UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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FATHOM HOLDINGS INC.
FORM 10-Q
For the Quarterly Period Ended June 30, 2023
TABLE OF CONTENTS
Page | ||
Consolidated Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022 | 3 | |
4 | ||
5 | ||
6 | ||
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Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22 | |
31 | ||
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32 | ||
32 | ||
32 | ||
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33 | ||
34 |
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PART I FINANCIAL INFORMATION
ITEM 1. Financial Statements.
FATHOM HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
| June 30, |
| December 31, | |||
2023 | 2022 | |||||
ASSETS | (Unaudited) | |||||
Current assets: |
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Cash and cash equivalents | $ | | $ | | ||
Restricted cash | | | ||||
Accounts receivable |
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Mortgage loans held for sale, at fair value | | | ||||
Prepaid and other current assets |
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Total current assets |
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Property and equipment, net |
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Lease right of use assets |
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Intangible assets, net | | | ||||
Goodwill | | | ||||
Other assets | | | ||||
Total assets | $ | | $ | | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable | $ | | $ | | ||
Accrued and other current liabilities | | | ||||
Warehouse lines of credit | | | ||||
Lease liability - current portion | | | ||||
Long-term debt - current portion |
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Total current liabilities |
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Lease liability, net of current portion |
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Long-term debt, net of current portion |
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Other long-term liabilities | | | ||||
Total liabilities |
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Commitments and contingencies (Note 18) |
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Stockholders’ equity: |
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Common stock ( |
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Additional paid-in capital |
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Accumulated deficit |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
3
FATHOM HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except share data)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 | |||||
Revenue | ||||||||||||
Gross commission income | $ | | $ | | $ | | $ | | ||||
Other service revenue | | | | | ||||||||
Total revenue | | | | | ||||||||
Operating expenses |
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Commission and other agent-related costs | | | | | ||||||||
Operations and support | | | | | ||||||||
Technology and development | | | | | ||||||||
General and administrative |
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Marketing |
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Depreciation and amortization | | | | | ||||||||
Total operating expenses |
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Loss from operations |
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Other expense (income), net |
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Interest expense (income), net |
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Other nonoperating expense (income), net |
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Other expense (income), net |
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Loss before income taxes |
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Income tax expense (benefit) |
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Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Net loss per share: |
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Basic | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Weighted average common shares outstanding: |
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Basic |
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Diluted |
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The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
4
FATHOM HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
(UNAUDITED)
(in thousands, except share data)
Common Stock |
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Number of | Additional | |||||||||||||
Outstanding | Par | Paid-in | Accumulated | |||||||||||
| Shares |
| Value |
| Capital |
| Deficit |
| Total | |||||
Balance at March 31, 2023 |
| | $ | — |
| $ | | $ | ( | $ | | |||
Stock-based compensation, net of forfeitures |
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Net loss |
| — |
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| ( |
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Balance at June 30, 2023 |
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| $ | | $ | ( | $ | |
Common Stock |
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Number of | Additional | |||||||||||||
Outstanding | Par | Paid-in | Accumulated | |||||||||||
| Shares |
| Value |
| Capital |
| Deficit |
| Total | |||||
Balance at March 31, 2022 |
| | $ | — |
| $ | | $ | ( | $ | | |||
Issuance of common stock for purchase of business |
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Repurchase of common stock | ( | — | ( | — | ( | |||||||||
Stock-based compensation, net of forfeitures | | — | | — | | |||||||||
Net loss |
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| ( |
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Balance at June 30, 2022 |
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| $ | | $ | ( | $ | |
Common Stock | ||||||||||||||
| Number of |
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Outstanding | Par | Paid-in | Accumulated | |||||||||||
Shares | Value | Capital | Deficit | Total | ||||||||||
Balance at December 31, 2022 | | $ | — | $ | | $ | ( | $ | | |||||
Stock-based compensation, net of forfeitures | | — | | — | | |||||||||
Net loss | — | — | — | ( | ( | |||||||||
Balance at June 30, 2023 |
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| $ | | $ | ( | $ | |
Common Stock | ||||||||||||||
| Number of |
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Outstanding | Par | Paid-in | Accumulated | |||||||||||
Shares | Value | Capital | Deficit | Total | ||||||||||
Balance at December 31, 2021 |
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| $ | | $ | ( | $ | | |||
Issuance of common stock for purchase of business | |
