Home›Real Estate›Industry›Fathom Flags Going Concern Doubts and Internal Control…

Fathom Flags Going Concern Doubts and Internal Control Weaknesses

In its SEC filing, Fathom said internal control failures over financial reporting could have led to material misstatements, after leadership changes and a remediation plan.

Reported · Written up by our desk · Industry

Fathom Holdings disclosed internal control weaknesses and going concern language in its SEC filing, and outlined a remediation plan after leadership changes, according to HousingWire. The company’s filing said its internal control over financial reporting had material weaknesses that could have resulted in material misstatements in its financial statements, effectively acknowledging that the controls meant to catch errors were not working as intended. HousingWire reports that the SEC documents also referenced a 2021 acquisition in which Fathom’s founder and then-CEO, Joshua Harley, and then-CFO, Marco Fregenal, signed a “side agreement” without the board’s knowledge. The board said it only found the agreement in April, and determined the company was not bound and that the deal did not have a material effect on financial information. The filing further stated that the “tone at the top” set by the former CFO and former CEO was insufficient to support effective internal controls and the company’s commitment to integrity and ethical values, HousingWire said.

More like this

Sources