UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 2)
For the Fiscal Year Ended
Commission File Number
(Exact name of Registrant as specified in its Charter)
| (State or other jurisdiction
of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
| The |
Securities registered pursuant to Section 12(g) of the Exchange Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act. Yes ¨
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. x
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ¨ | Accelerated filer | ¨ |
| x | Smaller reporting company | ||
| Emerging growth company | |||
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting
firm that prepared or issued its audit report.
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of
the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No
Based on the registrant’s
closing price of $7.14 as quoted on the NASDAQ Capital Market on June 30, 2023, the aggregate market value of the registrant’s
common stock held by non-affiliates of the registrant was approximately $
As of March 19, 2024, there were approximately shares of the registrant’s common stock outstanding.
| Audit Firm Id | Auditor Name: | Auditor Location: | ||
EXPLANATORY NOTE
As a result, Part III, Item 11 of the Company’s Original Form 10-K is hereby amended and restated in its entirety.
Except as described above, this Amendment does not modify or update disclosure in, or exhibits to, the Original Form 10-K, and such disclosure in, or exhibits to, the Original Form 10-K remain unchanged and speak as of the dates of the filing of the Original Form 10-K. In particular, the Amendment does not change any previously reported financial results, nor does it reflect events occurring after the dates of the Original Form 10-K.
i
Fathom Holdings Inc.
FORM 10-K/A
December 31, 2023
TABLE OF CONTENTS
Page
| PART III | 1 |
| Item 11. Executive Compensation | 1 |
| PART IV | 6 |
| Item 15. Exhibits and Financial Statement Schedules | 6 |
ii
PART III
Item 11. Executive Compensation.
Summary Compensation Table
The following table shows for the fiscal years ended December 31, 2023 and 2022, compensation awarded to, or earned by, anyone serving as principal executive officer during the most recently completed fiscal year and our next two most highly compensated executive officers who were serving as executive officers during the year ended December 31, 2023 (the “Named Executive Officers”).
Our Named Executive Officers for these purposes were:
| · | Marco Fregenal, Chief Executive Officer (from November 2023), Chief Financial Officer, and President; |
| · | Samantha Giuggio, Chief Broker Operations Officer; and |
| · | Joshua Harley, Chairman and Chief Executive Officer, until his resignation from those roles effective in November 2023. |
| Name and
Principal Position | Year | Salary(1) | Cash Bonus | Stock Awards(2) | All
Other Compensation | Total | |||||||||||||||||
| Marco Fregenal | 2023 | $ | 264,615 | (3) | $ | - | (4) | $ | 943,250 | (3)(4) | $ | 14,464 | (5) | $ | 1,222,329 | ||||||||
| Chief Executive Officer, Chief Financial Officer and Principal Executive Officer and Principal Financial Officer | 2022 | $ | 383,846 | (3) | $ | - | (4) | $ | 1,027,777 | (3)(4) | $ | 15,900 | (5) | $ | 1,411,623 | ||||||||
| Samantha Giuggio | 2023 | $ | 260,087 | (6) | $ | - | $ | 25,451 | (6)(7) | $ | 27,340 | (8) | $ | 312,878 | |||||||||
| Chief Broker Operations Officer | 2022 | $ | 265,481 | (6) | $ | - | $ | 219,227 | (6)(7) | $ | 14,027 | (8) | $ | 498,735 | |||||||||
| Joshua Harley | 2023 | $ | 500,000 | $ | - | $ | 1,212,750 | $ | 13,852 | (9) | $ | 1,726,602 | |||||||||||
| Former Chief Executive
Officer, Principal Executive Officer | 2022 | $ | 500,000 | $ | 442,000 | $ | 1,000,007 | $ | 18,000 | (9) | $ | 1,960,007 | |||||||||||
| (1) | Reflects base salary earned during the fiscal year covered. |
| (2) | Represents the aggregate grant date fair value of restricted stock awards and restricted stock unit awards computed in accordance with ASC 718, Compensation — Stock Compensation. |
| (3) | During 2023, Mr. Fregenal voluntarily reduced his base cash salary of $500,000 from January through mid-July and for November and December and elected to receive the balance of his base salary in restricted stock awards. During 2022, Mr. Fregenal voluntarily reduced his base cash salary of $500,000 in the third and fourth quarter and elected to receive the balance of his base salary in restricted stock awards. The aggregate amount of restricted stock awards were issued at a 10.0% premium to the amount of reduced cash compensation. |
| (4) | During 2023 and 2022, Mr. Fregenal voluntarily received the value of his cash bonus in restricted stock unit awards and restricted stock awards, respectively. |
| (5) | During 2023, includes $13,852 in medical insurance premiums and $612 attributable to use of a Company automobile. During 2022, includes $15,900 attributable to an automobile allowance. |
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| (6) | During 2023, Ms. Giuggio voluntarily reduced her base cash salary of $275,000 from January through mid-May and from mid-November through December and elected to receive the balance of her base salary in restricted stock awards. During 2022, Ms. Giuggio voluntarily reduced her base cash salary of $275,000 in the third and fourth quarter and elected to receive the balance of her base salary in restricted stock awards. The aggregate amount of restricted stock awards were issued at a 10.0% premium to the amount of reduced cash compensation. |
| (8) | During 2023, includes $13,488 attributable to an automobile allowance and $13,852 in medical insurance premiums. During 2022, includes $14,027 attributable to an automobile allowance. |
| (9) | During 2023, includes $13,852 in medical insurance premiums. During 2022, includes $18,000 attributable to an automobile allowance. |
Narrative to Summary Compensation Table
We review compensation annually for all employees, including our Named Executive Officers. In setting annual base salaries and bonuses and granting equity incentive awards, we consider compensation for comparable positions in the market, individual performance as compared to our expectations and objectives, our desire to motivate our employees to achieve short- and long-term results that are in the best interests of our shareholders, and a long-term commitment to our Company.