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Repurchase of common stock | ( |
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Stock-based compensation, net of forfeitures |
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Net loss | — | — | — | ( | ( | |||||||||
Balance at June 30, 2022 | | $ | — | $ | | $ | ( | $ | |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
5
FATHOM HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Six Months Ended June 30, | ||||||
| 2023 |
| 2022 | |||
CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss | $ | ( | $ | ( | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
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Depreciation and amortization |
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Non-cash lease expense | | | ||||
Deferred financing cost amortization | | — | ||||
Gain on sale of mortgages | ( | ( | ||||
Stock-based compensation |
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Deferred income taxes | | | ||||
Change in operating assets and liabilities: |
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Accounts receivable |
| ( |
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Prepaid and other current assets | | ( | ||||
Other assets | ( | | ||||
Accounts payable | | | ||||
Accrued and other current liabilities | | ( | ||||
Operating lease liabilities | ( | ( | ||||
Mortgage loans held for sale | ( | ( | ||||
Proceeds from sale and principal payments on mortgage loans held for sale | | | ||||
Net cash (used in) provided by operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchase of property and equipment |
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Amounts paid for business and asset acquisitions, net of cash acquired | — | ( | ||||
Purchase of intangible assets | ( | ( | ||||
Net cash used in investing activities |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Principal payments on long-term debt |
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Deferred acquisition consideration payments | ( | — | ||||
Net borrowings on warehouse lines of credit | | ( | ||||
Repurchase of common stock | — | ( | ||||
Proceeds from note payable, net $ | | — | ||||
Net cash provided by (used in) financing activities |
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Net increase (decrease) in cash, cash equivalents, and restricted cash |
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Cash, cash equivalents, and restricted cash at beginning of period |
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Cash, cash equivalents, and restricted cash at end of period | $ | | $ | | ||
Supplemental disclosure of cash and non-cash transactions: |
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Cash paid for interest | $ | | $ | | ||
Income taxes paid | — | | ||||
Amounts due to sellers | — | | ||||
Capitalized stock-based compensation | — | | ||||
Right of use assets obtained in exchange for new lease liabilities | | | ||||
Issuance of common stock for purchase of business | — | | ||||
Reconciliation of cash and restricted cash: |
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Cash and cash equivalents | $ | | $ | | ||
Restricted cash | | | ||||
Total cash, cash equivalents, and restricted cash shown in statement of cash flows | $ | | $ | |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
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Note 1. Organization, Consolidation and Presentation of Financial Statements
Fathom Holdings Inc. (“Fathom”, “Fathom Holdings,” and collectively with its consolidated subsidiaries and affiliates, the “Company”) is a national, technology-driven, real estate services platform integrating residential brokerage, mortgage, title, insurance services and supporting software called intelliAgent. The Company’s brands include Fathom Realty, Dagley Insurance, Encompass Lending, intelliAgent, LiveBy, Real Results, Verus Title and Cornerstone.
The unaudited interim consolidated financial statements include the accounts of Fathom Holdings’ wholly owned subsidiaries. All transactions and accounts between and among its subsidiaries have been eliminated. All adjustments and disclosures necessary for a fair presentation of these unaudited interim consolidated financial statements have been included.
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results of operations for the periods presented. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the Security and Exchange Commission (“SEC”) on March 30, 2023 (the “Form 10-K”). The results of operations for any interim periods are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period.
In January and February 2022, the Company acquired Cornerstone Financial (“Cornerstone”) and iPro realty Network (“iPro”), respectively, in separate transactions accounted for as business combinations. Cornerstone is a real estate mortgage business that will help expand the Company’s reach in the Washington DC and surrounding markets. The acquisition of iPro, a real estate brokerage business, will help expand the Company’s reach in the Utah real estate market.
Certain prior period amounts have been revised to conform to the current presentation. These changes have no impact on our previously reported consolidated balance sheets or statements of operations.
The Company has evaluated the impact of events that have occurred subsequent to June 30, 2023, through the date the consolidated financial statements were filed with the SEC. Based on this evaluation the Company has determined that there are no material subsequent events that would require recognition or disclosure.
Note 2. Risks and Uncertainties
Certain Significant Risks and Business Uncertainties — The Company is subject to the risks and challenges associated with companies at a similar stage of development. These include dependence on key individuals, successful development and marketing of its offerings, and competition with larger companies with greater financial, technical, and marketing resources. Furthermore, during the period required to achieve substantially higher revenue in order to become consistently profitable, the Company may require additional funds that might not be readily available or might not be on terms that are acceptable to the Company.
Liquidity — The Company has a history of negative cash flows from operations and operating losses. The Company generated net losses of approximately $
7
COVID-19 Risks, Impacts and Uncertainties - In December 2019, a novel strain of coronavirus, COVID-19, was identified in Wuhan, China. This new coronavirus caused a global health emergency and was declared a pandemic by the World Health Organization (WHO) in March 2020 (“COVID-19’’ or the “Pandemic”). In May 2023, the WHO declared that COVID-19 was no longer a global health emergency.
