bridge notes issued $ 750,000,000 $ 750,000,000        
Conversion rate of bridge notes into Better Class A common stock 1          
Consideration amount per one share $ 10          
Bridge Note Purchase Agreement | Aurora Acquisition Corp | SB Northstar LP            
RELATED PARTY TRANSACTIONS            
Bridge notes purchased 650,000,000 $ 650,000,000        
Bridge Note Purchase Agreement | Aurora Acquisition Corp | Better HoldCo, Inc.            
RELATED PARTY TRANSACTIONS            
Conversion rate of bridge notes into Better Class A common stock   1        
Consideration amount per one share   $ 10        
Bridge Note Purchase Agreement | Aurora Acquisition Corp | Sponsor            
RELATED PARTY TRANSACTIONS            
Bridge notes purchased $ 100,000,000 $ 100,000,000        
v3.23.4
RELATED PARTY TRANSACTIONS - Director Services Agreement (Details) - USD ($)
 3 Months Ended 6 Months Ended 9 Months Ended 12 Months Ended
Apr. 04, 2023
Apr. 01, 2023
Mar. 21, 2023
Feb. 06, 2023
Aug. 26, 2022
Oct. 15, 2021
Mar. 21, 2021
Sep. 30, 2023
Sep. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Feb. 07, 2023
RELATED PARTY TRANSACTIONS                                
Share-Based Payment Arrangement, Expense               $ 25,044,000 $ 10,973,000     $ 37,398,000 $ 31,021,000 $ 38,557,000 $ 55,215,000  
Aurora Acquisition Corp                                
RELATED PARTY TRANSACTIONS                                
Compensation expense related to retention bonus                           50,000 50,000  
Merger Agreement | Better HoldCo, Inc. | Aurora Acquisition Corp                                
RELATED PARTY TRANSACTIONS                                
Maximum transaction expenses to be reimbursed         $ 15,000,000                     $ 2,500,000
Minimum number of days from amendment date with in which payment should made         5 days                      
Proceeds from transaction expenses reimbursed $ 3,750,000     $ 3,750,000 $ 7,500,000                      
Subsequent event | Merger Agreement | Aurora Acquisition Corp                                
RELATED PARTY TRANSACTIONS                                
Proceeds from transaction expenses reimbursed       $ 3,750,000                        
Subsequent event | Merger Agreement | Better HoldCo, Inc. | Aurora Acquisition Corp                                
RELATED PARTY TRANSACTIONS                                
Proceeds from transaction expenses reimbursed   $ 3,750,000                            
Ms. Harding, CFO                                
RELATED PARTY TRANSACTIONS                                
Incremental hourly fee                           500    
Ms. Harding, CFO | Aurora Acquisition Corp                                
RELATED PARTY TRANSACTIONS                                
Incremental hourly fee                   $ 500            
Expenses per month                   10,000       10,000    
Expenses per year                   15,000       15,000    
Share-Based Payment Arrangement, Expense     $ 75,000       $ 50,000                  
Ms. Harding, CFO | Forecast | Aurora Acquisition Corp                                
RELATED PARTY TRANSACTIONS                                
Share-Based Payment Arrangement, Expense     $ 75,000                          
Director Services Agreement | Aurora Acquisition Corp                                
RELATED PARTY TRANSACTIONS                                
Annual payments           $ 50,000                    
Incremental hourly fee           $ 500                    
Accrued services expenses                   300,000       87,875 100,000  
Services expenses                   $ 492,500 $ 117,500     $ 222,875 $ 390,000  
v3.23.4
RELATED PARTY TRANSACTIONS - Promissory Note from Related Party (Details) - Aurora Acquisition Corp - USD ($)
Dec. 09, 2020
Jun. 30, 2023
Dec. 31, 2022
Aug. 03, 2022
Feb. 23, 2022
Dec. 31, 2021
May 10, 2021
Related party              
RELATED PARTY TRANSACTIONS              
Notes Payable, Current   $ 412,395 $ 2,812,395     $ 1,412,295  
Promissory note              
