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What changed in Fathom Holdings Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Fathom Holdings Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+431 added−423 removedSource: 10-K (2026-03-30) vs 10-K (2025-03-28)

Top changes in Fathom Holdings Inc.'s 2025 10-K

431 paragraphs added · 423 removed · 348 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

80 edited+12 added−13 removed27 unchanged
Biggest changeIndustry Trends In addition to the negative impacts of recent economic uncertainty and increased interest rates, we believe the following trends have impacted the U.S. real estate market and that their impact will continue to accelerate: • according to the NAR, 97% of homebuyers use the Internet to search for homes, illustrating the importance of technology and transition away from expensive brick-and-mortar offices in the industry, while only 2% found their agent through the agent’s office; • nevertheless, according to the NAR, 88% of home buyers and 90% of home sellers still used an agent or broker in 2024, up from 86% for both buyers and sellers in 2022, for various reasons, including the relative size, importance and infrequency of a home sale for any individual; • the complexity of the home selling or buying process continues to require the best personal service possible, while technology can make the process and business more efficient; and • downturns like the current one are inevitable, and favor companies with lower cost business models that also pay agents higher commissions.
Biggest changeThe complexity of the home selling or buying process continues to require the best personal service possible, while technology can make the process and business more efficient; and • Economic downturns. Downturns like the current one are inevitable, and favor companies with lower-cost business models that pay higher commissions to their agents.
IntelliAgent has since grown to include brokerage and agent-level websites, content creation and management, customer relationship management, social media marketing, agent reviews, a training platform, and marketing repository. Our technology roadmap includes our own fully-integrated e-signature platform, goal setting and accountability for agents, expense tracking for agents, and application programming interfaces (API) for integration with additional third-party tools.
IntelliAgent has since grown to include brokerage and agent-level websites, content creation and management, customer relationship management, social media marketing, agent reviews, a training platform, and marketing repository. Our technology roadmap includes our own fully-integrated e-signature platform, goal setting and accountability for agents, expense tracking for agents, and application programming interfaces for integration with additional third-party tools.
Our success may also be affected by national, regional and local economic conditions. Intellectual Property We have a registered trademark with the USPTO for the name and logo of “intelliAgent” and “Fathom Realty”, as they relate to real estate and associated industries. We also own the rights to the domain names FathomHoldings.com, FathomRealty.com, FathomCareers.com, intelliAgent.com, Naberly.com, and LiveBy.com.
Our success may also be affected by national, regional and local economic conditions. Intellectual Property We have a registered trademark with the USPTO for the name and logo of “intelliAgent” and “Fathom Realty”, as they relate to real estate and associated industries. We also own the rights to the domain names FathomHoldings.com, FathomRealty.com, FathomCareers.com, intelliAgent.com, and Naberly.com.
We are a national, technology-driven, real estate services platform integrating residential brokerage, mortgage, title, and Software as a Service (“SaaS”) offerings to brokerages and agents by leveraging intelliAgent®, our proprietary cloud-based software. The Company’s brands include Fathom Realty, Encompass Lending, intelliAgent, LiveBy, Real Results, and Verus Title.
We are a national, technology-driven, real estate services platform integrating residential brokerage, mortgage, title, and Software as a Service (“SaaS”) offerings to brokerages and agents by leveraging intelliAgent®, our proprietary cloud-based software. The Company’s brands include Fathom Realty, Encompass Lending, intelliAgent, Real Results, and Verus Title.
The Dodd-Frank Act also increased regulation of the mortgage industry, including: (i) generally prohibiting lenders from making residential mortgage loans unless a good faith determination is made of a borrower’s creditworthiness based on verified and documented information; (ii) requiring the CFPB to enact regulations to help assure that consumers are provided with timely and understandable information about residential mortgage loans that protect them against unfair, deceptive and abusive practices; and (iii) requiring federal regulators to establish minimum national underwriting guidelines for residential mortgages that lenders will be allowed to securitize without retaining any of the loans’ default risk.
The Dodd-Frank Act also increased regulation of the mortgage industry, including: (i) generally prohibiting lenders from making residential mortgage loans unless a good faith determination is made of a borrower’s creditworthiness based on verified and documented information; (ii) requiring the CFPB to enact regulations to help ensure that consumers are provided with timely and understandable information about residential mortgage loans that protect them against unfair, deceptive and abusive practices; and (iii) requiring federal regulators to establish minimum national underwriting guidelines for residential mortgages that lenders will be allowed to securitize without retaining any of the loans’ default risk.
Other federal laws and regulations applicable to our business include (i) the Federal Truth in Lending Act of 1969; (ii) the Federal Equal Credit Opportunity; (iii) the Federal Fair Credit Reporting Act; (iv) the Fair Housing Act; (v) the Home Mortgage Disclosure Act; (vi) the Gramm-Leach-Bliley Act; (vii) the Consumer Financial Protection Act; (viii) the Fair and Accurate Credit Transactions Act; and (ix) the Do Not Call/Do Not Fax Act and other federal and state laws pertaining to the privacy rights of consumers, which affects our opportunities to solicit new clients.
Other federal laws and regulations applicable to our business include (i) the Federal Truth in Lending Act of 1969; (ii) the Federal Equal Credit Opportunity; (iii) the Federal Fair Credit Reporting Act; (iv) the Fair Housing Act; (v) the Home Mortgage Disclosure Act; (vi) the Gramm-Leach-Bliley Act; (vii) the Consumer Financial Protection Act; (viii) the Fair and Accurate Credit Transactions Act; and (ix) the Do Not Call/Do Not Fax Act and other federal and state laws pertaining to the privacy rights of consumers, which affects our opportunities to solicit new agents.
Fathom Realty’s commission model is designed to empower real estate agents to build a more profitable business by allowing them to keep a high percentage of their commission without sacrificing support, technology, or training. We believe that by simply joining our company, agents from traditional model brokerages can increase their income by over 25% on average.
Fathom Realty’s commission model is designed to empower real estate agents to build a more profitable business by allowing them to keep a high percentage of their commission without sacrificing support, technology, or training. We believe that by simply joining the Company, agents from traditional model brokerages can increase their income by over 25% on average.
Through our website, we provide buyers, sellers, landlords, and tenants with access to all available properties for sale or lease on the multiple listing service, or MLS, in each of the markets in which we operate. We provide each of our agents their own personal website that they can modify to match their personal branding.
Through our website, we provide buyers, sellers, landlords, and tenants with access to all available properties for sale or lease on the multiple listing service, or MLS, in each market in which we operate. We provide each of our agents their own personal website that they can modify to match their personal branding.
For leases, we recognize revenue through lease commissions negotiated between our agents and landlords, and we retained $85 per transaction with the remainder paid to the agent. In 2023, our agents paid $550 for each of their first 15 completed sales transactions and $150 per transaction for the rest of their anniversary year.
For leases, we recognize revenue through lease commissions negotiated between our agents and landlords, and we retain $85 per transaction with the remainder paid to the agent. In 2023, our agents paid $550 for each of their first 15 completed sales transactions and $150 per transaction for the rest of their anniversary year.
Third-Party Rules Beyond federal, state and local governmental regulations, the real estate industry is subject to rules established by private real estate groups and/or trade organizations, including, among others, state Associations of REALTORS® (AOR), and local Associations of REALTORS® (AOR), the National Association of Realtors® (NAR), and local Multiple Listing Services (MLSs).
Third-Party Rules Beyond federal, state and local government regulations, the real estate industry is subject to rules established by private real estate groups and/or trade organizations, including, among others, state Associations of REALTORS® (AOR), and local Associations of REALTORS® (AOR), the National Association of Realtors® (NAR), and local Multiple Listing Services (MLSs).
To develop and accelerate the growth of agents joining Fathom, we developed the Fathom Talent Acquisition Platform. The Fathom Talent Acquisition Platform combines talented agents, technology and process. Fathom has built an extensive database of potential agents who we believe would fit the Fathom culture and benefit from joining the Company.
To develop and accelerate agent growth, we developed the Fathom Talent Acquisition Platform. The Fathom Talent Acquisition Platform combines talented agents, technology and process. Fathom has built an extensive database of potential agents who we believe would fit our culture and benefit from joining the Company.
In each of the states where we have operations, we assign appropriate personnel to manage and comply with applicable laws and regulations. Most states have local regulations (city or county government) that govern the conduct of the real estate brokerage business.
We assign appropriate personnel to manage and comply with applicable laws and regulations in each of the states where we operate. Most states have local regulations (city or county government) that govern the conduct of the real estate brokerage business.
Kansas North Carolina We primarily target urban or suburban areas or regions with populations of at least 50,000, of which there are approximately 775 in the United States. We believe this provides us opportunity for continued growth. We have expanded rapidly since our inception fourteen years ago.
Kansas North Carolina We primarily target urban or suburban areas or regions with populations of at least 50,000, of which there are approximately 775 in the United States. We believe this provides opportunity for continued growth. We have expanded rapidly since our inception fifteen years ago.
With respect to these independent contractors, like most brokerage firms, we are subject to the Internal Revenue Service regulations and applicable state law guidelines regarding independent contractor classification. These regulations and guidelines are subject to judicial and agency interpretation.
With respect to these independent contractors, like all brokerage firms, we are subject to the Internal Revenue Service regulations and applicable state law guidelines regarding independent contractor classification. These regulations and guidelines are subject to judicial and agency interpretation.
Additionally, transactions on properties priced over $500,000 are subject to a High-Value Property Fee of $250 per $500,000 tier for properties over $500,000. • Fathom Share Plan: Under this plan, agents pay a 12% commission split on each transaction until they reach an annual cap of $12,000 in fees paid to the Company.
Additionally, transactions on properties priced over $500,000 are subject to a High-Value Property Fee of $250 per $500,000 tier for properties over $500,000. • Fathom Share Plan: Agents on the Fathom Share Plan pay a 12% commission fee on each transaction until they reach an annual cap of $12,000 in fees paid to the Company.
Specifically, using advanced Internet-based software, we can improve compliance and oversight while providing, at no cost to our agents, technology tools and services to our agents and their customers, including: • a robust, mobile-friendly, customer-facing corporate website providing access to view all homes for sale and lease in the markets that we serve, with the ability to search and save favorite properties and receive alerts for new properties that fit their criteria; • a customizable, mobile-friendly agent website with home search, lead capture, and blogging capabilities; • an advanced customer relationship management system, with visitor tracking, property alerts, and customer communication, all designed to help convert leads into customers; • social media tools to enhance agent marketing and visibility; • streamlined solicitation, collection, verification and posting of customer testimonials; • single property websites for our agents’ listings; • a wide array of on-demand training modules for the professional development of agents at all levels of experience; and • agent access to intelliAgent, which is described in more detail below.
At no cost to our agents, we can improve compliance and oversight by providing advanced Internet-based software and technology tools and services to our agents and their customers, including: • A robust, mobile-friendly, customer-facing corporate website providing viewing access to all homes for sale and lease in the markets that we serve, with the ability to search and save favorite properties and receive alerts for new properties that fit their criteria; • A customizable, mobile-friendly agent website with home search, lead capture, and blogging capabilities; • An advanced customer relationship management system, with visitor tracking, property alerts, and customer communication, all designed to help convert leads into customers; • Social media tools to enhance agent marketing and visibility; • Streamlined solicitation, collection, verification and posting of customer testimonials; • Single property websites for our agents’ listings; • On-demand training modules for the professional development of agents at all levels of experience; and • Agent access to intelliAgent, which is described in more detail below.
We intend for intelliAgent to be more than just a technology platform for Fathom; we might someday use a simplified version of intelliAgent as a platform to unify independent brokerages through a smarter broker network, which would help them effectively compete against larger 8 Table of Contents regional and national brands.
We intend for intelliAgent to be more than just a technology platform for Fathom; we might someday use a simplified version of intelliAgent as a platform to unify independent brokerages through a smarter broker network, which would help them effectively compete against larger regional and national brands.
If necessary, we will aggressively assert our rights under trade secret, unfair competition, trademark and copyright laws to protect our intellectual property. We protect these rights through trademark law, the maintenance of trade secrets, the development of trade dress, and, where appropriate, litigation against those who are, in our opinion, infringing these rights.
If necessary, we will aggressively assert our rights under trade secret, unfair competition, trademark and copyright laws to protect our intellectual property. We protect these rights through trademark law, the maintenance of trade secrets, the development of trade dress, and, where appropriate, legal proceedings against those who are, in our opinion, infringing these rights.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, moved authority to administer RESPA from the Department of Housing and Urban Development to the new Consumer Financial Protection Bureau, or the CFPB.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), moved authority to administer RESPA from the Department of Housing and Urban Development to the Consumer Financial Protection Bureau (the "CFPB").
Real Estate Regulation - State and Local Level Real estate and brokerage licensing laws and requirements vary by state. In general, all individuals and entities lawfully conducting businesses as real estate agents or sales associates must be licensed in the state in which they carry on business and must at all times be in compliance.
Real Estate Regulation - State and Local Level Real estate and brokerage licensing laws and requirements vary by state. In general, all individuals and entities lawfully conducting businesses as real estate agents or sales associates must be licensed in the state in which they carry on business.
In August 2024, we introduced two new commission plans, Fathom Max and Fathom Share, designed to provide agents with greater flexibility while incorporating a revenue share opportunity. • Fathom Max Plan: Agents on the Max plan pay a flat transaction fee of $465 per transaction until they reach an annual cap of $9,000 in fees paid to the Company.
In August 2024, we introduced two new commission plans, Fathom Max and Fathom Share, designed to provide agents with greater flexibility and a revenue sharing opportunity. • Fathom Max Plan: Agents on the Fathom Max Plan pay a fee of $465 per transaction until they reach an annual cap of $9,000 in fees paid to the Company.
This data includes the significant and lengthy downturn from the second half of 2005 through 2011, and in that time frame, the number of annual U.S. existing home sale transactions declined by approximately 39%. Beginning in 2012, the U.S. residential real estate industry began its recovery, and the number of annual U.S. existing home sale units improved.
This data includes the significant and lengthy downturn from the second half of 2005 through 2011, when the number of annual U.S. existing home sale transactions declined by approximately 39%. Beginning in 2012, the U.S. residential real estate industry began its recovery, and the number of annual U.S. existing home sale units improved.
RESPA also protects borrowers against certain abusive practices, such as kickbacks, and places limitations upon the use of escrow accounts. RESPA also requires detailed disclosures concerning the transfer, sale, or assignment of mortgage servicing, as well as disclosures for mortgage escrow accounts.
RESPA also protects borrowers against certain abusive practices, such as kickbacks, and limits the use of escrow accounts. RESPA also requires detailed disclosures concerning the transfer, sale, or assignment of mortgage servicing, as well as disclosures for mortgage escrow accounts.
He has also served as our President since January 1, 2018. Prior to this, Mr. Fregenal served as our Chief Operating Officer and Chief Financial Officer from May 1, 2012 to December 31, 2017. Prior to joining our company, Mr.
He has also served as our President since January 1, 2018. Prior to this, Mr. Fregenal served as 13 Table of Contents our Chief Operating Officer and Chief Financial Officer from May 1, 2012 to December 31, 2017. Prior to joining our company, Mr.
In order to obtain this license, most jurisdictions require that a member or manager be licensed individually as a real estate broker in that jurisdiction. If applicable, this member or manager is responsible for supervising the entity’s licensees and real estate brokerage activities within the state.
To obtain this license, most jurisdictions require that a member or manager 12 Table of Contents be licensed individually as a real estate broker in that jurisdiction. If applicable, this member or manager is responsible for supervising the entity’s licensees and real estate brokerage activities within the state.
Our technology, services, data, lead generation, and marketing tools are designed to be used by our agents to represent their real estate clients with best-in-class service.
Our technology, services, data, lead generation, and marketing tools are designed for our agents to be able to represent their real estate clients with best-in-class service.
To capitalize on this, we focus on helping our agents improve professionally and increase their financial ability to invest in their personal marketing. Cost Structure The lower overall cost of operating our business primarily virtually enables us to offer our agents a 100% commission model. The 100% commission model charges each agent a flat fee per real estate transaction.
To capitalize on this, we focus on helping our agents improve professionally and increase their financial ability to invest in their personal marketing. Cost Structure Our lower overall operating costs relative to competitors enables us to offer our agents a 100% commission model. The 100% commission model charges each agent a flat fee per real estate transaction.
Real estate listings precede sales and a period of poor listing activity will negatively impact revenue. Past performance in similar seasons or during similar weather events can provide no assurance of future or current performance, and macroeconomic shifts in the markets we serve can conceal the impact of poor weather and/or seasonality.
Because real estate listings precede sales, a period of poor listing activity could negatively impact revenue. Past performance in similar seasons or during similar weather events can provide no assurance of future performance, and macroeconomic shifts in the markets we serve can obscure the impact of poor weather and/or seasonality.
