FTHM 10-K & 10-Q changes, risk factors and insider trading

To capture and retain market share in the various local markets that we serve, we must compete successfully against other brokerages for agents and for the consumer relationships that they bring. Our competitors could lower the fees that they charge to agents or could raise the compensation structure for those agents. Our competitors may have access to greater financial resources than us,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. Our competitors could, as a result, have greater leverage in attracting both new and established agents in the market and in generating business among local consumers. Our ability to grow in the local markets that we serve will depend on our ability to compete with these local brokerages.

Participation in our commission plan represents a key component of our agent and broker value proposition. Agents might not understand or appreciate our value. In addition, agents might not appreciate other components of our value proposition including the systems and tools that we provide to agents, and the professional development opportunities we create and deliver. We compete with many other real estate brokerages for qualified agents and if agents do not understand the elements of our agent value proposition, or do not perceive it to be more valuable than the models used by most competitors, we might not be able to attract, retain and incentivize new and existing agents to grow our revenue. This could also negatively impact our agent growth rate. Our net licensed agent and broker base grewdecreased by approximately 21%1.2% from approximately 11,795 agent licenses at December 31, 2023, to approximately 14,300 agent licenses at December 31, 2024.2024, to approximately 14,135 agent licenses at December 31, 2025. Because we derive revenue from real estate transactions in which our agents receive commissions, increasesthe insize of our licensed agent base generallydirectly correlateimpacts to increases inour revenue. AIf slowdowndeclines in our licensed agent growthbase rateare wouldnot haveoffset aby materialincreased adverseproductivity effector ontransaction volume, our revenue and could adversely affect our results of operations.operations could be adversely affected.

In addition to our existing agent commission plans, weWe introduced two new agent commission plans in August 2024. These new plans, Fathom Max and Fathom Share, were designed to enhance agent recruitment and retention while reinforcing our commitment to provide flexible, attractive options for agents. However, our new plans might not work as designed and might not deliver agent growth and retention, particularly if agents do not appreciate or understand the commission plans. If our new plans do not work as intended, our agent growth rate might be affected, which could adversely affect our results of operations.

Our historic growth was better than market average, increasing from 2020 to 2021 by 87% and from 2021 to 2022 by 25% in revenue. However, forFor the year ended December 31, 2024,2025, our revenue declinedincreased to $335$420.5 million from $345$335.2 million, which represents an annual rate of declineincrease of approximately 3%.25.4%. We believe that our future revenue growth will depend, among other factors, on our ability to:

We currently are usinguse 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.

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. We believe the exclusion of share-based compensation expense related to restricted stock awards and stock options provides a useful supplemental measure in evaluating the performance of our operations and provides better transparency of our results of operations. We believe that our non-GAAP financial measures are meaningful to investors when analyzing our results of operationsoperations, as thisthey isare a key metric used by our management for financial and operational decision-making.

Adverse outcomes in legal and regulatory actions against other companies, brokers, and agents in the residential and commercial real estate industry may adversely impact the financial condition of the Company and our real estate brokers and agents when those matters relate to business practices shared by the Company, our real estate brokers and agents, or our industry at large. Such matters may include, without limitation, RESPA,the federal Real Estate Settlement Procedures Act, Telephone Consumer Protection Act of 1991 and state consumer protection law,laws, antitrust and anticompetition, and worker classification claims. Additionally, ifthe success of plaintiffs or regulatory bodies are successful in such actions, this may increase the likelihood that similar claims are made against the Company and/or our real estate brokers and agentsagents, which claims could result in significant liability and beadversely adverse toimpact our financial results if we or our brokers and agents are unable to distinguish or defend our business practices.

As an example, in the matter of Burnett v. National Association of Realtors (U.S. District Court for the Western District of Missouri), a federal jury found that the NAR and certain other remaining brokerage defendants liable for $1.8 billion in damages on claims that these companies conspired to artificially inflate brokerage commissions, which is in violation of federal antitrust law (the “Burnett Ruling”). The verdict was appealed on October 31, 2023. Additionally, certain other brokerage defendants settled with the plaintiffs, including both monetary and non-monetary settlement terms. That same day, the NAR, EXPeXp 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. On or about March 15, 2024, NAR agreed to settle the Burnett Ruling, along with a sistersimilar 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.

Due to the NAR Settlement, there may be rule changes for the NAR. InAs a result of the NAR Settlement, effective mid-July 2024, NAR has agreed to put in place a new rule prohibiting offers of compensation on the MLS, asand well as adopt newadopted rules requiring written agreements between buyers and buyers’ agents. The direct and indirect effects, if any, of the NAR Settlement and similar settlements upon the real estate industry are not yet entirely clear. There could also be further changes in real estate industry practices. All of this has prompted discussion of regulatory changes to rules established by local or state real estate boards or multiple listing services and may require changes to brokers’ business models, including changes in agent and broker compensation.

