fthm-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the quarterly period ended March 31, 2025

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from______to______

Commission File Number 001-39412

FATHOM HOLDINGS INC.

(Exact name of Registrant as specified in its Charter)


North Carolina						82-1518164
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

2000 Regency Parkway Drive, Suite 300, Cary, North Carolina 27518

(Address of principal executive offices) (Zip Code)

(888) 455-6040

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, No Par Value

FTHM

The NASDAQ Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of May 12, 2025, the registrant had 27,776,484 shares of common stock outstanding.


		Page
PART I - FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024	3
	Unaudited Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024	4
	Unaudited Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three months ended March 31, 2025 and 2024	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024	6
	Notes to Unaudited Consolidated Financial Statements	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	35
ITEM 4.	Controls and Procedures	35
PART II - OTHER INFORMATION		36
ITEM 1.	Legal Proceedings	36
ITEM 1A.	Risk Factors	37
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
ITEM 6.	Exhibits	39
SIGNATURES		40


	March 31, 2025		December 31, 2024
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	7,976	$	7,127
Restricted cash	195		263
Accounts receivable	3,133		3,147
Other receivable - current	3,000		4,000
Mortgage loans held for sale, at fair value	9,508		4,772
Prepaid and other current assets	6,962		5,647
Total current assets	30,774		24,956
Property and equipment, net	1,783		1,854
Lease right of use assets	4,370		3,781
Intangible assets, net	19,561		20,234
Goodwill	21,498		21,498
Other receivable - long-term	3,000		3,000
Other assets	31		74
Total assets	$	81,017	$	75,397
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,199	$	4,305
Accrued and other current liabilities	5,862		4,894
Warehouse lines of credit	9,269		4,556
Lease liability - current portion	1,483		1,237
Long-term debt - current portion	4,158		4,389
Total current liabilities	25,971		19,381
Lease liability, net of current portion	3,818		3,522
Long-term debt, net of current portion	5,086		5,087
Other long-term liabilities	2,727		2,726
Total liabilities	37,602		30,716
Commitments and contingencies (Note 18)
Stockholders’ equity:
Common stock (no par value, shares authorized, 100,000,000; shares issued and outstanding, 27,587,774 and 22,732,716 as of March 31, 2025 and December 31, 2024, respectively)	—		—
Additional paid-in capital	142,224		137,844
Accumulated deficit	(98,809)		(93,163)
Total stockholders' equity	43,415		44,681
Total liabilities and stockholders’ equity	$	81,017	$	75,397


	Three Months Ended March 31,
	2025		2024

Revenue	$	93,135	$	70,503
Commission and service costs	85,047		63,637
General and administrative	8,647		9,000
Marketing	1,370		1,201
Technology and development	1,937		1,590
Litigation contingency	4		—
Depreciation and amortization	554		728
Loss from operations	(4,424)		(5,653)

Other expense (income), net
Interest expense, net	156		105
Other nonoperating expense	1,049		152
Other expense, net	1,205		257
Loss before income taxes	(5,629)		(5,910)
Income tax expense	17		17
Net loss	$	(5,646)	$	(5,927)
Net loss per share:
Basic	$	(0.24)	$	(0.31)
Diluted	$	(0.24)	$	(0.31)
Weighted average common shares outstanding:
Basic	23,407,905		19,178,474
Diluted	23,407,905		19,178,474


	Common Stock
	Number of Outstanding Shares	Par Value		Additional Paid-in Capital		Accumulated Deficit		Total
Balance at December 31, 2024	22,732,716	$	—	$	137,844	$	(93,163)	$	44,681
Stock-based compensation, net of forfeitures	517,055	—		1,506		—		1,506
Issuance of common stock for public offering	4,338,003	—		3,043		—		3,043
Discount of common stock for public offering	—	—		(126)		—		(126)
Other	—	—		(43)		—		(43)
Net loss	—	—		—		(5,646)		(5,646)
Balance at March 31, 2025	27,587,774	$	—	$	142,224	$	(98,809)	$	43,415


	March 31, 2025
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Trade names	$	5,226	$	(1,972)	$	3,254
Software development	18,032		(9,215)		8,817
Customer relationships	2,020		(773)		1,247
Agent relationships	9,243		(3,090)		6,153
Know-how	430		(340)		90
	$	34,951	$	(15,390)	$	19,561


	December 31, 2024
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Trade names	$	5,226	$	(1,841)	$	3,385
Software development	17,371		(8,404)		8,967
Customer relationships	2,020		(723)		1,297
Agent relationships	9,235		(2,761)		6,474
Know-how	430		(319)		111
	$	34,282	$	(14,048)	$	20,234


Years Ending December 31,
2025 (remaining)	$	4,026
2026	4,837
2027	3,908
2028	2,840
2029	1,881
Thereafter	2,069
Total	$	19,561


	Real Estate Brokerage		Mortgage		Technology		Other (a)		Total
Balance at March 31, 2025	$	4,068	$	10,428	$	4,168	$	2,834	$	21,498


	March 31, 2025		December 31, 2024
Deferred annual fee	$	1,326	$	851
Due to sellers	1,208		1,328
Accrued compensation	1,347		818
Other accrued liabilities	1,981		1,897
Total accrued and other current liabilities	$	5,862	$	4,894