Real Estate Regulation - Federal The Real Estate Settlement Procedures Act of 1974, as amended, or RESPA, became effective on June 20, 1975. RESPA requires lenders, mortgage agents, or servicers of home loans to provide borrowers with pertinent and timely disclosures regarding the nature and costs of the real estate settlement process.
Real Estate Regulation - Federal The Real Estate Settlement Procedures Act of 1974, as amended ("RESPA"), requires lenders, mortgage agents, or servicers of home loans to provide borrowers with pertinent and timely disclosures regarding the nature and costs of the real estate settlement process.
Consequently, this higher commission retained by our agents combined with our unique delivery of support services and the flexibility it provides for agents has facilitated our growth over the past several years. We also differentiate ourselves by not charging our agents royalties or franchise fees.
Consequently, the higher commission retained by our agents combined with our unique delivery of support services has facilitated our growth over the past several years. We also differentiate ourselves by not charging our agents royalties or franchise fees.
Agents, sales associates or salespersons are generally classified as independent contractors; however, real estate firms can also offer employment. Engaging in the real estate brokerage business requires obtaining a real estate broker license (although in some states the licenses are personal to individual agents).
Agents, sales associates or salespersons are generally classified as independent contractors. Engaging in the real estate brokerage business requires obtaining a real estate broker license (although in some states the licenses are personal to individual agents).
Human Capital As of December 31, 2024, we had approximately 270 full-time employees. Our operations are overseen directly by management. Our management oversees all responsibilities in the areas of corporate administration, training, agent relations, business development, technology, and research. We intend to expand and retain our current management and skilled employees with experience relevant to our businesses.
Human Capital As of December 31, 2025, we had approximately 281 full-time employees. Our management oversees all responsibilities in the areas of corporate administration, training, agent relations, business development, technology, and research. We intend to expand and retain our current management and skilled employees with experience relevant to our businesses.
Each third-party organization generally has prescribed policies, bylaws, codes of ethics or conduct, and fees and rules governing the actions of members in dealings with other members, clients and the public, as well as how the third-party organization’s brand and services may or might not be deployed or displayed.
“REALTOR” and “REALTORS” are registered trademarks of the National Association of REALTORS®. Each third-party organization has prescribed policies, bylaws, codes of ethics or conduct, and fees and rules governing the actions of members in dealings with other members, clients and the public, as well as how the third-party organization’s brand and services may or might not be deployed or displayed.
A content marketing strategy updates candidates on the latest developments and offers that may be of interest to them in growing their business. Additionally, a team of experienced recruiters focuses on personally introducing and sharing the Fathom brands value proposition with real estate professionals across the country.
A content marketing strategy updates candidate agents on the latest developments and offers that may be of interest to them in growing their business. Additionally, a team of experienced recruiters focuses on personally introducing and sharing the Company's value proposition with real estate professionals nationwide.
While an assertion of our rights could result in a substantial cost and diversion of management effort, we believe the protection and defense against infringement of our intellectual property rights are essential to our business.
While asserting our rights could result in a substantial costs and diversion of management attention, we believe the protection and defense against infringement of our intellectual property rights are essential to our business.
In other words, they may close 20% fewer homes but could earn the same income as before under our fee model compared to being at a traditional brokerage. We believe this is a competitive advantage we can continue to leverage in our industry. Traditional brokerage companies retain between 20% and 50% of the commission of their agents.
In other words, the agents may close 20% fewer homes but could earn the same income as before under our fee model compared to that of a traditional brokerage, which we believe is a competitive advantage. Traditional brokerage companies retain between 20% and 50% of their agents' commission.
We have grown rapidly since inception, and plan to accelerate our growth through the following aspects of our vision: • offer full brokerage services via our technology-enabled, low-overhead business model; • attract and retain high-producing agents by offering high compensation per transaction and industry-leading benefits; • continue to enhance and develop our proprietary software platform to facilitate our own business and potentially increase our revenue by licensing it to others; and 7 Table of Contents • pursue further growth through potential acquisitions, including potentially using our publicly traded stock as consideration, depending on its value at the time.
We have grown rapidly since inception, and plan to accelerate our growth by executing the following aspects of our vision: • Offering full brokerage services via our technology-enabled, low-overhead business model; • Attracting and retaining high-producing agents by offering high compensation per transaction and industry-leading benefits; 7 Table of Contents • Enhancing and refining our proprietary software platform to facilitate our own business and create licensing opportunities; and • Pursuing further growth through acquisitions, including potentially using our publicly traded stock as consideration, depending on its value at the time.
Other Information We make available, free of charge through our website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as is reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (“SEC”) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Gwin received his BBA in Business Administration from the University of San Diego and his Juris Doctor in Litigation and Corporate Law from Purdue Global University.] Other Information We make available, free of charge through our website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as is reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (“SEC”) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Spring and summer seasons historically reflect greater sales periods in comparison to fall and winter seasons. The latter periods also tend to see greater agent attrition. We have historically experienced lower revenues during the fall and winter seasons, as well as during periods of unseasonable weather, which reduces our operating income, net income, operating margins and cash flow.
Spring and summer seasons historically reflect greater sales periods compared to fall and winter seasons. The latter periods also tend to see greater agent attrition. We have historically experienced lower revenues during the fall and winter seasons, as well as during periods of unseasonable weather, which reduces our results of operations.
States require a real estate broker to be employed by the brokerage firm or permit an independent contractor classification, and the broker may work for another broker conducting business on behalf of the sponsoring broker. 12 Table of Contents States may require a person licensed as a real estate agent, sales associate or salesperson to be affiliated with a broker in order to engage in licensed real estate brokerage activities or allow the agent, sales associate or salesperson to work for another agent, sales associate or salesperson conducting business on behalf of the sponsoring agent, sales associate or salesperson.
States may require a person licensed as a real estate agent, sales associate or salesperson to be affiliated with a broker to engage in licensed real estate brokerage activities or allow the agent, sales associate or salesperson to work for another agent, sales associate or salesperson conducting business on behalf of the sponsoring agent, sales associate or salesperson.
We believe our commission structure, business model, advanced technology offerings, and our focus on treating our agents well attract more agents and higher producing agents to join and stay with our Company.
We believe we offer our agents some of the best technology, training, and support available in the industry. We believe our commission structure, business model, advanced technology offerings, and focus on treating our agents well attract more agents and higher producing agents to join and stay with our Company.
We are also subject to federal and state regulations relating to employment, contractor, and compensation practices. Except for our employed state agents, all agents in our brokerage operations have been retained as independent contractors, either directly or indirectly through third-party entities formed by these independent contractors for their business purposes.
Except for our employed state agents, all agents in our brokerage operations have been retained as independent contractors, either directly or indirectly through third-party entities formed by these independent contractors for their business purposes.
Periodic downturns, like the current one, can often be defined by things over which the industry has no control, such as economic uncertainty and increased interest rates. (see "Industry Trends" for further detail below). The following information is based on data published by the NAR.
The U.S. residential real estate industry has a long history of growth, despite periodical downturns. Periodic downturns, like the current one, are often defined by things over which industry participants have no control, such as economic uncertainty and increased interest rates (see "Industry Trends" below for further detail). The following information is based on data published by the NAR.
In addition, federal fair housing laws generally make it illegal to discriminate against protected classes of individuals in housing or brokerage services.
In addition, federal fair housing laws generally prohibit discrimination against protected classes of individuals in housing or brokerage services.
This fee contributes to covering the Company’s operational costs, including technology, training, and agent support services. These structural changes are expected to enhance agent attraction and retention, increase gross profit per transaction from higher production agents, and provide an additional revenue stream for agents through the revenue share program.
These structural changes are expected to enhance agent attraction and retention, increase gross profit per transaction from higher producing agents, and provide an additional revenue stream for agents through the revenue share program.
Internally, we use our technology to provide agents with opportunities to increase their profitability, reduce risk, and develop professionally, while fostering a culture that values collaboration, strength of community, and commitment to serving the consumer’s best interests.
Internally, we use our technology to provide agents with opportunities to increase their profitability, reduce risk, and develop professionally, while fostering a culture that values collaboration, community, and commitment to serving the consumer’s best interests. We provide our agents with the systems, support, professional development and infrastructure to help them succeed in unpredictable, and often challenging, economic conditions.
While we currently utilize these vendors to provide our services in the short-term, we believe other alternatives are available in the longer term, should they be needed, to license or develop replacement technology. Our March 2021 acquisition of Naberly was intended to reduce our need for third party software.
We have developed and own the intelliAgent software. We also license third-party software. While we currently utilize these vendors to provide our services in the short-term, we believe other alternatives are available in the longer term, should they be needed, to license or develop replacement technology.
Every agent also pays a $600 annual fee on their first sale (recognized as a reduction to Commission and other agent-related costs over the following twelve months), which helps cover our operating costs such as technology, errors and omissions insurance, training, and oversight.
Each agent paid a $600 annual fee on their first sale (recognized as a reduction to commission and other agent-related costs over the following twelve months), which helped cover our operating costs.
This should allow us to monetize a portion of our technology and generate revenue from small-to-medium sized brokerages and agents who would not otherwise join our company. We believe that intelliAgent also provides us with the platform to more fully integrate our mortgage, title, and insurance companies that are part of Fathom Holdings.
Doing so would allow us to monetize intelliAgent and generate revenue from small-to-medium sized brokerages who would not otherwise join our company. We believe that intelliAgent also provides us a platform to more fully integrate our mortgage and title business.
However, there was another housing downturn beginning in 2022, when severe inflation gave rise to high interest rates which caused U.S. existing home sale transactions to decline by approximately 33.5% in 2023, and decline another approximately 0.7% in 2024.
However, there was another housing downturn beginning in 2022, when elevated inflation and rising mortgage interest rates contributed to a significant decline in transaction activity. U.S. existing home sale transactions declined by approximately 33.5% in 2023 and declined an additional approximately 0.7% in 2024.
This deeper integration is designed to encourage a higher level of agent adoption and use of our various services companies and therefore create a better agent experience, customer experience, and generate higher revenues for our company and add value for our shareholders.
This deeper integration is 8 Table of Contents designed to encourage a higher level of agent adoption and use of our ancillary services, thereby creating a better agent and customer experience, which could lead to higher revenues for the Company and add value for our shareholders.
A commission calculator on our website allows agents to determine how much money they could make if they join our company.
A commission calculator on our website allows agents to determine how much money they could make if they join our company. 9 Table of Contents Our Markets Currently, our market is the United States.
Our Focus on Agents We believe that agents deliver unique value to the specific customers they serve in different ways depending upon the knowledge, skills or expertise of the agent and the needs and desires of the customers.
These elements are designed to build brand awareness and position Fathom as the brokerage of choice for agents making career decisions. Our Focus on Agents We believe that agents deliver unique value to the specific customers they serve in different ways depending upon their knowledge, skills or expertise and the needs and desires of the customers.
Government Regulation We serve the residential real estate industry which is regulated by federal, state and local authorities as well as private associations or state sponsored associations or organizations. We are required to comply with federal, state, and local laws, as well as private governing bodies’ regulations, which, when combined, result in a highly-regulated industry.
Government Regulation We serve the residential real estate industry which is highly-regulated by federal, state and local authorities as well as private associations or state sponsored associations or organizations. We are also subject to federal and state regulations relating to employment, contractor, and compensation practices.
After reaching the cap, they pay a reduced $165 transaction fee per sale for the remainder of their anniversary year. The High-Value Property Fee does not apply to this plan. • Errors & Omissions (E&O) Insurance Fee: A $35 E&O fee is charged on every transaction, regardless of whether an agent has reached their cap.
The High-Value Property Fee does not apply to the Fathom Share Plan. • Errors & Omissions ("E&O") Insurance Fee: Regardless of whether an agent has reached their cap, a $35 E&O fee is charged on every transaction to cover the cost of maintaining professional liability insurance for all transactions.
In 2023, our average cost to recruit a new agent was $1,050 and our annual cost associated with each agent was $1,150 so we broke even in an agent’s first year if he or she completes just two sales.
In 2023, our average cost to recruit a new agent was $1,050 and our annual costs associated with each agent was $1,150, meaning we broke even if an agent completed just two sales in his or her first year. In 2024, we increased the fee we charged on an agent’s first transaction of each anniversary year from $600 to $700.
The best example of this was the significant downturn in the U.S. residential real estate market between 2005 and 2011. Such depressed real estate cycles are often followed by extended periods of higher buyer demand, lower available real estate supply and increasing home values.
Such depressed real estate cycles are often followed by extended periods of higher buyer demand, lower available real estate supply and increasing home values.
Below is an example of a traditional brokerage company’s commission model assuming a 30% split, versus our commission model. This is an example of potential commission savings and results similar to the example below may vary and are not guaranteed.
Below is a comparison of our commission model against of a traditional brokerage company’s commission model assuming a 30% split. This is an example of potential commission savings and results may vary and are not guaranteed. Commission Comparison We believe our commission model also allows agents to directly compete against discount brokerages and other disruptive new competitors.
Real estate licensees, whether they are salespersons, individuals, agents or entities, must follow the state’s real estate licensing laws and regulations.
Real estate licensees must follow the state’s real estate licensing laws and regulations.
In the future, we also intend to roll out an enhanced version of the Naberly platform to launch a national real estate portal to help generate leads for our Fathom agents, as well as non-Fathom agents, in the markets in which we are not currently operating.
Offering even more robust technology to help our agents grow their businesses is a key strategy to continuing our agent growth trajectory. We intend to offer an enhanced version of the Naberly platform to launch a national real estate portal to generate leads for our agents, including non-Fathom agents, in the markets in which we are not currently operating.
None of our employees or agents are represented by unions, and we believe our employee and agent relations are good. 13 Table of Contents Information about our Executive Officers The following table sets forth current information concerning our executive officers: Name Age Position Marco Fregenal 61 Chief Executive Officer and President Samantha Giuggio 55 Chief Operations Officer of Fathom Holdings and President of Fathom Realty Jon Gwin 45 Chief Revenue Officer of Fathom Holdings Marco Fregenal – President and Chief Executive Officer, Director Marco Fregenal has been our Chief Executive Officer since November 2023, and our Chief Financial Officer between 2012 and November 2024.
Information about our Executive Officers and [Senior Management] The following table sets forth current information concerning our executive officers [and a member of our senior management]: Name Age Position Marco Fregenal 62 Chief Executive Officer and President Laura Muller 55 President of Fathom Realty Jon Gwin 46 Chief Revenue Officer of Fathom Holdings Marco Fregenal – President and Chief Executive Officer, Director Marco Fregenal has been our Chief Executive Officer since November 2023, and our Chief Financial Officer between 2012 and November 2024.
The acquisition of Cornerstone, a real estate mortgage business, has helped us to expand our reach in the DC and surrounding markets. On November 1, 2024, the Company acquired My Home Group ("MHG"). MHG is a real estate agency group with over 2,200 agents. This acquisition increases the Company's real estate brokerage and ancillary business presence in Arizona and Washington.
On November 1, 2024, the Company acquired My Home Group ("MHG"). MHG is a real estate agency group with over 2,200 agents. The acquisition increased the Company's real estate brokerage and ancillary business presence in Arizona and Washington. In November 2025, the Company completed the divestiture of LiveBy, a subsidiary focused on data and technology solutions.
Fregenal received a B.S. in economics from Rutgers University and a Masters in Econometrics and Operations Research from Monmouth University. Samantha Giuggio — Chief Operations Officer and President Samantha Giuggio has served as our Chief Operations Officer for Fathom Holdings and President of Fathom Realty since November 2024. Prior to this, Ms.
Fregenal received a B.S. in economics from Rutgers University and a Masters in Econometrics and Operations Research from Monmouth University. Laura (Lori) Muller — President of Fathom Realty Lori Muller has served as President of Fathom Realty since February 2026. Prior to this, Ms. Muller served as Vice President and the President of U.S. Organization with Exit Realty Corp.
We achieved gross commission income of approximately $314.7 million on $12.3 billion in real estate sales volume for the year ended December 31, 2024. As of December 31, 2024, we had approximately 14,300 agent licenses.
We achieved gross commission income of approximately $399.0 million on $16.5 billion in real estate sales volume for the year ended December 31, 2025.
Prior to this, he served as Chief Operating Officer from June 2024 to November 2024. Prior to joining Fathom Holdings, Mr. Gwin served as the Chief Operating Officer for American Financial Network for 14 years. Mr.
Gwin served as the Chief Operating Officer for American Financial Network for 14 years. Mr.
IntelliAgent includes, but is not limited to consumer facing websites, transaction management, personnel management, customer relationship management, accounting management for agent transactions, reporting, social media marketing and other marketing and marketing repository, along with a future marketplace for add-on services and third-party technology.
Our proprietary intelliAgent real estate technology platform provides a suite of brokerage and agent level tools, technology, business processes, business intelligence and reporting, training. IntelliAgent includes consumer facing websites, transaction management, personnel management, customer relationship management, accounting management for agent transactions, reporting, and social media marketing, along with a marketplace for add-on services and third-party technology.
