Real Estate
Home›Real Estate›Industry›Fathom flags material weaknesses and possible misstate…
Fathom flags material weaknesses and possible misstatements tied to prior CEOs
In its Q1 2026 SEC filing, the company links ineffective disclosure controls to former executives and a 2021 side agreement that the board says is not binding.
Fathom Holdings said in a Q1 2026 10-Q that its financial reporting disclosure controls and procedures were ineffective due to identified material weaknesses, and it warned that prior filings may contain potential material misstatements. HousingWire reports the company also pointed to specific deficiencies, including issues with maintaining an effective risk assessment and ensuring quality information and communication.
The filing attributes the control problems to conduct by former executives, naming Joshua Harley, its former CEO, and Marco Fregenal, who had served as CFO before becoming CEO in 2023 and was later terminated in June 2026. Fathom said the termination followed an acquisition announcement involving Bed Bath and Beyond, while Fathom attributed the dismissal to unspecified policy violations and named Adam Rothstein as interim CEO.
Fathom also said the primary driver behind its financial reporting issues was negotiations for an acquisition in 2021, when Harley and Fregenal signed a “side agreement” that allegedly bound the company without board knowledge or authorization. According to the filing, the board discovered the side agreement in April and concluded it does not bind Fathom and did not have a material effect on financial information.
The SEC filing did not detail the specific types of misstatements it believes may have occurred, but it said the deficiencies could have led to material misstatements to its quarterly consolidated financial statements that would not have been prevented or detected on a timely basis. Fathom outlined a remediation plan and noted liquidity support commitments.