For the six months ended June 30, 2023 and the year ended December 31, 2022, due in part to the widespread availability of multiple COVID-19 vaccines, the effects of COVID-19 on business worldwide lessened. However, any lingering impact from COVID-19, as well as the recent increases in interest rates and inflationary pressure in the U.S. and world economies, is not fully known and cannot be estimated as the U.S. and global economies continue to react.
Use of Estimates — The preparation of the unaudited interim consolidated financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to doubtful accounts, legal contingencies, income taxes, deferred tax asset valuation allowances, stock-based compensation, goodwill, estimated lives of intangible assets, and intangible asset impairment. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company might differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Note 3. Recent Accounting Pronouncements
In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. In addition, an entity will have enhanced disclosure requirements about allowances and credit quality indicators. The new standard is effective for the Company for fiscal years beginning after December 15, 2022. The Company adopted the standard on January 1, 2023, and the impact of the new standard on its consolidated financial statements was immaterial.
In August 2020, the FASB issued ASU No. 2020-06 Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40). The objective of the amendments in this ASU is to address issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The amendments in this ASU reduce the number of accounting models for convertible debt instruments and redeemable convertible preference shares. For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract. The amendments in the ASU are effective for fiscal years beginning after December 15, 2023, including interim periods therein. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted the standard during the quarter ended June 30, 2023, and the impact of the new standard on its consolidated financial statements was immaterial.
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Note 4. Acquisitions
The Company completed
The Company updated the fair value estimates used in the purchase price allocation related to the Cornerstone and iPro acquisitions during the period from acquisition through December 31, 2022, resulting in an increase of $
Pro forma information has not been included as it is impracticable to obtain the information due to the lack of availability of historical GAAP financial data. The results of operations of these businesses do not have a material effect on the Company’s consolidated results of operations. Acquisition related costs incurred during the six months ended June 30, 2022, were $
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Note 5. Intangible Assets, Net
Intangible assets, net consisted of the following (amounts in thousands):
| June 30, 2023 | ||||||||
Gross Carrying | Accumulated | Net Carrying | |||||||
| Amount |
| Amortization |
| Value | ||||
Trade names | $ | | ( | $ | | ||||
Software development |
| |
| ( |
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Customer relationships | | ( | | ||||||
Agent relationships |
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| ( |
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Know-how | | ( | | ||||||
$ | | $ | ( | $ | |
| December 31, 2022 | ||||||||
| Gross Carrying |
| Accumulated |
| Net Carrying | ||||
| Amount |
| Amortization |
| Value | ||||
Trade names | $ | | $ | ( | $ | | |||
Software development |
| |
| ( |
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Customer relationships | | ( | | ||||||
Agent relationships | | ( | | ||||||
Know-how |
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| ( |
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$ | | $ | ( | $ | |
Estimated future amortization of intangible assets as of June 30, 2023 was as follows (amounts in thousands):
Years Ending December 31, |
|
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2023 (remaining) | $ | | |
2024 |
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2025 |
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2026 |
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2027 |
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Thereafter | | ||
Total | $ | |
The aggregate amortization expense for intangible assets was $
The aggregate amortization expense for intangible assets was $
Note 6. Goodwill
The carrying amount of goodwill by reportable segment as of June 30, 2023 and December 31, 2022 were as follows (amounts in thousands):
Real Estate | |||||||||||||||
| Brokerage |
| Mortgage |
| Technology |
| Other (a) |
| Total | ||||||
Balance at June 30, 2023 and December 31, 2022 | $ | | $ | | $ | $ | | $ | |
The Company has a risk of future impairment to the extent that individual reporting unit performance does not meet projections. Additionally, if current assumptions and estimates, including projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates, and other market factors, are not met, or if valuation factors outside of
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the Company’s control change unfavorably, the estimated fair value of goodwill could be adversely affected, leading to a potential impairment in the future. For the six months ended June 30, 2023, no events occurred that indicated it was more likely than not that goodwill was impaired.
Note 7. Accrued and Other Current Liabilities
Accrued and other current liabilities consisted of the following (amounts in thousands):
| June 30, |
| December 31, | |||
2023 | 2022 | |||||
Deferred annual fee | $ | | $ | | ||
Due to sellers | | | ||||
Accrued compensation | | | ||||
Other accrued liabilities |
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Total accrued and other current liabilities | $ | | $ | |
Note 8. Warehouse Lines of Credit
Encompass Lending Group (“Encompass”), a wholly owned subsidiary of the Company, utilizes line of credit facilities as a means of temporarily financing mortgage loans pending their sale. The underlying warehouse lines of credit agreements, as described below, contain financial and other debt covenants.