Commission Comparison We believe our commission model also allows agents to directly compete against discount brokerages and other disruptive new competitors. The flat transaction fee that we collect allows our agents to adjust the commission the charge accordingly to be highly competitive. 5 Table of Contents The commission we collect from our agents is our primary source of revenue.
Our flat transaction fee model allows our agents to adjust the commission they charge to be more competitive in their markets. 5 Table of Contents The commission we collect from our agents is our primary source of revenue.
This new ‘High-Value Property Fee’ consist of an additional $200 on properties priced between $600,000 and $999,999. Then, there is an additional fee of $250 charged for each $500,000 tier range over a $1,000,000 property price.
A second change included a new fee on sales of properties over $600,000 and is in addition to the agent’s transaction fee of $550. This new "High-Value Property Fee" consists of an additional $200 on properties priced between $600,000 and $999,999, with a tiered fee structure of $250 for each $500,000 tier over a $1,000,000 sales price.
With our low flat transaction fee, even during a decline in the housing market where home sales decline by 20%, we believe most real estate agents can net as much income as they did the year before at a traditional brokerage.
For example, even during a period in which home sales declined by 20%, we believe most of our real estate agents could net as much income as they would during the prior period at a traditional brokerage.
This fee helps cover the cost of maintaining professional liability insurance for all transactions. In addition to these changes, the Company launched a revenue share program in August 2024 to provide agents with the opportunity to earn additional income by recruiting other agents into Fathom.
In addition to these changes, the Company launched a revenue share program in August 2024 to provide agents with the opportunity to earn additional income by recruiting other agents to the Company. This program allows agents to receive a percentage of the Company’s retained commission from agents they sponsor, with earnings based on a five-tier structure.
Our revenue and operating margins each quarter will remain subject to seasonal fluctuations, poor weather, natural disasters and macroeconomic market changes that may make it difficult to compare or analyze our financial performance effectively across successive quarters. 11 Table of Contents Furthermore, the residential real estate market and the real estate industry in general are often cyclical, characterized by protracted periods of depressed home values, lower buyer demand, inflated rates of foreclosure and often changing regulatory or underwriting standards applicable to mortgages.
Our revenue and operating margins each quarter is subject to seasonal fluctuations, poor weather, natural disasters and macroeconomic market changes that may make it difficult to compare or analyze our financial performance effectively across successive quarters.
As a result, we can offer our agents significantly more of their commissions compared to traditional real estate brokerage firms; we do not split our agents’ commissions, but instead charge a flat fee per real estate transaction. We believe we offer our agents some of the best technology, training, and support available in the industry.
As a result, we can offer our agents significantly more of their commissions compared to traditional real estate brokerage firms by charging a flat fee per real estate transaction, and we also offer a revenue share plan that provides agents with additional income opportunities.
Industry Background We primarily operate in the U.S. residential real estate industry, with a market size of over $2.5 trillion with over 4.06 million new and existing properties sold in the United States in 2024. Our agents also opportunistically engage in commercial real estate transactions. We derive most of our revenues from serving buyers and sellers of existing homes.
The transaction was part of the Company’s ongoing efforts to evaluate its portfolio of businesses and allocate capital in alignment with its strategic priorities. Industry Background We primarily operate in the U.S. residential real estate industry, with a market size of over $3.5 trillion with over 4.06 million new and existing properties sold in the United States in 2025.
Our low flat transaction fee provides agents money to outspend their competition on marketing while netting the same amount of money as an agent at a traditional brokerage.
More importantly, agents can reinvest that increase into their marketing thereby increasing their transaction volume which also benefits Fathom. In a slowing housing market, it is difficult to increase revenue. Our low flat transaction fee allows agents greater marketing budgets than their competition while netting the same amount of money as an agent at a traditional brokerage.
In 2024, we were ranked the #6 largest independent real estate brokerage firm and the #9 overall largest brokerage firm in the United States (per available data). These rankings were published by The Real Trends Five Hundred based on several criteria including transaction size, sales volume, affiliation, top movers, core services, and others.
These rankings were published by The Real Trends Five Hundred based on several criteria including transaction size, sales volume, affiliation, top movers, core services, and others. Fathom also was listed in the top three of the Top 100 Places to Work in Dallas Fort Worth five years in a row by the Dallas Morning News.
She served as an Agent and Group Leader Training Coordinator with us prior to this. Ms. Giuggio received an associate’s degree in hospitality management from Holyoke Community College. Jon Gwin - Chief Revenue Officer Jon Gwin has served as our Chief Revenue Officer for Fathom Holdings since November 2024.
International, where she oversaw U.S. brokerage operations. [Jon Gwin - Chief Revenue Officer Jon Gwin has served as our Chief Revenue Officer for Fathom Holdings since November 2024. Prior to this, he served as Chief Operating Officer from June 2024 to November 2024. Prior to joining Fathom Holdings, Mr.
This program allows agents to receive a percentage of the Company’s retained commission from agents they sponsor, with earnings based on a five-tier structure. The percentage of revenue share varies by plan, with higher earnings available for Fathom Share participants. Every agent also pays an annual fee of $700, which is charged on their first transaction of each anniversary year.
Every agent also pays an annual $700 fee, which is charged on their first transaction of each anniversary year. This fee contributes to covering the Company’s operational costs, including technology, training, and agent support services.
We provide our agents with the systems, support, professional development and infrastructure designed to help them succeed in unpredictable, and often challenging, economic conditions. This includes delivering 24/7 access to collaborative tools and training for real estate agents.
This includes delivering 24/7 access to collaborative tools and training for agents.
As of December 31, 2024, we had approximately 14,300 agent licenses.
As of December 31, 2025, we had approximately 14,135 agent licenses. None of our employees or agents are represented by unions, and we believe our employee and agent relations are good.
According to the National Association of Realtors, or the NAR, existing home sales represented approximately 90% of the overall market by number of transactions in 2024. The U.S. residential real estate industry has a long history of growth, despite periodical downturns.
We derive most of our revenues from serving buyers and sellers of existing homes, although our agents also opportunistically engage in commercial real estate transactions. According to the National Association of Realtors (the "NAR"), existing home sales represented approximately 90% of the number of real estate transactions in 2025.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny such sales could also create public perception of difficulties or problems with our business and might also make it more difficult for us to raise capital through the sale of equity securities in the future at a time and price that we deem appropriate. 36 Table of Contents Joshua Harley, our Founder and former Chief Executive Officer, Marco Fregenal, our President and Chief Executive Officer, and Scott Flanders, a significant shareholder and director, own a significant percentage of our stock, and as a result, they can take actions that may be adverse to the interests of the other shareholders and the trading price for our common stock may be depressed.
Biggest changeAny such sales could also create public perception of difficulties or problems with our business and might also make it more difficult for us to raise capital through the sale of equity securities in the future at a time and price that we deem appropriate.
The concentration and market power of the top real estate listing aggregators allow them to monetize their platforms by expanding into the brokerage business, charging significant referral, listing, and display fees, charging listing and display fees, diluting the relationship between agents and brokers and between agents and the consumer, tying referrals to use of their products, consolidating and leveraging data, and engaging in preferential or exclusionary practices to favor or disfavor other industry participants.
The concentration and market power of the top real estate listing aggregators allow them to monetize their platforms by expanding into the brokerage business, charging significant referral, listing, and display fees diluting the relationship between agents and brokers and between agents and the consumer, tying referrals to use of their products, consolidating and leveraging data, and engaging in preferential or exclusionary practices to favor or disfavor other industry participants.
One dominant listing aggregator has introduced an iBuying offering to consumers and recently launched a brokerage with employee sales agents in several locations to support this offering, and has joined many local MLSs as a participating broker to gain electronic access directly to real estate listings rather than relying on disparate electronic feeds from other brokers participating in MLS or MLS syndication feeds.
One dominant listing aggregator has introduced an iBuying offering to consumers and recently launched a brokerage with employee sales agents in several locations to support this offering, and has joined many local MLSs as a broker to gain electronic access directly to real estate listings rather than relying on disparate electronic feeds from other brokers participating in MLS or MLS syndication feeds.
Loss of our current executive officers or other key management could significantly harm our business We depend on the industry experience and talent of our current executives, including our President and Chief Executive Officer and Marco Fregenal. We also rely on individuals in key management positions within our operations, finance, and technology teams.
Loss of our current executive officers or other key management could significantly harm our business We depend on the industry experience and talent of our current executives, including Marco Fregenal, our President and Chief Executive Officer. We also rely on individuals in key management positions within our operations, finance, and technology teams.
We carry errors and omissions insurance for errors made by our title and escrow companies, by our company owned brokerage business during the real estate settlement process, and by us related to real estate services.
We carry errors and omissions insurance for errors made by our title and escrow companies, errors made by our company owned brokerage business during the real estate settlement process, and errors made by us related to real estate services.
We currently develop portions of our technology in Brazil, India, and Philippines and could conduct operations in other foreign jurisdictions in the future.
We currently develop portions of our technology in Brazil, India, and the Philippines and could conduct operations in other foreign jurisdictions in the future.
Recent actions by U.S. banking regulators have reduced the ability of bitcoin-related services providers to gain access to banking services and liquidity of bitcoin may also be impacted to the extent that changes in applicable laws and regulatory requirements negatively impact the ability of exchanges and trading venues to provide services for bitcoin and other digital assets.
Recent actions by U.S. banking regulators have reduced the ability of bitcoin-related services providers to gain access to banking services and the liquidity of bitcoin may also be impacted to the extent that changes in applicable laws and regulatory requirements negatively impact the ability of exchanges and trading venues to provide services for bitcoin and other digital assets.
The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of bitcoin or the ability of individuals or institutions such as us to own or transfer bitcoin.
The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of bitcoin or the ability of individuals or institutions such as us to own or transfer bitcoin.
This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities.
Unless we consent to the selection of an alternative forum, our amended and restated bylaws provide that North Carolina state courts will be, to the fullest extent permitted by law, the sole and exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees to the Company or our shareholders; any action asserting a claim against us arising pursuant to the North Carolina Business Corporation Act, or our articles of incorporation or bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine.
Unless we consent to the selection of an alternative forum, our amended and restated bylaws provide that North Carolina state courts will be, to the fullest extent permitted by law, the sole and exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees to the Company or its shareholders; any action asserting a claim against us arising pursuant to the North Carolina Business Corporation Act, or our articles of incorporation or bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine.
Such litigation and other proceedings may include, but are not limited to, actions relating to intellectual property, commercial arrangements, negligence and fiduciary duty claims arising from our brokerage operations, actions against our title company for defalcations on closing payments or claims against the title agent contending that the agent knew or should have known that a transaction was fraudulent or that the agent was negligent in addressing title defects or conducting settlement, standard brokerage disputes like the failure to disclose hidden defects in a property such as mold, vicarious liability based upon conduct of individuals or entities outside of our control, including our agents, third-party service or product providers, antitrust claims, general fraud claims, employment law claims, including claims challenging the classification of our agents as independent contractors and compliance with wage and hour regulations, and claims alleging violations of RESPA or state consumer fraud statutes.
Such litigation and other proceedings may include, but are not limited to, actions relating to intellectual property, commercial arrangements, negligence and fiduciary duty claims arising from our brokerage operations, actions against our title company for defalcations on closing payments or claims against the title agent contending that the agent knew or should have known that a transaction was fraudulent or that the agent was negligent in addressing title defects or conducting settlement, standard brokerage disputes like the failure to disclose hidden defects in a property such as mold, vicarious liability based upon conduct of individuals or entities we control, including our agents, third-party service or product providers, antitrust claims, general fraud claims, employment law claims, including claims challenging the classification of our agents as independent contractors and compliance with wage and hour regulations, and claims alleging violations of RESPA or state consumer fraud statutes.
District Court for the Western District of Missouri), alleging a similar fact pattern and antitrust violations. On or about March 15, 2024, NAR agreed to settle the Burnett Ruling, along with a sister litigation, by agreeing to pay $418 million over approximately four years, and changing certain of its rules surrounding agent commissions (the “NAR Settlement”).
District Court for the Western District of Missouri), alleging a similar fact pattern and antitrust violations. On or about March 15, 2024, NAR agreed to settle the Burnett Ruling, along with similar litigation, by agreeing to pay $418 million over approximately four years, and changing certain of its rules surrounding agent commissions (the “NAR Settlement”).
Historically, the bitcoin markets have been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network.
Historically, bitcoin markets have been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network.
Moreover, defending a suit, regardless of its merits, could entail substantial expense and require the time and attention of key management personnel. We might experience significant claims relating to our operations, and losses resulting from fraud, defalcation or misconduct. We issue title insurance policies covering real property to mortgage lenders and buyers of real property.
Moreover, defending a suit, regardless of its merits, could entail substantial expense and require the time and attention of key management. We might experience significant claims relating to our operations, or losses resulting from fraud, defalcation or misconduct. We issue title insurance policies covering real property to mortgage lenders and buyers of real property.
Alternatively, if a court were to find the choice of forum provisions contained in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and operating results.
Alternatively, if a court were to find the choice of forum provisions contained in our bylaws inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and operating results.
Potential reform of Fannie Mae or Freddie Mac or certain federal agencies or a reduction in U.S. government support for the housing market could have a material impact on our operations. Numerous pieces of legislation seeking various changes for government sponsored entities, or GSEs have been introduced in Congress to reform the U.S. housing finance market.
Potential reform of Fannie Mae or Freddie Mac or certain federal agencies or a reduction in U.S. government support for the housing market could have a material impact on our operations. Numerous pieces of legislation seeking various changes for government sponsored entities have been introduced in Congress to reform the U.S. housing finance market.
Additionally, the Dodd-Frank Wall Street Reform and Consumer Protection Act contains the Mortgage Reform and Anti-Predatory Lending Act, or the Mortgage Act, which imposes several additional requirements on lenders and servicers of residential mortgage loans, by amending certain existing provisions and adding new sections to RESPA and other federal laws.
Additionally, the Dodd-Frank Wall Street Reform and Consumer Protection Act contains the Mortgage Reform and Anti-Predatory Lending Act (the "Mortgage Act"), which imposes several additional requirements on lenders and servicers of residential mortgage loans by amending certain existing provisions and adding new sections to RESPA and other federal laws.
The SEC has also brought recent actions against individuals and digital asset market participants alleging such persons artificially increased trading volumes in certain digital assets through wash trades, or repeated buying and selling of the same assets in fictitious transactions to manipulate their underlying trading price.
The SEC has also brought actions against individuals and digital asset market participants alleging such persons artificially increased trading volumes in certain digital assets through wash trades, or repeated buying and selling of the same assets in fictitious transactions to manipulate their underlying trading price.
Our competitors may have access to greater financial resources than us, allowing them to undertake expensive local advertising or marketing efforts. In addition, our competitors may be able to leverage local relationships, referral sources, and strong local brand and name recognition that we have not established.
Our competitors may have access to greater financial resources than we, allowing them to undertake expensive local advertising or marketing efforts. In addition, our competitors may be able to leverage local relationships, referral sources, and strong local brand and name recognition that we have not established.
In addition, in June 2023, the SEC announced enforcement actions against Coinbase, Inc., and Binance Holdings Ltd., two providers of large trading venues for digital assets, which similarly was followed by a decrease in the market price of bitcoin and other digital assets.
In addition, in June 2023, the SEC announced enforcement actions against Coinbase, Inc., and Binance Holdings Ltd., two providers of large trading venues for digital assets, which was followed by a decrease in the market price of bitcoin and other digital assets.
If we were to own all or a portion of our bitcoin in a different manner, the accounting treatment for our bitcoin, our ability to use our bitcoin as collateral for additional borrowings, and the regulatory requirements to which we are subject, may correspondingly change.
If we were to own all or a portion of our bitcoin in a different manner, the accounting treatment for our bitcoin, our ability to use our bitcoin as collateral for additional borrowings, and the regulatory requirements to which we are subject, may change.
The SEC also alleged as part of its June 5, 2023, complaint that Binance Holdings Ltd. committed strategic and targeted “wash trading” through its affiliates to artificially inflate the volume of certain digital assets traded on its exchange.
The SEC also alleged as part of its June 2023 complaint that Binance Holdings Ltd. committed strategic and targeted “wash trading” through its affiliates to artificially inflate the volume of certain digital assets traded on its exchange.
The declaration, payment and amount of any future dividends will be made at the discretion of our Board, and will depend upon, among other things, the results of operations, cash flows and financial condition, operating and capital requirements, and other factors as our Board considers relevant.
The declaration, payment and amount of any future dividends will be made at the discretion of our Board, and will depend upon, among other things, the results of operations, cash flows and financial condition, operating and capital requirements, and other factors our Board considers relevant.
We compete to attract real estate professionals through the quality of the website and mobile products; the size and attractiveness of the consumer audience; the quality and measurability of the leads we generate; the perceived return on investment we deliver, and the effectiveness of marketing and workflow tools.