RELATED PARTY TRANSACTIONS              
Aggregate principal amount $ 300,000       $ 4,000,000   $ 2,000,000
Principal amount of notes restated $ 300,000            
Aggregate cap of notes to cover operating costs   12,000,000 12,000,000 $ 12,000,000 $ 4,000,000    
Notes Payable, Current   $ 412,395 2,812,395        
Promissory note | Related party              
RELATED PARTY TRANSACTIONS              
Notes Payable, Current     $ 2,812,395     $ 1,412,295  
v3.23.4
RELATED PARTY TRANSACTIONS - Capital Contribution from Sponsor (Details)
 1 Months Ended
Jul. 31, 2021
USD ($)
Capital Contribution from Sponsor | Sponsor | Aurora Acquisition Corp  
RELATED PARTY TRANSACTIONS  
SEC filing fee $ 669,000
v3.23.4
COMMITMENTS AND CONTINGENCIES (Details)
 6 Months Ended 12 Months Ended
Mar. 10, 2021
USD ($)
$ / shares
shares
Mar. 08, 2021
USD ($)
shares
Jun. 30, 2023
USD ($)
item
$ / shares
Dec. 31, 2022
USD ($)
letter
lawsuit
$ / shares
shares
Dec. 31, 2021
USD ($)
shares
Jun. 22, 2022
USD ($)
Oct. 27, 2021
Mar. 03, 2021
item
COMMITMENTS AND CONTINGENCIES                
Payment of underwriting fee       $ 0        
Aurora Acquisition Corp                
COMMITMENTS AND CONTINGENCIES                
Maximum number of demands for registration of securities | item               3
Deferred fee per unit | $ / shares     $ 0.35 $ 0.35        
Number of units sold | shares         24,300,287      
Net proceeds $ 22,542,813 $ 8,505,100   $ 0 $ 8,505,100      
Gross proceeds $ 23,002,870              
Underwriting fee (in percentage) 2              
Deferred underwriting fee waived       $ 8,505,100   $ 8,505,100    
Payment of underwriting fee     $ 0          
Percentage of holders under lockup provisions     1.00% 1.00%     1.00%  
Lockup period for transfer of shares post merger     6 months 6 months        
Number of demand letters received     2 2        
Number of lawsuits filed     0 0        
Aurora Acquisition Corp | Over-allotment Option                
COMMITMENTS AND CONTINGENCIES                
Number of units sold | shares 2,300,287 3,300,000   3,300,000        
Share price (in dollars per share) | $ / shares $ 10.00              
v3.23.4
COMMITMENTS AND CONTINGENCIES - Pre-Closing Bridge Notes (Details)
Nov. 02, 2021
USD ($)
Feb. 11, 2021
USD ($)
Dec. 31, 2023
USD ($)
Sep. 30, 2023
USD ($)
Jun. 30, 2023
USD ($)
Feb. 07, 2023
USD ($)
Better HoldCo, Inc. | Subsequent event | Class B ordinary shares            
COMMITMENTS AND CONTINGENCIES            
Amount of pre-money equity valuation         $ 6,900,000,000  
Aurora Acquisition Corp | Subsequent event | Series D Preferred Stock            
COMMITMENTS AND CONTINGENCIES            
Percent of discount     50.00% 50.00% 50.00%  
Aurora Acquisition Corp | Subsequent event | Better HoldCo, Inc.            
COMMITMENTS AND CONTINGENCIES            
Percent of discount         75.00%  
Amount of pre-money equity valuation         $ 6,900,000,000  
Aurora Acquisition Corp | Subsequent event | Better HoldCo, Inc. | Class B ordinary shares            
COMMITMENTS AND CONTINGENCIES            
Percent of discount     75.00% 75.00% 75.00% 75.00%
Amount of pre-money equity valuation       $ 6,900,000,000   $ 6,900,000,000
Aurora Acquisition Corp | Subsequent event | Better HoldCo, Inc. | Common Stock            
COMMITMENTS AND CONTINGENCIES            
Percent of discount         75.00%  
Amount of pre-money equity valuation     $ 6,900,000,000 6,900,000,000 $ 6,900,000,000  
Aurora Acquisition Corp | Subsequent event | Better HoldCo, Inc. | Common Stock | Class B ordinary shares            
COMMITMENTS AND CONTINGENCIES            
Amount of pre-money equity valuation       $ 6,900,000,000 $ 6,900,000,000  
Bridge Note Purchase Agreement | Sponsor            
COMMITMENTS AND CONTINGENCIES            
Bridge notes purchased $ 100,000,000          
Bridge Note Purchase Agreement | SB Northstar LP            
COMMITMENTS AND CONTINGENCIES            
Bridge notes purchased 650,000,000          
Bridge Note Purchase Agreement | Better HoldCo, Inc.            
