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Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 347 added, 308 removed, 829 unchanged (44% of the section changed)

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, December 31,

September 30, December 31,

(Amounts in thousands, except share and per share amounts) 2024 2023

4 unchanged sentences

Loans held for investment (net of allowance for credit losses

of $ 261 and none as of June 30, 2024 and December 31, 2023, respectively)

of $ 1,138 and none as of September 30, 2024 and December 31, 2023, respectively)

Other receivables, net 17,337 16,888

6 unchanged sentences

Total Assets $ 845,163 $ 905,554

Liabilities and Stockholders’ Equity

Liabilities and Stockholders’ (Deficit)/Equity

Warehouse lines of credit $ 134,481 $ 126,218

1 unchanged sentence

Customer deposits 97,782 11,839

Accounts payable and accrued expenses (includes $ 66 and none payable to related parties as of June 30, 2024 and December 31, 2023, respectively)

Accounts payable and accrued expenses (includes $ 81 and none payable to related parties as of September 30, 2024 and December 31, 2023, respectively)

68,557 66,558

3 unchanged sentences

Lease liabilities 4,824 31,202

Other liabilities (includes none and $ 390 payable to related parties as of June 30, 2024 and December 31, 2023, respectively)

Other liabilities (includes none and $ 390 payable to related parties as of September 30, 2024 and December 31, 2023, respectively)

14,973 25,837

1 unchanged sentence

Commitments and contingencies (see Note 12)

Stockholders’ Equity

Stockholders’ (Deficit)/Equity

Common stock $ 0.0001 par value;

3,300,000,000 shares authorized as of June 30, 2024 and December 31, 2023, and 755,548,679 and 751,773,361 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

66,000,000 shares authorized as of September 30, 2024 and December 31, 2023, and 15,136,302 and 15,035,467 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively 1

Notes receivable from stockholders ( 9,149 ) ( 10,111 )

Additional paid-in capital 1

1,858,070 1,838,499

Accumulated deficit ( 1,851,143 ) ( 1,704,076 )

Accumulated other comprehensive loss 2,608 ( 1,714 )

Total Stockholders’ Equity 44,908 122,600

Total Liabilities and Stockholders’ Equity $ 957,883 $ 905,554

Total Stockholders’ (Deficit)/Equity 388 122,600

Total Liabilities and Stockholders’ (Deficit)/Equity $ 845,163 $ 905,554

Periods have been adjusted to reflect the 1-for-50 reverse stock split on August 16, 2024.

See Note 1 Organization and Nature of the Business - Reverse Stock Split, for additional information.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended June 30, Six Months Ended

Three Months Ended September 30, Nine Months Ended

September 30,

(Amounts in thousands, except share and per share amounts) 2024 2023 2024 2023

29 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Three Months Ended June 30, 2024

(Amounts in thousands, except share and per share amounts) Issued and Outstanding Par

Value Notes Receivables from Stockholders Additional Paid-In

Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Equity (Deficit)

Balance as of March 31, 2024 755,578,694 75 ( 10,976 ) 1,844,786 ( 1,755,568 ) ( 2,027 ) 76,290

For the Three Months Ended September 30, 2024

(Amounts in thousands, except share and per share amounts) Issued and Outstanding 1

Notes Receivables from Stockholders Additional Paid-In

Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Total Stockholders' (Deficit) Equity

Balance as of June 30, 2024 15,110,974 2 ( 9,130 ) 1,852,417 ( 1,796,933 ) ( 1,448 ) 44,908

Issuance of common stock for options exercised 1,483 — — 74 — — 74

Cancellation of common stock ( 859,697 ) — — — — — —

Stock-based compensation — — — 5,924 — — 5,924

Tax withholding upon vesting of restricted stock units — — — ( 364 ) — — ( 364 )

Share issued for vested restricted stock units 812,053 — — — — — —

Settlement of notes receivable from stockholders — — 1,846 ( 1,846 ) — — —

Shares issued for vested restricted stock units 23,845 — — — — — —

Vesting of common stock issued via notes receivable from stockholders — — ( 19 ) 19 — — —

Net loss — — — — ( 54,210 ) — ( 54,210 )

Other comprehensive loss— foreign currency translation adjustment, net of tax — — — — — 579 579

Balance - June 30, 2024 755,548,679 $ 75 $ ( 9,130 ) $ 1,852,344 $ ( 1,796,933 ) $ ( 1,448 ) $ 44,908

Other comprehensive income— foreign currency translation adjustment, net of tax — — — — — 4,056 4,056

Balance - September 30, 2024 15,136,302 $ 2 $ ( 9,149 ) $ 1,858,070 $ ( 1,851,143 ) $ 2,608 $ 388

Periods have been adjusted to reflect the 1-for-50 reverse stock split on August 16, 2024.

See Note 1 Organization and Nature of the Business - Reverse Stock Split, for additional information.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Three Months Ended June 30, 2023

For the Three Months Ended September 30, 2023

Convertible preferred stock Common Stock

(Amounts in thousands, except share and per share amounts) Shares Amount Issued and Outstanding Par Value Notes Receivables from Stockholders Additional Paid-In

Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Equity (Deficit)

Balance - March 31, 2023 108,721,433 $ 436,280 98,358,440 $ 10 $ ( 55,581 ) $ 625,545 $ ( 1,255,278 ) $ ( 1,645 ) $ ( 686,949 )

(Amounts in thousands, except share and per share amounts) Shares 1

Amount Issued and Outstanding 1

Notes Receivables from Stockholders Additional Paid-In

Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Total Stockholders' (Deficit) Equity

Balance - June 30, 2023 2,174,429 $ 436,280 1,967,644 $ — $ ( 56,757 ) $ 631,503 $ ( 1,299,320 ) $ ( 1,732 ) $ ( 726,306 )

Recapitalization of shares due to Business Combination 4,471,866 — 4,046,598 1 — ( 1 ) — — —

Adjusted Balance as of March 31, 2023 332,314,737 436,280 300,639,517 30 ( 55,581 ) 625,525 ( 1,255,278 ) ( 1,645 ) ( 686,949 )

Adjusted Balance as of June 30, 2023 6,646,295 436,280 6,014,242 1 ( 56,757 ) 631,502 ( 1,299,320 ) ( 1,732 ) ( 726,306 )

Conversion of convertible preferred stock to common stock ( 6,646,295 ) ( 436,280 ) 6,646,295 1 — 436,279 — — 436,280

Conversion of pre-closing bridge notes to common stock — — 2,100,000 — — 750,000 — — 750,000

Issuance of common stock upon Business Combination close — — 200,090 — — 37,967 — — 37,967

Exercise of warrants — — 291,523 — — 4,290 — — 4,290

Transaction costs related to the Business Combination — — — — — ( 18,178 ) — — ( 18,178 )

Recognition of derivative liability related to earnout — — — — — ( 1,112 ) — — ( 1,112 )

Assumption private & public placement warrants — — — — — ( 1,276 ) — — ( 1,276 )

Issuance of common stock for options exercised — — 34,686 — — 2,253 — — 2,253

3 unchanged sentences

Vesting of common stock issued via notes receivable from stockholders — — — — ( 1,297 ) — — ( 1,297 )

Forfeiture of shares — — ( 308,813 ) — 30,161 ( 30,161 ) — — —

Forgiveness of officer loans — — — — 988 — — — 988

Shares transferred in settlement of loans — — ( 149,626 ) — 15,200 ( 15,200 ) — — —

Net loss — — — — — — ( 353,889 ) — ( 353,889 )

Other comprehensive loss— foreign currency translation adjustment, net of tax — — — — 1 — ( 698 ) ( 697 )

Balance - June 30, 2023 332,314,737 $ 436,280 300,712,117 $ 30 $ ( 56,757 ) $ 631,493 $ ( 1,299,320 ) $ ( 1,732 ) $ ( 726,306 )

Balance - September 30, 2023 — $ — 15,019,335 $ 2 $ ( 10,448 ) $ 1,832,444 $ ( 1,653,209 ) $ ( 2,430 ) $ 166,359

Periods have been adjusted to reflect the 1-for-50 reverse stock split on August 16, 2024.

See Note 1 Organization and Nature of the Business - Reverse Stock Split, for additional information

The accompanying notes are an integral part of these unaudited consolidated financial statements.

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Six Months Ended June 30, 2024

(Amounts in thousands, except share and per share amounts) Issued and Outstanding Par

Value Notes Receivables from Stockholders Additional Paid-In

Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Equity (Deficit)

For the Nine Months Ended September 30, 2024

(Amounts in thousands, except share and per share amounts) Issued and Outstanding 1

Notes Receivables from Stockholders Additional Paid-In

Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' (Deficit) Equity

Balance - December 31, 2023 15,035,467 2 ( 10,111 ) 1,838,499 ( 1,704,076 ) ( 1,714 ) 122,600

4 unchanged sentences

Tax withholding upon vesting of restricted stock units — — — ( 1,736 ) — — ( 1,736 )

Share issued for vested restricted stock units 5,090,442 1 — — — — 1

Shares issued for vested restricted stock units 127,254 — — — — — —

Vesting of common stock issued via notes receivable from stockholders — — ( 884 ) 876 — — ( 8 )

1 unchanged sentence

Net loss — — — — ( 147,067 ) — ( 147,067 )

Other comprehensive loss— foreign currency translation adjustment, net of tax — — — — — 266 266

Balance - June 30, 2024 755,548,679 $ 75 $ ( 9,130 ) $ 1,852,344 $ ( 1,796,933 ) $ ( 1,448 ) $ 44,908

Other comprehensive income— foreign currency translation adjustment, net of tax — — — — — 4,322 4,322

Balance - September 30, 2024 15,136,302 $ 2 $ ( 9,149 ) $ 1,858,070 $ ( 1,851,143 ) $ 2,608 $ 388

Periods have been adjusted to reflect the 1-for-50 reverse stock split on August 16, 2024.