Encompass maintains a master loan warehouse agreement with a bank whereby Encompass borrows funds to finance the origination or purchase of eligible loans. Interest on funds borrowed is equal to the greater of the 30-Day Secured Overnight Financing Rate (SOFR) rate plus
Encompass maintains a mortgage participation purchase agreement with a bank whereby Encompass borrows funds to finance the origination or purchase of eligible loans. Interest on funds borrowed is equal to the greater of the 1 month Term SOFR Reference Rate (SOFR) Rate plus
Encompass maintains a warehousing credit and security agreement with a bank whereby Encompass borrows funds to finance the origination of eligible mortgage loans. Interest on funds borrowed is equal to the greater of the daily adjusting Bloomberg Short-Term Bank Yield (BSBY) rate plus
11
Note 9. Debt
Long-term debt consisted of the following (amounts in thousands):
| June 30, 2023 |
| December 31, 2022 | |||
$ | | $ | | |||
Notes payable: | ||||||
Convertible note payable, less unamortized costs of $ | | — | ||||
— | | |||||
| | |||||
Total debt | | | ||||
Long-term debt, current portion | ( | ( | ||||
Long-term debt, net of current portion | $ | | $ | |
On April 13, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an accredited investor (the “Holder”) and issued a Senior Secured Convertible Promissory Note in principal amount of $
The Company shall pay interest to the Holder quarterly in cash on the principal amount of this Note at a rate which fluctuates every calendar month, and is equal to (i) the monthly average Secured Overnight Financing Rate (SOFR) plus (ii)
In connection with the Offering, the Company also entered into a Security Agreement pursuant to which the Note is secured by all the Company’s existing and future assets.
All or any portion of the principal amount of the Note, plus accrued and unpaid interest and any late charges thereon, is convertible at any time, in whole or in part, at the Investor’s option, into shares of the Company’s common stock at an initial fixed conversion price of $
Note 10. Fair Value Measurements
FASB ASC 820, Fair Value Measurement (“ASC 820”), defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The methodology establishes consistency and comparability by providing a fair value hierarchy that prioritizes the inputs to valuation techniques into three broad levels, which are described below:
● | Level 1 inputs are quoted market prices in active markets for identical assets or liabilities (these are observable market inputs). |
● | Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability (includes quoted market prices for similar assets or identical or similar assets in markets in which there are few transactions, prices that are not current or prices that vary substantially). |
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● | Level 3 inputs are unobservable inputs that reflect the entity’s own assumptions in pricing the asset or liability (used when little or no market data is available). |
A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.
In general, fair value is based upon quoted market prices, where evaluated. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure the financial instruments are recorded at fair value.
While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.
Mortgage loans held for sale – The fair value of mortgage loans held for sale is determined, when possible, using quoted secondary-market prices or purchaser commitments. If no such quoted price exists, the fair value of a loan is determined using quoted prices for a similar asset or assets, adjusted for the specific attributes of that loan, which would be used by other market participants. The loans are considered Level 2 on the fair value hierarchy.
Derivative financial instruments – Derivative financial instruments are reported at fair value. Fair value is determined using a pricing model with inputs that are unobservable in the market or cannot be derived principally from or corroborated by observable market data. These instruments are Level 3 on the fair value hierarchy.
The fair value determination of each derivative financial instrument categorized as Level 3 required one or more of the following unobservable inputs:
● | Agreed prices from Interest Rate Lock Commitments (“IRLC”); |
● | Trading prices for derivative instruments; and |
● | Closing prices at June 30, 2023 and December 31, 2022 for derivative instruments. |
The following are the major categories of assets and liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 (amounts in thousands):
June 30, 2023 | ||||||||||||
| Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
Mortgage loans held for sale | $ | — | $ | | $ | — | $ | | ||||
Derivative assets (included in prepaids and other current assets) |
| — |
| — |
| | | |||||
$ | — | $ | | $ | | $ | |
December 31, 2022 | ||||||||||||
| Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
Mortgage loans held for sale | $ | — | $ | |
| $ | — |
| $ | | ||
Derivative assets (included in prepaids and other current assets) |
| — |
| — |
| |
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$ | — | $ | |
| $ | |
| $ | |
The Company enters into IRLCs to originate residential mortgage loans held for sale, at specified interest rates and within a specific period of time (generally between 30 and 90 days), with customers who have applied for a loan and meet certain credit and underwriting criteria. These IRLCs meet the definition of a derivative and are reflected on the consolidated balance sheets at fair value with changes in fair value recognized in other service revenue on the consolidated statements of operations. Unrealized gains and losses on the IRLCs, reflected as derivative assets and derivative liabilities, respectively, are measured based on the fair value of the underlying mortgage loan, quoted agency mortgage-backed security (“MBS”) prices, estimates of the fair value of the mortgage servicing rights and the probability that the mortgage loan will fund within the terms of the IRLC, net of commission expense and broker fees. The fair value of
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the forward loan sales commitment and mandatory delivery commitments being used to hedge the IRLCs and mortgage loans held for sale not committed to purchasers are based on quoted agency MBS prices.