COMMITMENTS AND CONTINGENCIES            
Bridge notes issued $ 750,000,000 $ 750,000,000        
Conversion rate of bridge notes into Better Class A common stock 1          
Consideration amount per one share $ 10          
Bridge Note Purchase Agreement | Aurora Acquisition Corp | Sponsor            
COMMITMENTS AND CONTINGENCIES            
Bridge notes purchased 100,000,000 100,000,000        
Bridge Note Purchase Agreement | Aurora Acquisition Corp | SB Northstar LP            
COMMITMENTS AND CONTINGENCIES            
Bridge notes purchased $ 650,000,000 $ 650,000,000        
Bridge Note Purchase Agreement | Aurora Acquisition Corp | Better HoldCo, Inc.            
COMMITMENTS AND CONTINGENCIES            
Conversion rate of bridge notes into Better Class A common stock   1        
Consideration amount per one share   $ 10        
v3.23.4
SHAREHOLDERS' EQUITY - Preferred Shares (Details) - Aurora Acquisition Corp - $ / shares
Jun. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
Class of Warrant or Right [Line Items]      
Preference shares, shares authorized 5,000,000 5,000,000 5,000,000
Preference shares, par value, (per share) $ 0.0001 $ 0.0001 $ 0.0001
Preference shares, shares issued 0 0 0
Preference shares, shares outstanding 0 0 0
v3.23.4
SHAREHOLDERS' EQUITY - Ordinary Shares (Details)
 6 Months Ended 9 Months Ended 12 Months Ended
Jun. 30, 2023
vote
$ / shares
shares
Sep. 30, 2023
vote
$ / shares
shares
Dec. 31, 2022
Vote
vote
$ / shares
shares
Aug. 24, 2023
shares
Sep. 30, 2022
shares
Jun. 30, 2022
shares
Dec. 31, 2021
$ / shares
shares
Dec. 31, 2020
shares
SHAREHOLDERS' EQUITY                
Ordinary shares, shares authorized (in shares)   3,300,000,000 1,086,027,188          
Common stock, par value (in dollars per share) | $ / shares   $ 0.0001 $ 0.0001          
Ordinary shares, votes per share | vote     1          
Common stock, issued (in shares)   737,585,438 299,783,421          
Common stock, outstanding (in shares)   737,585,438 299,783,421          
Class A ordinary stock subject to possible redemption, issued (in shares)     332,314,737          
Class A ordinary stock subject to possible redemption, outstanding (in shares) 332,314,737 0 332,314,737   332,314,737 332,314,737 108,721,433 107,634,678
Class A ordinary share                
SHAREHOLDERS' EQUITY                
Ordinary shares, shares authorized (in shares)   1,800,000,000 24,452,565          
Common stock, par value (in dollars per share) | $ / shares   $ 0.0001            
Ordinary shares, votes per share | vote   1            
Common stock, issued (in shares)     24,452,565 91,300,735        
Common stock, outstanding (in shares)     24,452,565          
Class A ordinary share | Aurora Acquisition Corp                
SHAREHOLDERS' EQUITY                
Ordinary shares, shares authorized (in shares) 500,000,000   500,000,000       500,000,000  
Common stock, par value (in dollars per share) | $ / shares $ 0.0001   $ 0.0001       $ 0.0001  
Ordinary shares, votes per share | Vote     1          
Class A ordinary shares subject to possible redemption | Aurora Acquisition Corp                
SHAREHOLDERS' EQUITY                
Class A ordinary stock subject to possible redemption, issued (in shares)     24,300,287          
Class A ordinary stock subject to possible redemption, outstanding (in shares) 212,598   24,300,287       24,300,287  
Class A ordinary shares not subject to possible redemption | Aurora Acquisition Corp                
SHAREHOLDERS' EQUITY                
Ordinary shares, shares authorized (in shares) 500,000,000   500,000,000          
Common stock, par value (in dollars per share) | $ / shares $ 0.0001   $ 0.0001          
Ordinary shares, votes per share | vote 1              
Common stock, issued (in shares) 1,836,240   3,500,000       3,500,000  
Common stock, outstanding (in shares) 1,836,240   3,500,000       3,500,000  
Class B ordinary shares                
SHAREHOLDERS' EQUITY                
Ordinary shares, shares authorized (in shares)   700,000,000 588,261,164          
Common stock, par value (in dollars per share) | $ / shares   $ 0.0001            
Ordinary shares, votes per share | vote   3            
Common stock, issued (in shares)     171,441,780 574,407,420        
Common stock, outstanding (in shares)     171,441,780          
Class B ordinary shares | Aurora Acquisition Corp                