Because we charge our agents a flat fee per transaction, our agents have always been empowered to negotiate their own fees. Further, the flat fee per transaction model eliminates any incentive for us to interfere with our agent’s ability to negotiate their fees, as our net income would not be affected by increases or decreaseschanges in agent commission.commission does not affect our net income. Agents who can set their own fees can tailor fees to better compete in their target market, affording them greater flexibility. Agents who are better positioned to compete in their markets will likely increase their transaction volume, which would positively impact our revenues since we are paid on a per-transaction basis. We believe the freedom of our agents to negotiate their own fees helps us recruit and retain agents without having any material adverse effect on our operations, revenues, earnings, or financial results.

We operate in a heavily regulated industry with regulated labor classifications which present significant riskrisks in general for each potential instance wherein which we fail to maintain compliance.comply.

Our agents cancould be classified as either employees or independent contractors, and we could potentially misclassify or fail to consistently achievecomply compliance.with the requirements of such classifications. Classifications and compliance are subject to the Internal Revenue Service regulations and applicable state law guidelines and penalties.

BeyondIn addition to workforce regulations and classifications, there exist complex, heavily regulated federal, state and local authority laws, regulations and policies governinggovern our real estate business, as well as our title, title insurance, insurance, mortgage, lead generation, and other ancillary services.

In addition, Fathom Realty, LLC (“Fathom Realty”), a wholly-owned subsidiary of the Company, has been named as a defendant in two purported class actions in the United States District Court for the Eastern District of Texas Sherman Division. The complaints, filed by named plaintiffs QJ Team, LLC, Five Points Holdings, LLC, Julie Martin, Mark Adamas, and Adelaida Matta,complaints allege that coordination among several realtor associations, MLSs, and Texas real estate brokerages resulted in inflated commissions paid by home sellers to buyer brokers beginning in 2019. The Company believes the lawsuits are without merit, particularly with respect to Fathom Realty, whichand intends to vigorously defend itself.

Additionally, the Dodd-Frank Wall Street Reform and Consumer Protection Act contains the Mortgage Reform and Anti-Predatory Lending Act,Act or (the "Mortgage Act,Act"), which imposes several additional requirements on lenders and servicers of residential mortgage loans,loans by amending certain existing provisions and adding new sections to RESPA and other federal laws. ItThe 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 are also significantly increased by the Mortgage Act,laws, which could lead to an increase in lawsuits against mortgage lenders and servicers.

Maintaining legal compliance is challenging and increases our costs due to the resources required to continually monitor business practices for compliance with applicable laws, rules and regulations, and to monitor changes in theexisting applicable laws themselves.and the enactment of new ones.

We might not be aware of all the laws, rules and regulations thatapplicable governto 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-specificjurisdiction-specific knowledge and compliance.

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.

Further, if we lose our ability to obtain and maintain everythe regulatory approvalapprovals and licenselicenses necessary to conduct business as we currently operate, our ability to conduct business may be harmed. Lastly, any lobbying or related activities we undertake inregarding responseexisting, to mitigate liability of currentproposed, or new regulations could substantially increase our operating expenses.

If we fail to protect the privacy or personal information of employees, independent contractors, or consumersconsumers, or personalif information that they share with us, orwe fail to comply with privacy or data security legal requirements, our reputation and business could be significantly harmed.

Tens of thousands of consumers, independent contractors, and employees have shared personal information with us during the normal course of our business processing residential real estate transactions.business. Such information includes, but is not limited to, social security numbers, annual income amounts and sources, consumer names, addresses, phone numbers, and email addresses.

The application, disclosure and safeguarding of this information is regulated by federal and state privacy laws. To comply with privacy laws, we invested resources andhave adopted a privacy policy outlining(the procedures"Privacy forPolicy") thegoverning our use and safeguarding of personal information. ThisOur policyPrivacy 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.

Privacy policies and compliance with federal and state privacy laws present risks including legal liability for failure to comply.liability. 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-specificjurisdiction-specific knowledge and compliance.

Our policyPrivacy Policy and safeguards could be deemed insufficient if third parties with whom we have shared personal information fail to protect the privacy ofsafeguard that information. Legal liability under such laws would impose significant costs and would damage our reputation. Any of these consequences could result in a material unfavorableadverse impact on our brand, business model, revenue, expenses, income and margins.operating results.

We participate in a highly competitive market, and pressure from existing and new companiescompetitors might adversely affect our business and operating results.

The market to provide home listings and marketing services for the residential real estate industry is highly competitive and fragmented. Homes are not typically marketed exclusively through anymultiple single channel.channels. Accordingly, current and potential competitors could aggregate a set of listings similar to ours. We compete with online real estate marketplaces, such as Zillow and Realtor.com, and traditional offline media. We compete to attract consumers by the number and quality of listings; user experience; the breadth, depth, and relevance of insights and other content on homes, neighborhoods, and professionals; brand and reputation; and the quality of mobile products. We compete to attract real estate professionals through the quality of theour 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,deliver and the effectiveness of marketing and workflow tools. We also compete for advertisers against other media, including print media, television and radio, social networks, search engines, other websites, and email marketing. We compete primarily on the size and attractiveness of the audience;audience, pricing;pricing, and the ability to target desired audiences.