See Note 1 Organization and Nature of the Business - Reverse Stock Split, for additional information.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Six Months Ended June 30, 2023

For the Nine Months Ended September 30, 2023

Convertible preferred stock Common Stock

(Amounts in thousands, except share and per share amounts) Shares Amount Issued and Outstanding Par Value Notes Receivables from Stockholders Additional Paid-In

Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Equity (Deficit)

(Amounts in thousands, except share and per share amounts) Shares Amount Issued and Outstanding 1

Notes Receivables from Stockholders Additional Paid-In

Capital Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Total Stockholders' (Deficit) Equity

Balance - December 31, 2022 2,174,429 $ 436,280 1,961,567 $ — $ ( 53,225 ) $ 618,153 $ ( 1,167,688 ) $ ( 1,423 ) $ ( 604,183 )

1 unchanged sentence

Adjusted Balance as of December 31, 2022 6,646,295 436,280 5,995,668 1 ( 53,225 ) 618,152 ( 1,167,688 ) ( 1,423 ) ( 604,183 )

Conversion of convertible preferred stock to common stock ( 6,646,295 ) ( 436,280 ) 6,646,295 1 — 436,279 — — 436,280

Conversion of pre-closing bridge notes to common stock — — 2,100,000 — — 750,000 — — 750,000

Issuance of common stock upon Business Combination close — — 200,090 — — 37,967 — — 37,967

Exercise of warrants — — 291,523 — — 4,290 — — 4,290

Transaction costs related to the Business Combination — — — — — ( 18,178 ) — — ( 18,178 )

Recognition of derivative liability related to earnout — — — — — ( 1,112 ) — — ( 1,112 )

Assumption private & public placement warrants — — — — — ( 1,276 ) — — ( 1,276 )

Issuance of common stock for options exercised — — 34,686 — — 4,459 — — 4,459

1 unchanged sentence

Stock-based compensation — — — — 926 52,022 — 52,948

Tax withholding upon vesting of restricted stock units — — — — — ( 4,790 ) — — ( 4,790 )

Shares issued for vested restricted stock units — — 265,622 — — — — — —

Vesting of common stock issued via notes receivable from stockholders — — — — ( 4,498 ) — — — ( 4,498 )

Forfeiture of shares — — ( 308,813 ) — 30,161 ( 30,161 ) — — —

Forgiveness of officer loans — — — — 988 — — — 988

Shares transferred in settlement of loans — — ( 149,626 ) — 15,200 ( 15,200 ) — —

Net loss — — — — — — ( 485,521 ) — ( 485,521 )

Other comprehensive loss— foreign currency translation adjustment, net of tax — — — — — ( 1,007 ) ( 1,007 )

Balance - June 30, 2023 332,314,737 $ 436,280 300,712,117 $ 30 $ ( 56,757 ) $ 631,493 $ ( 1,299,320 ) $ ( 1,732 ) $ ( 726,306 )

Balance - September 30, 2023 — $ — 15,019,335 $ 2 $ ( 10,448 ) $ 1,832,444 $ ( 1,653,209 ) $ ( 2,430 ) $ 166,359

Periods have been adjusted to reflect the 1-for-50 reverse stock split on August 16, 2024.

See Note 1 Organization and Nature of the Business - Reverse Stock Split, for additional information.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

Six Months Ended June 30,

Nine Months Ended September 30,

(Amounts in thousands) 2024 2023

7 unchanged sentences

Non-cash interest and amortization of debt issuance costs and discounts 4,472 6,043

Other non-cash adjustments — 2,147

Change in fair value of warrants ( 927 ) ( 861 )

Change in fair value of convertible preferred stock warrants — ( 266 )

Change in fair value of bifurcated derivative — 236,603

1 unchanged sentence

(Recovery of)/Provision for loan repurchase reserve ( 10,168 ) 178

Provision for credit losses 1,138 —

Change in fair value of derivatives ( 3,651 ) ( 819 )

22 unchanged sentences

Cash Flows from Financing Activities:

Issuance of convertible notes (issued to a related party.

See Note 10) — 528,585

Principal payments on convertible notes ( 1,103 ) —

Exercise of convertible preferred stock warrants — 1,460

Proceeds from Business Combination — 21,616

Proceeds from issuance of common stock — 16,351

Net borrowings/(repayments) on warehouse lines of credit 8,263 ( 70,513 )

2 unchanged sentences

Repayments on corporate line of credit — ( 146,449 )

Principal payments on convertible notes ( 1,103 ) ( 3,361 )

Payment of debt issuance costs — ( 3,561 )

Payment of equity financing costs — ( 13,375 )

Proceeds from exercise of stock options 5 343

Repurchase or cancellation of common stock — ( 224 )

Net cash (used in)/ provided by financing activities 144,827 ( 25,486 )

Net cash provided by/(used in) financing activities 93,108 330,929

Effects of currency translation on cash, cash equivalents, and restricted cash 1,675 ( 941 )

Net Decrease in Cash, Cash Equivalents, and Restricted Cash ( 180,666 ) ( 211,132 )

Net (Decrease)/Increase in Cash, Cash Equivalents, and Restricted Cash ( 290,987 ) 208,506

Cash, cash equivalents, and restricted cash—Beginning of period 528,066 346,065

Cash, cash equivalents, and restricted cash—End of period $ 237,079 $ 554,571

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the total of the same such amounts shown on the previous page.

Six Months Ended June 30,

Nine Months Ended September 30,

(Amounts in thousands) 2024 2023

10 unchanged sentences

Settlement of Notes Receivable from Stockholders $ 1,846 $ —

Reduction of lease liability via modification $ 20,839 $ —

Acquisition earnout $ — $ 3,430

Forgiveness of notes receivable from stockholders

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

15 unchanged sentences

The Company’s Class A common stock, par value $ 0.0001 per share (“Class A common stock”), and public warrants are listed on the Nasdaq Capital Market under the ticker symbols “BETR” and “BETRW,” respectively.

Going Concern Considerations— 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 condensed consolidated financial statements are issued.

On October 12, 2023, and on April 9, 2024, the Company was notified by the Listing Qualifications Staff of The Nasdaq Stock Market, LLC ("Nasdaq") that the Company’s Class A common stock was not in compliance with the $1.00 minimum bid price rule for continued listing on Nasdaq, and would be subject to delisting for failure to regain compliance with such rule within the first 180-day compliance period (ending April 9, 2024) or a subsequent 180-day compliance period (ending October 7, 2024).

If the Class A common stock is no longer listed on Nasdaq, or another national securities exchange, such delisting would constitute a fundamental change under the indenture for the Convertible Note (as defined below) that would require the Company to redeem the Convertible Note prior to maturity for an amount in cash equal to the principal amount of the Convertible Note plus accrued and unpaid interest to the redemption date.

As of June 30, 2024, the Company had cash and cash equivalents, together with short-term investments of $ 378.8 million, compared to $ 528.6 million principal amount outstanding under the Convertible Note.

If the Company is required to redeem the Convertible Note prior to maturity, the Company may not have sufficient available cash and cash equivalents or be able to obtain additional liquidity, on acceptable terms or at all, to enable the Company to redeem or refinance the Convertible Note and continue operating its business.

The Company applied for and, on March 7, 2024, received approval from Nasdaq to transfer the listing of its Class A common stock, from the Nasdaq Global Market to the Nasdaq Capital Market.

The Class A common stock transferred to the Nasdaq Capital Market effective as of the opening of business on March 13, 2024 and continues to trade under the symbol “BETR.”

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On April 9, 2024, the Company received formal notice that Nasdaq granted the Company’s request for an additional 180-day period, or until October 7, 2024, to evidence compliance with the $1.00 per share requirement for continued inclusion on The Nasdaq Capital Market pursuant to the Bid Price Rule.

If at any time before October 7, 2024, the bid price of the Company’s Class A common stock closes at or above $1.00 per share or more for a minimum of ten consecutive business days, Nasdaq will provide the Company with written confirmation of compliance with the Bid Price Rule.

On June 4, 2024, at the 2024 annual meeting of the Company’s stockholders, the Company’s stockholders approved amendments to the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to effect one or more reverse stock splits of the Company’s Common Stock (as defined below) at a ratio ranging from any whole number between 1-for-2 and 1-for-100 and in the aggregate not more than 1-for-100, inclusive, as determined by the Company’s board of directors (the “Reverse Stock Split Authorization”).

On August 1, 2024, pursuant to the Reverse Stock Split Authorization, the Company’s board of directors approved a reverse stock split (the “Reverse Stock Split”) and set a split ratio of 1-for-50 of our Class A common stock, Class B common stock, par value $ 0.0001 per share (“Class B common stock”), and Class C common stock, par value $ 0.0001 per share (“Class C common stock” and, together with the Class A common stock and the Class B common stock, “Common Stock” ), provided that the Company’s board of directors reserved the right to modify or abandon the amendment prior to filing with the Secretary of State of the State of Delaware.

As of the effective time of the Reverse Stock Split, one post-split share of our Common Stock will be issued in exchange for every 50 pre-split shares of our Common Stock.

The Reverse Stock Split will result in the Company’s share price being above the $1.00 Bid Price Rule and mitigates the going concern conditions.

The Reverse Stock Split is currently scheduled to become effective at 6:00 p.m.

New York time on August 16, 2024.

Reverse Stock-Split— On Friday, August 16, 2024, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation, effecting a 1-for-50 reverse stock split of the Company’s common stock (the “Reverse Stock Split”) for the primary purpose of increasing the per share trading price of the Company’s Class A common stock to enable the Company to regain compliance with the minimum bid price requirement for continued listing on The Nasdaq Capital Market (the “Nasdaq”).

The Company’s Class A common stock began trading on a split-adjusted basis on the Nasdaq upon the market open on Monday, August 19, 2024.

Effective August 16, 2024, as a result of the Reverse Stock Split, every 50 shares of the Company’s issued and outstanding common stock were converted into one issued and outstanding share of Class A common stock, Class B common stock and Class C common stock, as applicable, without any change to the par value per share, the voting rights of the common stock, any stockholder’s percentage interest in the Company’s equity or any other aspect of the common stock.

The accompanying financial statements have been retroactively recast to reflect this reverse split stock resulting in a reclass to historic financials between common stock and additional paid-in-capital.

On September 3, 2024, the Company received a letter from Nasdaq notifying the Company that the Staff has determined that for the last 10 consecutive business days, from August 19, 2024, to August 30, 2024, the closing bid price of the Company’s common stock has been at $1.00 per share or greater, and accordingly, the Company has regained compliance with Listing Rule 5550(a)(2) and the matter is now closed.