We compete to attract real estate professionals through the quality of our website and mobile products; the size and attractiveness of the consumer audience; the quality and measurability of the leads we generate; the perceived return on investment we deliver and the effectiveness of marketing and workflow tools.
In addition, we rely on third-party vendors to provide the cloud office platform and to provide additional systems and related support. If we cannot continue to retain these services on acceptable terms, our access to these systems and services could be interrupted.
In addition, we rely on third-party vendors to provide the cloud office platform and additional systems and related support. If we cannot retain these services on acceptable terms, our access to these systems and services could be interrupted.
Our intellectual property rights, including existing and future trademarks, trade secrets and copyrights, are important assets of the business. We have taken measures to protect our intellectual property, but these measures might not be sufficient or effective.
Our intellectual property rights, including existing and future trademarks, trade secrets and copyrights, are important assets of our business. We have taken measures to protect our intellectual property, but these measures might not be sufficient or effective.
In particular, we expect that unauthorized parties will attempt, to gain access to our systems and facilities, as well as those of our partners and third-party service providers, through various means, such as hacking, social engineering, phishing and fraud. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders.
We expect that unauthorized parties will attempt, to gain access to our systems and facilities, as well as those of our partners and third-party service providers, through various means, such as hacking, social engineering, phishing and fraud. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders.
Cybersecurity and other threats directed at us could range from uncoordinated individual attempts to gain unauthorized access to information technology systems to sophisticated and targeted measures aimed at disrupting business or gathering personal data of customers, employees, contractors and other individuals. Recent high-profile ransomware attacks are examples of the kinds of cybersecurity risks we face.
Cybersecurity and other threats directed at us could range from uncoordinated attempts to gain unauthorized access to information technology systems to sophisticated, targeted measures aimed at disrupting business or gathering personal data of customers, employees, contractors and other individuals. Recent high-profile ransomware attacks are examples of the cybersecurity risks we face.
We currently are using and intend to continue to use Adjusted EBITDA, a non-GAAP financial measure, in reporting our annual and quarterly results of operations; however, Adjusted EBITDA is not equivalent to net income (loss) from operations as determined under GAAP, and shareholders may consider GAAP measures to be more relevant to our operating performance.
We currently use and intend to continue to use Adjusted EBITDA, a non-GAAP financial measure, in reporting our annual and quarterly results of operations; however, Adjusted EBITDA is not equivalent to net income (loss) from operations as determined under GAAP, and shareholders may consider GAAP measures to be more relevant to our operating performance.
We might not become aware of all privacy laws, changes to privacy laws, or third-party privacy regulations governing the real estate business or be unable to comply with all of these regulations, given the rate of regulatory changes, ambiguities in regulations, contradictions in regulations between jurisdictions, and the difficulties in achieving both company-wide and region-specific knowledge and compliance.
We might not become aware of all privacy laws, changes to privacy laws, or third-party privacy regulations governing the real estate business or be unable to comply with all of these regulations, given the rate of regulatory changes, ambiguities in regulations, contradictions in regulations between jurisdictions, and the difficulties in achieving both company-wide and jurisdiction-specific knowledge and compliance.
The three shareholders voting together can significantly influence all matters requiring approval by our shareholders, including the election and removal of directors and any proposed merger, acquisition, consolidation or sale of all or substantially all of our assets. In addition, due to his significant ownership stake and his service as our Chief Executive Officer, Mr.
The four shareholders voting together can significantly influence all matters requiring approval by our shareholders, including the election and removal of directors and any proposed merger, acquisition, consolidation or sale of all or substantially all of our assets. In addition, due to his significant ownership stake and his service as our Chief Executive Officer, Mr.
The consequences of a material privacy/data security incident can include violations of applicable privacy or data security laws, reputational damage, loss of market value, costly litigation with third parties (which could result in our exposure to material civil or criminal liability) and regulatory investigations, diminution in the value of the services we provide to our customers, and increased cybersecurity protection and remediation costs (that may include liability for stolen assets or information), which in turn could have a material adverse effect on our competitiveness and results of operations.
The consequences of a material privacy/data security incident can include violations of applicable privacy or data security laws, reputational damage, loss of market value, costly litigation with third parties (which could result in our exposure to material civil or criminal liability) and regulatory investigations, diminution in the value of the services we provide to our customers, and increased cybersecurity protection and remediation costs (that may include liability for stolen assets or information), which 22 Table of Contents in turn could have a material adverse effect on our competitiveness and results of operations.
As a result, management’s attention may be diverted from other business concerns, which could harm our business and operating results. Although we have already hired additional employees to comply with these requirements, we may need to hire more resources in the future, which will increase our costs and expenses.
As a result, management’s attention may be diverted from other business concerns, which could harm our business and operating results. Although we have already hired additional employees to comply with these requirements, we may need to deploy more resources in the future, which will increase our costs and expenses.
Although we employ measures designed to prevent, detect, address, and mitigate these threats (including access controls, data encryption, vulnerability assessments, and maintenance of backup and protective systems), 22 Table of Contents cybersecurity incidents and other privacy/data security incidents, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption, or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including potentially sensitive personal information of our customers) and the disruption of business operations.
Although we employ measures designed to prevent, detect, address, and mitigate these threats (including access controls, data encryption, vulnerability assessments, and maintenance of backup and protective systems), cybersecurity incidents and other privacy/data security incidents, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption, or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including potentially sensitive personal information of our customers) and the disruption of business operations.
If we fail, or we have been alleged to have failed, to comply with any existing or future applicable laws, rules and regulations, we could be subject to lawsuits and administrative complaints and proceedings, as well as criminal proceedings. Our noncompliance could result in significant defense costs, settlement costs, damages and penalties.
If we fail, or we have been alleged to have failed, to comply with any applicable laws, rules and regulations, we could be subject to lawsuits and administrative complaints and proceedings, as well as criminal proceedings. Our noncompliance could result in significant defense costs, settlement costs, damages and penalties.
We believe that our non-GAAP financial measures are meaningful to investors when analyzing our results of operations as this is a key metric used by our management for financial and operational decision-making. The market price of our stock may fluctuate based on future non-GAAP results if investors base their investment decisions on such non-GAAP financial measures.
We believe that our non-GAAP financial measures are meaningful to investors when analyzing our results of operations, as they are a key metric used by our management for financial and operational decision-making. The market price of our stock may fluctuate based on future non-GAAP results if investors base their investment decisions on such non-GAAP financial measures.
It also broadly prohibits unfair, deceptive or abusive acts and practices, and knowingly or recklessly providing substantial assistance to a covered person in violation of that prohibition. The penalties for noncompliance with these laws are also significantly increased by the Mortgage Act, which could lead to an increase in lawsuits against mortgage lenders and servicers.
The Mortgage Act also broadly prohibits unfair, deceptive or abusive acts and practices, and knowingly or recklessly providing substantial assistance to a covered person in violation of that prohibition. The Mortgage Act also significantly increased the penalties for noncompliance with these laws, which could lead to an increase in lawsuits against mortgage lenders and servicers.
Moreover, the risks of us engaging in a bitcoin treasury strategy have created, and could continue to create, complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.
Moreover, the risks of us engaging in a bitcoin treasury strategy have created, and could continue to create, complications due to the lack of experience that third parties have with companies engaging in 29 Table of Contents such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.
If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our bitcoin, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our bitcoin and our financial condition and results of operations could be materially adversely affected.
If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our bitcoin, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may 30 Table of Contents lose some or all of our bitcoin and our financial condition and results of operations could be materially adversely affected.
The occurrence of natural disasters, including hurricanes, floods, earthquakes, tsunamis, tornadoes, fires, explosions, pandemic disease, such as the coronavirus pandemic, and man-made disasters, including acts of terrorism and military actions, could adversely affect our operations, results of operations or financial condition, even if home values and buyers’ access to financing has not been affected.
The occurrence of natural disasters, including hurricanes, floods, earthquakes, tsunamis, tornadoes, fires, explosions, pandemic disease, and man-made disasters, including acts of terrorism and military actions, could adversely affect our operations, results of operations or financial condition, even if home values and buyers’ access to financing has not been affected.
In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-08, which will require us to measure any in-scope crypto assets (including bitcoin holdings) at fair value on our balance sheet, and to recognize gains and losses from changes in the fair value of bitcoin in net income each reporting period.
In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-08, which requires us to measure any in-scope crypto assets (including bitcoin holdings) at fair value on our balance sheet, and to recognize gains and losses from changes in the fair value of bitcoin in net income each reporting period.
If we were unsuccessful, and if bitcoin is determined to constitute a security for purposes of the federal securities laws, then we would have to register as an investment company, and the additional regulatory restrictions imposed by 1940 Act could adversely affect the market price of bitcoin and in turn adversely affect the market price of our common stock.
If we were unsuccessful, and if bitcoin is deemed a security for purposes of the federal securities laws, then we would have to register as an investment company, and the additional regulatory restrictions imposed by 1940 Act could adversely affect the market price of bitcoin and in turn adversely affect the market price of our common stock.
We monitor our assets and income for compliance under the 1940 Act and seek to conduct our business activities in a manner such that we do not fall within its definitions of “investment company” or that we qualify under one of the 29 Table of Contents exemptions or exclusions provided by the 1940 Act and corresponding SEC regulations.
We monitor our assets and income for compliance under the 1940 Act and seek to conduct our business activities in a manner such that we do not fall within its definitions of “investment company” or that we qualify under one of the exemptions or exclusions provided by the 1940 Act and corresponding SEC regulations.
While senior SEC officials have stated their view that bitcoin is not a “security” for purposes of the federal securities laws, a contrary determination by the SEC could lead to our classification as an “investment company” under the 1940 Act, if the portion of our assets consists of investments in bitcoins exceeds 40% safe harbor limits prescribed in the 1940 Act, which would subject us to significant additional regulatory controls that could have a material adverse effect on our business and operations and may also require us to change the manner in which we conduct our business.
While senior SEC officials have stated that bitcoin is not a “security” for purposes of the federal securities laws, a contrary determination by the SEC could lead to our classification as an “investment company” under the 1940 Act, if the portion of our assets consists of investments in bitcoins exceeds the 40% safe harbor limits prescribed in the 1940 Act, which would subject us to significant additional regulations that could have a material adverse effect on our business and operations and may also require us to change the manner in which we conduct our business.
Any such compromises to our security could harm our reputation, which could cause customers to lose trust and confidence in us or could cause agents to stop working for us. In addition, we may incur significant costs for remediation that may include liability for stolen assets or information, repair of system damage, and compensation to customers and business partners.
Any such compromises to our security could harm our reputation, which could cause customers or agents to lose confidence in us. In addition, we may incur significant costs for remediation that may include liability for stolen assets or information, repair of system damage, and compensation to customers and business partners.
If we were unable to receive the necessary capacity on acceptable terms and did not have sufficient liquidity or established operations to fund originations ourselves, then we may be unable to maintain or increase the amount of mortgage loans that we originate, which will adversely affect the growth of our mortgage business.
If we were unable to receive the necessary capacity on acceptable terms and did not have sufficient liquidity or established operations to fund originations ourselves, we may be unable to maintain or increase the amount of mortgage loans that we originate, which would adversely affect the growth of our mortgage business.
Any of the following could cause further decline in the housing or mortgage markets and have a material adverse effect on our business by causing periods of lower growth or a decline in the number of home sales or home prices which, in turn, could adversely affect our revenue and profitability: • an increase in unemployment or inflation; • a decrease in the affordability of homes due to changes in interest rates, home prices, the cost and availability of building materials, and rates of wage and job growth; • slow economic growth or recessionary conditions; • weak credit markets; • low consumer confidence in the economy or the residential real estate market; • instability of financial institutions; 32 Table of Contents • legislative, tax or regulatory changes that would adversely impact the residential real estate or mortgage markets, including but not limited to potential reform relating to Fannie Mae, Freddie Mac and other government sponsored entities, or GSEs, that provide liquidity to the U.S. housing and mortgage markets; • increasing mortgage rates, like we have experienced recently, and increasing down payment requirements or constraints on the availability of mortgage financing, including but not limited to the potential impact of various provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, or other legislation and regulations that may be promulgated thereunder relating to mortgage financing, including restrictions imposed on mortgage originators, as well as retention levels required to be maintained by sponsors to securitize certain mortgages; • excessive or insufficient home inventory levels on a regional level; • high levels of foreclosure activity, including but not limited to the release of homes already held for sale by financial institutions; • adverse changes in local or regional economic conditions, including potential impacts from the COVID-19 pandemic; • the inability or unwillingness of homeowners to enter into home sale transactions due to negative equity in their existing homes; • demographic changes, such as a decrease in household formations, lower turnover in the housing market due to homeowners staying in the same home longer than in the past, or slowing rate of immigration or population growth; • decrease in home ownership rates, declining demand for real estate and changing social attitudes toward home ownership; • changes in local, state and federal laws or regulations that affect residential real estate transactions or encourage ownership, including but not limited to changes in tax law in late 2017 that limit the deductibility of certain mortgage interest expense, the application of the alternative minimum tax, and real property taxes and employee relocation expense; or • acts of nature, such as hurricanes, earthquakes and other natural disasters that disrupt local or regional real estate markets and which may, in some circumstances lead us to waive certain fees in impacted areas.
Any of the following could cause further decline in the housing or mortgage markets and have a material adverse effect on our business by causing periods of lower growth or a decline in the number of home sales or home prices which, in turn, could adversely affect our revenue and profitability: • an increase in unemployment or inflation; • a decrease in the affordability of homes due to changes in interest rates, home prices, the cost and availability of building materials, and rates of wage and job growth; • slow economic growth or recessionary conditions; • weak credit markets; • low consumer confidence in the economy or the residential real estate market; • instability of financial institutions; • legislative, tax or regulatory changes that would adversely impact the residential real estate or mortgage markets, including but not limited to potential reform relating to Fannie Mae, Freddie Mac and other government sponsored entities, that provide liquidity to the U.S. housing and mortgage markets; • increasing mortgage rates, like we have experienced recently, and increasing down payment requirements or constraints on the availability of mortgage financing, including but not limited to the potential impact of various provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or other legislation and regulations that may be promulgated thereunder relating to mortgage financing, including restrictions imposed on mortgage originators, as well as retention levels required to be maintained by sponsors to securitize certain mortgages; • excessive or insufficient home inventory levels on a regional level; • high levels of foreclosure activity, including but not limited to the release of homes already held for sale by financial institutions; • adverse changes in local or regional economic conditions; • the inability or unwillingness of homeowners to enter into home sale transactions due to negative equity in their existing homes; • demographic changes, such as a decrease in household formations, lower turnover in the housing market due to homeowners staying in the same home longer than in the past, or slowing rate of immigration or population growth; • decrease in home ownership rates, declining demand for real estate and changing social attitudes toward home ownership; • changes in local, state and federal laws or regulations that affect residential real estate transactions or encourage ownership, including but not limited to changes in tax law in late 2017 that limit the deductibility of certain mortgage interest expense, the application of the alternative minimum tax, and real property taxes and employee relocation expense; or • acts of nature, such as hurricanes, earthquakes and other natural disasters that disrupt local or regional real estate markets and which may, in some circumstances lead us to waive certain fees in impacted areas. 32 Table of Contents The continued decline in global economic conditions could also materially impact the revenue of our recently acquired businesses, including insurance, title insurance, mortgage, lead generation, and other ancillary services.
If we do not remain on the forefront of innovation, we might not be able to achieve or sustain profitability, particularly in the current environment of economic uncertainty and increased interest rates, which are having a negative effect on the real estate industry.
If we do not 14 Table of Contents remain on the forefront of innovation, we might not be able to achieve or sustain profitability, particularly in the current environment of economic uncertainty and increased interest rates, which are having a negative effect on the real estate industry.
Employee or agent litigation and unfavorable publicity could negatively affect our future business. Our employees or agents may, from time to time, bring lawsuits against us alleging injury, creating a hostile workplace, discrimination, wage and hour disputes, sexual harassment, or other employment issues.
Employee or agent litigation and unfavorable publicity could negatively affect our future business. Our employees or agents may, from time to time, bring lawsuits against us alleging injury, creation of a hostile workplace, discrimination, wage and hour disputes, sexual harassment, or other employment issues.
In the future, we might identify material weaknesses in our internal controls over financial reporting or fail to meet the demands that will be placed upon us as a public company, including the requirements of the Sarbanes-Oxley Act, and we may be unable to accurately report our financial results, or report them within the timeframes required by law or stock exchange regulations.
We might identify material weaknesses in our internal controls over financial reporting or fail to meet the demands that will be placed upon us as a public company, including the requirements of the Sarbanes-Oxley Act, and we may be unable to accurately report our financial results, or report them within the timeframes required by law or stock exchange 23 Table of Contents regulations.