	March 31, 2025
Lender	Borrowing Capacity		Outstanding Borrowings		Weighted -Average Interest Rate on Outstanding Borrowings
Bank A1	$	10.0	$	4.7	6.75	%
Bank B2	$	10.0	$	4.5	6.64	%


	Three Months Ended March 31,
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(5,646)	$	(5,927)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,440		1,480
Non-cash lease expense	357		529
Deferred financing cost amortization	25		—
Gain on sale of mortgages	(1,491)		(1,215)
Stock-based compensation	1,506		2,652
Deferred income taxes	1		5
Change in operating assets and liabilities:
Accounts receivable	15		356
Prepaid and other current assets	(315)		(901)
Other assets	43		8
Accounts payable	893		434
Accrued and other current liabilities	1,089		1,112
Operating lease liabilities	(404)		(566)
Mortgage loans held for sale originations	(54,687)		(49,598)
Proceeds from sale and principal payments on mortgage loans held for sale	51,441		50,684
Net cash used in operating activities	(5,733)		(947)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(25)		(1)
Purchase of intangible assets	(670)		(534)
Amounts paid for business and asset acquisitions, net of cash acquired	(120)		—
Net cash used in investing activities	(815)		(535)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt	(257)		(148)
Deferred acquisition consideration payments	—		(83)
Borrowings from warehouse lines of credit	54,959		49,440
Repayment on warehouse lines of credit	(50,247)		(49,277)
Proceeds from the issuance of common stock in connection with a public offering	3,043		—
Payment of offering cost in connection with issuance of common stock in connection with public offering	(169)		(28)
Net cash provided by (used in) financing activities	7,329		(96)
Net increase (decrease) in cash, cash equivalents, and restricted cash	782		(1,578)
Cash, cash equivalents, and restricted cash at beginning of period	7,389		7,540
Cash, cash equivalents, and restricted cash at end of period	$	8,171	$	5,962


	March 31, 2025		December 31, 2024
3.75% Small Business Administration installment loan due May 2050	$	108	$	109
Convertible note payable, less unamortized costs of $29	8,496		8,471
Promissory note payable	164		226
Short term debt	192		197
Director and officer (D&O) insurance policy promissory note1	68		135
Executive and officer (E&O) insurance policy promissory note2	216		338
Total debt	9,244		9,476
Long-term debt, current portion	(4,158)		(4,389)
Long-term debt, net of current portion	$	5,086	$	5,087


	Three Months Ended March 31,
	2025		2024
Operating lease expense	$	357	$	413
Short-term lease expense	144		175
Total lease cost	$	501	$	588


	March 31, 2025		December 31, 2024
Weighted average remaining lease term (in years) - operating leases	3.8		4.1
Weighted average discount rate - operating leases	7.96	%	7.61	%


	March 31, 2025
	Level 1		Level 2		Level 3		Total
Mortgage loans held for sale	$	—	$	9,508	$	—	$	9,508
Derivative assets	—		—		5		5
	$	—	$	9,508	$	5	$	9,513


Years Ended December 31,	Operating Leases
2025 (remaining)	$	1,399
2026	1,688
2027	1,516
2028	1,020
2029	144
Thereafter	402
Total minimum lease payments	6,169
Less effects of discounting	(868)
Present value of future minimum lease payments	$	5,301


	Shares	Weighted Average Grant Date Fair Value
Nonvested at December 31, 2024	546,653	$	4.72
Granted	—	—
Vested	(170,800)	4.74
Forfeited	(13,292)	13.44
Nonvested at March 31, 2025	362,561	$	4.39


	Three Months Ended March 31,
	2025		2024
Commission and service costs	$	663	$	1,092
General and administrative	813		1,480
Marketing	30		80
Total stock-based compensation	$	1,506	$	2,652


	As of March 31,
	2025	2024
Stock options	147,707	147,707
Non-vested restricted stock awards	362,561	1,246,528
Non-vested restricted stock units	2,533,310	2,631,384
Common stock warrants	240,100	240,100
Convertible debt	1,759,804	583,333



	Three Months Ended March 31, 2025
	Real Estate Brokerage		Mortgage		Technology		Total
Revenue	$	88,875	$	2,603	$	644	$	92,122
Intersegment revenue	—		—		419		419
Total segment revenue	88,875		2,603		1,063		92,541
Corporate and other services (a)							1,047
Elimination of intersegment revenue							(453)
Total revenue							93,135
Less:
Commissions	84,411		703		—		85,114
Compensation	1,313		1,054		452		2,819
Other segment expenses	1,566		1,224		139		2,929
Adjusted EBITDA by segment	1,585		(378)		472		1,679
Corporate and other services (a) expenses							(3,153)
Total adjusted EBITDA							(1,474)
Stock based compensation							(1,506)
Litigation contingency							(4)
Depreciation and amortization							(1,440)
Other income (expense), net							(1,205)
Loss before income tax							$	(5,629)


	Three Months Ended March 31, 2024
	Real Estate Brokerage		Mortgage		Technology		Total
Revenue	$	65,385	$	2,264	$	765	$	68,414
Intersegment revenue	—		—		352		352

SEC Form 10-Q filed by Fathom Holdings Inc.