Many of our existing and potential competitors have substantial competitive advantages, such as:

•morelarger financial,budgets and greater financial resources, for research and development, sales and marketing, and other resourcesmarketing;

•strongstronger relationships with third-party data providers, such as multiple listing services and listing aggregators;

These advantages could be increasingly important considering current economic uncertainties and increased interest rates, and recent industry consolidation could makefurther competitionstrengthen evenindustry stronger in our industry.competition.

TheOur competitors' success of our competitors could result in fewer users visiting our website and mobile applications, and the loss of market share.

There is also intense competition infor the relatedancillary businessesservices we recently expanded into via acquisitions,offer including title insurance, mortgage,mortgage and lead generation, and other ancillary services. We added these services to our platform so our agents could offer critical ancillary services to their clients, but also to gain new and significant incremental revenue streams and enhance our revenues per transaction.generation. Our efforts to create a more complete transaction experience for consumers through these services will require significant integration and coordination on our part and might not resultpositively inimpact increasedour revenuesfinancial or earnings,performance particularly if agents or consumers perceive that our competitors offer more attractive rates or are perceived as offering a better transactional experience by agents or consumers.experience. This increased competition could stall our growth in these areas.

We expect increased competition if our market continues to expand. In addition, current or potentialour competitors might be acquired by third parties with greater resources than ours,we, which would further strengthen these current or potentialour competitors and enable them to compete more vigorously or broadly with us. If we are not able tocannot compete effectively, our business and operating results will be materially and adversely affected.

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,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. These actions divert and reduce the earnings of other industry participants, including Fathomthe Company and ourits agents.

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. If this listing aggregator or another aggregator is successful in gaining market share with such offering, it could control significant industry inventory and an increasing portion of agent referrals, including the ability to direct referrals to agents and brokers that share revenue with them. In addition, this listing aggregator may attempt to use its growing access to key data spanning the home buying experienceinfluence to displace or pre-emptpreempt its competitors before they can reach customers.

Aggregators could intensify their current business tactics or introduce new programs that could be materially disadvantageous to our business and other brokerage participants in the industry including, but not limited to:

•broadening and/or increasing fees for their programs that charge brokerages and their affiliated sales agents fees including,including fees for referral, listing, display, advertising and related fees or introducing new fees for new or existing servicesadvertising;

•setting upestablishing competing brokerages and/or expanding their offerings to include products (including agent tools) and services ancillary to the real estate transaction,services, such as title, escrow and mortgage origination services, that compete with servicesour offered by usofferings;

•notexcluding includingthe Fathom'sCompany's listings or ourits franchisees’ listings on their websites;

Seasons and weather traditionally impact the real estate industry. Historically, spring and summer reflect greater sales activity in comparisoncompared to fall and winter. We have historically experienced lower revenues during the fall and winter seasons, as well as during periods of unseasonable weather, which reduces our operatingresults income,of netoperations. income,Because operating margins and cash flow. Realreal estate listings precede sales, and a period of poor listings activity willcould 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 concealobscure the impact of seasonality.

Home sales in successive quarters can fluctuate widely due to a wide variety of seasonal factors, including holidays, and the school year calendar’s impact on timing of family relocations. Our revenue and operating margins each quarter (including downstream revenue at our title, insurance and mortgage groups) will remainis subject to seasonal fluctuations, which may make it difficult to compare or analyze our financial performance effectively across successive quarters.

As the numbernumbers of our agents, acquired companiescompanies, and business lines grow,increase, our success will depend on our ability to expand, maintainmaintain, and improve the technology that supports our business operations, including, but not limited to, our cloud office platform.platform and our ability to adopt and integrate new technologies such as machine learnings and artificial intelligence ("AI") solutions. Loss of key personnel or the lack of adequate staffing with the requisite expertise and training could impede our efforts in this regard. If we fail to adopt and offer new in-demand technologies, and/or if our systems and technologies lack capacity or quality sufficientnecessary to service agents and their clients, then the number of agents who wish to use our products could decrease,be less attractive to agents, the level of client service and transaction volume afforded by our systems could suffer, and our costs could increase. Our competitors or other third parties may incorporate AI and emerging technologies into their products or operations more quickly or more successfully than we do, which could impact our ability to compete effectively. Additionally, AI algorithms and other emerging technologies may be flawed and datasets underlying such technologies may be insufficient or contain biased information. If the new technologies integrated into our products or that we use in our operations produce analyses or recommendations that are, or are alleged to be, deficient, inaccurate, or biased, our reputation, business, financial condition, and results of operations may be adversely affected. 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 mayour sufferreputation acould lossbe of reputation.damaged. Any of these events could negatively affect our financial position.position and results of operations.

Cybersecurity incidents, data breaches and other types of privacy/data security incidents are not uncommon in our industry due to the nature of our industry’s services, the volume of sensitive information involved, and the desirability of that information to bad actors. Incidents involving phishing, hacking and unintentional exposure of sensitive information, among others, can and do occur. Cybersecurity and other threats directed at us could range from uncoordinated individual attempts to gain unauthorized access to information technology systems to sophisticated andsophisticated, 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.