Moreover, there are inherent risks associated with upgrading, improving and expanding our information technology systems. We cannot be sure that the expansion and improvements to our infrastructure and systems 15 Table of Contents will be fully or effectively implemented on a timely basis, if at all. These efforts may reduce revenue and our margins and adversely impact our financial results.
Moreover, there are inherent risks associated with upgrading, improving and expanding our information technology systems. We cannot be sure that the expansion and improvements to our infrastructure and systems will be fully or effectively implemented on a timely basis, if at all. These efforts may reduce revenue and our margins and adversely impact our financial results.
When acting as a title agent issuing a policy on behalf of an underwriter, our insurance risk is typically limited to the first five thousand dollars for claims on any one policy, though our insurance risk is not limited if we are negligent.
When acting as a title agent issuing a policy on behalf of an underwriter, our insurance risk is typically limited to the first five thousand 25 Table of Contents dollars for claims on any one policy, though our insurance risk is not limited if we are negligent.
Similarly, the open-source nature of the bitcoin blockchain means the contributors and developers of the bitcoin blockchain are generally not directly compensated for their contributions in maintaining and developing the blockchain, and any failure to properly monitor and upgrade the bitcoin blockchain could adversely affect the bitcoin blockchain and negatively affect the price of bitcoin.
Similarly, the open-source nature of the bitcoin blockchain means contributors and developers of the bitcoin blockchain are generally not directly compensated for 28 Table of Contents their contributions in maintaining and developing the blockchain, and any failure to properly monitor and upgrade the bitcoin blockchain could adversely affect the bitcoin blockchain and negatively affect the price of bitcoin.
If we are not able to compete effectively, our business and operating results will be materially and adversely affected. Listing aggregator concentration and market power creates, and is expected to continue to create, disruption in the residential real estate brokerage industry, which might have a material adverse effect on our results of operations and financial condition.
If we cannot compete effectively, our business and operating results will be materially and adversely affected. Listing aggregator concentration and market power creates, and is expected to continue to create, disruption in the residential real estate brokerage industry, which might have a material adverse effect on our results of operations and financial condition.
We believe that our future results will depend, in part, upon our ability to retain and attract highly skilled and qualified management. The loss of our executive officers or any key personnel could have a material adverse effect on our operations because other officers might not have the experience and expertise to readily replace these individuals.
We believe that our future results depend, on our ability to retain and attract highly skilled and qualified management. The loss of our executive officers or any key personnel could have a material adverse effect on our operations because other officers might not have the experience and expertise to readily replace these individuals.
The techniques used to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target.
The techniques used to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, leverage AI and sophisticated technology, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target.
Historically, changes in the federal 33 Table of Contents funds rate have led to changes in interest rates for other loans, but the extent of the impact on the future availability and price of mortgage financing cannot be predicted with certainty.
Historically, changes in the federal funds rate have led to changes in interest rates for other loans, but the extent of the impact on the future availability and price of mortgage financing cannot be predicted with certainty.
Such proposed changes include among other things, changes designed to reduce government support for housing finance and the winding down of the federal conservatorship of Fannie Mae or Freddie Mac over a period of years.
Such proposed changes include among other things, changes designed to reduce government support for housing finance and the winding down of the federal conservatorship of Fannie Mae or 33 Table of Contents Freddie Mac over a period of years.
If we fail to properly integrate these acquisitions, we might not achieve the anticipated benefits of these acquisitions or future acquisitions. Our future revenue and growth prospects could be adversely affected by our dependence on other contractors. Our business is highly dependent on a few significant technology vendors.
If we fail to properly integrate these acquisitions, we might not achieve their anticipated benefits. Our future revenue and growth prospects could be adversely affected by our dependence on other contractors. Our business is highly dependent on a few significant technology vendors.
Lack of available credit or lack of confidence in the financial sector could impact the residential real estate market, which in turn could materially and adversely affect our business, financial condition and results of operations.
Lack of available credit or lack 31 Table of Contents of confidence in the financial sector could impact the residential real estate market, which in turn could materially and adversely affect our business, financial condition and results of operations.
Even if we are able to prevent our bitcoin from being considered the property of a custodian’s bankruptcy estate as part of an insolvency proceeding, it is possible that we would still be delayed or may otherwise experience difficulty in accessing our bitcoin 27 Table of Contents held by the affected custodian during the pendency of the insolvency proceedings.
Even if we are able to prevent our bitcoin from being considered the property of a custodian’s bankruptcy estate in an insolvency proceeding, it is possible that we would still be delayed or may otherwise experience difficulty in accessing our bitcoin held by the affected custodian during the pendency of the insolvency proceedings.
We cannot be sure that the expansion and improvements to our infrastructure and systems will be fully or effectively implemented on a timely basis, if at all. These efforts may reduce revenue and our margins and adversely impact our financial results.
We cannot be sure that the expansion and improvements to our infrastructure and systems will be fully or 15 Table of Contents effectively implemented on a timely basis, if at all. These efforts may reduce revenue and our margins and adversely impact our financial results.
The Sarbanes-Oxley Act requires, 34 Table of Contents among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. To maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. Significant resources and management oversight may be required to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard.
We do not believe that we are an “investment company,” as such term is defined in the 1940 Act, and are not registered as an “investment company” under the 1940 Act as of the date of this prospectus supplement.
We do not believe that we are an “investment company,” as such term is defined in the 1940 Act, and are not registered as an “investment company” under the 1940 Act as of the date of this Report.
Due in particular to the volatility in the price of bitcoin, to the extent we invest in bitcoin we expect ASU 2023-08 to increase the volatility of our financial results, and affect the carrying value of bitcoin on our balance sheet, and it could also have adverse tax consequences, which in turn could have a material adverse effect on our financial results and the market price of our common stock.
To the extent we invest in bitcoin we expect ASU 2023-08 to increase the volatility of our financial results, and affect the carrying value of bitcoin 27 Table of Contents on our balance sheet, and it could also have adverse tax consequences, which in turn could have a material adverse effect on our financial results and the market price of our common stock.
The trading price of our common stock has ranged from $1.53 to $56.81 and is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control.
The trading price of our common stock has ranged from $0.65 to $56.81 and is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control.
In general, the laws, rules and regulations applicable to our business practices include, without limitation, the federal Real Estate Settlement Procedures Act, or RESPA, the federal Fair Housing Act, the Dodd-Frank Act, and federal advertising and other laws, as well as comparable state statutes; rules of trade organization such as the NAR, local MLSs, and state and local AORs; licensing requirements and related obligations that could arise from our business practices relating to the provision of services other than real estate brokerage services, including our title, insurance and mortgage businesses ; privacy regulations relating to our use of personal information collected from the registered users of our websites; laws relating to the use and publication of information through the Internet; and state real estate brokerage licensing requirements, as well as statutory due diligence, disclosure, record keeping and standard-of-care obligations relating to these licenses.
The laws, rules and regulations applicable to our business practices include, without limitation: • RESPA; • The federal Fair Housing Act; • The Dodd-Frank Act; • Federal advertising laws, as well as comparable state statutes; • Rules of trade organizations such as the NAR, local MLSs, and state and local AORs; 18 Table of Contents • Licensing requirements and related obligations that could arise from our business practices relating to the provision of services other than real estate brokerage services, including our title, insurance and mortgage businesses ; • Privacy regulations relating to our use of personal information collected from the registered users of our websites; • Laws relating to the use and publication of information through the Internet; and • State real estate brokerage licensing requirements, as well as statutory due diligence, disclosure, record keeping and standard-of-care obligations relating to these licenses.
We might not be aware of all the laws, rules and regulations that govern our business, or be able to comply with all of them, given the rate of regulatory changes, ambiguities in regulations, contradictions in laws and regulations between jurisdictions, and the difficulties in achieving both company-wide and region-specific knowledge and compliance.
We might not be aware of all the laws, rules and regulations applicable to our business, or be able to comply with all of them, given the rate of regulatory changes, ambiguities in regulations, contradictions in laws and regulations between jurisdictions, and the difficulties in achieving both company-wide and jurisdiction-specific knowledge and compliance.
To the extent that one or more of our top executives or other key management personnel depart from our 24 Table of Contents company, our operations and business prospects may be adversely affected. In addition, changes in executives and key personnel could be disruptive to our business . We do not have any key person insurance.
To the extent that one or more of our top executives or other key management personnel depart, our operations and business prospects may be adversely affected. In addition, changes in executives and key personnel could be disruptive to our business . We do not have any key person insurance.
Many of our existing and potential competitors have substantial competitive advantages, such as: • greater scale; • stronger brands and greater name recognition; • longer operating histories; • more financial, research and development, sales and marketing, and other resources; • more extensive relationships with participants in the residential real estate industry, such as brokers, agents, and advertisers; 20 Table of Contents • strong relationships with third-party data providers, such as multiple listing services and listing aggregators; • access to larger user bases; and • larger intellectual property portfolios.
Many of our existing competitors have substantial competitive advantages, such as: • greater scale; • stronger brands and greater name recognition; • longer operating histories; • larger budgets and greater financial resources, for research and development, sales and marketing; • more extensive relationships with participants in the residential real estate industry, such as brokers, agents, and advertisers; • stronger relationships with third-party data providers, such as multiple listing services and listing aggregators; • access to larger user bases; and • larger intellectual property portfolios.
We might identify material weaknesses in the future that might cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements.
We might identify material weaknesses that could cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements.
From time to time, we intend to evaluate other brokerages for acquisition in order to accelerate growth and might not succeed in identifying suitable candidates or we may acquire brokerages that negatively impact us.
From time to time, we 24 Table of Contents intend to evaluate other brokerages for acquisition in order to accelerate growth and might not succeed in identifying suitable candidates or we may acquire brokerages that negatively impact us.
If we are unable to sell our bitcoin, enter into additional capital raising transactions using bitcoin as collateral, or otherwise generate funds using our bitcoin holdings, or if we are forced to sell our bitcoin at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.
If we are unable to sell our bitcoin, enter into additional capital raising transactions using bitcoin as collateral, or otherwise generate funds using our bitcoin holdings, or if we are forced to sell our bitcoin at a significant loss, our business and financial condition could be negatively impacted.
These and other rules promulgated by the CFPB could have a significant impact on the availability of home mortgages and how mortgage agents and lenders transact business. In addition, the Dodd-Frank Act contained provisions that require GSEs, including Fannie Mae and Freddie Mac, to retain an interest in the credit risk arising from the assets they securitize.
These and other rules promulgated by the CFPB could have a significant impact on the availability of home mortgages and how mortgage agents and lenders transact business. In addition, the Dodd-Frank Act contains provisions that require entities such as Fannie Mae and Freddie Mac, to retain an interest in the credit risk arising from the assets they securitize.
Specifically, we use Adjusted EBITDA, which we use to represent net income (loss), excluding other income (expense), income taxes expense (benefit), depreciation and amortization, share-based compensation expense and 17 Table of Contents transaction-related costs.
Specifically, we use Adjusted EBITDA, which we use to represent net income (loss), excluding other income (expense), income taxes expense (benefit), depreciation and amortization, share-based compensation expense and transaction-related costs.
It is 28 Table of Contents also not possible to predict the nature of any such additional authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function or the willingness of financial and other institutions to continue to provide services to the digital assets industry, nor how any new regulations or changes to existing regulations might impact the value of digital assets generally and bitcoin specifically.
It is also impossible to predict the nature of any such additional authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function or the willingness of financial and other institutions to continue to provide services to the digital assets industry, or how any new regulations or changes to existing regulations might impact the value of digital assets generally and bitcoin specifically.
In addition, if our systems, procedures or controls are not adequate to provide reliable, accurate and timely financial and other reporting, we might not be able to satisfy regulatory scrutiny or contractual obligations with third parties and may suffer a loss of reputation. Any of these events could negatively affect our financial position.
In addition, if our systems, procedures or controls are not adequate to provide reliable, accurate and timely financial and other reporting, we might not be able to satisfy regulatory scrutiny or contractual obligations with third parties and our reputation could be damaged. Any of these events could negatively affect our financial position and results of operations.
Due to the unregulated nature and lack of transparency surrounding the operations of many bitcoin trading venues, bitcoin trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in bitcoin trading venues and adversely affect the value of our bitcoin. 30 Table of Contents Bitcoin trading venues are relatively new and, in many cases, unregulated.
Due to the unregulated nature and lack of transparency surrounding the operations of many bitcoin trading venues, bitcoin trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in bitcoin trading venues and adversely affect the value of our bitcoin.
We might not achieve sufficient revenue to achieve or maintain profitability. We could incur significant losses in the future for many reasons, including the other risks described in this Report, and we may encounter unforeseen expenses, difficulties, complications and delays and other unknown events.
We could incur significant losses in the future for many reasons, including the other risks described in this Report, and we may encounter unforeseen expenses, difficulties, complications and delays and other unknown events. Accordingly, we might not be able to achieve or maintain profitability and we may incur significant losses for the foreseeable future.
These steps may include, among others, selling bitcoin that we might otherwise hold for the long term and deploying our cash in non-investment assets, and we may be forced to sell our bitcoin at unattractive prices.
These steps may include, among others, selling bitcoin that we might otherwise hold long term and deploying our cash in non-investment assets, and we may be forced to sell our bitcoin.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changePrior to engaging a third-party service provider, we carefully evaluate their cybersecurity reputation and track record, industry reports, and any potential information that they would have access to in the course of their work with us. 37 Table of Contents Governance As of December 31, 2024, no risks from cybersecurity threats, including as a result of cybersecurity incidents we have experienced in the past, have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition.
Biggest changeGovernance As of December 31, 2025, no risks from cybersecurity threats, including as a result of cybersecurity incidents we have experienced in the past, have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition. 37 Table of Contents Our Board of Directors is involved in the design, implementation, and evaluation of our cybersecurity protocols.
We have a completed automated system deploy, which allows us to ‘revive’ our entire systems, via code (using a concept of infrastructure as code) in any cloud (or even physical servers) of our choice.
We have a completed automated system deploy, which allows us to "revive" our entire systems, via code (using a concept of infrastructure as code) in any cloud (or even physical servers) of our choice.
The Audit Committee of the Board of Directors oversees management’s adherence to, and implementation of, the cybersecurity protocols and receives periodic updates on the Company’s cybersecurity risks. Our cybersecurity protocols and related processes are integrated into our overall enterprise risk management (ERM) process. We use the COSO Framework as a framework for our Cybersecurity Policy.
The Audit Committee of the Board of Directors oversees management’s compliance with, and implementation of, the cybersecurity protocols and receives periodic updates on the Company’s cybersecurity risks. Our cybersecurity protocols and related processes are integrated into our overall enterprise risk management (ERM) process. We use the COSO Framework as a framework for our Cybersecurity Policy.
Mitigation, System Recovery, Redundancy and Continuity As a process of mitigation, redundancy, and recovery, we keep multiple temporal copies of our databases and code base in multiple places, both on cloud and offline.
With those recommendations, we schedule improvements and upgrades to resolve the vulnerabilities promptly. Mitigation, System Recovery, Redundancy and Continuity As a process of mitigation, redundancy, and recovery, we keep multiple temporal copies of our databases and code base in multiple places, both on cloud and offline.
Staying Updated with Cybersecurity The Company goes through a quarterly systems penetration test, using an independent third-party vendor, that finds new possible vulnerabilities in the system with recommendations to mitigate each vulnerability. With those recommendations, we schedule those fixes via our development team to resolve the vulnerabilities as soon as possible.
Particularly, our Audit Committee receives regular and frequent reports on the existence of cybersecurity threats, and works with management to devise appropriate measures to mitigate risks. Staying Updated with Cybersecurity The Company goes through a quarterly systems penetration test, using an independent third-party vendor, to identify possible vulnerabilities in the system and recommendations to mitigate each vulnerability.
Removed
Our Board of Directors is involved in the design, implementation, and evaluation of our cybersecurity protocols. Particularly, our Audit Committee receives regular and frequent reports on the existence of cybersecurity threats, and works with management to devise appropriate measures to mitigate risks.
Added
Prior to engaging a third-party service provider, we carefully evaluate their cybersecurity reputation and track record, industry reports, and any potential information that they would have access to in the course of their work with us.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also lease small office spaces in the various regions in which we operate, in order to comply with regulatory and licensing requirements within such jurisdictions and in some cases, to provide office space for our agents. We do not own any real property and we believe that our leased facilities are suitable and adequate to meet current needs.
Biggest changeThis office space is approximately 1,980 square feet and is primarily for our accounting team. We also lease small office spaces in the various regions in which we operate to comply with regulatory and licensing requirements within such jurisdictions and in some cases, to provide office space for our agents.
Item 2. Properties. Our principal executive office is located at 2000 Regency Parkway Drive, Suite 300, Cary, North Carolina, 27518. Our total office space at the principal executive office is approximately 28,700 square feet and has lease terms expiring in December 2028. We also lease office space located at 24800 Chrisanta Drive, Suite 140, Mission Viejo, California, 92691.