Employment Agreements
We have not entered into employment agreements with any of our Named Executive Officers.
Annual Base Salary
Base salaries for our Named Executive Officers have generally been set at levels deemed necessary to attract and retain individuals with superior talent. The following table presents the annual base salaries for each of our Named Executive Officers for 2023, as determined by the non-employee members of the Board.
| Name | 2023 Base Salary | |||
| Marco Fregenal | $ | 500,000 | ||
| Samantha Giuggio | $ | 275,000 | ||
| Joshua Harley | $ | 500,000 | ||
As noted in the previous table, in connection with the Company’s strategic cost cutting measures, Mr. Fregenal and Ms. Giuggio, in addition to certain other members of management, each volunteered for base salary reductions for certain time periods during 2023 and elected to receive the balance of their respective base salary in restricted stock awards.
Bonus Compensation
Our discretionary bonus plan motivates and rewards our Named Executive Officers for achievements relative to our goals and expectations for each fiscal year. Our Named Executive Officers are eligible to receive discretionary annual bonuses based on our compensation committee and Board’s assessment of their individual performance and our Company’s results of operations and financial condition. Our Named Executive Officers are eligible to elect to receive the value of their cash bonuses in restricted stock awards.
Equity-Based Awards
Our equity-based incentive awards are designed to align our interests with those of our employees and consultants, including our Named Executive Officers. Our compensation committee is generally responsible for approving equity grants. Vesting of equity awards is generally tied to continuous service with us and serves as an additional retention measure. Our executives generally are awarded an initial new hire grant upon commencement of employment. Additional grants may occur periodically in order to specifically incentivize executives.
2
Our Board adopted, and our shareholders approved, the 2019 Plan, which effectively replaced our 2017 Stock Plan as we do not intend to grant any more awards under the 2017 Stock Plan. The 2017 Plan became effective on May 11, 2017. The 2019 Plan became effective on August 9, 2019.
The purpose of our 2019 Plan is to attract and retain real estate agents, employees, non-employee directors and consultants. Our 2019 Plan authorizes us to make grants to eligible recipients of non-qualified stock options, incentive stock options, restricted stock awards, restricted stock units and stock-based awards.
Other Compensation
Our Named Executive Officers did not participate in, or otherwise receive any benefits under, any pension or deferred compensation plan sponsored by us during 2023 or 2022.
Outstanding Equity Awards at Fiscal Year-End
The following table shows for the fiscal year ended December 31, 2023, certain information regarding outstanding equity awards at fiscal year-end for the Named Executive Officers.
| Name | Number
of shares or units of stock that have not vested (#) | Market
value of shares or units of stock that have not vested ($) | ||||||
| Marco Fregenal | 448,127 | (1) | 1,608,776 | (2) | ||||
| Samantha Giuggio | 31,864 | (3) | $ | 114,392 | (2) | |||
| Joshua Harley | 404,030 | (4) | $ | 1,450,468 | (2) | |||
| (1) | Of these shares, 207,280 are restricted and vest in full on May 31, 2024, 2,213 shares are restricted and vest in full on July 2, 2024, 29,412 shares are restricted and vest in full on August 30, 2024, 175,000 units are restricted and vest in full on September 10, 2024, 9,222 shares are restricted and vest in full on December 1, 2024, 25,000 are restricted and vest in full on January 1, 2025. |
| (2) | Based on $3.59 per share which was the closing price of our common stock on December 29, 2023, the last trading day of that fiscal year. |
| (3) | Of these shares, 30 shares are restricted and vest in full on July 1, 2024, 565 shares are restricted and vest in full on December 31, 2024, 2,248 shares are restricted and vest in full on December 31, 2024, and 29,021 shares are restricted and vest in full on March 30, 2025. |
| (4) | Of these shares, 58,140 shares are restricted and vest in full on May 31, 2024, 43,600 shares are restricted and vest in full on July 2, 2024, 58,824 shares are restricted and vest in full on August 30, 2024, 225,000 units are restricted and vest in full on September 10, 2024, and 18.466 shares are restricted and vest in full on December 1, 2024. |
Director Compensation
Our directors who are employed by us do not receive any additional compensation for serving on our Board, and our non-employee directors receive cash and equity compensation as described below.