SHAREHOLDERS' EQUITY                
Ordinary shares, shares authorized (in shares) 50,000,000   50,000,000       50,000,000  
Common stock, par value (in dollars per share) | $ / shares $ 0.0001   $ 0.0001       $ 0.0001  
Ordinary shares, votes per share 1   1          
Common stock, issued (in shares) 6,950,072   6,950,072       6,950,072  
Common stock, outstanding (in shares) 6,950,072   6,950,072       6,950,072  
Shares subject to forfeiture 249,928   249,928          
Adjustment one of redemption price of stock based on market value and newly issued price (as a percent) 20.00%   20.00%          
Ratio to be applied to the stock in the conversion 20 20 20          
v3.23.4
SHAREHOLDERS' EQUITY - Warrants (Details) - Aurora Acquisition Corp
 6 Months Ended 12 Months Ended
Jun. 30, 2023
D
$ / shares
Dec. 31, 2022
D
$ / shares
Warrants    
Class of Warrant or Right [Line Items]    
Maximum period after business combination in which to file registration statement 30 days 30 days
Public Warrants    
Class of Warrant or Right [Line Items]    
Warrant exercise period condition one 30 days 30 days
Warrant exercise period condition two 12 months 12 months
Public Warrants expiration term 5 years 5 years
Share price trigger used to measure dilution of warrant $ 9.20 $ 9.20
Percentage of gross new proceeds to total equity proceeds used to measure dilution of warrant 60 60
Trading period after business combination used to measure dilution of warrant | D 10 10
Warrant exercise price adjustment multiple 115 115
Warrant redemption price adjustment multiple 180 180
Restrictions on transfer period of time after business combination completion 30 days 30 days
Public Warrants | Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $18.00    
Class of Warrant or Right [Line Items]    
Warrant redemption condition minimum share price   $ 18.00
Redemption price per public warrant (in dollars per share)   $ 0.01
Threshold trading days for redemption of public warrants   20 days
Threshold consecutive trading days for redemption of public warrants   30 days
Redemption period   30 days
Public Warrants | Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $10.00    
Class of Warrant or Right [Line Items]    
Warrant redemption condition minimum share price   $ 10.00
Redemption price per public warrant (in dollars per share)   $ 0.10
Minimum threshold written notice period for redemption of public warrants   90 days
Threshold trading days for redemption of public warrants   20 days
Threshold consecutive trading days for redemption of public warrants   30 days
Threshold number of business days before sending notice of redemption to warrant holders | D   3
Redemption period   30 days
v3.23.4
FAIR VALUE MEASUREMENTS (Details) - Aurora Acquisition Corp
Jun. 30, 2023
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
FAIR VALUE MEASUREMENTS      
Cash held in Trust Account $ 21,317,257 $ 282,284,619 $ 278,022,397
Fair Value, Inputs, Level 3 | Dividend rate      
FAIR VALUE MEASUREMENTS      
Measurement input, derivatives 0 0  
Money market funds | U.S. Treasury Securities      
FAIR VALUE MEASUREMENTS      
Cash held in Trust Account $ 21,317,257 $ 282,284,619  
v3.23.4
FAIR VALUE MEASUREMENTS - Recurring Basis (Details) - Aurora Acquisition Corp - USD ($)
Jun. 30, 2023
Dec. 31, 2022
Dec. 31, 2021
FAIR VALUE MEASUREMENTS      
Investments held in Trust Account - cash and cash equivalents $ 21,317,257 $ 282,284,619 $ 278,022,397
Derivative warrant liabilities 480,601 472,512 $ 13,340,717
Recurring | Public Warrants      
FAIR VALUE MEASUREMENTS      
Derivative warrant liabilities    
Recurring | Private Placement Warrants      
FAIR VALUE MEASUREMENTS      
Derivative warrant liabilities    
Recurring | Quoted Prices in Active Markets (Level 1)      
FAIR VALUE MEASUREMENTS      
Investments held in Trust Account - cash and cash equivalents 21,317,257 282,284,619  
Total Fair Value 21,470,956 282,375,745  
Recurring | Quoted Prices in Active Markets (Level 1) | Public Warrants      
FAIR VALUE MEASUREMENTS      
Derivative warrant liabilities 153,699 91,126  
Recurring | Quoted Prices in Active Markets (Level 1) | Private Placement Warrants      
FAIR VALUE MEASUREMENTS      
Derivative warrant liabilities   0  
Recurring | Significant Other Observable Inputs (Level 2)      
FAIR VALUE MEASUREMENTS      
Investments held in Trust Account - cash and cash equivalents   0  
Total Fair Value   0  