Item 2. Properties. Our principal executive office is located at 2000 Regency Parkway Drive, Suite 300, Cary, North Carolina, 27518, where we lease approximately 28,700 square feet on a lease expiring in December 2028. We also lease office space on a month-to-month lease at 24800 Chrisanta Drive, Suite 140, Mission Viejo, California, 92691.
Removed
This office space is approximately 1,980 square feet and is primarily for our accounting team. This office lease expired during December 2020 and the Company is currently renting this space on a month-to-month lease.
Added
We do not own any real property and we believe that our leased facilities are suitable and adequate to meet current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe plaintiff filed an amended complaint on January 21, 2025, and the Company filed another Motion to Dismiss in February 2025. The Company intends to vigorously defend the action. The lawsuits allege unlawful conspiracy in violation of federal antitrust law and, against certain defendants (but not us) deceptive trade practices under the Texas Deceptive Trade Practices Act.
Biggest changeThe lawsuits allege unlawful conspiracy in violation of federal antitrust law and, against certain defendants (but not the Company) deceptive trade practices under the Texas Deceptive Trade Practices Act. The Company opted into a settlement between a nationwide plaintiff class and the NAR by executing a Supplemental Settlement Agreement in June 2024 (the "NAR Settlement").
A fourth purported class action was filed on September 26, 2024, on behalf of buyers of residential property nationwide, and with an Illinois-specific sub-class, against Fathom Realty, LLC and other real estate brokers.
A fourth purported class action was filed against Fathom Realty, LLC and other real estate brokers on September 26, 2024 on behalf of buyers of residential property nationwide, and with an Illinois-specific sub-class.
A second purported class action complaint was filed on December 14, 2023, by plaintiffs Julie Martin, Mark Adams and Adelaida Matta in the same court, naming us as a defendant along with others, many of whom are also named in the first lawsuit.
A second purported class action complaint was filed on December 14, 2023, by plaintiffs Julie Martin, Mark Adams and Adelaida Matta in the same court, naming the Company as a defendant along with others, many of whom are also named in the first lawsuit.
As previously reported by us in a Current Report on Form 8-K filed on November 28, 2023, we have been named as a defendant in a purported class action complaint in the United States District Court for the Eastern District of Texas Sherman Division, filed on November 13, 2023, by plaintiffs QJ Team, LLC and Five Points Holdings, LLC, individually and on behalf of all other persons similarly situated.
As previously reported in a Current Report on Form 8-K filed on November 28, 2023, the Company has been named as a defendant in a purported class action complaint in the United States District Court for the Eastern District of Texas Sherman Division, filed on November 13, 2023, by plaintiffs QJ Team, LLC and Five Points Holdings, LLC, individually and on behalf of all other persons similarly situated.
The court approved the NAR Settlement over objections on November 26, 2024, and the approval 38 Table of Contents is subject to appeal. If the NAR Settlement is sustained on appeal, it is expected to resolve claims against the Company related to this matter.
The court approved the NAR Settlement over objections on November 26, 2024, and the approval is subject to appeal. If the NAR Settlement is sustained on appeal, it is expected to resolve claims against the Company related to this matter.
Adverse results in such litigation might harm our business and financial condition. Moreover, defending these lawsuits, regardless of their merits, could entail substantial expense and require the time and attention of our key management personnel. Item 4. Mine Safety Disclosures. Not applicable. 39 Table of Contents PART II
Moreover, defending these lawsuits, regardless of their merits, could entail substantial expense and require the time and attention of management. Item 4. Mine Safety Disclosures. Not applicable. 39 Table of Contents PART II
In the complaint, the Plaintiffs allege that Defendants conspired to raise buyer broker commissions in violation of Section 1 of the Sherman Act, the Illinois Antitrust Act, and the Illinois Consumer Fraud and Deceptive Business Practices Act. On December 16, 2024, the Company filed a Motion to Dismiss for Failure to State a Claim.
In the complaint, the Plaintiffs allege that Defendants conspired to raise buyer broker commissions in violation of Section 1 of the Sherman Act, the Illinois Antitrust Act, and the Illinois Consumer Fraud and Deceptive Business Practices Act.
Though we intend to vigorously defend ourselves as we believe the lawsuits are particularly without merit with respect to us because of our flat fee business model, we cannot predict with certainty the cost of our defense, the cost of prosecution, insurance coverage, or the ultimate outcome of the lawsuits and any others that might be filed in the future, including remedies or damage awards.
Other than the NAR Settlement above, we cannot predict with certainty the cost of our defense, the cost of prosecution, insurance coverage, or the ultimate outcome of the lawsuits and any others that might be filed in the future, including remedies or damage awards. Adverse results in such litigation might harm our business and financial condition.
In addition to the foregoing, My Home Group (“MHG”), which the Company acquired on November 1, 2024, is a defendant in four active lawsuits: one in the United States District Court for the District of Arizona, filed in January 2024; and three separate matters in Superior Court of Maricopa County, Arizona, filed in September 2024, January 2023 and April 2022.
My Home Group ("MHG"), which the Company acquired in November 2024, is a defendant in an active lawsuit in the United States District Court for the District of Arizona, filed in January 2024. In September 2025, the plaintiff filed for preliminary approval of the settlement agreement. The Company estimates the total cost of the settlement to be approximately $1.0 million.
Removed
We expect additional lawsuits to be filed, given the breadth of the residential real estate industry and the volume of participants in the residential real estate industry in Texas and the rest of the United States.
Added
Item 3. Legal Proceedings. From time to time the Company is involved in litigation, claims, and other proceedings arising in the ordinary course of business.
Added
Such litigation and other proceedings may include actions relating to employment law and misclassification of agents as independent contractors, intellectual property, commercial or contractual claims, brokerage or real estate disputes, or other consumer protection statutes, ordinary-course brokerage disputes like the failure to disclose property defects, commission disputes, and various liabilities based upon conduct of individuals or entities, including agents and third-party contractor agents.
Added
Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. In September 2024, Fathom Realty, a wholly-owned subsidiary of the Company, reached a nationwide settlement related to claims asserted in Burnett v. The National Association of Realtors, et al.
Added
As part of the settlement Fathom Realty paid $500,000 into a settlement fund on October 1, 2025, $500,000 on January 2, 2026, and will pay $1.95 million on or before October 1, 2026. The Company has included $2.45 million in other short-term liabilities in its balance sheet as of December 31, 2025.
Added
Fathom Realty has also agreed to adhere to the rule changes put forth by the NAR.
Added
On November 26, 2024, the court approved the NAR Settlement over 38 Table of Contents objections. The final approval order is currently being appealed, and the Company is actively monitoring. If the NAR Settlement is sustained on appeal, it is expected to resolve claims against the Company related to this matter.
Added
On December 16, 2024, the Company filed a Motion to Dismiss for Failure to State a Claim, and the plaintiffs filed an amended complaint in January 2025. The parties have agreed in principle to a settlement amount of $250,000, payable in three installments; however, the agreement remains subject to negotiation and execution of a mutually acceptable settlement agreement.
Added
The Company has included $0.5 million in accrued and other current liabilities and $0.5 million in other long-term liabilities in its balance sheet as of December 31, 2025. Fathom Realty, LLC is a defendant in an active lawsuit filed in August 2024 in the United States District Court for the Southern District of Florida.
Added
In September 2025, the court granted preliminary approval of a settlement agreement. The Company estimates the total cost of the settlement to be approximately $1.0 million. The Company has included $1.0 million in accrued and other current liabilities in its balance sheet as of December 31, 2025.
Added
On January 28, 2026 the Company received written notice from TotalBrokerage alleging that MHG failed to remit certain subscription fees due in January 2026 under the parties’ subscription agreement (the “Agreement”). The TotalBrokerage matter involves an alleged claim of approximately $1.0 million.
Added
The Company is currently evaluating the claims asserted by TotalBrokerage and assessing its contractual rights and obligations under the Agreement. At this time, the Company cannot reasonably estimate the ultimate outcome of this matter or determine whether a loss contingency exists or the amount of any potential loss, if any.
Added
Accordingly, no accrual has been recorded as of December 31, 2025. The Company will continue to evaluate this matter and will record a liability in a future period if and when a loss becomes probable and reasonably estimable.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed8 unchanged
Biggest changeThere were no equity repurchases for the year ended December 31, 2024 . The approximate dollar value of shares that may yet be purchased pursuant to the repurchase program is $4.0 million . Management has no plans to repurchase additional shares at this time. Item 6. [Reserved] 40 Table of Contents
Biggest changeThere were no equity repurchases for the year ended December 31, 2025 . The approximate dollar value of shares that may yet be purchased pursuant to the repurchase program is $4.0 million . Management has no plans to repurchase additional shares at this time.
The information regarding our equity compensation plans required by this Item 5 is incorporated by reference to the information under the section captioned “Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters” contained in our proxy statement related to the 2024 Annual Meeting of Shareholders (the “Proxy Statement”).
The information regarding our equity compensation plans required by this Item 5 is incorporated by reference to the information under the section captioned “Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters” contained in our proxy statement related to the 2026 Annual Meeting of Shareholders (the “Proxy Statement”).
Market Information Our common stock trades on The Nasdaq Capital Market under the symbol “FTHM”. Holders of Common Stock As of December 31, 2024, we had approximately 713 shareholders of record of our common stock.
Market Information Our common stock trades on The Nasdaq Capital Market under the symbol “FTHM”. Holders of Common Stock As of December 31, 2025, we had approximately 704 shareholders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

84 edited+26 added−33 removed34 unchanged
Biggest changeIn the event of a sustained market deterioration, we may need or seek advantageously to obtain additional funding through equity or debt financing, which might not be available on favorable terms or at all and could hinder our business and dilute our existing shareholders.
Biggest changeIn the event of a sustained market deterioration, we may need or seek advantageously to obtain additional funding through equity or debt financing, which might not be available on favorable terms or at all and could hinder our business and dilute our existing shareholders. 48 Table of Contents Cash Flows Comparison of the Years Ended December 31, 2025 and 2024 (amounts in thousands) Year Ended December 31, Change 2025 2024 Dollars Percentage Net cash used in operating activities $ (20,536) $ (4,688) $ (15,848) 338 % Net cash provided by investing activities $ 4,021 $ 3,302 $ 719 22 % Net cash provided by financing activities $ 15,042 $ 1,236 $ 13,806 1117 % Cash Flows from Operating Activities Net cash used in operating activities was approximately $20.5 million for the year ended December 31, 2025, compared to $4.7 million for the year ended December 31, 2024.
Additionally, as other world events, such as the ongoing conflict in Ukraine and in the Middle East, may impact the economy and our operations in new ways, we will continuously assess our liquidity needs.
Additionally, we will continuously assess our liquidity needs as other world events, such as the ongoing conflict in Ukraine and in the Middle East, may impact the economy and our operations in new ways.
Regardless of whether the housing market continues to slow or grow, we continue to believe that we are positioned to leverage our low-cost, high-engagement model, affording agents and brokers increased income and ownership opportunities while offering a scalable solution to brokerage owners looking to prosper in a series of fluctuations in economic activity.
Regardless of whether the housing market continues to slow or grow, we believe that we are positioned to leverage our low-cost, high-engagement model, affording agents and brokers increased income and ownership opportunities while offering a scalable solution to brokerage owners looking to prosper in a series of fluctuations in economic activity.
To perform these assessments, we identified and analyzed macroeconomic conditions, industry and market conditions and Company-specific factors. As a result of the analysis performed, management believes the estimated fair value of the reporting units continue to exceed their carrying values and does not represent a more likely than not possibility of potential impairment.
To perform these assessments, we identified and analyzed macroeconomic conditions, industry and market conditions and Company-specific factors. As a result of the analysis performed, management believes the estimated fair values of the reporting units continue to exceed their carrying values and does not represent a more likely than not possibility of potential impairment.
Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA compared to net income (loss), the closest comparable GAAP measure.
Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. There are limitations related to the use of Adjusted EBITDA compared to net income (loss), the closest comparable GAAP measure.
We assess goodwill for possible impairment by performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount.
We assess goodwill for possible impairment by performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value.
Commission and service cost primarily includes costs related to agent commissions, net of fees paid to us by our agents and commission costs for our mortgage and other ancillary business. These costs generally correlate with recognized revenues.
Commission and service costs primarily includes costs related to agent commissions, net of fees paid to us by our agents and commission costs for our mortgage and other ancillary business. These costs generally correlate with recognized revenues.
No additional impairment steps are necessary if we qualitatively determine that it is more likely than not that the fair value of the reporting unit is less than its carrying amount.
No additional impairment steps are necessary if we qualitatively determine that it is more likely than not that the fair value of the reporting unit is less than its carrying value.
The most significant assumptions under these methods include the estimated remaining useful life, expected future revenue, annual agent revenue attrition, costs to develop new agents, charges for contributory assets, tax rate, discount rate and tax amortization benefit. Management has developed these assumptions on the basis of historical knowledge of the business and projected financial information of the respective acquired company.
The most significant assumptions under these methods include the estimated remaining useful life, expected future revenue, annual agent revenue attrition, costs to develop new agents, charges for contributory assets, tax rate, discount rate and tax amortization benefit. Management has developed these assumptions based on historical knowledge of the business and projected financial information of the respective acquired company.
In March 2025, the Company completed an offering of common stock (the "2025 Offering"), which resulted in the issuance and sale by the Company of 3,505,364 and 832,639 shares of common stock, at a public offering price of $0.68 per share and $0.72 per share respectively, generating gross proceeds of $3.0 million, of which the Company received approximately $2.7 million, after deducting underwriting discounts and other offering costs.
In March 2025, the Company completed an offering of common stock (the "March 2025 Offering"), which resulted in the issuance and sale by the Company of 3,505,364 and 832,639 shares of common stock, at a public offering price of $0.68 per share and $0.72 per share, respectively, generating gross proceeds of $3.0 million, of which the Company received approximately $2.9 million, after deducting underwriting discounts and other offering costs.
Our primary operation, Fathom Realty (as defined below), operates as a real estate brokerage company , working with real estate agents to help individuals purchase and sell residential and commercial properties, primarily in the South, Atlantic, Southwest, and Western parts of the United States, with the intention of expanding into all states .
Our primary business, Fathom Realty (as defined below), operates as a real estate brokerage company , working with real estate agents to help individuals purchase and sell residential and commercial properties, primarily in the South, Atlantic, Southwest, and Western parts of the United States, with the intention of expanding into all states .
We are presenting the non-GAAP measure of Adjusted EBITDA to assist investors in seeing our financial performance through the eyes of management, and because we believe this measure provides an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.
We are presenting Adjusted EBITDA to assist investors in seeing our financial performance through the eyes of management, and because we believe this measure provides an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.
Goodwill Goodwill is not amortized but is subject to impairment testing. We review goodwill for impairment on an annual basis in the fiscal fourth quarter or on an interim basis if an event occurs or circumstances change that indicate goodwill may be impaired.
Goodwill Goodwill is not amortized but is subject to impairment testing. We review goodwill for impairment on an annual basis in our fourth fiscal quarter or on an interim basis if an event occurs or circumstances change that indicate goodwill may be impaired.
We also have other service revenue, including mortgage lending, title insurance, home and other insurance, and SaaS revenues. Gross Commission Income We recognize commission-based revenue on the closing of a transaction, less the amount of any closing-cost reductions. Revenue is affected by the number of real estate transactions we close, the mix of transactions, home sale prices, and commission rates.
We also have other service revenue, including mortgage lending, title insurance, and SaaS revenues. Gross Commission Income We recognize commission-based revenue when a transaction closes, less the amount of any closing-cost reductions. Revenue is affected by the number of real estate transactions we close, the mix of transactions, home sale prices, and commission rates.
General and administrative General and administrative expenses consist primarily of fees for professional services and personnel costs, related to including base pay, bonuses, benefits, and share based compensation. Professional services principally consist of external legal, audit, and tax services.
General and administrative General and administrative expenses consist primarily of fees for professional services and personnel costs, including base pay, bonuses, benefits, and share-based compensation. Professional services principally consist of external legal, audit, and tax services.
Other Service Revenue Mortgage Lending Revenue We recognize revenue streams for our mortgage lending services business which are primarily comprised of loans sold, origination and other fees. The gain on the sale of mortgage loans represents the difference between the net sales proceeds and the carrying value of the mortgage loans sold and includes the servicing rights release premiums.
Other Service Revenue Mortgage Lending Revenue We recognize revenue streams for our mortgage lending services business which primarily consists of loans sold, origination and other fees. The gain on the sale of mortgage loans represents the difference between the net sales proceeds and the carrying value of the mortgage loans sold and includes the servicing rights release premiums.
Servicing rights release premiums represent one-time fee revenues earned for transferring the risk and rewards of ownership of servicing rights to third parties. Retail origination fees are principally revenues from loan originations and recorded in the statement of operations in other service revenue.