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.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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, and stockholders’ equity (deficit) and cash flows.

The results of operations and other information for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2024.

The results of operations and other information for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2024.

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, 2023.

12 unchanged sentences

The Company has not recognized any impairments on these investments to date and any unrealized gains or losses on these investments are immaterial.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Allowance for Credit Losses – Held to Maturity (“HTM”) Short-term Investments — The Company’s HTM Short-term investments are required to utilize the Current Expected Credit Loss approach to estimate expected credit losses.

9 unchanged sentences

Mortgage Loans Held for Sale, at Fair Value — The Company sells its 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 primarily consists of mortgage loans as well as home equity line of credit and closed-end second lien loans (together defined as “HELOC”), originated for sale by BMC.

3 unchanged sentences

The Company accounts for the gains or losses resulting from sales of loans based on the guidance of ASC 860-20 – Sales of Financial Assets .

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.

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 gain on loans, net.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Subsequent changes in the fair value of the IRLC are measured at each reporting period within gain on loans, net until the loan is funded.

10 unchanged sentences

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.

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

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

8 unchanged sentences

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, mortgage servicing rights, and warrant and equity related liabilities.

Assets and liabilities measured at fair value on a recurring basis include LHFS, derivative assets and liabilities, including IRLCs and forward sale commitments, and warrant and equity related liabilities.

When developing fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs.

3 unchanged sentences

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 Overnight Financing Rate (“SOFR”).

The outstanding balance of the Company’s warehouse lines of credit will fluctuate based on its lending volume.

The outstanding balance of the Company’s warehouse

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

1 unchanged sentence

The Company did not incur any significant issuance costs related to its warehouse lines of credit.

Convertible Note— As part of the Closing of the Business Combination, the Company issued the Convertible Note.

Convertible Note— As part of the Closing of the Business Combination, the Company issued the Convertible Note to a related party.

Upon initial issuance, the Convertible Note is evaluated for redemption and conversion features that could result in embedded derivatives that require bifurcation from the notes.

8 unchanged sentences

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, 2023, which describes the Company’s annual significant income tax accounting policy and related methodology.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition — The Company generates revenue from the following streams:

10 unchanged sentences

Integrated partnership fees —Includes fees that the Company receives for originating loans on behalf of an integrated partnership, which are recognized as revenue upon the integrated partner’s funding of the loan.

Provision for loan repurchase reserve —In connection with the sale of loans on the secondary market, the Company 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.

Provision for loan repurchase reserve recovery/(provision) —In connection with the sale of loans on the secondary market, the Company 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 provision for loan repurchase reserve, represents the charge for these potential losses.

2) Other revenue consists of revenue from the Company’s additional offerings such as real estate services, insurance, and international lending revenue, which is recognized based on ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”).

2) Other revenue consists of revenue from the Company’s additional offerings such as real estate services, insurance services, and international lending revenue, which 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 core principle, involving a five-step process, of the revenue model is that an

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

For real estate services, the Company generates revenues from fees related to real estate agent services, mainly from cooperative brokerage fees from the Company’s network of third-party real estate agents, which assist customers in the purchase or sale of a home.

8 unchanged sentences

For title insurance, the Company recognizes revenue from fees upon the completion of the performance obligation which, is when the mortgage transaction closes.

For homeowners insurance and title insurance, the Company is the agent in the transactions as

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

For homeowners insurance and 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.

For international lending revenue, the Company generates revenue primarily from broker fees earned in the U.K.

The Company recognizes international lending revenue upon completion of the performance obligation, which is when the mortgage transaction closes.

3) Net interest income includes interest income from LHFS, including HELOCs, calculated based on the note rate of the respective loan, interest income from short-term investments, and interest income on loans held for investment.

3) Net interest income includes interest income from LHFS, calculated based on the note rate of the respective loan, interest income from short-term investments, and interest income on loans held for investment.

Interest expense includes interest expense on warehouse lines of credit, interest expense on customer deposits, as well as interest expense on the Convertible Note.

13 unchanged sentences

These expenses are expensed as incurred.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Other Expenses — Other expenses consist of direct costs related to other non-mortgage homeownership activities, including settlement service expenses, lead generation expenses, expenses incurred in relation to our international lending activities, and gains and losses from equity related liabilities.

4 unchanged sentences

Reclassification of Prior Period Presentation in the Balance Sheet and Statement of Operations and Comprehensive Loss — Reclassifications of the previously reported statement of operations and comprehensive loss have been made to conform to the current period’s presentation, which provides increased transparency to the nature of the costs.

To conform to the current presentation, the following changes were made to the prior period statement of operations:

To conform to the current presentation, the following changes were made to the prior period condensed consolidated financial statements:

• Loans held for investment—Loans held for investment has been reclassified from prepaid expenses and other assets to loans held for investment on the condensed consolidated balance sheets.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

• Common Stock—Common Stock has been recast to reflect the 1-for-50 reverse stock split, see Note 1 Organization and Nature of the Business - Reverse Stock Split, for additional information.

• Additional paid-in-capital—Additional paid-in-capital has been recast to reflect the 1-for-50 reverse stock split,.

see Note 1 Organization and Nature of the Business - Reverse Stock Split, for additional information.

• Gain on loans, net (Previously mortgage platform revenue, net)—Loan repurchase reserve recovery (provision) has been reclassified from mortgage platform expenses to gain on loans, net.

The Company’s mortgage related activities that do not include originating and selling loans, namely in the U.K., have been reclassified to other revenue.

The Company’s mortgage related activities that do not include originating and selling loans, namely in the U.K., have been reclassified from other platform revenue to other revenue.

• Net interest income:

• Interest income—Interest income from short-term investments has been reclassified from other income.

• Interest expense (Previously warehouse interest expense)—Interest expense and amortization on non-funding debt has been reclassified to interest expenses from interest expense and amortization on non-funding debt.

• Interest expense (Previously warehouse interest expense)—Interest expense and amortization on non-funding debt has been reclassified to interest expense from interest expense and amortization on non-funding debt.

• Loan origination expense (Previously mortgage platform expenses)—The Company’s expenses that were not incurred to originate and sell loans, namely in the U.K., have been reclassified to other expenses.

2 unchanged sentences

• Compensation and benefits—Compensation and benefits, which includes stock-based compensation, was previously allocated to mortgage platform expenses, other platform expenses, general and administrative expenses, marketing and advertising expenses, and technology and product development expenses based on allocated headcount is now presented as its own financial statement line item.

• Rent and occupancy—Rent and occupancy, which is now included within general and administrative expenses, was previously allocated to mortgage platform expenses, other platform expenses, general and administrative expenses, marketing and advertising expenses, and technology and product development expenses based on allocated headcount.

• Depreciation and amortization—Depreciation and amortization was previously allocated to mortgage platform expenses, other platform expenses, general and administrative expenses, marketing and advertising expenses, and technology and product development expenses based on allocated headcount is now presented as its own financial statement line item.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

• Rent and occupancy—Rent and occupancy was previously allocated to mortgage platform expenses, other platform expenses, general and administrative expenses, marketing and advertising expenses, and technology and product development expenses based on allocated headcount, is now included within general and administrative expenses.

The impacts of the reclassifications on the condensed consolidated statements of operations and comprehensive loss are as follows:

(Amounts in thousands) Six Months Ended June 30, 2023

(Amounts in thousands) Nine Months Ended September 30, 2023

Caption name change As previously reported Reclassifications As reclassified

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Interest income 12,527 5,479 18,006

Interest expense ( 6,786 ) ( 6,298 ) ( 13,084 )

Warehouse interest expense Interest expense ( 9,544 ) ( 18,237 ) ( 27,781 )

Net interest income 2,983 ( 12,758 ) ( 9,775 )

13 unchanged sentences

Interest and amortization on non-funding debt ( 18,237 ) 18,237 —

Change in fair value of warrant liabilities 861 ( 861 ) —

Change in fair value of convertible preferred stock warrants 266 ( 266 ) —

4 unchanged sentences

Net loss $ ( 485,521 ) $ — $ ( 485,521 )

Reclassification of the Statement of Cash Flows —To conform to the current presentation, borrowings on warehouse lines of credit and repayments of warehouse lines of credit on the statement of cash flows have been combined into net borrowings (repayments) on warehouse lines of credit within cash (used in)/provided by financing activities as well as the breakout for gain on sale of loans, net from proceeds from sale of mortgage loans held for sale within cash used in operating activities.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Reclassification of the Statement of Cash Flows —To conform to the current presentation, borrowings on warehouse lines of credit and repayments of warehouse lines of credit on the statement of cash flows have been combined into net borrowings (repayments) on warehouse lines of credit within cash (used in)/provided by financing activities, as original maturities are short-term (90 days or less), as well as the breakout for gain on sale of loans, net from proceeds from sale of mortgage loans held for sale within cash used in operating activities.

Recently Issued Accounting Standards Not Yet Adopted

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ASU 2023-03 will become effective for the Company once the addition to the FASB Codification is made available.

As of June 30, 2024, the Company does not expect ASU 2023-06 will have a material impact on the consolidated financial statements.

As of September 30, 2024, the Company does not expect ASU 2023-06 will have a material impact on the consolidated financial statements.

In August 2023, the FASB issued ASU 2023-04, Liabilities (Topic 405):

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ASU 2023-04 will become effective for the Company once the addition to the FASB Codification is made available.

As of June 30, 2024, the Company does not expect ASU 2023-04 will have any impact on the consolidated financial statements.

As of September 30, 2024, the Company does not expect ASU 2023-04 will have any impact on the consolidated financial statements.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements:

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ASU 2023-06 will become effective for each amendment on the effective date of the SEC’s corresponding disclosure rule changes.

As of June 30, 2024, the Company does not expect ASU 2023-06 will have a material impact on the consolidated financial statements.

As of September 30, 2024, the Company does not expect ASU 2023-06 will have a material impact on the consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures .

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A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements.

The Company is currently assessing the impact of the disclosure requirements on the consolidated financial statements.

The Company does not expect ASU 2023-07 will have a material impact on the consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

3 unchanged sentences

however, retrospective application is also permitted.

