SCHEDULE 13D: Investment Group Acquires 13% Stake in Fathom Holdings Inc. Through Private Placement

A group of investors, including Prometheus Foundation, ReMY Capital Partners III, L.P., and director Adam Rothstein, have collectively acquired a 13% stake in Fathom Holdings Inc. through a private placement totaling approximately $2.4 million.

Summary

• Prometheus Foundation, ReMY Capital Partners III, L.P., and Adam Rothstein, along with other unrelated investors, entered into a Securities Purchase Agreement with Fathom Holdings Inc. on March 10, 2025.
• Under this agreement, Prometheus Foundation purchased 2,117,824 shares for approximately $1.45 million.
• ReMY Capital Partners III, L.P. acquired 657,256 shares for approximately $450,000.
• Adam Rothstein purchased 730,284 shares for approximately $500,000.
• In total, the reporting persons acquired 3,505,364 shares of Fathom Holdings Inc. common stock.
• This acquisition represents approximately 13.0% of the Issuer's total outstanding common stock, calculated based on 22,620,255 shares outstanding as of November 7, 2024, plus the 4,338,003 newly issued shares.
• The shares were acquired for investment purposes, with the reporting persons reserving the right to engage with management and the Board on strategic matters.
• Adam Rothstein, who is a director of Fathom Holdings Inc., was issued 56,117 restricted stock units upon the closing of the transaction.
• ReMY, its general partner, and Mark S. Siegel, along with Adam Rothstein, ceased to be members of the reported "group" for Section 13(d) purposes upon the closing of this transaction, making this an "exit filing" for them.

Sentiment

Score: 7

Explanation: The investment represents a significant capital injection and a vote of confidence from a group of investors, including an existing director. While there is dilution, the capital raise itself is a positive for the company's financial position and strategic flexibility. The investors' stated intent to engage with management and the board suggests potential for strategic improvements.

Positives

• Significant capital injection of approximately $2.4 million into Fathom Holdings Inc. through the private placement.
• The investment group, including existing director Adam Rothstein, indicates a strategic interest in the company's operations and future direction.
• Adam Rothstein's continued role as a director and receipt of restricted stock units aligns his interests with long-term shareholder value.

Negatives

• The issuance of 4,338,003 new shares in connection with the Purchase Agreement results in dilution for existing shareholders.
• The average purchase price of approximately $0.6847 per share by the investors might be lower than the current market price, potentially indicating a discount or perceived lower valuation.

Risks

• The Reporting Persons may change their investment intentions, including purchasing additional shares or selling all or a portion of their current holdings, which could impact stock price volatility.
• While the Reporting Persons state no present plans for extraordinary corporate transactions or changes to the board/management beyond Rothstein's existing directorship, they reserve the right to make suggestions on such matters.

Future Outlook

The Reporting Persons acquired the shares for investment purposes and may engage in communications with the Issuer's management and Board, offering suggestions on operations, business and financial strategies, strategic transactions, and Board composition. They also reserve the right to purchase additional shares or sell their current holdings in the future, subject to market conditions.

Industry Context

This filing indicates a significant private investment into Fathom Holdings Inc., a company likely operating in the real estate or technology-enabled real estate brokerage sector. Such investments can signal investor confidence or a belief in the company's strategic direction, especially when an existing director is part of the acquiring group. The involvement of venture investors specializing in tech and media (Adam Rothstein) suggests a potential focus on technological advancements within the real estate industry.

Comparison to Industry Standards

• This document primarily details an ownership change and capital injection for Fathom Holdings Inc. and does not provide operational or financial results that would allow for a direct comparison to industry standards or specific comparable companies/projects.

Management Changes

Corporate Governance

Legal Proceedings

• None of the Reporting Persons have been convicted in a criminal proceeding or been a party to a civil proceeding ending in a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws during the past five years.

Related Party Transactions

• Adam Rothstein, who is a director of Fathom Holdings Inc., was a purchaser in the Securities Purchase Agreement and was issued 56,117 restricted stock units in connection with his board appointment upon the closing of the transaction.

Stakeholder Impact

• Shareholders: Experience dilution due to the issuance of new shares but benefit from the capital injection into the company. The involvement of strategic investors and an existing director may signal increased oversight and potential for strategic improvements.
• Company (Fathom Holdings Inc.): Receives approximately $2.4 million in capital, which can be used for operations, growth initiatives, or debt reduction.

Next Steps

• The Reporting Persons may engage in communications with Fathom Holdings Inc.'s stockholders, management, and Board of Directors.
• The Reporting Persons may make suggestions concerning the Issuer's operations, prospects, business and financial strategies, strategic transactions, assets and liabilities, business and financing alternatives, and the composition of the Board.
• The Reporting Persons may, in the future, purchase additional shares or sell existing shares of the Issuer's common stock.

Key Dates

Recommendation

Keywords

Fathom Holdings Inc., SEC Filing, Schedule 13D, Private Placement, Equity Investment, Share Acquisition, Prometheus Foundation, ReMY Capital Partners, Adam Rothstein, Corporate Governance, Investment Strategy, Shareholder Activism, Dilution, Restricted Stock Units