Recurring | Significant Other Observable Inputs (Level 2) | Public Warrants      
FAIR VALUE MEASUREMENTS      
Derivative warrant liabilities   0  
Recurring | Significant Other Observable Inputs (Level 2) | Private Placement Warrants      
FAIR VALUE MEASUREMENTS      
Derivative warrant liabilities   0  
Recurring | Significant Other Unobservable Inputs (Level 3)      
FAIR VALUE MEASUREMENTS      
Investments held in Trust Account - cash and cash equivalents   0  
Total Fair Value 326,902 381,386  
Recurring | Significant Other Unobservable Inputs (Level 3) | Public Warrants      
FAIR VALUE MEASUREMENTS      
Derivative warrant liabilities   0  
Recurring | Significant Other Unobservable Inputs (Level 3) | Private Placement Warrants      
FAIR VALUE MEASUREMENTS      
Derivative warrant liabilities $ 326,902 $ 381,386  
v3.23.4
FAIR VALUE MEASUREMENTS - Unobservable inputs (Details) - Aurora Acquisition Corp - Private Placement Warrants - Fair Value, Inputs, Level 3
 3 Months Ended
Mar. 31, 2023
Jun. 30, 2023
$ / shares
Y
Dec. 31, 2022
Dec. 31, 2022
Dec. 31, 2022
$ / shares
Dec. 31, 2022
Y
Dec. 31, 2022
USD ($)
Dec. 31, 2021
$ / shares
Y
Mar. 08, 2021
Mar. 08, 2021
$ / shares
Mar. 08, 2021
Y
Mar. 08, 2021
USD ($)
FAIR VALUE MEASUREMENTS                        
Public Warrants expiration term     5 years                  
Minimum                        
FAIR VALUE MEASUREMENTS                        
Period until the expected close of the transaction, considered for determination of expected term 3 months                      
Maximum                        
FAIR VALUE MEASUREMENTS                        
Period until the expected close of the transaction, considered for determination of expected term 6 months                      
Stock price                        
FAIR VALUE MEASUREMENTS                        
Measurement input, derivatives   10.45     10.09     9.90   10.02    
Strike price                        
FAIR VALUE MEASUREMENTS                        
Measurement input, derivatives   11.50     11.50     11.50   11.50    
Probability of completing a business combination                        
FAIR VALUE MEASUREMENTS                        
Measurement input, derivatives   0.6000   0.4000       1.0000 0.9000      
Remaining term (in years)                        
FAIR VALUE MEASUREMENTS                        
Measurement input, derivatives   1.13   0.0289   2.89 2.89 5.00     5.5 5.50
Volatility                        
FAIR VALUE MEASUREMENTS                        
Measurement input, derivatives   0.0500   0.0300       0.2200 0.1500      
Risk-free rate                        
FAIR VALUE MEASUREMENTS                        
Measurement input, derivatives   0.0526   0.0420       0.0126 0.0096      
Fair value of warrants                        
FAIR VALUE MEASUREMENTS                        
Measurement input, derivatives   0.06     0.07     1.59   0.86    
v3.23.4
FAIR VALUE MEASUREMENTS - Change in the Fair Value of the Warrant Liabilities (Details) - Aurora Acquisition Corp - Recurring - USD ($)
 3 Months Ended 12 Months Ended
Mar. 08, 2021
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2022
Dec. 31, 2021
Warrants              
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]              
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Beginning Balance   $ 733,739 $ 472,512 $ 11,262,650 $ 13,340,717 $ 13,340,717 $ 0
Initial measurement $ 13,882,167            
Change in valuation inputs or other assumptions   (253,138) 261,227 (3,813,346) (2,078,067) (12,868,205) (1,576,196)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance   480,601 733,739 7,449,304 11,262,650 472,512 13,340,717
Warrants | Over-allotment Option              
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]              
Initial measurement             1,034,746
Fair Value, Inputs, Level 3              
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]              
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Beginning Balance   381,386 381,386 8,771,879 8,662,912 8,662,912 0
Initial measurement 9,152,167            
Change in valuation inputs or other assumptions   (54,484)   (2,233,833) 108,967 (8,281,526) (1,035,190)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance   326,902 381,386 6,538,046 8,771,879 381,386 8,662,912
Fair Value, Inputs, Level 3 | Over-allotment Option              