The Company is currently assessing the impact of the disclosure requirements on the consolidated financial statements.

The Company does not expect ASU 2023-09 will have a material impact on the consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Comprehensive Income - Expense Disaggregation Disclosures (subtopic 220-410), which requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses.

This ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted for annual financial statements that have not yet been issued.

The Company is in the process of assessing the impact the adoption of this guidance will have on the Company’s financial statement disclosures.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Recent Securities and Exchange Commission (SEC) Final Rules Not Yet Adopted

8 unchanged sentences

The Company is currently evaluating the impact of these final rules on its consolidated financial statements and disclosures.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Revenue — The Company disaggregates revenue based on the following revenue streams:

Gain on loans, net consisted of the following :

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands) 2024 2023 2024 2023

4 unchanged sentences

Other revenue consisted of the following:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands) 2024 2023 2024 2023

5 unchanged sentences

Net interest income consisted of the following:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands) 2024 2023 2024 2023

3 unchanged sentences

Other interest expense ( 1,631 ) ( 11,940 ) ( 5,963 ) ( 18,237 )

Total net interest income $ 5,152 $ ( 41 ) $ 8,934 $ 880

Total net interest income/(loss) $ 4,421 $ ( 10,655 ) $ 13,355 $ ( 9,775 )

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 six months ended June 30, 2024, consists of reductions in headcount and any associated costs that primarily include one-time employee termination benefits.

The restructuring program, which continued during the nine months ended September 30, 2024, consists of reductions in headcount and any associated costs

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

that primarily include reduction in real estate footprint expenses and one-time employee termination benefits.

The Company expects the restructuring initiatives to continue at least through the end of 2024.

2 unchanged sentences

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 six months ended June 30, 2024 and 2023, the Company impaired property and equipment of none and $ 4.8 million, respectively, which was related to termination of lease agreement and sale of laptops resulting from a reduction in the workforce.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three and six months ended June 30, 2024 and 2023, the Company’s restructuring and impairment expenses consist of the following:

Three Months Ended June 30, Six Months Ended June 30,

In September 2024, the Company entered into a lease amendment with a landlord to reassign the lease to a third party and release the Company of all rights and obligations under the original lease.

The amendment was accounted for as a lease modification (the “Lease Modification”) which reduced the term of the lease from June 30, 2030 to November 1, 2024.

Upon entering into the Lease Modification, the Company made the remaining lease payments of $ 7.3 million and incurred initial direct costs of $ 1.1 million.

As part of the Lease Modification, the Company reduced the right-of-use asset by $ 12.4 million and removed the lease liability of $ 20.8 million.

Total lease costs will be expensed over the amended lease term and are included within general and administrative expenses within the condensed consolidated statements of operations and comprehensive loss.

All corresponding leasehold improvements will be depreciated over the amended lease term.

For both the three months ended September 30, 2024 and 2023, the Company impaired property and equipment of none .

For the nine months ended September 30, 2024 and 2023, the Company impaired property and equipment of none and $ 4.8 million, respectively, which was related to termination of lease agreement and sale of laptops resulting from a reduction in the workforce.

For the three and nine months ended September 30, 2024 and 2023, the Company’s restructuring and impairment expenses consist of the following:

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands) 2024 2023 2024 2023

3 unchanged sentences

Real estate restructuring loss (2)

— ( 37 ) — 5,252

Gain on lease settlement (2)

1 unchanged sentence

Impairment of property and equipment (2)

— 302 — 4,844

Total Restructuring and Impairments $ 43 $ 679 $ 948 $ 11,508

1 unchanged sentence

(2) Impairments of Right-of-Use Assets, real estate restructuring loss, gain on lease settlement, and impairment of property and equipment are included in other expenses on the condensed consolidated statements of operations and comprehensive loss.

The cumulative amount of one-time termination benefits, impairment of loan commitment assets, impairment of right-of-use assets, and impairment of property and equipment as of June 30, 2024 is $ 123.2 million, $ 105.6 million, $ 8.5 million, and $ 12 million, respectively.

The cumulative amount of one-time termination benefits, impairment of loan commitment assets, impairment of right-of-use assets and real estate restructuring loss, and impairment of property and equipment as of September 30, 2024 is $ 123.2 million, $ 105.6 million, $ 8.5 million, and $ 12.0 million, respectively.

Loans Held for Sale and Warehouse Lines of Credit

The Company has the following outstanding warehouse lines of credit:

(Amounts in thousands) Maturity Facility Size June 30, 2024 December 31, 2023

(Amounts in thousands) Maturity Facility Size September 30, 2024 December 31, 2023

Funding Facility 1 (1)

July 31, 2024 $ 100,000 $ 69,228 $ 61,709

September 30, 2024 $ 100,000 $ — $ 61,709

Funding Facility 2 (2)

6 unchanged sentences

Cash collateral deposit of $ 15 million is maintained and included in restricted cash.

Subsequent to June 30, 2024, the Company extended the maturity to August 31, 2024.

Subsequent to September 30, 2024, the Company extended the maturity to September 30, 2025.

(2) Interest charged under the facility is at the 30-day term SOFR plus 2.10 % - 2.25 %.

1 unchanged sentence

(3) Interest charged under the facility is at the 30-day term SOFR plus 1.75 % - 3.75 %.

There is no cash collateral deposit maintained as of June 30, 2024.

Subsequent to June 30, 2024, the Company extended the maturity to August 3, 2025.

There is no cash collateral deposit maintained as of September 30, 2024.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

2 unchanged sentences

The Company’s LHFS are summarized below by those pledged as collateral and those fully funded by the Company:

(Amounts in thousands) June 30, 2024 December 31, 2023

(Amounts in thousands) September 30, 2024 December 31, 2023

Funding Facility 1 $ 60,583 $ 63,483

7 unchanged sentences

Total LHFS at fair value $ 339,485 $ 170,150

Average days loans held for sale, excluding Company-funded LHFS and Company-funded HELOC, for the three and six months ended June 30, 2024 and 2023 were approximately 20 days, 23 days, 22 days, and 23 days, respectively.

Average days loans held for sale, excluding Company-funded LHFS and Company-funded HELOC, for the three and nine months ended September 30, 2024 and 2023 were approximately 24 days, 21 days, 28 days, and 21 days, respectively.

This is defined as the average days between funding and sale for loans funded during each period.

As of June 30, 2024 and December 31, 2023, the Company had an immaterial amount of loans either 90 days past due or non-performing.

For the six months ended June 30, 2024 and 2023, the weighted average interest rate for the warehouse lines of credit was 7.40 % and 6.77 %, respectively.

As of September 30, 2024 and December 31, 2023, the Company had an immaterial amount of loans either 90 days past due or non-performing.

For the nine months ended September 30, 2024 and 2023, the weighted average interest rate for the warehouse lines of credit was 6.90 % and 6.92 %, 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, and leverage ratios.

In addition, these warehouse lines also require the Company to maintain compensating cash balances, which aggregated to $ 18.8 million as of June 30, 2024 and December 31, 2023 and are included in restricted cash on the accompanying condensed consolidated balance sheets.

The Company was in compliance with all financial covenants under the warehouse lines as of June 30, 2024.

In addition, these warehouse lines also require the Company to maintain compensating cash balances, which aggregated to $ 18.8 million as of September 30, 2024 and December 31, 2023 and are included in restricted cash on the accompanying condensed consolidated balance sheets.

The Company was in compliance with all financial covenants under the warehouse lines as of September 30, 2024.

Loans Held for Investment

Loans Held for Investment —The majority of the Company’s Loans Held for Investment portfolio consists of property - buy to let loans which makes up 93 % of the total loan portfolio as of June 30, 2024.

Loans Held for Investment —The majority of the Company’s Loans Held for Investment portfolio consists of property - buy to let loans, which is the purchase of property for the purpose of renting to a tenant, which makes up 97.5 % of the total loan portfolio as of September 30, 2024.

The Company’s Loans Held for Investment portfolio is summarized as follows:

(Amounts in thousands) June 30, 2024 December 31, 2023

(Amounts in thousands) September 30, 2024 December 31, 2023

Property - Buy to Let $ 80,499 $ 1,063

Other 2,040 3,730

Total Loans Held for Investment (net of allowance for credit losses

of $ 261 and none as of June 30, 2024 and December 31, 2023, respectively)

$ 31,260 $ 4,793

Accrued interest receivable on loans receivable totaled $ 0.2 million and an immaterial amount, respectively, as of June 30, 2024 and December 31, 2023 and is included in other receivables, net on the condensed consolidated balance sheets.

Allowance for credit losses $ ( 1,138 ) $ —

Total Loans Held for Investment, net $ 81,401 $ 4,793

Accrued interest receivable on loans receivable totaled $ 0.2 million and an immaterial amount, respectively, as of September 30, 2024 and December 31, 2023 and is included in other receivables, net on the condensed consolidated balance sheets.

The Company elected the practical expedient to exclude the applicable accrued interest receivable on loans receivable from the disclosed amortized cost basis.

The Company concluded that it has a substantive non-accrual policy which allows for the timely reversal of accrued interest should an asset be placed on non-accrual;

accordingly, there was no allowance for credit losses for accrued interest receivable on loans receivable as of June 30, 2024.

When writing off uncollectible accrued interest receivables on its loans held for investment portfolio, the Company considers 90 days to be a timely manner.

accordingly, there was no allowance for credit losses for accrued interest

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

receivable on loans receivable as of September 30, 2024.

When writing off uncollectible accrued interest receivables on its loans held for investment portfolio, the Company considers 90 days to be a timely manner.

Uncollectible amounts of accrued interest receivable are charged off by reversing interest income.

The Company had no charge offs of uncollectible accrued interest on its outstanding loans held for investment during the three and six month period ended June 30, 2024 and 2023.

The Company had no charge offs of uncollectible accrued interest on its outstanding loans held for investment during the three and nine month periods ended September 30, 2024 and 2023.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due.

As of both June 30, 2024 and December 31, 2023, there were no loans held for investment past due.

As of both September 30, 2024 and December 31, 2023, there were no loans held for investment past due.

The Company considers loans for which the repayment is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, or where foreclosure is probable, to be collateral dependent.