In the ordinary course of our business, we collect and store sensitive data, including proprietary business information and personal information about our customers, employees and contractors. Our business, and particularly our cloud-based platform, is reliant on the uninterrupted functioning of our information technology systems. The secure processing, maintenance, and transmission of information are critical to our operations, especially the processing and closing of real estate transactions. 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. 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 stoplose workingconfidence forin 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. We may also be subject to legal claims, government investigation, and additional state and federal statutory requirements.

Like others in our industry, we experience immaterial privacy/data security incidents, such as cybersecurity incidents and other attempts to disrupt or gain unauthorized access to our systems on a regular basis and instances of unauthorized or inadvertent access to or disclosure of sensitive personal information. When we become aware of privacy/data security incidents, we work diligently to address them, including by working to terminate unauthorized or inappropriate access and implementing additional measures and operational changes to avoid reoccurrence and future incidents. 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. For more information seesee, "Item 1C. Cybersecurity."

The performance and reliability of our systems and operations are critical to our reputation and ability to attract agents and teams of agents to join our Company as well as our ability to service home buyers and sellers. Our systems and operations are vulnerable to security breaches, interruption or malfunction due to certain events beyond our control, including natural disasters, such as earthquakes, fire and flood, power loss, telecommunication failures, break-ins, sabotage, computer viruses, intentional acts of vandalism and similar events. 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. Any security breach, interruption, delay or failure in our systems and operations could substantially reduce the transaction volume that can be processed with our systems, impair quality of service, increase costs, prompt litigation and other consumer claims, and damage our reputation, any of which could substantially harm our financial condition.

OurIf our mortgage business might beis unable to sell its originated loansloans, and,we in that situation, Fathom willwould need to service the loans and potentially foreclose on the home byor itselfdo orso through a third party, and either optionof which could impose significant costs, time on Fathom.the Company. Our inability to sell originated loans could also expose us to adverse market conditions affecting mortgage loans.

ToOur the extent that we are unableinability to sell originated loans, we would beexpose exposedus to adverse market conditions affecting mortgage loans. For example, we may be required to write down the value of the loan, which reduces the amount of our current assets. Additionally, if we borrowed under a warehouse credit facility for the loan, then we willcould be required to repay the borrowed amount, which reduces our cash on hand available for other corporate uses. Finally, if a homeowner was unable to make his or her mortgage payments, then we may be required to foreclose on the home securing the loan. We do not currently have processes to foreclose a home, and we may be unable to establish such processes or retain a third party to do so on economicallyacceptable feasible terms to foreclose the home.terms. Furthermore, any proceeds from selling a foreclosed home may be significantly less than the remaining amount of the loan due to us.

Fathom Holdings Inc. (the “CompanyCompany,”, “CorporateOur,”, “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, insurance and SaaS offerings for brokers and agents. Our primary operation,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.

Fathom Realty Holdings, LLC, a Texas limited liability company (“Fathom Realty”), is a wholly owned subsidiary of Fathomthe Holdings Inc.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).

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.

Our business is dependentdepends on the economic conditions withinof 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.

InDemand for housing typically increases in periods of economic growth, demand typically increases 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,instability can also negatively impact the housing markets in which we operate.

Due to therising increasing interest ratesinflation and increasing inflation,mortgage interest rates, the U.S. residential real estate market began a contraction trend beginning in the second quarter of 2022. In 2023, the existing home sales market declined 6.2%,approximately 6.2% compared to the prior year and declined an additional approximately 0.7% in 20242024. accordingIn to2025, theexisting NAR,home whichsales isremained at historically subdued levels, totaling approximately 4.06 million units, representing little growth from 2024, one of the lowest theannual markettransaction hasvolumes beenrecorded since 1995.

The Company believes that it continuesis to be well positionedwell-positioned for growth in all of its businesses in the current economic climate. We have a strong base of agent support, which should drive organic market share growth, retention and productivity. Additionally, we have an efficient operating model with lower fixed costs driven by our cloud-based model, with minimum brick-and-mortar locations.

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.

Throughout 2024,2024 and continuing into 2025, historically elevated mortgage interest rates and high home prices havecontributed causedto subdued transaction activity and increased inventory levels, as measured in months of supply, to rise.levels. Construction of new homes continuesalso toremained slow alsoconstrained due to historically elevated mortgagefinancing interest ratescosts and thecontinued strainedchallenges related to labor availability of labor and materials.material costs. According to the NAR, inventory of existing homes for sale in the U.S.United States was approximately 1.15 million units at the end of December 20242024, 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.

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 and 2023.2024. If inflation continues to moderatelessen into 20252026 as anticipated, mortgage rates should decline, which we expect to boost homebuyer demand and homebuilder sentiment. The NAR anticipates transactions to increase by 9%14% in 20252026, ,fromfrom 4.06 million existing home sales in 2025 to 4.54.63 million existing home sales.sales in 2026. According to the NAR, nationwide average sales price for existing homes in December 20242025 (preliminary) was $404,400,$405,400, up 6%0.4% from $382,600$403,700 in December 2023.2024.

In response to these macroeconomic and consumer demand developments, we took action to adjustadjusted our operations andto manage our business towards longer-term profitability despite these adverse macroeconomic factors. Looking ahead, we remain focused on getting back to positive total company Adjusted EBITDA for the full year 2025.2026.