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]              
Initial measurement             545,935
Fair Value, Inputs, Level 1              
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]              
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Beginning Balance   352,353 91,126 2,490,771 4,677,805 4,677,805 0
Initial measurement $ 4,730,000            
Change in valuation inputs or other assumptions   (198,654) 261,227 (1,579,513) (2,187,034) (4,586,679) (541,006)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance   $ 153,699 $ 352,353 $ 911,258 $ 2,490,771 $ 91,126 4,677,805
Fair Value, Inputs, Level 1 | Over-allotment Option              
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]              
Initial measurement             $ 488,811
v3.23.4
SUBSEQUENT EVENTS (Details) - Aurora Acquisition Corp - USD ($)
 12 Months Ended
Sep. 30, 2023
Feb. 24, 2023
Feb. 08, 2023
Dec. 31, 2021
Dec. 31, 2023
Jun. 30, 2023
Feb. 23, 2023
Feb. 07, 2023
Subsequent Event [Line Items]                
Repayment amount     $ 2,400,000          
Amount outstanding     412,395     $ 412,395    
Surrender and cancellation of Founder Shares   $ 263,123,592   $ 0        
Novator Capital Ltd.                
Subsequent Event [Line Items]                
Surrender and cancellation of Founder Shares (in shares)   1,663,760            
Novator Capital Ltd. | Limited waiver                
Subsequent Event [Line Items]                
Aggregate redemption amount             $ 17,000,000  
Public shareholders                
Subsequent Event [Line Items]                
Surrender and cancellation of Founder Shares (in shares)   24,087,689            
Subsequent event                
Subsequent Event [Line Items]                
Repayment amount     2,400,000          
Amount outstanding     $ 412,395          
Consideration $ 35,000,000              
Surrender and cancellation of Founder Shares   $ 263,123,592            
Subsequent event | Novator Capital Ltd.                
Subsequent Event [Line Items]                
Surrender and cancellation of Founder Shares (in shares)   1,663,760            
Subsequent event | Novator Capital Ltd. | Limited waiver                
Subsequent Event [Line Items]                
Aggregate redemption amount             $ 17,000,000  
Share price (in dollars per share)         $ 10.00 $ 10.00    
Subsequent event | Public shareholders                
Subsequent Event [Line Items]                
Surrender and cancellation of Founder Shares (in shares)   24,087,689            
Subsequent event | Series D Preferred Stock                
Subsequent Event [Line Items]                
Percent of discount 50.00%       50.00% 50.00%    
Common Stock | Class B ordinary shares                
Subsequent Event [Line Items]                
Surrender and cancellation of Founder Shares       $ 25        
Surrender and cancellation of Founder Shares (in shares)       249,928        
Better HoldCo, Inc. | Subsequent event                
Subsequent Event [Line Items]                
Percent of discount           75.00%    
Amount of pre-money equity valuation           $ 6,900,000,000    
Better HoldCo, Inc. | Subsequent event | Class B ordinary shares                
Subsequent Event [Line Items]                
Percent of discount 75.00%       75.00% 75.00%   75.00%
Amount of pre-money equity valuation $ 6,900,000,000             $ 6,900,000,000
Better HoldCo, Inc. | Preferred Stock                
Subsequent Event [Line Items]                
Percent of discount               50.00%
Better HoldCo, Inc. | Preferred Stock | Subsequent event                
Subsequent Event [Line Items]                
Amount of pre-money equity valuation               $ 6,900,000,000
Better HoldCo, Inc. | Common Stock | Subsequent event                
Subsequent Event [Line Items]                
Percent of discount           75.00%    
Amount of pre-money equity valuation 6,900,000,000       $ 6,900,000,000 $ 6,900,000,000    
Better HoldCo, Inc. | Common Stock | Subsequent event | Class B ordinary shares                
Subsequent Event [Line Items]                
Amount of pre-money equity valuation $ 6,900,000,000         $ 6,900,000,000    
v3.23.4
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Accounting Standards Update [Extensible Enumeration] us-gaap_AccountingStandardsUpdateExtensibleList Accounting Standards Update 2016-02 [Member]