As of June 30, 2024 and December 31, 2023, there were no loans secured by any asset type for which formal foreclosure proceedings are in process.

As of September 30, 2024 and December 31, 2023, there were no loans secured by any asset type for which formal foreclosure proceedings are in process.

Loans are placed on non-accrual status and the accrual of interest is discontinued if principal or interest payments become 90 days past due and/or management deems the collectability of the principal and/or interest to be in question.

2 unchanged sentences

Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

As of June 30, 2024 and December 31, 2023, there were no loans that were placed on non-accrual status.

During the three and six months ended June 30, 2024 and 2023, there were no modifications for loans to borrowers experiencing financial difficulty.

As of September 30, 2024 and December 31, 2023, there were no loans that were placed on non-accrual status.

During the three and nine months ended September 30, 2024 and 2023, there were no modifications for loans to borrowers experiencing financial difficulty.

Loans are categorized into risk categories based on relevant information about the ability of borrowers to service their debt, including, but not limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends.

6 unchanged sentences

0-20 months, 21-40 months, and over 40 months.

The following table presents amortized cost for outstanding loans, by class and year of origination/renewal, as of June 30, 2024 and December 31, 2023.

The following table presents amortized cost for outstanding loans, by class and year of origination/renewal, as of September 30, 2024 and December 31, 2023.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The tables below presents loans by credit quality indicator and vintage year:

June 30, 2024

September 30, 2024

(Amounts in thousands) 2024 2023 2022 2021 2020 Prior Total

9 unchanged sentences

Total $ 79,710 $ 855 $ 1,151 $ 667 $ 138 $ 18 $ 82,539

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

12 unchanged sentences

Changes in the carrying amount of goodwill, net consisted of the following:

Six Months Ended June 30,

Nine Months Ended September 30,

(Amounts in thousands) 2024 2023

3 unchanged sentences

Balance at end of period $ 33,403 $ 31,354

No impairment of goodwill was recognized for the three and six months ended June 30, 2024 and 2023.

No impairment of goodwill was recognized for the three and nine months ended September 30, 2024 and 2023.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Internal use software and other intangible assets, net consisted of the following:

As of June 30, 2024

As of September 30, 2024

(Amounts in thousands, except useful lives) Weighted Average Useful Lives (in years) Gross Carrying Value Accumulated Amortization Net Carrying Value

1 unchanged sentence

Internal use software and website development 3.0 $ 144,504 $ ( 124,678 ) $ 19,826

Other 5.7 1,001 ( 336 ) 665

Intellectual property and other 5.7 1,062 ( 401 ) 661

Total Intangible assets with finite lives, net 145,565 ( 125,079 ) 20,486

3 unchanged sentences

Total Internal use software and other intangible assets, net $ 149,763 $ ( 125,079 ) $ 24,684

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2023

8 unchanged sentences

Total Internal use software and other intangible assets, net $ 141,967 $ ( 103,841 ) $ 38,126

The Company capitalized $ 2.2 million and $ 3.5 million in internal use software and website development costs during the three months ended June 30, 2024 and 2023, respectively.

Included in capitalized internal use software and website development costs are $ 0.5 million and $ 0.7 million of stock-based compensation costs for the three months ended June 30, 2024 and 2023, respectively.

Amortization expense totaled $ 7.1 million and $ 9.4 million during the three months ended June 30, 2024 and 2023, respectively.

For the three months ended June 30, 2024 and 2023, no impairment was recognized relating to intangible assets.

The Company capitalized $ 3.0 million and $ 7.6 million in internal use software and website development costs during the six months ended June 30, 2024 and 2023, respectively.

Included in capitalized internal use software and website development costs are $ 0.9 million and $ 1.4 million of stock-based compensation costs for the six months ended June 30, 2024 and 2023, respectively.

Amortization expense totaled $ 15.1 million and $ 18.8 million during the six months ended June 30, 2024 and 2023, respectively.

For the six months ended June 30, 2024 and 2023, no impairment was recognized relating to intangible assets.

The Company capitalized $ 2.5 million and $ 5.2 million in internal use software and website development costs during the three months ended September 30, 2024 and 2023, respectively.

Included in capitalized internal use software and website development costs are $ 0.4 million and $ 2.7 million of stock-based compensation costs for the three months ended September 30, 2024 and 2023, respectively.

Amortization expense totaled $ 6.0 million and $ 9.3 million during the three months ended September 30, 2024 and 2023, respectively.

For the three months ended September 30, 2024 and 2023, no impairment was recognized relating to intangible assets.

The Company capitalized $ 5.4 million and $ 13.6 million in internal use software and website development costs during the nine months ended September 30, 2024 and 2023, respectively.

Included in capitalized internal use software and website development costs are $ 1.3 million and $ 5.1 million of stock-based compensation costs for the nine months ended September 30, 2024 and 2023, respectively.

Amortization expense totaled $ 21.1 million and $ 28.1 million during the nine months ended September 30, 2024 and 2023, respectively.

For the nine months ended September 30, 2024 and 2023, no impairment was recognized relating to intangible assets.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Prepaid Expenses and Other Assets

Prepaid expenses and other assets consisted of the following:

As of June 30, As of December 31,

As of September 30, As of December 31,

(Amounts in thousands) 2024 2023

2 unchanged sentences

Security Deposits 11,021 15,179

Prefunded loans in escrow 10,179 —

Total prepaid expenses and other assets $ 36,618 $ 51,386

The prefunded loans in escrow consists of loans that were funded in the current period but closed in the subsequent period.

Due to the timing of the closing of these loans they are not mortgage loans held for sale in the current period.

Customer Deposits

Customer Deposits —In relation to the Company’s banking activities tied to the Company’s acquisition of Birmingham Bank in the U.K., the Company offers individual savings accounts and other depository products with

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

differing maturities and interest rates to its customers.

The balance of customer deposits as of June 30, 2024 and December 31, 2023 was $ 36.6 million and $ 11.8 million, respectively, on the condensed consolidated balance sheets.

The balance of customer deposits as of September 30, 2024 and December 31, 2023 was $ 97.8 million and $ 11.8 million, respectively, on the condensed consolidated balance sheets.

The following table presents average balances and weighted average rates paid on deposits for the periods indicated:

Three Months Ended June 30,

Three Months Ended September 30,

(Amounts in thousands) Average Balance Average Rate Paid Average Balance Average Rate Paid

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Total Deposits $ 67,821 2.84 % $ 10,143 2.41 %

Six Months Ended June 30,

Nine Months Ended September 30,

(Amounts in thousands) Average Balance Average Rate Paid Average Balance Average Rate Paid

4 unchanged sentences

The following table presents maturities of customer deposits:

(Amounts in thousands) As of June 30, 2024

(Amounts in thousands) As of September 30, 2024

Demand deposits 41,072

1 unchanged sentence

Total $ 97,782

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Interest Expense on deposits is recorded in interest expense in the condensed consolidated statements of operations and comprehensive loss for the periods indicated as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands) 2024 2023 2024 2023

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Deposits are for U.K.

banking clients and are protected up to £ 85.0 thousand ($ 107.5 thousand, USD equivalent as of June 30, 2024 ) per eligible person by the Financial Services Compensation Scheme in the U.K.

Of the total customer deposits as of June 30, 2024, $ 1.7 million were over the applicable insured amount.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Corporate Line of Credit and Convertible Note

Corporate Line of Credit —The Company made the final principal payment on its corporate line of credit in August 2023 and as such incurred no interest expense under the corporate line of credit during the three and six months ended June 30, 2024.

For the three months ended June 30, 2023, the Company recorded a total of $ 3.6 million related to interest expense as follows:

banking clients and are protected up to £ 85.0 thousand ($ 113.8 thousand, USD equivalent as of September 30, 2024 ) per eligible person by the Financial Services Compensation Scheme in the U.K.

Of the total customer deposits as of September 30, 2024, $ 22.1 million were over the applicable insured amount.

Corporate Line of Credit, Preclosing Bridge Notes, and Convertible Note

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 expense within the condensed consolidated statements of operations and comprehensive loss.

For the six months ended June 30, 2023, the Company recorded a total of $ 6.2 million related to interest expense as follows:

For the nine months ended September 30, 2023, the Company recorded a total of $ 17.5 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 expense within the condensed consolidated statements operations and comprehensive loss.

Convertible Note— In connection with the Closing of the Business Combination, the Company issued to SB Northstar LP, a Cayman Islands exempted limited partnership and an affiliate of SoftBank Group Corp., a senior subordinated convertible note in the aggregate principal amount of $ 528.6 million (the “Convertible Note”), $ 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”).

Pre-Closing Bridge Notes— In connection with the Closing of the Business Combination, the Pre-Closing Bridge Notes held by SB Northstar in an aggregate principal amount o f $ 650.0 million automatically converted into Class C common stock at a conversion price of $ 10.00 per share and 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 Class A common stock.

For the three and nine months ended September 30, 2023, the Company recorded a loss of $ 237.7 million and a loss of $ 236.6 million, respectively, of changes in fair value of embedded derivatives included in other expenses/(income), within the consolidated statements of operations and comprehensive loss.

Convertible Note— In connection with the Closing of the Business Combination, the Company issued to SB Northstar LP, a related party, a Cayman Islands exempted limited partnership, and an affiliate of SoftBank Group Corp., a senior subordinated convertible note in the aggregate principal amount of $ 528.6 million (the “Convertible Note”), $ 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 Convertible Note bears 1 % interest per annum and matures on August 22, 2028, unless earlier converted or redeemed.

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The Convertible Note is convertible, at the option of SB Northstar, into shares of the Company’s Class A common stock, with an initial conversion rate per $1,000 principal amount of Convertible Note 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 Convertible Note may be redeemed at the option of the Company at a redemption price of 115 % of par pl us accrued interest in cash, at any time on or before the 30th trading day prior to the maturity date of the Convertible Note 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 d ate of notice of optional redemption.

The Indenture provides that the First Anniversary VWAP may be no less than $ 400.00 and no greater than $ 600.00 , adjusted by the 1-for-50 reverse stock split, subject to adjustments as described therein.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Convertible Note is redeemable prior to maturity in the event of a fundamental change under the Indenture, such as the removal of the Company’s Class A common stock from the Nasdaq.