Note 11. Leases
Operating Leases
The Company has operating leases primarily consisting of office space with remaining lease terms of less than
Leases with an initial term of twelve months or less are not recorded on the balance sheet, and the Company does not separate lease and non-lease components of contracts. There are
Our lease agreements generally do not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach to derive an appropriate imputed discount rate. The Company benchmarked itself against other companies of similar credit ratings and comparable quality and derived an imputed rate, which was used in a portfolio approach to discount its real estate lease liabilities. The Company used estimated incremental borrowing rates for all active leases.
The table below presents certain information related to lease costs for the Company’s operating leases (amounts in thousands):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 | |||||
Operating lease expense | $ | |
| $ | | $ | |
| $ | | ||
Short-term lease expense |
| | |
| |
| | |||||
Total lease cost | $ | | $ | | $ | | $ | |
The following table presents the weighted average remaining lease term and the weighted average discount rate related to operating leases:
| June 30, 2023 |
| December 31, 2022 | ||
Weighted average remaining lease term (in years) - operating leases | |||||
Weighted average discount rate - operating leases |
| | % | | % |
The following table presents the maturities of lease liabilities (amounts in thousands):
| Operating | ||
Years Ended December 31, | Leases | ||
2023 (remaining) | $ | | |
2024 |
| | |
2025 |
| | |
2026 |
| | |
2027 |
| | |
2028 and thereafter |
| | |
Total minimum lease payments | | ||
Less effects of discounting | ( | ||
Present value of future minimum lease payments | $ | |
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Note 12. Shareholders’ Equity
On March 10, 2022, the Company’s Board of Directors authorized an expenditure of up to $
During the six months ended June 30, 2022, the Company issued shares of common stock as part of the purchase consideration in connection with the acquisitions of iPro and Cornerstone. Refer to Note 4 for additional information about these acquisitions and the shares of common stock issued.
The Company has an outstanding equity-classified warrant issued to an underwriter in August 2020 (the “Underwriter Warrant”) to purchase
Note 13. Stock-based Compensation
The Company’s 2019 Omnibus Stock Incentive Plan (the “2019 Plan”) provides for granting stock options, restricted stock awards, and restricted stock units to employees, directors, contractors and consultants of the Company. As of June 30, 2023, there were approximately
Restricted Stock Awards
Following is the restricted stock award activity for the three and six months ended June 30, 2023:
|
| Weighted Average | |||
Grant Date | |||||
Shares | Fair Value | ||||
Nonvested at December 31, 2022 |
| | $ | | |
Granted |
| |
| | |
Released |
| ( |
| | |
Forfeited |
| ( |
| | |
Nonvested at March 31, 2023 | | | |||
Granted | | | |||
Released | ( | | |||
Forfeited | ( | | |||
Nonvested at June 30, 2023 |
| | |
Restricted Stock Unit Awards
During 2022, the Company commenced granting restricted stock units to employees and agents.
Following is the restricted stock unit award activity for the three and six months ended June 30, 2023:
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|
| Weighted Average | |||
Grant Date | |||||
Shares | Fair Value | ||||
Nonvested at December 31, 2022 |
| | $ | | |
Granted |
| |
| | |
Released |
| — |
| — | |
Forfeited |
| ( |
| | |
Nonvested at March 31, 2023 | | $ | | ||
Granted | | | |||
Released | ( | | |||
Forfeited | ( | | |||
Nonvested at June 30, 2023 |
| | $ | |
Stock Option Awards
There were
Stock-based Compensation expense
Stock-based compensation expense related to all awards issued under the Company’s stock compensation plans for the three and six months ended June 30, 2023 and 2022 was as follows (amounts in thousands):
Three Months Ended |
| Six Months Ended | ||||||||||
June 30, | June 30, | |||||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 | |||||
Commission and other agent-related cost | $ | |
| $ | | $ | | $ | | |||
Operations and support | | | | | ||||||||
Technology and development |
| |
|
| |
| |
| | |||
General and administrative | | | |