Fathom Holdings (FTHM) FY2025 10-K Risk Factors: 15 New, 7 Dropped

What the changes say

Legal and antitrust pressures surrounding broker commissions and agent classifications intensified significantly this year.
Macroeconomic factors like interest rates and geopolitical conflicts continue to constrain the residential real estate market.
New disclosures address risks related to bitcoin holdings and smaller reporting company status.

What changed since the prior 10-K

New

NewRisks Related to Our Business
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
High interest rates and economic uncertainty could hinder our ability to achieve or sustain profitability while innovating our Internet products.
NewRisks Related to Our Business
in significant liability and adversely impact our financial results if we or our brokers and agents are unable to distinguish or defend our business practices
The Burnett v. NAR antitrust ruling and Gibson v. NAR lawsuit could result in significant liability for our business practices.
NewRisks Related to Our Business
We operate in a heavily regulated industry with regulated labor classifications which present significant risks in general for each potential instance in which we fail to comply
Misclassifying our agents as independent contractors instead of employees could trigger IRS and state penalties and alter our cost structure.
NewRisks Related to Our Business
The U.S. Department of Justice has opened an anti-trust investigation of some of our biggest competitors, and they are defendants in related lawsuits that could negatively impact our industry
Fathom Realty was named in two class actions in Texas regarding inflated buyer broker commissions, while the Mortgage Act imposes new restrictions on lenders.
NewRisks Related to Our Business
Tens of thousands of consumers, independent contractors, and employees have shared personal information with us during the normal course of our business. Such information includes, but is not limited to, social security numbers, annual income amounts and sources, names, addresses, phone numbers, and email addresses
We store sensitive personal information like social security numbers and income amounts for thousands of consumers, contractors, and employees.
NewRisks Related to Our Business
personal information. Our Privacy Policy includes informing consumers, independent contractors and employees that we will not share their personal information with third parties without their prior consent unless required to do so by law
Failing to comply with complex federal and state privacy laws or third-party safeguarding failures could cause significant legal liability and reputational damage.
NewRisks Related to Our Business
We are a “smaller reporting company” and a non-accelerated filer and, as a result of the reduced disclosure and governance requirements applicable to smaller reporting companies and non-accelerated filers, our common stock may be less attractive to investors
Our status as a smaller reporting company and non-accelerated filer may make our common stock less attractive to investors.
NewRisks Related to Our Business
We are often involved in various lawsuits and legal proceedings that arise in the ordinary course of business
Ordinary course litigation including intellectual property, fiduciary duty, title defalcations, and mold disclosure claims could adversely affect us.
NewRisks Related to Our Business
Investors’ expectations of our performance relating to environmental, social, and governance factors may impose additional costs and expose us to new risks
Stakeholder expectations regarding environmental, social, and governance factors may impose costly compliance initiatives and reputational risks.
NewRisks Related to Bitcoin Treasury Strategy
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
Changes in our ownership of bitcoin or its regulatory and accounting treatment could negatively affect our financial results and stock price.
NewRisks Related to Bitcoin Treasury Strategy
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
U.S. banking regulations reducing bitcoin service providers' access to banking could impact bitcoin liquidity and exchange availability.
NewRisks Related to Bitcoin Treasury Strategy
lose some or all of our bitcoin and our financial condition and results of operations could be materially adversely affected
Security breaches or cyberattacks at custodians like Coinbase or FTX could cause us to lose our bitcoin holdings.
NewRisks Related to Our Industry
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
NewRisks Related to Our Industry
The introduction and integration of emerging technologies into the real estate industry and any delay or inability to successfully integrate such technologies into our business or the businesses of our real estate professionals could result in competitive harm
NewRisks Related to Ownership of Our Common Stock
If we are not able to comply with the applicable continued listing requirements or standards of The Nasdaq Stock Market, Nasdaq could delist our common stock

Dropped

DroppedRisks Related to Our Business
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
DroppedRisks Related to Our Business
Our agents can be classified as either employees or independent contractors, and we could potentially misclassify or fail to consistently achieve compliance. Classifications and compliance are subject to the Internal Revenue Service regulations and applicable state law guidelines and penalties
DroppedRisks Related to Our Business
If we fail to protect the privacy of employees, independent contractors, or consumers or personal information that they share with us, or fail to comply with privacy or data security legal requirements, our reputation and business could be significantly harmed
DroppedRisks Related to Our Business
We are an “emerging growth company,” and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors
DroppedRisks Related to Our Business
We are subject to certain risks related to litigation filed by or against us, and adverse results might harm our business and financial condition
Technological and geographic growth could strain operational controls and service levels.
DroppedRisks Related to Bitcoin Treasury Strategy
held by the affected custodian during the pendency of the insolvency proceedings. Any such outcome could have a material adverse effect on our financial condition and the market price of our common stock
DroppedRisks Related to Our Industry
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

Reworded

88% rewrittenRisks Related to Our Business
Adverse outcomes in litigation and regulatory actions against other companies and agents in our industry could adversely impact our financial results
Added specific references to the Real Estate Settlement Procedures Act and noted that industry lawsuits increase the likelihood of similar claims against us.
87% rewrittenRisks Related to Our Industry
Our results are tied to the residential real estate market and we might be negatively impacted by downturns in this market and general global economic conditions
Expanded geopolitical risk factors to include Iran alongside Ukraine and the Israeli-Palestinian conflict, and added financial institution sensitivity.
75% rewrittenRisks Related to Our Business
Our competitors' success could result in the loss of market share
Added the risk that our competitors might be acquired by third parties with greater resources to compete more vigorously.
Was: The success of our competitors could result in fewer users visiting our website and mobile applications, and the loss of market share
72% rewrittenRisks Related to Our Business
In addition to workforce regulations and classifications, complex, heavily regulated federal, state and local authority laws, regulations and policies govern our real estate business, as well as our title, title insurance, insurance, mortgage, lead generation, and other ancillary services
Formatted the applicable laws and regulations into a bulleted list for the real estate and ancillary services businesses.
Was: Beyond workforce regulations and classifications, there exist complex, heavily regulated federal, state and local authority laws, regulations and policies governing our real estate business, as well as our title, title insurance, insurance, mortgage, lead generation, and other ancillary services
68% rewrittenRisks Related to Our Business
If we do not remain an innovative leader in the real estate industry, we might not be able to grow our business and leverage our costs to achieve profitability
Trimmed the description of market characteristics for Internet products and services from the end of the risk factor.
65% rewrittenRisks Related to Our Industry
A lack of financing for homebuyers in the U.S. residential real estate market at favorable rates and on favorable terms could have a material adverse effect on our financial performance and results of operations
Retained existing risk language regarding mortgage interest rates and government policies with minor stylistic refinements.
63% rewrittenRisks Related to Our Business
We have recently acquired businesses that are outside our core competencies as a real estate brokerage, which could be difficult to integrate, disrupt our core business, dilute shareholder value, and adversely affect our operating results
Removed specific historical acquisition names like LiveBy, Inc. and streamlined integration failure consequences.
Was: We have recently acquired businesses that are outside our core competencies as a real estate brokerage, which could be difficult to integrate, disrupt our core business, dilute stockholder value, and adversely affect our operating results and the value of our common stock
56% rewrittenRisks Related to Our Business
Our future revenue and growth prospects could be adversely affected by our dependence on other contractors
Appended a sentence regarding risks related to litigation filed by or against us at the end of the vendor risk factor.
50% rewrittenRisks Related to Bitcoin Treasury Strategy
Our bitcoin treasury strategy could expose us to various risks associated with bitcoin
48% rewrittenRisks Related to Bitcoin Treasury Strategy
Our intended bitcoin holdings may be less liquid than our existing cash and cash equivalents and might not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents
47% rewrittenRisks Related to Our Business
Our historical revenue growth rates might not be indicative of our future growth, and we might not continue to grow at our recent pace, or at all
40% rewrittenRisks Related to Our Business
Our operating results are subject to seasonality and vary significantly among quarters during each calendar year, making meaningful comparisons of successive quarters difficult
40% rewrittenRisks Related to Our Business
We might not be able to effectively manage rapid growth in our business
38% rewrittenRisks Related to Our Business
If we fail to continue to grow in the local markets we serve or if we fail to successfully identify and pursue new business opportunities, our long-term prospects, financial condition and results of operations may be harmed, and our stock price may decline
34% rewrittenRisks Related to Our Business
Maintaining legal compliance is challenging and increases our costs due to the resources required to continually monitor business practices for compliance with laws, rules and regulations, and to monitor changes in existing applicable laws and the enactment of new ones
Was: Maintaining legal compliance is challenging and increases our costs due to resources required to continually monitor business practices for compliance with applicable laws, rules and regulations, and to monitor changes in the applicable laws themselves
34% rewrittenRisks Related to Our Business
We might use interest rate derivatives to manage our exposure to interest rate risks associated with our mortgage business
Was: We might use interest rate derivatives from time to time to manage our exposure to interest rate risks associated with our mortgage business
32% rewrittenRisks Related to Our Business
Our business could be adversely affected if we are unable to expand, maintain and improve the systems and technologies upon which we rely to operate
31% rewrittenRisks Related to Bitcoin Treasury Strategy
Bitcoin and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty
31% rewrittenRisks Related to Our Business
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
29% rewrittenRisks Related to Our Business
Loss of our current executive officers or other key management could significantly harm our business
29% rewrittenRisks Related to Our Business
Our business, financial condition and reputation may be substantially harmed by security breaches, interruptions, delays and failures in our systems and operations
28% rewrittenRisks Related to Our Business
We participate in a highly competitive market, and pressure from existing and new competitors might adversely affect our business and operating results
Was: We participate in a highly competitive market, and pressure from existing and new companies might adversely affect our business and operating results
26% rewrittenRisks Related to Our Business
We have a history of losses, and we might not be able to achieve or sustain profitability
24% rewrittenRisks Related to Our Industry
The occurrence of natural or man-made disasters or pandemics could adversely affect our operations, results of operations and financial condition
23% rewrittenRisks Related to Our Business
If we are unable to obtain sufficient financing through warehouse credit facilities to fund origination of mortgage loans, then we may be unable to grow our mortgage business

All 58 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Business

01We have a history of losses, and we might not be able to achieve or sustain profitability26% rewritten
02If we do not remain an innovative leader in the real estate industry, we might not be able to grow our business and leverage our costs to achieve profitability68% rewritten
03remain 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 industryNew
04We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all
05We might not be able to effectively manage rapid growth in our business40% rewritten
06If we fail to grow in the various local markets that we serve or are unsuccessful in identifying and pursuing new business opportunities our long-term prospects and profitability will be harmed
07If we fail to continue to grow in the local markets we serve or if we fail to successfully identify and pursue new business opportunities, our long-term prospects, financial condition and results of operations may be harmed, and our stock price may decline38% rewritten
08Our agent commission plans, including Fathom Max and Fathom Share, might not positively contribute to agent recruitment and retention, which would adversely affect our revenue growth and results of operations
09If we fail to expand effectively into adjacent markets, our growth prospects could be harmed
10Our historical revenue growth rates might not be indicative of our future growth, and we might not continue to grow at our recent pace, or at all47% rewritten
11We might not be successful in our efforts to do any of the foregoing, and any failure to be successful in these matters could materially and adversely affect our revenue. Our past revenue growth is not indicative of our future growth
12Adverse outcomes in litigation and regulatory actions against other companies and agents in our industry could adversely impact our financial results88% rewritten
13in significant liability and adversely impact our financial results if we or our brokers and agents are unable to distinguish or defend our business practicesNew
14We operate in a heavily regulated industry with regulated labor classifications which present significant risks in general for each potential instance in which we fail to complyNew
15In addition to workforce regulations and classifications, complex, heavily regulated federal, state and local authority laws, regulations and policies govern our real estate business, as well as our title, title insurance, insurance, mortgage, lead generation, and other ancillary services72% rewritten
16The U.S. Department of Justice has opened an anti-trust investigation of some of our biggest competitors, and they are defendants in related lawsuits that could negatively impact our industryNew
17Maintaining legal compliance is challenging and increases our costs due to the resources required to continually monitor business practices for compliance with laws, rules and regulations, and to monitor changes in existing applicable laws and the enactment of new ones34% rewritten
18Tens of thousands of consumers, independent contractors, and employees have shared personal information with us during the normal course of our business. Such information includes, but is not limited to, social security numbers, annual income amounts and sources, names, addresses, phone numbers, and email addressesNew
19personal information. Our Privacy Policy includes informing consumers, independent contractors and employees that we will not share their personal information with third parties without their prior consent unless required to do so by lawNew
20We participate in a highly competitive market, and pressure from existing and new competitors might adversely affect our business and operating results28% rewritten
21Our competitors' success could result in the loss of market share75% rewritten
22Listing 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 condition31% rewritten
23Our operating results are subject to seasonality and vary significantly among quarters during each calendar year, making meaningful comparisons of successive quarters difficult40% rewritten
24Our business could be adversely affected if we are unable to expand, maintain and improve the systems and technologies upon which we rely to operate32% rewritten
25Our business, financial condition and reputation may be substantially harmed by security breaches, interruptions, delays and failures in our systems and operations29% rewritten
26If we are unable to obtain sufficient financing through warehouse credit facilities to fund origination of mortgage loans, then we may be unable to grow our mortgage business23% rewritten
27We are a “smaller reporting company” and a non-accelerated filer and, as a result of the reduced disclosure and governance requirements applicable to smaller reporting companies and non-accelerated filers, our common stock may be less attractive to investorsNew
28Loss of our current executive officers or other key management could significantly harm our business29% rewritten
29Employee or agent litigation and unfavorable publicity could negatively affect our future business
30Failure to protect intellectual property rights could adversely affect our business
31We may evaluate potential vendors, suppliers and other business partners for acquisition in order to accelerate growth but might not succeed in identifying suitable candidates or may acquire businesses that negatively impact us
32We have recently acquired businesses that are outside our core competencies as a real estate brokerage, which could be difficult to integrate, disrupt our core business, dilute shareholder value, and adversely affect our operating results63% rewritten
33Our future revenue and growth prospects could be adversely affected by our dependence on other contractors56% rewritten
34We are often involved in various lawsuits and legal proceedings that arise in the ordinary course of businessNew
35We might experience significant claims relating to our operations, or losses resulting from fraud, defalcation or misconduct
36We might use interest rate derivatives to manage our exposure to interest rate risks associated with our mortgage business34% rewritten
37Part of our technology is currently being developed in foreign countries, including Brazil, India, and the Philippines, which makes us subject to certain risks associated with foreign laws and regulations
38Investors’ expectations of our performance relating to environmental, social, and governance factors may impose additional costs and expose us to new risksNew

Risks Related to Bitcoin Treasury Strategy

39Our bitcoin treasury strategy could expose us to various risks associated with bitcoin50% rewritten
40on 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 stockNew
41Bitcoin and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty31% rewritten
42their 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 bitcoinNew
43Regulatory change reclassifying bitcoin as a security could lead to our classification as an “investment company” under the Investment Company Act of 1940, as amended, or the 1940 Act, and could adversely affect the market price of bitcoin and the market price of our common stock
44We may be subject to regulatory developments related to crypto assets and crypto asset markets, which could adversely affect our business, financial condition, and results of operations
45Our intended bitcoin holdings may be less liquid than our existing cash and cash equivalents and might not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents48% rewritten
46lose some or all of our bitcoin and our financial condition and results of operations could be materially adversely affectedNew

Risks Related to Our Industry

47Our results are tied to the residential real estate market and we might be negatively impacted by downturns in this market and general global economic conditions87% rewritten
48of 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 operationsNew
49A lack of financing for homebuyers in the U.S. residential real estate market at favorable rates and on favorable terms could have a material adverse effect on our financial performance and results of operations65% rewritten
50Potential 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
51The occurrence of natural or man-made disasters or pandemics could adversely affect our operations, results of operations and financial condition24% rewritten
52The introduction and integration of emerging technologies into the real estate industry and any delay or inability to successfully integrate such technologies into our business or the businesses of our real estate professionals could result in competitive harmNew

Risks Related to Ownership of Our Common Stock

53The requirements of being a public company may strain our resources, divert management’s attention, and affect our ability to attract and retain qualified board of director members
54Our common stock price might fluctuate significantly, and the price of our common stock might be negatively impacted by factors which are unrelated to our operations
55Because we do not intend to pay any cash dividends on our shares of common stock in the near future, our shareholders will not be able to receive a return on their shares unless they sell them
56Future sales of shares of our common stock by existing shareholders could depress the market price of our common stock
57If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline
58If we are not able to comply with the applicable continued listing requirements or standards of The Nasdaq Stock Market, Nasdaq could delist our common stockNew

Other Fathom Holdings 10-Ks

FY2024 10-K risk factors
50 risks
Fathom Holdings faces ongoing net losses of $21.6 million in 2024 alongside declining annual revenues of $335 million. The company relies heavily on agent recruitment commission plans like Fathom Max and Fathom Share. A newly adopted bitcoin treasury strategy introduces significant digital asset volatility and regulatory risks. Extensive regulatory oversight spans RESPA, fair housing, mortgage, and title insurance operations.
Filed Mar 28, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.