In this event, the Company would be required to redeem the Convertible Note for an amount in cash equal to the principal balance plus accrued and unpaid interest on the redemption date.

As of June 30, 2024 and December 31, 2023, the carrying amount of the Convertible Note was $ 516.4 million and $ 514.6 million on the condensed consolidated balance sheets, respectively.

For the three and six months ended June 30, 2024, the Company recorded a total of $ 1.6 million and $ 4.3 million, respectively, of interest expense related to the Convertible Note.

As of September 30, 2024 and December 31, 2023, the carrying amount of the Convertible Note was $ 518.0 million and $ 514.6 million on the condensed consolidated balance sheets, respectively.

For the three and nine months ended September 30, 2024, the Company recorded a total of $ 1.6 million and $ 5.9 million, respectively, of interest expense related to the Convertible Note.

Interest expense from the Convertible Note is included in interest expense within the condensed consolidated statements of operations and comprehensive loss.

In February 2024, the Company made a cash payment in the amount of $ 2.5 million , which consisted of $ 1.1 million towards the principal and $ 1.4 million of interest from January 1, 2024 through February 15, 2024.

As the Convertible Note was issued in August 2023, no interest expense was incurred for the three and six months ended June 30, 2023.

For the period February 16, 2024 to September 30, 2024, the Company has elected to pay interest in kind on the Convertible Note, which is calculated at 1 % per annum and accrued at the fair value of the additional note issued.

For the both the three and nine months ended September 30, 2023, the Company recorded a total of $ 0.5 million of interest expense related to the Post-Closing Convertible Notes.

Related Party Transactions

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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.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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).

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 LLC, in which Vishal Garg, the Chief Executive Officer of the Company, and certain of 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.

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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 expense of none and $ 6 thousand in the three months ended June 30, 2024 and 2023, respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.

The Company incurred gross expense of none and $ 33 thousand in the six months ended June 30, 2024 and 2023, respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.

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 for both the three and six months ended June 30, 2024 and 2023, respectively.

The Company is invoiced on a net basis and recorded none and $ 153 thousand payable as of June 30, 2024 and December 31, 2023, respectively, included within other liabilities on the condensed consolidated balance sheets.

In connection with this agreement, the Company incurred gross expense of none in the three months ended September 30, 2024 and reduced the accrued expense by $ 27 thousand in the three months ended September 30, 2023, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.

The Company incurred gross expense of none and $ 6 thousand in the nine months ended September 30, 2024 and 2023, respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.

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 for both the three and nine months ended September 30, 2024 and 2023, respectively.

The Company is invoiced on a net basis and recorded none and $ 153 thousand payable as of September 30, 2024 and December 31, 2023, respectively, included within other liabilities 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.

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In January 2024, the agreement was extended for an additional year.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 $ 153 thousand and $ 70 thousand for the three months ended June 30, 2024 and 2023 respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.

The Company paid expenses of $ 478 thousand and $ 371 thousand for the six months ended June 30, 2024 and 2023 respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss and had a payable of $ 66 thousand and $ 230 thousand as of June 30, 2024 and December 31, 2023, respectively, included within other liabilities on the condensed consolidated balance sheets.

In connection with these agreements, the Company paid expenses of $ 232 thousand and $ 67 thousand for the three months ended September 30, 2024 and 2023 respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.

The Company paid expenses of $ 711 thousand and $ 438 thousand for the nine months ended September 30, 2024 and 2023 respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss and had a payable of $ 68 thousand and $ 230 thousand as of September 30, 2024 and December 31, 2023, respectively, included 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.

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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 June 30, 2024 and December 31, 2023,

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

the Company had $ 5.3 million and $ 6.3 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.

For the three months ended June 30, 2024, the Company incurred $ 16 thousand of expenses for amortization of internal use software under the agreement, which are included within depreciation and amortization on the condensed consolidated statements of operations and comprehensive loss.

For the three months ended June 30, 2023, the Company incurred $ 1 thousand of expenses under the agreement which are included within marketing expenses and depreciation and amortization on the condensed consolidated statements of operations and comprehensive loss.

For the six months ended June 30, 2024, the Company incurred $ 32 thousand of expenses for amortization of internal use software under the agreement, which are included within depreciation and amortization on the condensed consolidated statements of operations and comprehensive loss.

For the six months ended June 30, 2023, the Company incurred $ 22 thousand of expenses under the agreement, which are included within marketing expenses and depreciation and amortization on the condensed consolidated statements of operations and comprehensive loss.

As of September 30, 2024 and December 31, 2023, the Company had $ 4.8 million and $ 6.3 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.

For both the three months ended September 30, 2024 and 2023 the Company incurred $ 16 thousand of expenses for amortization of internal use software under the agreement, which are included within depreciation and amortization on the condensed consolidated statements of operations and comprehensive loss.

For the nine months ended September 30, 2024, the Company incurred $ 48 thousand of expenses for amortization of internal use software under the agreement, which are included within depreciation and amortization on the condensed consolidated statements of operations and comprehensive loss.

For the nine months ended September 30, 2023, the Company incurred $ 38 thousand of expenses under the agreement, which are included within marketing expenses and depreciation and amortization on the condensed consolidated statements of operations and comprehensive loss.

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.

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The Company originally entered into the data services agreement in March 2021, 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 $ 13 thousand and $( 42 ) thousand for the three months ended June 30, 2024 and 2023 respectively, which are included within loan origination expenses on the consolidated statements of operations and comprehensive loss.

The Company incurred expenses of $ 40 thousand and none for the six months ended June 30, 2024 and 2023 respectively, which are included within loan origination expenses on the consolidated statements of operations and comprehensive loss.

The Company recorded a payable of none and $ 7 thousand as of June 30, 2024 and December 31, 2023, respectively, and is included within other liabilities on the condensed consolidated balance sheets.

In connection with usage of the services, the Company incurred expenses of $ 51 thousand and none for the three months ended September 30, 2024 and 2023 respectively, which are included within loan origination expenses on the consolidated statements of operations and comprehensive loss.

The Company incurred expenses of $ 90 thousand and none for the nine months ended September 30, 2024 and 2023 respectively, which are included within loan origination expenses on the consolidated statements of operations and comprehensive loss.

The Company recorded a payable of $ 13 thousand and $ 7 thousand as of September 30, 2024 and December 31, 2023, respectively, and is included within other liabilities on the condensed consolidated balance sheets.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Commitments and Contingencies

7 unchanged sentences

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 $ 8.5 million and $ 8.4 million as of June 30, 2024 and December 31, 2023, respectively, which is included in accounts payable and accrued expenses on the condensed consolidated balance sheets.

During the three and six months ended June 30, 2024, the changes in the liability included a settlement of $ 0.5 million as well as an additional accrued expense of $ 0.6 million related to certain other employment matters, which is included within general and administrative expense on the consolidated statement of operations and comprehensive loss.

There were no changes in the estimated liability for both the three and six months ended June 30, 2023.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As part of the dispute, the Company included an estimated liability of $ 8.3 million and $ 8.4 million as of September 30, 2024 and December 31, 2023, respectively, which is included in accounts payable and accrued expenses on the condensed consolidated balance sheets.

During the three months ended September 30, 2024, the changes in the liability included settlements of $ 0.2 million as well as a reduction of accrued expense of $ 0.2 million related to certain other employment matters, which is included within general and administrative expense on the consolidated statement of operations and comprehensive loss.

During the nine months ended September 30, 2024, changes included settlement payments of $ 0.7 million as well as a reduction of accrued expense of $ 0.1 million related to certain other employment matters, which is included within general and administrative expense on the consolidated statement of operations and comprehensive loss.

There were no changes in the estimated liability for both the three and nine months ended September 30, 2023.

On June 7, 2022, Sarah Pierce, Pre-Business Combination Better’s former Head of Sales and Operations, filed litigation against Pre-Business Combination Better, Mr.

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Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers.

As of June 30, 2024 and December 31, 2023, the Company included an estimated liability of $ 6.6 million and $ 8.6 million, respectively, within accounts payable and accrued expenses on the condensed consolidated balance sheets.

For the three and six months ended June 30, 2024, the Company recorded additional accruals for these potential TRID defects of $ 0.1 million and $ 0.1 million, respectively, which are included within loan origination expense in the condensed consolidated statement of operations and comprehensive loss.

During the three and six months ended June 30, 2024, the Company had relief of the liability due to payments to customers in the amount of $ 2.1 million and $ 2.1 million, respectively.

For the three and six months ended June 30, 2023, the Company recorded an additional accrual for these potential TRID defects of $ 0.1 million and $ 0.3 million, respectively, and are included within loan origination expense in the condensed consolidated statement of operations and comprehensive loss.

As of September 30, 2024 and December 31, 2023, the Company included an estimated liability of $ 6.6 million and $ 8.6 million, respectively, within accounts payable and accrued expenses on the condensed consolidated balance sheets.

For the three and nine months ended September 30, 2024, the Company recorded additional accruals for these potential TRID defects of $ 0.1 million and $ 0.3 million, respectively, which are included within loan origination expense in the condensed consolidated statement of operations and comprehensive loss.

During the three and nine months ended September 30, 2024, the Company had relief of the liability due to payments to customers in the amount of $ 0.1 million and $ 2.2 million, respectively.

For the three and nine months ended September 30, 2023, the Company recorded an additional accrual for these potential TRID defects of $ 3.0 million and $ 2.7 million, respectively, and are included within loan origination expense 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.

2 unchanged sentences

Minimum Bid Price Notice —On October 12, 2023, the Company received a letter from 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 Bid Price Rule requires listed securities to maintain a minimum bid price

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 Company applied for and, on March 7, 2024, received approval from Nasdaq to transfer the listing of its Class A common stock, from the Nasdaq Global Market to the Nasdaq Capital Market.

2 unchanged sentences

If at any time before October 7, 2024, the bid price of the Company’s Class A common stock, par value $ 0.0001 per share closes at $1.00 per share or more for a minimum of ten consecutive business days, Nasdaq will provide the Company with written confirmation of compliance with the Bid Price Rule.

If the Company does not regain compliance within the allotted compliance periods, including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that the Class A common stock will be subject to delisting.