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. 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. 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”). OnIn November 26, 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. 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 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. Our flat fee makeshelps itus soavoid we have never interferedinterfering with our agents' ability to negotiate commissions andbecause 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. The Company will continue to monitor ongoing and similar antitrust litigation against our competitors, however, as our agent compensation model fully supports commission negotiation, we do not expect to have to change our compensation model in a manner that would adversely affect our financial condition and results of operations. 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.

Due to our low-overhead business model, which leverages our proprietary technology, we can offer our agents the ability to keepretain 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 our business model and our focus on treating our agents well will attract more agents and higher-producing agents.

Fathom’s real estate agent licenses grewdecreased 21%1.2% to approximately 14,30014,135 agent licenses atas of December 31, 2024,2025, updown from approximately 11,79514,300 atas of December 31, 2023.2024.

Beginning in January 1, 2023, agents have been primarily able to earn stock grants in the form of stock units based on the achievement of agent referral metrics achieved.metrics. These stock grants typically are granted quarterly and vest in two years. The Company discontinued this program during 2025, and no additional stock grants are expected to be issued under this program in the future.

Our CEO, who is our Chief Operating Decision Maker ("CODM"), makes operating decisions and assesses performance based on the services of identified operating segments and has identified three operating and reportable segments: (1) Real Estate Brokerage;Brokerage, Mortgage;(2) Mortgage, and Technology.(3) Title. 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 TechnologyTitle segment, the Company provides SaaStitle solutionsinsurance, escrow, and datasettlement mining for third party customers and continuesservices to developfacilitate its intelliAgent platform for current use by the Company’sresidential real estate agents.transactions.

The CODM reviews revenue and adjustedAdjusted EBITDA to evaluate financial performance of the reportable segments and to allocate resources. Adjusted EBITDA represents the revenues of the operating segment less operating expenses directly attributable to the respective operating segment. We define Adjusted EBITDA is defined by us 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. In particular, the Company believes the exclusion of non-cash share-based compensation expense related to restricted stock awards and stock options and transaction-related costs provides a useful supplemental measure in evaluating the performance of our operations and provides better transparency into our results of operations. The Company’s presentation of Adjusted EBITDA might not be comparable to similar measures used by other companies. SeeRefer "NON-GAAPto FINANCIALNote MEASURE"17 below– Segment Reporting for morefurther information.information regarding the Company’s business segments.

Our revenue primarily consists of commissions generated from real estate brokerage services. We also have other service revenue, including mortgage lending, title insurance, home and other insurance, and SaaS revenues.

We recognize commission-based revenue on the closing ofwhen a transaction,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.

We recognize revenue streams for our mortgage lending services business which are primarily comprisedconsists of loans sold, origination and other fees.

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 expensesexpensed when the loans are sold. Interest income is interest earned on originated loans prior to the sale of the asset.

The Company generatesgenerated 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 Company’s subscription arrangements do not provide customers with the right to take possession of the software supporting the platform. 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.

Commission and service costs consistsconsist primarily of: agent commissions, less fees paid by the Company to agents,agents; order fulfillment,fulfillment; share-based compensation for agents,agents; title searches,searches; and direct costcosts to fulfill the services provided for our brokerage, mortgage lending, title service, insurance services and other services provided.

Technology and development expenses primarily include personnel costs,costs related to ongoing development and maintenance of proprietary software for use by our own agents, customers, and support staff. Such personnel costs including base pay, bonuses, benefits, and share basedshare-based compensation. Technology and development expenses also include amortization of capitalized software and development costs, data licenses, other software, and equipment costs, as well as infrastructure and operational expenses, such as, for data centers, communication, and hosted services.

General and administrative expenses consist primarily of fees for professional services and personnel costs, related to including base pay, bonuses, benefits, and share basedshare-based compensation. Professional services principally consist of external legal, audit, and tax services. In the short term, we expect general and administrative expenses to increase in absolute dollars due to the anticipated growth of our business and to meet the increased compliance requirements associated with operation as a public company. However, in the long term, we anticipate general and administrative expenses as a percentage of revenue to decrease over time, if and as revenue increases.

Marketing expenses consist primarily of online and traditional advertising, as well as costs for marketing and promotional materials. Advertising costs are expensed as they are incurred. We expect marketing expenses to increase in absolute dollars as we continue to expand our advertising programs,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.

In 2025, we recognized a U.S. federal and state income tax benefits for a portion of historical net losses was recognized in the period ended December 31, 2024.losses. Previously, we havehad not recognized the tax benefits because of the uncertainty of realizing a future benefit from those items. 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 taxabletemporary temporarybook-tax differences. As of December 31, 2024,2025, we had federal net operating loss carryforwards of approximately $54.6$59.2 million and state net operating loss carryforwards of approximately $28.9$33.5 million. Of the federal net operating losses $1.0 million are subject to expiration beginning in 2035 and $53.6$58.2 million carry forward indefinitely. State net operating losses will begin to expire, if not utilized, in 2032. Utilization of the net operating loss carryforwards may be subject to an annual limitation according to Section 382 of the Internal Revenue Code of 1986 as amended, and similar state law provisions.