During our fiscal year ended December 31, 2023, each non-employee director received an annual retainer of $50,000 per year in cash compensation, as well as $100,000 in one-year time-vesting restricted stock awards. In addition, we paid the audit, compensation, and nominating and governance committee chairs the following cash fees for serving in such position:
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Board Chair
In January, 2024 our Compensation Committee approved annual fees for the independent Chair of the Board of $85,000 effective in November 2023.
Compensation Committee Chair
$15,000 per year in cash, paid quarterly
Audit Committee Chair
$30,000 per year in cash, paid quarterly
Nominating and Governance Chair
$15,000 per year in cash, paid quarterly
We cover the travel costs for Board members to attend four in-person Board meetings a year, or any additional in-person Board meetings duly called.
The following table sets forth the total compensation earned by each of our non-employee directors serving in 2023.
| Name(4) | Fees Earned
($) | Restricted Stock Awards ($)(1)(2)(3) | Total ($) | |||||||||
| Scott N. Flanders | $ | 60,938 | $ | 100,000 | $ | 160,938 | ||||||
| Ravila Gupta | $ | 50,000 | $ | 100,000 | $ | 150,000 | ||||||
| David C. Hood | $ | 76,250 | $ | 100,000 | $ | 176,250 | ||||||
| Stephen Murray | $ | 31,250 | $ | 100,000 | $ | 131,250 | ||||||
| Glenn Sampson | $ | 42,500 | $ | 100,000 | $ | 142,500 | ||||||
| Jennifer Venable | $ | 62,500 | $ | 100,000 | $ | 162.500 | ||||||
| (1) | The amounts shown in this column represent the aggregate grant date fair value of stock options computed in accordance with ASC 718, Compensation — Stock Compensation. The amount represents the grant date fair value of the stock options granted. |
| (2) | On August 28, 2023, Mr. Flanders, Ms. Gupta, Mr. Hood, Mr. Murray, Mr. Sampson and Ms. Venable received 15,432 restricted stock units that vest in full on August 27, 2024. |
| (3) | At December 31, 2023, each of Mr. Sampson and Ms. Venable had 22,148 options outstanding, all of which were exercisable. Mr. Hood had 18,337 options outstanding, all of which were exercisable. Mr. Flanders had 13,078 options outstanding, all of which were exercisable. |
| (4) | Messrs. Fregenal and Harley are both named executive officers, and both also served as directors during 2023, but neither received additional compensation for service provided as a director in 2023. |
4
In April 2023, in consultation with Alpine Rewards, the Company’s outside compensation consultant, the Board adopted an updated non-employee director compensation policy, to be effective July 1, 2023. Under the updated policy, each non-employee director will receive an annual retainer of $50,000 per year in cash compensation, as well as an annual grant of $100,000 in one-year time-vesting Restricted Stock Units. The compensation for the audit, compensation, and nominating and governance committee chairs will remain the same as described above, and the Company will also pay the audit, compensation, and nominating and governance committee members the following cash fees for serving in such position:
Compensation Committee Member
$7,500 per year in cash, paid quarterly.
Audit Committee Member
$10,000 per year in cash, paid quarterly.
Nominating and Governance Member
$5,000 per year in cash, paid quarterly.
5
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(a) The following documents are filed as part of this report:
(1) Financial Statements
The financial statements and report of the independent registered public accounting firm are filed as part of this Report (see “Index to Consolidated Financial Statements” at Item 8).
(2) Financial Statement Schedules
The financial statements schedules are omitted because they are not applicable, or the required information is shown in the consolidated financial statements or notes thereto.
(b) Exhibits
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| 32.1 | Certification of the Principal Executive Officer and the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | 10-K | 32.1 | March 19, 2024 | ||||||
| 101.INS | Inline XBRL Instance Document. | 10-K | — | 101.INS | March 19, 2024 | |||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | 10-K | — | 101.SCH | March 19, 2024 | |||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | 10-K | — | 101.CAL | March 19, 2024 | |||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | 10-K | — | 101.DEF | March 19, 2024 | |||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | 10-K | — | 101.LAB | March 19, 2024 | |||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | 10-K | — | 101.PRE | March 19, 2024 | |||||
| 104 | Cover Page Interactive Data File, formatted in inline XBRL (included in Exhibit 101). | — | — | — | Filed herewith |
* The schedules to these exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a copy of any schedule omitted from the exhibits to the SEC upon request.
# Management contract or compensatory plan.
8
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| FATHOM HOLDINGS INC. | ||
| Date: July 2, 2024 | By: | /s/ Marco Fregenal |
| Marco Fregenal | ||
| President and Chief Executive Officer (Principal Executive Officer, Principal Financial Officer, And Principal Accounting Officer) | ||
S-1