The Company would then be entitled to appeal that determination to a Nasdaq hearings panel.

On August 1, 2024, pursuant to the Reverse Stock Split Authorization, the Company’s board of directors approved the Reverse Stock Split and set a split ratio of 1-for-50 of our Common Stock.

As of the effective time of the Reverse Stock Split, one post-split share of our Common Stock will be issued in exchange for every 50 pre-split shares of our Common Stock.

On Friday, August 16, 2024, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation, effecting a 1-for-50 reverse stock split of the Company’s common stock (the “Reverse Stock Split”) for the primary purpose of increasing the per share trading price of the Company’s Class A common stock to enable the Company to regain compliance with the minimum bid price requirement for continued listing on The Nasdaq.

The Company’s Class A common stock began trading on a split-adjusted basis on the Nasdaq upon the market open on Monday, August 19, 2024.

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 June 30, 2024 and December 31, 2023, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $ 309.7 million and $ 227.4 million, respectively.

The IRLCs derived from those

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

notional amounts are recorded within derivative assets and liabilities, at fair value as of June 30, 2024 and December 31, 2023, respectively, on the condensed consolidated balance sheets.

As of September 30, 2024 and December 31, 2023, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $ 223.3 million and $ 227.4 million, respectively.

The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of September 30, 2024 and December 31, 2023, respectively, on the condensed consolidated balance sheets.

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 June 30, 2024 and December 31, 2023, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $ 460.0 million and $ 265.0 million, respectively.

The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of June 30, 2024 and December 31, 2023, respectively, on the condensed consolidated balance sheets.

As of September 30, 2024 and December 31, 2023, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $ 295.0 million and $ 265.0 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, 2024 and December 31, 2023, respectively, on the condensed consolidated balance sheets.

Concentrations —See below for areas considered to be concentrations of credit risk for the Company:

Significant loan purchasers are those that represent more than 10% of the Company’s loan volume.

During the three months ended June 30, 2024, the Company had three loan purchasers that accounted for 48 %, 27 % and 12 % of loans sold by the Company.

During the three months ended June 30, 2023, the Company had one loan purchaser that accounted for 71 % of loans sold by the Company.

During the six months ended June 30, 2024, the Company had three loan purchasers that accounted for 51 % , 22 % and 15 % of loans sold by the Company.

During the six months ended June 30, 2023, the Company had one loan purchaser that accounted for 75 % of loans sold by the Company.

During the three months ended September 30, 2024, the Company had three loan purchasers that accounted for 36 %, 27 % and 19 % of loans sold by the Company.

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 nine months ended September 30, 2024, the Company had three loan purchasers that accounted for 44 % , 20 % and 20 % of loans sold by the Company.

During the nine months ended September 30, 2023, the Company had one loan purchaser that accounted for 68 % 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 June 30, 2024 , the company originated 10 % of its LHFS secured by properties in Florida.

As of September 30, 2024 , the Company had no significant originations representing 10% or greater of its LHFS secured by properties in any specific geographical area.

As of December 31, 2023 , the Company originated 12 % and 11 % of its LHFS secured by properties in Florida and Texas, respectively.

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Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million.

As of June 30, 2024 and December 31, 2023, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.

As of September 30, 2024 and December 31, 2023, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Escrow Payable and Other Customer Accounts —In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement.

2 unchanged sentences

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 June 30, 2024 and December 31, 2023 was $ 4.1 million and $ 3.4 million, respectively.

The balance in these accounts as of September 30, 2024 and December 31, 2023 was $ 4.7 million and $ 3.4 million, respectively.

Risks and Uncertainties

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Through this program, mortgage-backed securities are purchased and sold forward.

For all counterparties with open positions as of June 30, 2024, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis.

For all counterparties with open positions as of September 30, 2024, 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.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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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 $ 1.0 million ( 5 l oans) and $ 9.0 million ( 20 l oans) in unpaid principal balance of loans during the three months ended June 30, 2024 and 2023, respectively, related to its loan repurchase obligations.

The Company repurchased $ 3.0 million ( 11 l oans) and $ 14.9 million ( 35 l oans) in unpaid principal balance of loans during the six months ended June 30, 2024 and 2023, respectively, related to its loan repurchase obligations.

The Company repurchased $ 3.2 million ( 8 l oans) and $ 3.6 million ( 11 l oans) in unpaid principal balance of loans during the three months ended September 30, 2024 and 2023, respectively, related to its loan repurchase obligations.

The Company repurchased $ 6.2 million ( 19 l oans) and $ 20.8 million ( 52 l oans) in unpaid principal balance of loans during the nine months ended September 30, 2024 and 2023, respectively, related to its loan repurchase obligations.

The Company’s loan repurchase reserve is included within other liabilities on the consolidated balance sheets.

The (recovery of)/provision for the loan repurchase reserve is included within gain on loans, net on the consolidated statements of operations and comprehensive loss.

The (recovery

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of)/provision for the loan repurchase reserve is included within gain on loans, net on the consolidated statements of operations and comprehensive loss.

The following presents the activity of the Company’s loan repurchase reserve:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands) 2024 2023 2024 2023

6 unchanged sentences

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.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands, except for share and per share amounts) 2024 2023 2024 2023

18 unchanged sentences

Basic and diluted loss per share are presented together as the amounts for basic and diluted loss per share are the same (i.e., the Company’s other equity-linked instruments outstanding are anti-dilutive for the periods presented).

There were no preferred dividends declared or accumulated during the three and six months ended June 30, 2024 and 2023.

Historically, the Company applied the two-class method that requires earnings available to common stockholders for the period to be allocated between our 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 was a participating security as the holders of such shares participated in earnings but did not contractually participate in the Company’s losses and therefore no losses were allocated to the convertible preferred stock in prior periods.

The Company's potentially dilutive securities, which include stock options, RSUs, convertible preferred stock, warrants to purchase shares of convertible common stock, warrants to purchase shares of preferred stock, pre-closing Bridge Notes, and Sponsor locked-up shares, have been excluded from the computation of diluted net loss per share, as the effect would be anti-dilutive.

The Company excluded the following

There were no preferred dividends declared or accumulated during the three and nine months ended September 30, 2024 and 2023.

Historically, the Company applied the two-class method that requires earnings available to

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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:

Six Months Ended June 30,

common stockholders for the period to be allocated between our Common Stock and participating securities based upon their respective rights to receive dividends as if all earnings for the period had been distributed.

Prior to conversion as part of the Closing of the Business Combination, the Company’s outstanding convertible preferred stock was a participating security as the holders of such shares participated in earnings but did not contractually participate in the Company’s losses and therefore no losses were allocated to the convertible preferred stock in prior periods.

The Company's potentially dilutive securities, which include stock options, RSUs, convertible preferred stock prior to the Business Combination, warrants to purchase shares of convertible common stock, warrants to purchase shares of preferred stock prior to the Business Combination, pre-closing Bridge Notes prior to the Business Combination, and Sponsor locked-up shares, have been excluded from the computation of diluted net loss per share, as the effect would be anti-dilutive.

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:

Nine Months Ended September 30,

(Amounts in thousands) 2024 2023

2 unchanged sentences

RSUs and Options to purchase common stock (1)

59,355 144,726

Warrants to purchase convertible preferred stock (1)

8 unchanged sentences

The Company’s financial instruments measured at fair value on a recurring basis are summarized below:

June 30, 2024

September 30, 2024

(Amounts in thousands) Level 1 Level 2 Level 3 Total

20 unchanged sentences

__________________

(1) As of June 30, 2024 and December 31, 2023, derivative assets and liabilities represent both IRLCs and forward sale commitments.

(1) As of September 30, 2024 and December 31, 2023, derivative assets and liabilities represent both IRLCs and forward sale commitments.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(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.

4 unchanged sentences

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

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

pricing models that are primarily sensitive to market observable data.

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 June 30, 2024 and December 31, 2023.

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, 2024 and December 31, 2023.

Significant changes in the pull-through factor of the IRLCs, in isolation, could result in significant changes in the IRLCs’ fair value measurement.

1 unchanged sentence

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 $ 3.4 million and $ 0.2 million of IRLCs during the three months ended June 30, 2024 and 2023, respectively.

The Company had purchases/issuances of approximately $ 5.9 million and $ 0.7 million of IRLCs during the six months ended June 30, 2024 and 2023, respectively.

The number of days from the date of the IRLC to expiration of the rate lock commitment outstanding as of June 30, 2024 was approximately 50 days on average.

The Company had issuances of approximately $ 10.0 million and $ 0.1 million of IRLCs during the three months ended September 30, 2024 and 2023, respectively.

The Company had issuances of approximately $ 15.9 million and $ 0.6 million of IRLCs during the nine months ended September 30, 2024 and 2023, respectively.

The number of days from the date of the IRLC to expiration of the rate lock commitment outstanding as of September 30, 2024 was approximately 51 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 June 30, 2024, the Company recognized $ 1.5 million and $ 4.0 million of gains related to changes in fair value of IRLCs and forward sale commitments, respectively.

During the six months ended June 30, 2024, the Company recognized $ 1.6 million and $ 6.4 million of gains related to changes in fair value of IRLCs and forward sale commitments, respectively.

During the three months ended June 30, 2023, the Company recognized $ 3.2 million of losses and $ 7.9 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively.

During the six months ended June 30, 2023, the Company recognized $ 1.0 million and $ 3.4 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively.

During the three months ended September 30, 2024, the Company recognized $ 1.0 million of gains and $ 9.1 million of losses related to changes in fair value of IRLCs and forward sale commitments, respectively.

During the nine months ended September 30, 2024, the Company recognized gains of $ 2.6 million and losses of $ 2.7 million related to changes in fair value of IRLCs and forward sale commitments, respectively.

During the three months ended September 30, 2023, the Company recognized $ 0.9 million of losses and $ 5.0 million of gains related to changes in the 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.

Gains and losses related to changes in the fair value of IRLCs and forward sale commitments are included in gain on loans, 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 $ 0.7 million and $ 8.1 million of gains, included in the $ 4.0 million of gains and $ 7.9 million of gains, during the three months ended June 30, 2024 and 2023, respectively.