For the year ended December 31, 2024,2025, gross commission income decreasedincreased by approximately $10.7$84.0 millionmillion, or 3.3%,26.7%, as compared with the year ended December 31, 2023.2024. This decreaseincrease was primarily attributable to a decrease14.6% increase in transaction volume causedto approximately 42,405 real estate transactions from approximately 37,000 transactions in the prior year. Our transaction volume increased primarily due to the addition of My Home Group in November 2024. Average revenue per transaction increased by historically7.9% highto house$9,404 prices. During thefor year ended December 31, 2024, transaction volume decreased by 3.0% to approximately 37,000 transactions2025, compared to approximately 38,139 transactions$8,712 for the year ended December 31, 2023. 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, 2023.2024.

For the year ended December 31, 2024,2025, other service revenue was approximately $20.4$21.7 million, a 3.1%6.2% increase from 2023.2024. 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, partially offset by the reduction of insurance revenue as a result of our sale of our insurance business in May 2024.walkovers.

For the year ended December 31, 2024,2025, commission and service costs decreasedincreased by approximately $10.0$79.4 million, or 3.2%,25.9%, as compared with the year ended December 31, 2023.2024. Commission and service costcosts 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. As such, the decreaseincrease in commission and service costs compared to the same period in 20232024 was primarily due to aan decreaseincrease in agent commissions paid due to lowerhigher transaction volume mainly due to historically elevated interest rates.volume.

For the year ended December 31, 2024,2025, marketinggeneral and administrative expenses decreased by approximately $0.2$0.5 million, or 4.0%,1.5%, as compared with the year ended December 31, 2023.2024. TheThis decrease is primarily due to a $3.0 million decrease in marketingstock expensescompensation isexpense, primarilypartially offset by an increase in compensation expense related to anthe decreaseCompany's investment in marketing investment for our brokerage business.growth.

For the year ended December 31, 2024,2025, litigationtotal contingencymarketing expenses increaseddecreased by $3.5approximately $0.6 million, or 100%,11.0%, as compared with the year ended December 31, 2023.2024. The increasedecrease in litigation contingencymarketing expenses is primarily due to the accruedCompany's NARreduced settlementreliance andon relatedexternal legalmarketing expenses.agencies.

For the year ended December 31, 2024,2025, depreciationtotal technology and amortizationdevelopment expenses decreasedincreased by approximately $0.9$0.7 millionmillion, or 29.2%10.1%, fromas compared with the year ended December 31, 2023.2024. TheThis decrease in depreciation and amortization expenseincrease is primarily attributable due to the absence of depreciation and amortization related to our insuranceongoing businessinvestment thatin wethe soldintelliAgent effective May 3, 2024.platform.

The Company recorded an income tax benefit of $1 million and an income tax expense of $0.1 million and an income tax benefit of $1.0 million for the years ended December 31, 20242025 and 2023,2024, respectively. The tax benefit for the period ended December 31, 20242025 primarily the result of the release of a portion of the valuation allowance against historical deferred tax assets. The Company maintains a valuation allowance on the remaining net deferred tax assets at year-end due to historical operating losses.

To date, our principal sources of liquidity have been revenues and the net proceeds we received throughfrom public offerings and private sales of our common stock, as well as proceeds from loans. As of December 31, 2024,2025, our cash totaled approximately $7.1$5.8 million, which represented a decrease of $0.3$1.4 million compared to December 31, 2023.2024. As of December 31, 2024,2025, we had net working capital of approximately $5.6$2.0 million, which represented a decrease of $1.3$3.6 million compared to December 31, 2023.2024. In March 2025,2026, wethe raisedCompany approximatelyreceived $2.7$2.0 million in net proceeds offrom a registeredsubordinated directorsecured offeringpromissory ofnote commonmaturing stock.in April 2027.

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 shareshare, respectively, generating gross proceeds of $3.0 million, of which the Company received approximately $2.7$2.9 million, after deducting underwriting discounts and other offering costs.

For more information regarding risk factors that could affect our results of operations, financial condition, and liquidity, see the risk factors previously disclosed in our most recent Annual Report on Form 10-K, as filed with the SEC on March 30, 2026 and amended on April 30, 2026, and in our most recent Quarterly Report on Form 10-Q, as filed with the SEC on July 16, 2026. The risks described in our Annual Report are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or future results of operations and the trading price of our common stock. There have been no material changes in risk factors relevant to our results of operations, financial condition, or liquidity since December 31, 2025.

During the three months ended March 31, 2026, the Company implemented several leadership and growth initiatives to support agent productivity, expansion, and long-term operational performance.

As of MarchJune 31,30, 2026 and MarchJune 31,30, 2025, we had approximately 10,4629,768 and 13,66513,931 agents, respectively, representing decline of approximately 23.4%.29.9%. The decrease in agent count during the period was primarily driven by a strategic review and rationalization of the Company’s agent base, including the removal of inactive and non-producing agents. Additionally, beginning in 2026, the Company transitioned from reporting agent licenses to reporting agent counts, which also contributes to the lower reported number and does not reflect a decline in underlying agent demand or engagement. As a result, the Company recast its agent count as of MarchJune 31,30, 20252026 for comparative purposes.

The Company's Chief Operating Decision Maker ("CODM") is its Interim Chief Executive Officer (CEO), who is responsible for evaluating the performance of the Company's operating segments and allocating resources. The Company identifies an operating segment as a component: (i) that engages in business activities from which it may earn revenues and incur expenses; (ii) that has available discrete financial information; and (iii) whose operating results are regularly reviewed by the CODM. The Company does not conduct business outside of the United States and no single customer accounts for more than 10% of total revenue in any reporting period.

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 servicesservice and other services provided.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025 (dollar amounts in thousands)

For the three months ended MarchJune 31,30, 2026, gross commission income decreased by approximately $7.5$9.0 million, or 8.5%,8%, as compared with the three months ended MarchJune 31,30, 2025. This decrease was primarily attributable to a 12.0%15.0% decrease in transaction volume,volume; withspecifically, 8,550we had 10,808 real estate transactions during the three months ended MarchJune 31,30, 2026, compared to 9,71512,710 transactions during the three months ended MarchJune 31,30, 2025. AccordingOur transaction volume decreased primarily due to thea NAR,reduction totalin our agent count and continued softness in existing home sales declined 8.4% in January, and were 4.4% lower compared to the prior year period. While activity showed modest improvement in February and March, the increase was not sufficient to offset the earlier declines, resulting in overall lower transaction volumes during the period.sales. During the three months ended MarchJune 31,30, 2026, average revenue per transaction was $9,513,$9,897, a 4.0%8.5% increaseincrease, as compared to $9,148$9,125 during the three months ended MarchJune 31,30, 2025, which is primarily attributable to higher transaction volumes generated through the Fathom Elevate plan, the Company's concierge-level plan.

For the three months ended MarchJune 31,30, 2026, other service revenue increased by approximately $0.8$2.2 million, or 18.8%,40%, as compared with the three months ended MarchJune 31,30, 2025. This increase was primarily attributable to growth in title service transaction volume, reflecting organic expansion, increased walkover activity, and continued growth in the Company’s mortgage business.

For the three months ended MarchJune 31,30, 2026, commission and service costs decreased by approximately $5.2$7.4 million, or 6.2%,6.6%, as compared with the three months ended MarchJune 31,30, 2025. Commission and service costs primarily includes costs related to agent commissions, net of fees paid to us by our agents. These costs generally correlate with recognized revenues. As such, the decrease in commission and service costs compared to the same period in 2025 was primarily attributable to a decrease in agent commissions.

For the three months ended MarchJune 31,30, 2026, general and administrative expenses increased by approximately $2.2$1.1 million, or 25.7%,14%, as compared with the three months ended MarchJune 31,30, 2025. The increase was primarily attributabledue to higher badprofessional debtfees, expenseand associatedother withcorporate agentoperating fees.expenses incurred to support the Company's operations.

For the three months ended MarchJune 31,30, 2026, total marketing expenses decreasedincreased by approximately $0.1$0.2 million, or 3.7%,13%, as compared with the three months ended MarchJune 31,30, 2025. The decreaseincrease was primarily due to lowerthe marketingCompany's personnelinvestment costsin following organizational efficiency initiatives.growth.

For the three months ended MarchJune 31,30, 2026, total technology and development expenses decreased by approximately $0.5$1.1 million, or 25.5%,59.4%, as compared with the three months ended MarchJune 31,30, 2025. The decrease was primarily attributable to the Company’s divestiture of its LiveBy business in November 2025.

For the three months ended MarchJune 31,30, 2026, total litigation contingency expenses increased by approximately $2.0$0.02 thousand,million, or 50.0%,100.0%, as compared with the three months ended MarchJune 31,30, 2025. The increase was primarily due to higherthe legalrecognition of litigation settlement feesexpense beingassociated incurredwith the preliminary approval of the settlement of the Fathom Realty lawsuit filed in August 2024 in the currentUnited year.States District Court for the Southern District of Florida. See Part II. Item 1 for a discussion of the lawsuit.

For the three months ended MarchJune 31,30, 2026, depreciation and amortization expenses increaseddecreased by approximately $5.0$0.02 thousand,million, or 0.9%,3%, as compared with the three months ended MarchJune 31,30, 2025. The increasedecrease was mainly due to capitalizedthe softwareabsence developmentof costamortization placedrelated intoto service.our LiveBy business that we sold in November 2025.

The Company recorded income tax (benefit) expense of approximately $0.02 million and $0.06 million for each of the three months ended MarchJune 31,30, 2026 and 2025.2025, respectively. This tax expense is primarily the result of current state income tax liabilities and deferred tax expense related to deferred tax liabilities that cannot be fully offset by deferred tax assets.

To date, our principal sources of liquidity have been the net proceeds we received through public offerings and private sales of our common stock, the sale of one of our businesses, as well as proceeds from loans. As of MarchJune 31,30, 2026, our cash and cash equivalents (including restricted cash) totaled approximately $4.5$4.7 million, which represented a decrease of approximately $1.4$1.2 million compared to December 31, 2025. As of MarchJune 31,30, 2026, we had negative net working capital of approximately $3.0negative $10.2 million, which represented a decrease of $5.0$12.2 million compared to December 31, 2025. As noted above, in May 2024 we sold our wholly-owned subsidiarysubsidiary, Dagley Insurance Agency for approximately $15.0 million in cash, $7.4 million of which we received at closing. The Company received $4.0 million during 2025. Of the balance the Company is owed related to the sale of its insurance business, the Company received $2.0$2.6 million in the first seveneight months of 2026 and expects to receivereceived the remainingoutstanding $1.0$0.4 million infrom SeptemberBBBY 2026.as part of debt purchase. On April 7, 2025, the Company repaid its $3.5 million convertible note (the “2023 Note”) in full. In March 2025, the Company completed a public offering of common stock (the "March 2025 Offering"), which resulted in the issuance and sale by the Company of 3,505,364 shares of common stock at an offering price of $0.68 per share and 832,639 shares of common stock at an offering price of $0.72 per share, generating gross proceeds of $3.0 million, of which the Company received total net proceeds of $2.9 million, after deducting underwriting discounts and other offering costs. In September 2025, the Company completed a public offering of common stock (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. The Company received $3.0 million in November 2025 related to the sale of its LiveBy business. In March 2026, the Company received $2.0 million in proceeds from a subordinated secured promissory note maturing in April 2027. The Company has short-term obligations totaling $8.7 million, consisting of a $5.0 million promissory note due in October 2026 and $3.7 million in liabilities related to legal settlements. In September 2024, the Company completed a private placement of senior secured convertible promissory notes with an aggregate principal amount of $5.0 million (the “2024 Notes”). The 2024 Notes were issued to an existing shareholder who beneficially owned more than 5% of the Company’s common stock and to the Chairman of the Company’s Board of Directors (the “2024 Offering”). The 2024 Notes mature in October 2026. In March 2026, the Company entered into a subordinated secured promissory note in the original principal amount of $2.0 million (the “Bridge Note”), which was increased to $3.0 million on May 29, 2026 when the Company and the original party agreed to amend and restate the Bridge Note. In response to the identified conditions, Bed Bath & Beyond, Inc. ("BBBY") has committed to provide financial support to the Company, for a year and one day following theseDecember issued1, financial statements.2026. Based on BBBY's commitment and financial capacity, management believes it is probable that these plans will be effectively implemented and will mitigate the conditions that raised substantial doubt about the Company’s ability to continue as a going concern for a period of at least one year from the date of the issuance of these condensed consolidated financial statements.

Comparison of the ThreeSix Months Ended MarchJune 31,30, 2026 and 2025 (dollar amounts in thousands)

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 20252026 consisted of a net loss of $5.6$14.4 million, non-cash charges of $1.8$6.9 million, including $1.5$1.0 million of stock-based compensation expenseexpense, and $1.4$3.9 million of depreciation and amortization,amortization and $2.6 million of provision for credit losses, partially offset by $1.5$4.3 million in gains on the sales of mortgages. Changes in assets and liabilities were primarily driven by $54.7$177.5 million in mortgage loan originations, partially offset by $51.4$180.0 million in proceeds from the sales and principal payments on mortgage loans held for sale.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 primarily consisted of $0.5$0.8 million for purchases of intangible assets related to technology development.

Net cash usedprovided inby investing activities for the threesix months ended MarchJune 31,30, 2025 primarily consisted of $0.7proceeds millionfrom forthe sale of Dagley Insurance Agency completed in May 2024 of $4.0 million, partially offset by the purchases of intangible assets related to technology development.development of $1.4 million.

Net cash usedprovided in financing activities for the threesix months ended MarchJune 31,30, 2026 was primarily driven by a net decrease of approximately $2.5$1.7 million in warehouse lines of credit, partially offset by $2.0$3.0 million in proceeds from the Bridge Note.

Net cash provided byin financing activities for the threesix months ended MarchJune 31,30, 2025 consisted primarily of the $3.0 million in proceeds from the issuance of common stock in connection with a public offering and the change of $4.7$8.1 million on our warehouse lines of credit.credit, and the repayment of a $3.5 million convertible note.

The Company's Chief Operating Decision Maker ("CODM") is its Interim Chief Executive Officer (CEO), who is responsible for evaluating the performance of the Company's operating segments and allocating resources. The Company identifies an operating segment as a component: (i) that engages in business activities from which it may earn revenues and incur expenses; (ii) that has available discrete financial information; and (iii) whose operating results are regularly reviewed by the CODM. The Company does not conduct business outside of the United States and no single customer accounts for more than 10% of total revenue in any reporting period.

The preparation of financial statements and related disclosures in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Our Annual Report on Form 10-K for the year ended December 31, 2025 contains a discussion of our critical accounting estimates in the Management's Discussion and Analysis of Financial Condition and Results of Operations section. There have been no material changes to these estimates during the threesix months ended MarchJune 31,30, 2026.