Servicing rights release premiums represent one-time fee revenues earned for transferring the risk and rewards of ownership of servicing rights to third parties. 44 Table of Contents Retail origination fees are principally revenues from loan originations and are recorded in the statement of operations in other service revenue.
Direct loan origination costs and expenses associated with the loans are charged to expenses when the loans are sold. Interest income is interest earned on originated loans prior to the sale of the asset.
Direct loan origination costs and expenses associated with the loans are expensed when the loans are sold. Interest income is interest earned on originated loans prior to the sale of the asset.
For further information on goodwill, see Note 4 - Goodwill. 50 Table of Contents Business Combinations The Company accounts for its business combinations under the provisions of Accounting Standards Codification (“ASC”) Topic 805-10, Business Combinations (“ASC 805-10”), which requires that the purchase method of accounting be used for all business combinations.
For further information on goodwill, see Note 4 - Goodwill. Business Combinations The Company accounts for its business combinations under the provisions of Accounting Standards Codification (“ASC”) Topic 805-10, Business Combinations (“ASC 805-10”), which requires that the purchase method of accounting be used for all business combinations.
Beginning in the second quarter of 2022, several economic factors began to adversely impact the residential real estate market, including higher mortgage interest rates, lower consumer sentiment, increased inflation, and declining financial market conditions.
Rising Interest Rates, and Other Risks Beginning in the second quarter of 2022, several economic factors began to adversely impact the residential real estate market, including higher mortgage interest rates, lower consumer sentiment, increased inflation, and declining financial market conditions.
Our mortgage business also experienced significant declines in loan volumes beginning in the second quarter of 2022, particularly from declines in refinancing prior mortgages. In response to these macroeconomic and consumer demand developments, we took action to adjust our operations and manage our business towards longer-term profitability despite these adverse macroeconomic factor s.
Our mortgage business also experienced significant declines in loan volumes beginning in the second quarter of 2022, particularly from declines in refinancing prior mortgages. In response to these macroeconomic and consumer demand developments, we adjusted our operations to manage our business towards longer-term profitability despite these adverse macroeconomic factor s.
The most significant variables in these valuations are discount rates and the number of years on which to base the cash flow projections, as well as other assumptions and estimates used to determine the cash inflows and outflows.
The most significant 51 Table of Contents variables in these valuations are discount rates and the number of years on which to base the cash flow projections, as well as other assumptions and estimates used to determine the cash inflows and outflows.
Some of these limitations are that: • Adjusted EBITDA excludes share-based compensation expense related to restricted stock awards, restricted stock unit awards, and stock options, which have been, and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of our compensation strategy; • Adjusted EBITDA excludes transaction-related costs primarily consisting of professional fees and any other costs incurred directly related to acquisition activity, which is an ongoing part of our growth strategy and therefore likely to occur; • Adjusted EBITDA excludes certain recurring, non-cash charges such as depreciation and amortization of property and equipment and capitalized software costs, however, the assets being depreciated and amortized may have to be replaced in the future; • Adjusted EBITDA excludes the gain on the sale of the business, as this item is non-recurring and not indicative of the company’s core operating performance; and 49 Table of Contents • Adjusted EBITDA excludes NAR related litigation expenses, which could continue to be significant recurring expenses in our business until a final settlement has been approved by the court.
Some of these limitations include: • Adjusted EBITDA excludes share-based compensation expense related to restricted stock awards, restricted stock unit awards, and stock options, which have been, and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of our compensation strategy; • Adjusted EBITDA excludes transaction-related costs primarily consisting of professional fees and any other costs incurred directly related to acquisition activity, which is an ongoing part of our growth strategy and therefore likely to occur; • Adjusted EBITDA excludes certain recurring, non-cash charges such as depreciation and amortization of property and equipment and capitalized software costs, however, the assets being depreciated and amortized may have to be replaced in the future; • Adjusted EBITDA excludes the loss (gain) on the sale of the business, as this item is non-recurring and not indicative of the company’s core operating performance; and • Adjusted EBITDA excludes litigation expenses, including expenses related to the NAR Settlement, which could continue to be significant recurring expenses in our business until any final settlements have been approved by a court.
Operating Expenses Commission and service costs Commission and service costs consists primarily of agent commissions, less fees paid by the Company to agents, order fulfillment, share-based compensation for agents, title searches, and direct cost to fulfill the services provided for our brokerage, mortgage lending, title service, insurance services and other services provided.
Operating Expenses Commission and service costs Commission and service costs consist primarily of: agent commissions, less fees paid by the Company to agents; order fulfillment; share-based compensation for agents; title searches; and direct costs to fulfill the services provided for our brokerage, mortgage lending, title service, and other services provided.
Stock Offering In December 2023, the Company completed an offering of common stock, which resulted in the issuance and sale by the Company of 2,450,000 shares of common stock, at a public offering price of $2.00 per share, generating gross proceeds of approximately $4.9 million, of which the Company received approximately $4.2 million after deducting underwriting discounts and other offering costs.
Financing Transactions 41 Table of Contents In December 2023, the Company completed an offering of common stock, which resulted in the issuance and sale by the Company of 2,450,000 shares at a public offering price of $2.00 per share, generating gross proceeds of approximately $4.9 million, of which the Company received approximately $4.2 million after deducting underwriting discounts and other offering costs.
Income Taxes The Company recorded an income tax benefit of $1 million and an income tax expense o f $0.1 million for the years ended December 31, 2024 and 2023 , respectively. The tax benefit for the period ended December 31, 2024 primarily the result of the release of a portion of the valuation allowance against historical deferred tax assets.
Income Taxes The Company recorded an income tax expense of $0.1 million and an income tax benefit of $1.0 million for the years ended December 31, 2025 and 2024, respectively. The tax benefit for the period ended December 31, 2025 primarily the result of the release of a portion of the valuation allowance against historical deferred tax assets.
We define the non-GAAP financial measure of Adjusted EBITDA as net income (loss), excluding other expense, income tax benefit, depreciation and amortization, share-based compensation expense, gain on sale of business benefit, NAR related litigation contingency expenses and transaction-related cost.
We define the non-GAAP financial measure of Adjusted EBITDA as net income (loss), excluding other expense, income tax benefit, depreciation and amortization, share-based compensation expense, gain on sale of business benefit, and transaction-related cost.
Subscription revenue, which includes support, is recognized on a straight-line basis over the non-cancellable contractual term of the arrangement, generally beginning on the date that the Company’s service is made available to the customer and is recorded as other service revenue in the statement of operations.
Subscription revenue, which includes support, is recognized on a straight-line basis over the non-cancellable contractual term of the arrangement, generally beginning on the date that the Company’s service is made available to the customer and is recorded as other service revenue in the statement of operations. The Company sold LiveBy in November 2025.
We believe that Adjusted EBITDA helps identify underlying trends in our business that otherwise could be masked by the effect of the expenses that we exclude in Adjusted EBITDA.
We believe that Adjusted EBITDA helps 49 Table of Contents identify underlying trends in our business that otherwise could be masked by the effect of the expenses that we exclude in Adjusted EBITDA.
Of the federal net operating losses $1.0 million are subject to expiration beginning in 2035 and $53.6 million carry forward indefinitely. State net operating losses will begin to expire, if not utilized, in 2032.
Of the federal net operating losses $1.0 million are subject to expiration beginning in 2035 and $58.2 million carry forward indefinitely. State net operating losses will begin to expire, if not utilized, in 2032.
As of December 31, 2024, our cash totaled approximately $7.1 million, which represented a decrease of $0.3 million compared to December 31, 2023. As of December 31, 2024, we had net working capital of approximately $5.6 million, which represented a decrease of $1.3 million compared to December 31, 2023.
As of December 31, 2025, our cash totaled approximately $5.8 million, which represented a decrease of $1.4 million compared to December 31, 2024. As of December 31, 2025, we had net working capital of approximately $2.0 million, which represented a decrease of $3.6 million compared to December 31, 2024.
However, a change in facts and circumstances as of the acquisition date can result in subsequent adjustments during the measurement period, but no later than one year from the acquisition date. Please see Note 3 - Acquisitions, for more detail.
However, a change in facts and circumstances as of the acquisition date can result in subsequent adjustments during the measurement period, but no later than one year from the acquisition date. Please see Note 3 - Acquisitions, for more detail. Recent Accounting Standards For information on recent accounting standards, see Note 2 - Summary of Significant Accounting Policies.
(the “Company”, “Corporate”, “Our”, “We”), headquartered in Cary, North Carolina, is a national, technology-driven, end-to-end real estate services company integrating residential brokerage, mortgage, title, insurance and SaaS offerings for brokers and agents.
(the “Company,” “Our,” or “We”), headquartered in Cary, North Carolina, is a national, technology-driven, end-to-end real estate services company integrating residential brokerage, mortgage, title, and SaaS offerings for brokers and agents.
Critical accounting estimates are those that we consider the most important to the portrayal of our financial condition and results of operations because they require our most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Actual results may differ from these estimates under different assumptions or conditions. 50 Table of Contents Critical accounting estimates are those that we consider the most important to the portrayal of our financial condition and results of operations because they require the most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
As a result of certain acquisitions during the period ended December 31, 2022, we realized a portion of the pre-existing deferred tax assets due to the reversal of taxable temporary differences. As of December 31, 2024, we had federal net operating loss carryforwards of approximately $54.6 million and state net operating loss carryforwards of approximately $28.9 million.
As a result of certain acquisitions during the period ended December 31, 2022, we realized a portion of the pre-existing deferred tax assets due to the reversal of temporary book-tax differences. As of December 31, 2025, we had federal net operating loss carryforwards of approximately $59.2 million and state net operating loss carryforwards of approximately $33.5 million.
Fathom Realty Holdings, LLC, a Texas limited liability company (“Fathom Realty”), is a wholly owned subsidiary of Fathom Holdings Inc. Fathom Realty owns 100% of 43 subsidiaries, each an LLC representing the state in which the entity operates (e.g. Fathom Realty NJ, LLC). Company Acquisitions On November 1, 2024, the Company acquired My Home Group ("MHG").
Fathom Realty Holdings, LLC, a Texas limited liability company (“Fathom Realty”), is a wholly owned subsidiary of the Company. Fathom Realty owns 100% of 43 subsidiaries, each an LLC representing the state in which the entity operates (e.g. Fathom Realty NJ, LLC).
Our flat fee makes it so we have never interfered with our agents' ability to negotiate commissions and have no direct incentive to do so. Our flat fee per real estate transaction model enables our agents to freely settle their transaction commissions at their own discretion.
Our flat fee helps us avoid interfering with our agents' ability to negotiate commissions because we have no direct incentive to do so. Our flat fee per real estate transaction model enables our agents to freely settle their transaction commissions at their own discretion.
For example, many of our competitors may need to develop mechanisms and a plan that enable buyers and sellers to negotiate commissions. In contrast, our flat fee per real estate transaction model has always enabled our agents to negotiate their own fees.
All of this may require changes to many brokers’ business models, including changes in agent and broker compensation. For example, many of our competitors may need to develop mechanisms that enable buyers and sellers to negotiate commissions. In contrast, our flat fee per real estate transaction model has always enabled our agents to negotiate their own fees.
Generally, we base our estimates on historical experience and on various other assumptions in accordance with GAAP that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
Generally, we base our estimates on historical experience and on various assumptions in accordance with GAAP that we believe to be reasonable under the circumstances.
We expect marketing expenses to increase in absolute dollars as we continue to expand our advertising programs, and promote of our newly acquired business lines, but we anticipate marketing expenses as a percentage of revenue to decrease over time, if and as our revenue increases.
We expect marketing expenses to increase in absolute dollars as we continue to expand our advertising programs and promote our newly acquired business lines, but we anticipate marketing expenses as a percentage of revenue to decrease over time, if and as our revenue increases. 45 Table of Contents Litigation contingency Litigation contingency expenses consist primarily of litigation costs related to the settlement related to claims asserted in Burnett v.
The following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most comparable GAAP financial measure, for each of the periods presented (amount in thousands): Year Ended December 31, 2024 2023 Net loss $ (21,577) $ (23,981) Gain on sale of business (2,958) — Stock based compensation 8,839 12,994 Depreciation and amortization 5,423 5,947 Litigation contingency 3,491 — Other expense, net 2,094 580 Other non-cash and transaction-related cost — 201 Income tax expense (benefit) (1,022) 148 Adjusted EBITDA $ (5,710) $ (4,111) Critical Accounting Estimates Discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with GAAP.
The following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most comparable GAAP financial measure, for each of the periods presented (amounts in thousands): Year Ended December 31, 2025 2024 Loss before income tax $ (20,222) (22,599) Loss (gain) on sale of business 922 (2,958) Stock based compensation 3,704 8,839 Depreciation and amortization 5,847 5,423 Litigation contingency 2,027 3,491 Other expense, net 3,721 2,094 Adjusted EBITDA $ (4,001) $ (5,710) Critical Accounting Estimates Discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with GAAP.
The Company’s presentation of Adjusted EBITDA might not be comparable to similar measures used by other companies. See "NON-GAAP FINANCIAL MEASURE" below for more information. Components of Our Results of Operations Revenue Our revenue primarily consists of commissions generated from real estate brokerage services.
The Company’s presentation of Adjusted EBITDA might not be comparable to similar measures used by other companies. Refer to Note 17 – Segment Reporting for further information regarding the Company’s business segments. Components of Our Results of Operations Revenue Our revenue primarily consists of commissions generated from real estate brokerage services.
Management believes that existing cash along with its planned budget, growth from increasing attach rates across the Company’s businesses from internal referrals, reduction of certain expenses given initiatives implemented throughout 2024 and 2025, and the expected ability to achieve sales volumes necessary to cover forecasted expenses, provide sufficient funding for the Company to continue as a going concern for a period of at least one year from the date of the issuance of these consolidated financial statements.
Management believes that existing cash along with its planned budget, the implementation of a $250 transaction fee for Fathom Realty transactions, an increase in monthly fees for MHG agents, growth from increasing attach rates across the Company’s businesses from internal referrals, ongoing expense reduction initiatives executed throughout 2025 and continuing in 2026, the ability to effectively manage working capital, and the expected ability to achieve sales volumes necessary to cover forecasted expenses, provide sufficient funding to continue as a going concern for a period of at least one year from the date of the issuance of these consolidated financial statements.
Purchased software and capitalized software development costs are amortized on a straight-line basis over the term of the expected benefit and the respective amortization expense is included in technology and development expense. In accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), we do not amortize goodwill.
All other finite-lived intangibles are amortized on a straight-line basis over the term of the expected benefit. Purchased software and capitalized software development costs are amortized on a straight-line basis over the term of the expected benefit and the respective amortization expense is included in technology and development expense. In accordance with U.S.
An impairment loss for goodwill would be recognized based on the difference between the carrying value and its estimated fair value, which would be determined based on either discounted future cash flows or another appropriate fair value method. The evaluation of goodwill for impairment requires management to use significant judgments and estimates in accordance with U.S.
An impairment loss for goodwill would be recognized based on the difference between the carrying value and its estimated fair value, which would be determined based on either discounted future cash flows or another appropriate valuation method.
Rising Interest Rates, and Other Risks Our business is dependent on the economic conditions within the markets in which we operate. Changes in these conditions can have a positive or negative impact on our business. The economic conditions influencing the housing markets primarily include economic growth, interest rates, unemployment, consumer confidence, mortgage availability, and supply and demand.
Market Conditions and Industry Trends Our business depends on the economic conditions of the markets in which we operate. Changes in these conditions can impact our business. The economic conditions influencing the housing markets primarily include economic growth, interest rates, unemployment, consumer confidence, mortgage availability and supply and demand.
During the year ended December 31, 2024, average revenue per transaction increased by 2.1% to $8,712 from $8,532 during the year ended December 31, 2023. For the year ended December 31, 2024, other service revenue was approximately $20.4 million, a 3.1% increase from 2023.
Average revenue per transaction increased by 7.9% to $9,404 for year ended December 31, 2025, compared to $8,712 for the year ended December 31, 2024. For the year ended December 31, 2025, other service revenue was approximately $21.7 million, a 6.2% increase from 2024.
Income Taxes U.S. federal and state income tax benefits for a portion of historical net losses was recognized in the period ended December 31, 2024. Previously, we have not recognized the tax benefits because of the uncertainty of realizing a future benefit from those items.
Generally Accepted Accounting Principles (“GAAP”), we do not amortize goodwill. Income Taxes In 2025, we recognized a U.S. federal and state income tax benefits for a portion of historical net losses. Previously, we had not recognized the tax benefits because of the uncertainty of realizing a future benefit from those items.
On or about March 15, 2024, NAR agreed to settle the Burnett Ruling, along with a sister litigation, by agreeing to pay $418 million over approximately four years, and changing certain of its rules surrounding agent commissions (the “NAR Settlement”). On November 26, 2024, the NAR Settlement was granted over objections, which resolved the claims against the Company.
District Court for the Western District of Missouri), alleging a similar fact pattern and antitrust violations. On or about March 15, 2024, NAR agreed to settle the Burnett Ruling, along with a sister litigation, by agreeing to pay $418 million over approximately four years, and changing certain of its rules surrounding agent commissions (the “NAR Settlement”).
For the year ended December 31, 2024, depreciation and amortization expenses decreased by approximately $0.9 million or 29.2% from the year ended December 31, 2023. The decrease in depreciation and amortization expense is primarily attributable due to the absence of depreciation and amortization related to our insurance business that we sold effective May 3, 2024.
For the year ended December 31, 2025, depreciation and amortization expenses decreased by approximately $0.01 million, or 0.4%, as compared with the year ended December 31, 2024. The decrease was due to the absence of amortization related to our insurance business that we sold in May 2024.
Amortization expense consists of amortization recorded on acquisition-related intangible assets, excluding purchased software. Customer 45 Table of Contents relationships are amortized on an accelerated basis, which coincides with the period of economic benefit we expect to receive. All other finite-lived intangibles are amortized on a straight-line basis over the term of the expected benefit.
Leasehold improvements are depreciated over the lesser of the life of the lease term or the useful life of the improvements. Amortization expense consists of amortization recorded on acquisition-related intangible assets, excluding purchased software. Customer relationships are amortized on an accelerated basis, which coincides with the period of economic benefit we expect to receive.
For the year ended December 31, 2024, technology and development expenses increased by approximately $0.4 million, or 5.6%, as compared with the year ended December 31, 2023. This increase is primarily attributable to our ongoing investment in the intelliAgent platform and our LiveBy business.
The decrease in marketing expenses is primarily due to the Company's reduced reliance on external marketing agencies. For the year ended December 31, 2025, total technology and development expenses increased by approximately $0.7 million, or 10.1%, as compared with the year ended December 31, 2024. This increase is primarily due to our ongoing investment in the intelliAgent platform.
That same day, the NAR, EXP World Holdings, Inc., Compass, Inc., Redfin Corporation, Weichert Realtors, United Real Estate, Howard Hann Real Estate Services, and Douglas Elliman, Inc. were named as defendants in Gibson v. National Association of Realtors (U.S. District Court for the Western District of Missouri), alleging a similar fact pattern and antitrust violations.
Additionally, certain other brokerage defendants settled with the plaintiffs, including both monetary and non-monetary settlement terms. That same day, the NAR, EXP World Holdings, Inc., Compass, Inc., Redfin Corporation, Weichert Realtors, United Real Estate, Howard Hann Real Estate Services, and Douglas Elliman, Inc. were named as defendants in Gibson v. National Association of Realtors (U.S.
This revenue increase is primarily attributable to an increase in mortgage loans and title service transaction volume, which were primarily attributable to organic growth and walkovers, partially offset by the reduction of insurance revenue as a result of our sale of our insurance business in May 2024.
This revenue increase is primarily attributable to an increase in mortgage loans and title service transaction volume, which were primarily attributable to organic growth and walkovers.
Operating Expenses Year Ended December 31, Change 2024 2023 Dollars Percentage Commission and service costs $ 306,913 $ 316,932 $ (10,019) (3.2 %) General and administrative 33,573 36,061 (2,488) (6.9 %) Marketing 5,796 6,038 (242) (4.0 %) Technology and development 6,635 6,284 351 5.6 % Litigation contingency 3,491 — 3,491 100 % Depreciation and amortization 2,239 3,164 (925) (29.2 %) Total operating expenses $ 358,647 $ 368,479 $ (9,832) (2.7) % 46 Table of Contents For the year ended December 31, 2024, commission and service costs decreased by approximately $10.0 million, or 3.2%, as compared with the year ended December 31, 2023.
Operating Expenses 46 Table of Contents Year Ended December 31, Change 2025 2024 Dollars Percentage Commission and service costs $ 386,281 $ 306,913 $ 79,368 25.9 % General and administrative 33,058 33,573 (515) (1.5 %) Marketing 5,157 5,796 (639) (11.0 %) Technology and development 7,303 6,635 668 10.1 % Litigation contingency 2,027 3,491 (1,464) (42 %) Depreciation and amortization 2,230 2,239 (9) (0.4 %) Total operating expenses $ 436,056 $ 358,647 $ 77,409 21.6 % For the year ended December 31, 2025, commission and service costs increased by approximately $79.4 million, or 25.9%, as compared with the year ended December 31, 2024.
Adjusted EBITDA is defined by us as net income (loss), excluding other 43 Table of Contents income and expense, costs related to acquisitions, income taxes, depreciation and amortization, and share-based compensation expense.
We define Adjusted EBITDA as net income (loss), excluding: (i) other income and expense, (ii) costs related to acquisitions, (iii) income taxes, (iv) depreciation and amortization, and (v) share-based compensation expense.
The Company had cash and cash equivalents of $7.1 million and $7.4 million as of December 31, 2024 and 2023, respectively. As discussed above, the Company also raised approximately $2.7 million in the 2025 Offering.
The Company had cash and cash equivalents of $5.8 million and $7.1 million as of December 31, 2025 and 2024, respectively.
Results of Operations Comparison of the Years Ended December 31, 2024, and 2023 (amounts in thousands) Revenue Year Ended December 31, Change 2024 2023 Dollars Percentage Gross commission income $ 314,741 $ 325,405 $ (10,664) (3.3) % Other service revenue 20,443 19,821 622 3.1 % Revenue $ 335,184 $ 345,226 $ (10,042) (2.9) % For the year ended December 31, 2024, gross commission income decreased by approximately $10.7 million or 3.3%, as compared with the year ended December 31, 2023.
Results of Operations Comparison of the Years Ended December 31, 2025, and 2024 (amounts in thousands) Revenue Year Ended December 31, Change 2025 2024 Dollars Percentage Gross commission income $ 398,767 $ 314,741 $ 84,026 26.7 % Other service revenue 21,710 20,443 1,267 6.2 % Revenue $ 420,477 $ 335,184 $ 85,293 25.4 % For the year ended December 31, 2025, gross commission income increased by approximately $84.0 million, or 26.7%, as compared with the year ended December 31, 2024.
SaaS Revenue The Company generates revenue from subscription and services related to the use of the LiveBy platform. The SaaS contracts are generally annual contracts paid monthly in advance of service and cancellable upon 30 days’ notice after the first year.
The SaaS contracts are generally annual contracts paid monthly in advance of service and cancellable upon 30 days’ notice after the first year. The Company’s subscription arrangements do not provide customers with the right to take possession of the software supporting the platform.
For the year ended December 31, 2024, marketing expenses decreased by approximately $0.2 million, or 4.0%, as compared with the year ended December 31, 2023. The decrease in marketing expenses is primarily related to an decrease in marketing investment for our brokerage business.
This decrease is primarily due to a $3.0 million decrease in stock compensation expense, partially offset by an increase in compensation expense related to the Company's investment in growth. For the year ended December 31, 2025, total marketing expenses decreased by approximately $0.6 million, or 11.0%, as compared with the year ended December 31, 2024.
The NAR anticipates transactions to increase by 9% in 2025 ,from 4.06 million existing home sales to 4.5 million existing home sales. According to the NAR, nationwide average sales price for existing homes in December 2024 (preliminary) was $404,400, up 6% from $382,600 in December 2023.
According to the NAR, nationwide average sales price for existing homes in December 2025 (preliminary) was $405,400, up 0.4% from $403,700 in December 2024.
However, the litigation and its ramifications could cause unforeseen turmoil in our industry, the impacts of which could have a negative effect on us as an industry participant.
However, the litigation and its ramifications could cause unforeseen turmoil in our industry, the impacts of which could have a negative effect on us as an industry participant. Real Estate Agents Due to our low-overhead business model, we can offer our agents the ability to retain significantly more of their commissions compared to traditional real estate brokerage firms.
There could also be further changes in real estate industry practices. All of this has prompted discussion of changes to rules established by local or state real estate boards or multiple listing services. All of this may require changes to many brokers’ business models, including changes in agent and broker compensation.
In November 2024, the NAR Settlement was granted over objections, which resolved the claims against the Company. There could also be further changes in real estate industry practices. All of this has prompted discussion of changes to rules established by local or state real estate boards or multiple listing services.
The Company sold its home and other insurance agency services business on May 3, 2024. 44 Table of Contents Title Service Revenue Title services revenue includes fees charged for title search and examination, property settlement and title insurance services provided in association with property acquisitions and refinance transactions.
Title Service Revenue Title services revenue includes fees charged for title search and examination, property settlement and title insurance services provided in association with property acquisitions and refinance transactions. SaaS Revenue The Company generated revenue from subscription and services related to the use of the LiveBy platform.
In periods of economic growth, demand typically increases resulting in increasing home sales transactions and home sales prices. Similarly, a decline in economic growth, increasing interest rates and declining consumer confidence generally decreases demand. These are the trends we are currently facing.
Demand for housing typically increases in periods of economic growth, resulting in higher home sales transactions and home sales prices. Similarly, a decline in economic growth, increasing interest rates and declining consumer confidence generally decreases demand. Additionally, regulations imposed by local, state and federal government agencies and geopolitical instability can negatively impact the housing markets in which we operate.
On October 31, 2023, a federal jury in Missouri found that the NAR and certain companies conspired to artificially inflate brokerage commissions, which violates federal antitrust law. The judgment was appealed on October 31, 2023. Additionally, certain other brokerage defendants settled with the plaintiffs, including both monetary and non-monetary settlement terms.
Looking ahead, we remain focused on getting back to positive total company Adjusted EBITDA for the full year 2026 . On October 31, 2023, a federal jury in Missouri found that the NAR and certain companies conspired to artificially inflate brokerage commissions, which violates federal antitrust law. The judgment was appealed on October 31, 2023.
GAAP, including, but not limited to, economic, industry and company-specific qualitative factors, projected future net sales, operating results and cash flows.
The evaluation of goodwill for impairment requires management to use significant judgments and estimates in accordance with GAAP, including, economic, industry and company-specific qualitative factors, projected future net sales, operating results and cash flows.
Liquidity and Capital Resources (amounts in thousands) Capital Resources December 31, 2024 December 31, 2023 Change Dollars Percentage Current assets $ 24,956 $ 23,194 $ 1,762 7.6 % Current liabilities 19,381 16,352 3,029 18.5 % Net working capital $ 5,575 $ 6,842 $ (1,267) (18.5) % To date, our principal sources of liquidity have been revenues and the net proceeds we received through public offerings and private sales of our common stock, as well as proceeds from loans.
The Company maintains a valuation allowance on the remaining net deferred tax assets at year-end due to historical operating losses. 47 Table of Contents Liquidity and Capital Resources (amounts in thousands) Capital Resources December 31, 2025 December 31, 2024 Change Dollars Percentage Current assets $ 35,920 $ 24,956 $ 10,964 43.9 % Current liabilities 33,897 19,381 14,516 74.9 % Net working capital $ 2,023 $ 5,575 $ (3,552) (63.7) % To date, our principal sources of liquidity have been revenues and the net proceeds from public offerings and private sales of our common stock, as well as proceeds from loans.
Depreciation expense is recorded on a straight-line method, based on estimated useful lives of five years for computer hardware, seven years for furniture and equipment and seven years for vehicles. Leasehold improvements are depreciated over the lesser of the life of the lease term or the useful life of the improvements.
The National Association of Realtors., et al. Depreciation and amortization Depreciation and amortization represent how we expense our fixed and intangible assets other than capitalized software. Depreciation expense is recorded on a straight-line method, based on estimated useful lives of five years for computer hardware, seven years for furniture and equipment and seven years for vehicles.
For the year ended December 31, 2024, litigation contingency expenses increased by $3.5 million, or 100%, as compared with the year ended December 31, 2023. The increase in litigation contingency expenses is due to the accrued NAR settlement and related legal expenses.
For the year ended December 31, 2025, total litigation contingency expenses decreased by approximately $1.5 million, or 41.9%, as compared with the year ended December 31, 2024. The decrease was due to reduced legal settlement fees being incurred in the current year, whereas the prior year included substantial legal costs associated with the NAR Settlement and related activities.
National Housing Inventory Throughout 2024, historically elevated mortgage interest rates and high home prices have caused inventory levels, as measured in months of supply, to rise. Construction of new homes continues to slow also due to historically elevated mortgage interest rates and the strained availability of labor and materials.
National Housing Inventory Throughout 2024 and continuing into 2025, historically elevated mortgage interest rates and high home prices contributed to subdued transaction activity and increased inventory levels. Construction of new homes also remained constrained due to elevated financing costs and continued challenges related to labor availability and material costs.
The cash proceeds to the Company from the issuance of the 2024 Note were $4.9 million after deducting the 2024 Offering expense. On March 10, 2025, the Company issued and sold shares of its common stock to certain investors and members of the Company’s Board in a registered direct offering (the “2025 Offering”).
The cash proceeds to the Company from the issuance of the 2024 Note were $4.9 million after deducting the 2024 Offering expense.
Based on Freddie Mac data, the average rate for a 30-year, conventional fixed rate mortgage was 6.61% in December 2024 and 2023. If inflation continues to moderate into 2025 as anticipated, mortgage rates should decline, which we expect to boost homebuyer demand and homebuilder sentiment.
Mortgage Rates 42 Table of Contents Historically elevated mortgage interest rates are negatively impacting the demand for homebuying. Based on Freddie Mac data, the average rate for a 30-year, conventional fixed rate mortgage was 6.21% in December 2025 compared to 6.61% in December 2024.
Agent Equity Ownership Beginning January 1, 2023, agents have been primarily able to earn stock grants in the form of stock units based on agent referral metrics achieved. These stock grants typically are granted quarterly and vest in two years.
Fathom’s real estate agent licenses decreased 1.2% to approximately 14,135 agent licenses as of December 31, 2025, down from approximately 14,300 as of December 31, 2024. 43 Table of Contents Agent Equity Ownership Beginning in January 2023, agents have been primarily able to earn stock grants in the form of stock units based on the achievement of agent referral metrics.
According to the NAR, inventory of existing homes for sale in the U.S. was 1.15 million at the end of December 2024 compared to 990,000 at the end of December 2023. Mortgage Rates Historically elevated mortgage interest rates are negatively impacting the demand for homebuying.
According to the NAR, inventory of existing homes for sale in the United States was approximately 1.15 million units at the end of December 2024, compared to approximately 990,000 units at the end of December 2023. Inventory levels increased further during 2025 as transaction activity remained below long-term historical averages.
The cash proceeds disbursed to the Company from the issuance of the Note were $3,300,000, after deducting the placement agent fee and purchaser expenses. 47 Table of Contents In December 2023, the Company, completed an offering of common stock, which resulted in the issuance and sale by the Company of 2,000,000 shares of common stock, at a public offering price of $2.00 per share and an option to the underwriters to purchase up to additional 450,000 shares.
In September 2025, the Company completed the September 2025 Offering, which resulted in the issuance and sale by the Company of 3,450,000 shares of common stock at an offering price of $2.00 per share, generating gross proceeds of $6.9 million, of which the Company received total net proceeds of $6.5 million, after deducting underwriting discounts and other offering costs.
For the year ended December 31, 2024, general and administrative expenses decreased by approximately $2.5 million, or 6.9%, as compared with the year ended December 31, 2023. This decrease is primarily attributable due to the elimination of costs attributable to our insurance business effective upon its sale in May 2024.
As such, the increase in commission and service costs compared to the same period in 2024 was primarily due to an increase in agent commissions paid due to higher transaction volume. For the year ended December 31, 2025, general and administrative expenses decreased by approximately $0.5 million, or 1.5%, as compared with the year ended December 31, 2024.
Real Estate Agents Due to our low-overhead business model, which leverages our proprietary technology, we can offer our agents the ability to keep significantly more of their commissions compared to traditional real estate brokerage firms. We believe we offer our agents some of the best technology, training, and support available in the industry.
We believe we offer our agents some of the best technology, training, and support available in the industry. We believe our business model and our focus on treating our agents well will attract more agents and higher-producing agents.
In 2023, the existing home sales market declined 6.2%, and declined an additional 0.7% in 2024 according to the NAR, which is the lowest the market has been since 1995. The Company believes that it continues to be well positioned for growth in all of its businesses in the current economic climate.
In 2025, existing home sales remained at historically subdued levels, totaling approximately 4.06 million units, representing little growth from 2024, one of the lowest annual transaction volumes recorded since 1995. The Company believes that it is well-positioned for growth in all of its businesses in the current economic climate.
Through its Mortgage segment, the Company provides residential loan origination and underwriting services. Through its Technology segment, the Company provides SaaS solutions and data mining for third party customers and continues to develop its intelliAgent platform for current use by the Company’s real estate agents.
Through its Real Estate Brokerage segment, the Company provides real estate brokerage services. Through its Mortgage segment, the Company provides residential loan origination and underwriting services. Through its Title segment, the Company provides title insurance, escrow, and settlement services to facilitate residential real estate transactions.

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