Unrealized activity related to changes in the fair value of forward sale commitments were $ 4.5 million of gains and $ 0.7 million of losses, included in the $ 6.4 million of gains and $ 3.4 million of gains, during the six months ended June 30, 2024 and 2023, respectively.

Unrealized activity related to changes in the fair value of forward sale commitments were $ 1.0 million of losses and $ 1.5 million of gains, included in the $ 9.1 million of losses and $ 5.0 million of gains, during the three months ended September 30, 2024 and 2023, respectively.

Unrealized activity related to changes in the fair value of forward sale commitments were $ 3.5 million of gains and $ 0.8 million of gains, included in the $ 2.7 million of losses and $ 8.4 million of gains, during the nine months ended September 30, 2024 and 2023, respectively.

The notional and fair value of derivative financial instruments not designated as hedging instruments were as follows:

(Amounts in thousands) Notional Value Derivative Asset Derivative Liability

Balance as of June 30, 2024

Balance as of September 30, 2024

IRLCs $ 223,343 $ 4,232 $ 2

5 unchanged sentences

Total $ 1,716 $ 949

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Warrant and equity related liabilities— The warrant liability consists of Warrants and certain shares issued to Novator Capital Sponsor Ltd.

3 unchanged sentences

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.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2024 and December 31, 2023, Level 3 instruments include IRLCs.

As of September 30, 2024 and December 31, 2023, Level 3 instruments include IRLCs.

The following table presents the rollforward of Level 3 IRLCs:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands) 2024 2023 2024 2023

7 unchanged sentences

Balance as of:

June 30, 2024:

September 30, 2024:

$ 635 $ ( 442 ) $ 193

2 unchanged sentences

Balance as of:

June 30, 2024:

September 30, 2024:

$ 29 $ ( 33 ) $ ( 4 )

December 31, 2023 $ 168 $ ( 1,041 ) $ ( 872 )

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:

June 30, 2024

September 30, 2024

(Amounts in dollars, except percentages) Range Weighted Average

1 unchanged sentence

Pull-through factor 0.33 % - 100 %

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

7 unchanged sentences

The use of market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(Amounts in thousands) Fair Value Level Carrying Amount Fair Value Carrying Amount Fair Value

6 unchanged sentences

As a number of assumptions and estimates were involved that are largely unobservable, loans held for investment and the Convertible Note were classified as Level 3 inputs within the fair value hierarchy.

On a consolidated basis, the Company recorded total income tax expense of $ 0.3 million and $ 1.9 million for the six months ended June 30, 2024 and 2023, respectively.

On a consolidated basis, the Company recorded total income tax expense of $ 0.1 million and $ 0.7 million for the three months ended September 30, 2024 and 2023, respectively.

The Company recorded total income tax expense of $ 0.5 million and $ 2.5 million for the nine months ended September 30, 2024 and 2023, 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 ( 0.4 )% for the six months ended June 30, 2024, changed from ( 1.4 )% for the six months ended June 30, 2023, as the Company was subject to withholding taxes on an intercompany dividend in 2023.

The year-to-date effective tax rate, after discrete items, of ( 0.23 )% for the three months ended September 30, 2024, changed from ( 0.19 )% for the three months ended September 30, 2023, as the Company was subject to withholding taxes on an intercompany dividend in 2023.

The year-to-date effective tax rate, after discrete items, of ( 0.3 )% for the nine months ended September 30, 2024, changed from ( 0.5 )% for the nine months ended September 30, 2023, as the Company was subject to withholding taxes on an intercompany dividend in 2023.

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 in all material jurisdictions as of June 30, 2024.

The Company is in a three-year cumulative loss position in all material jurisdictions as of September 30, 2024.

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.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Convertible Preferred Stock

1 unchanged sentence

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.

The change in fair value of warrants for the three months ended June 30, 2024 and 2023 was none and a loss of $ 0.3 million, respectively, and was recorded in other expenses within the condensed consolidated statements of operations and comprehensive loss.

The change in fair value of warrants for the six months ended June 30, 2024 and 2023 was none and a gain of $ 0.3 million, respectively, and was recorded in other expenses within the condensed consolidated statements of operations and comprehensive loss.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The change in fair value of warrants for both the three months ended September 30, 2024 and 2023 was none .

The change in fair value of warrants for the nine months ended September 30, 2024 and 2023 was none and a gain of $ 0.3 million, respectively, and was recorded in other expenses within the condensed consolidated statements of operations and comprehensive loss.

Stockholders' Equity

2 unchanged sentences

Each outstanding share of Pre-Business Combination Better common stock was exchanged for approximately 3.06 shares of the Company’s Class A or Class B common stock.

Private and Public Warrants— As of June 30, 2024 and December 31, 2023, the Company had a total of $ 1.4 million and $ 1.9 million, of Private Warrants held by a related party, and Public Warrants, respectively, which are included as warrant and equity related liabilities within the condensed consolidated balance sheets.

The change in fair value of Warrants for the three and six months ended June 30, 2024 was a loss of $ 0.1 million and gain of $ 0.5 million, respectively, and is included in other expenses within the condensed consolidated statements of operations and comprehensive loss.

There was no activity for the three and six months ended June 30, 2023 as the Warrants were assumed at the Closing of the Business Combination.

Sponsor Locked-up Shares— As of June 30, 2024 and December 31, 2023, the Company had a total of $ 0.2 million and $ 0.4 million, respectively, in respect of Sponsor Locked-up Share liabilities which were issued to a related party, and are included within warrant and equity liabilities in the condensed consolidated balance sheets.

The change in fair value of Sponsor Locked-up Shares for the three and six months ended June 30, 2024 was none and a gain of $ 0.2 million, respectively, and was included in other expenses within the condensed consolidated statements of operations and comprehensive loss.

There was no activity for the three and six months ended June 30, 2023 as the Sponsor Locked-up shares were assumed at the Closing of the Business Combination.

Private and Public Warrants— As of September 30, 2024 and December 31, 2023, the Company had a total of $ 1.2 million and $ 1.9 million, of Private Warrants held by a related party, and Public Warrants, respectively, which are included as warrant and equity related liabilities within the condensed consolidated balance sheets.

The change in fair value of Warrants for the three and nine months ended September 30, 2024 was a gain of $ 0.2 million and gain of $ 0.7 million, respectively, and is included in other expenses within the condensed consolidated statements of operations and comprehensive loss.

The change in fair value of Warrants for both the three and nine months ended September 30, 2023 was a gain of $ 0.2 million and is included in other expenses within the condensed consolidated statements of operations and comprehensive loss.

Sponsor Locked-up Shares— As of September 30, 2024 and December 31, 2023, the Company had a total of $ 0.2 million and $ 0.4 million, respectively, in respect of Sponsor Locked-up Share liabilities which were issued to a related party, and are included within warrant and equity 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, 2024 was none and a gain of $ 0.2 million, respectively, and was included in other expenses within the condensed consolidated statements of operations and comprehensive loss.

The change in fair value of Sponsor Locked-up Shares for both the three and nine months ended September 30, 2023 was a gain of $ 0.6 million and is included in other expenses within the condensed consolidated statements of operations and comprehensive loss.

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.

2 unchanged sentences

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.

As of June 30, 2024 and December 31, 2023, the Company had a total of $ 16.0 million and $ 18.3 million, respectively, of outstanding promissory notes.

Of the notes outstanding as of June 30, 2024 and December 31, 2023, $ 9.1 million and $ 10.1 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.

The balance as of June 30, 2024 does not include any promissory notes due from directors and officers of the Company.

Of the notes outstanding as of June 30, 2024 and December 31, 2023, $ 6.8 million and $ 8.2 million, respectively, were issued for the early exercise of stock options not yet vested.

As of September 30, 2024 and December 31, 2023, the Company had a total of $ 16.0 million and $ 18.3 million, respectively, of outstanding promissory notes.

Of the notes outstanding as of September 30, 2024 and December 31, 2023, $ 9.1 million and $ 10.1 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.

The balance as of September 30, 2024 does not include any promissory notes due from directors and officers of the Company.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Of the notes outstanding as of September 30, 2024 and December 31, 2023, $ 6.9 million and $ 8.2 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 on the condensed consolidated balance sheets as they relate to unvested share awards and therefore are considered non-substantive exercises.

1 unchanged sentence

The notes range in maturity from May 2025 to January 2026 and include interest rates ranging from 0.5 % to 2.5 % per annum.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Stock-Based Compensation

1 unchanged sentence

The Company recognized stock-based compensation expense as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands) 2024 2023 2024 2023

Total stock-based compensation expense 5,487 39,417 21,812 47,879

Stock-based compensation expense excludes $ 0.5 million and $ 0.7 million of stock-based compensation expense for the three months ended June 30, 2024 and 2023, which was capitalized (see Note 7).

Stock-based compensation expense excludes $ 0.9 million and $ 1.4 million of stock-based compensation expense for the six months ended June 30, 2024 and 2023, which was capitalized (see Note 7).

Stock-based compensation expense excludes $ 0.4 million and $ 2.7 million of stock-based compensation expense for the three months ended September 30, 2024 and 2023, which was capitalized (see Note 7).

Stock-based compensation expense excludes $ 1.3 million and $ 5.1 million of stock-based compensation expense for the nine months ended September 30, 2024 and 2023, which was capitalized (see Note 7).

Regulatory Requirements

3 unchanged sentences

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 June 30, 2024, the Company was in compliance with all necessary requirements.

As of September 30, 2024, the Company was in compliance with all necessary requirements.

Additionally, the Company is subject to other financial requirements established by government-sponsored enterprises (“GSEs”), which include a limit for a decline in net worth and quarterly profitability requirements.

1 unchanged sentence

The decline in net worth and decline in profitability permit GSEs to declare a breach of the Company’s contract.

The Company instituted additional financial requirements and remains in compliance with these requirements as of June 30, 2024.

The Company instituted additional financial requirements and remains in compliance with these requirements as of September 30, 2024.

Subsequent Events

The Company evaluated subsequent events from the date of the condensed consolidated balance sheets of June 30, 2024 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 5, and Note 12.

The Company evaluated subsequent events from the date of the condensed consolidated balance sheets of September 30, 2024 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 5.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements