Debt

3 Months Ended

Mar. 31, 2026

Total debt consisted of the following (amounts in thousands):


	March 31, 2026		December 31, 2025
3.75% Small Business Administration installment loan due May 2050	$	100	$	102
Convertible note payable	5,000		5,000
Promissory note payable	13		53
Bridge note	2,007		—
Director and officer (D&O) insurance policy promissory note1	26		102
Executive and officer (E&O) insurance policy promissory note2	205		329
Total debt	7,351		5,586
Long-term debt, current portion	(5,266)		(5,506)
Long-term debt, net of current portion	$	2,085	$	80

(1) The 2025 D&O note carries a 7.80% interest rate and is payable quarterly with the last quarterly payment due in June 2026.

(2) The 2025 E&O note carries a 12.25% interest rate and is payable monthly with the last monthly payment due in August 2026.

Promissory Note

In connection with the acquisition of My Home Group (“MHG”) in November 2024, the Company assumed a promissory note with a principal balance of $0.2 million, bearing an annual interest rate of 8.5%. The note was payable in 20 equal monthly installments of $13,413, with the final payment being made in April 2026.

Bridge Note

In March 2026, the Company entered into a subordinated secured promissory note in the original principal amount of $2.0 million (the “Original Bridge Note”) with Bed Bath & Beyond, Inc. (the “Investor”). In connection with the Original Bridge Note, on March 18, 2026, the Company, the Material Subsidiaries (as defined in the Original Bridge Note), and the Investor entered into (i) a security agreement (the “Security Agreement”) and (ii) a subsidiary guarantee (the “Subsidiary Guarantee”). The Company will pay the Investor the principal amount under the Original Bridge Note on April 1, 2027, or such earlier date as the Original Bridge Note is required or permitted to be repaid as provided by its terms. The Original Bridge Note bears interest at a rate equal to 9.0% per annum, which is added to the principal amount at the end of each calendar month beginning in March 2026. On May 29, 2026, the parties to the Original Bridge Note agreed to amend and restate the Original Bridge Note (the “Amended and Restated Bridge Note”) to, among other things, increase the original principal amount by $1.0 million (the “Additional Principal Amount”), for an aggregate original principal amount of $3,036,350, including $36,350 of accrued interest on the original principal amount as of May 29, 2026. The Amended and Restated Bridge Note also amended the Security Agreement and the Subsidiary Guarantee to include all obligations under the Amended and Restated Bridge Note, including the Additional Principal Amount, all accrued and future interest, and all other amounts owing under the Amended and Restated Bridge Note.

The Company will pay the Investor the principal amount under the Amended and Restated Bridge Note on April 1, 2027, or such earlier date as the Amended and Restated Bridge Note is required or permitted to be repaid as provided by its terms. The Amended and Restated Bridge Note bears interest at a rate equal to 9.0% per annum, which is added to the principal amount at the end of each calendar month beginning in March 2026.

Convertible Note Payable

In September 2024, the Company sold and issued senior secured convertible promissory notes in aggregate principal amount of $5.0 million (the "2024 Notes") to an existing shareholder, who beneficially owns more than 5.0% of Fathom's common stock, and the chairman of the Company's Board of Directors in a private placement (the "2024 Offering"). The

2024 Notes were issued pursuant to that certain Securities Purchase Agreement, dated as of September 25, 2024 (the “SPA”) by and among the Company and two accredited investors (each a “Holder” and together, the “Holders”).

The cash proceeds to the Company from the issuance of the 2024 Note were $4.9 million after deducting the 2024 Offering expense. In connection with the 2024 Offering, the Company also entered into a Security Agreement pursuant to which the 2024 Note is secured by all existing and future assets of the Company.

The Company failed to timely file with the Securities and Exchange Commission (the “Commission”) its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026 (the “Q1 Form 10-Q”), as required under Section 13(a) of the Exchange Act, which failure constituted an Event of Default under Section 6(a)(viii) of the Notes (the “Existing Filing Default”). The Company’s failure also constituted a breach under the SPA, which requires the Company to satisfy the current public information requirement under Rule 144(c) under the Securities Act (the “Existing SPA Default”), as well as a cross-default under Section 6(a)(iii) of the Notes (collectively with the Existing Filing Default and the Existing SPA Default, the “Existing Defaults”).

On May 29, 2026, the Company and the Holders entered into a Limited Waiver and Omnibus Amendment to the Senior Secured Convertible Promissory Notes (the “Waiver”). Pursuant to the Waiver, the Holders agreed to waive the Existing Defaults solely during the period commencing on the date of the Waiver through and including October 1, 2026 (the “Waiver Period”), subject to the terms and conditions set forth therein. The Waiver does not constitute a waiver of the Company’s obligation to pay Rule 144 Failure Payments as and when due in accordance with the SPA.

In consideration for the Holders’ agreement to waive the Existing Defaults, the Waiver provides for amendments to certain terms of the 2024 Notes, including an increase in the minimum interest rate floor from 8% per annum to 10% per annum. Further, during the continuance of the Existing Filing Default (from the date the Q1 Form 10-Q was required to be filed through the date on which the Q1 Form 10-Q is actually filed with the Commission), interest on the outstanding principal amount of the 2024 Notes shall accrue at a rate equal to 18% per annum (the “Default Rate”) in lieu of the interest rate otherwise applicable under the 2024 Notes. Upon cure of the Existing Filing Default, the interest rate on the 2024 Notes shall revert to the rate otherwise applicable under the 2024 Notes.

Beginning on September 25, 2024, quarterly interest payments are to be paid in cash on the principal amount at a fluctuating rate equal to (i) the monthly average Secured Overnight Financing Rate (SOFR) plus (ii) 6.0% per annum, subject to certain adjustments and a minimum rate of 10.0%. The 2024 Notes have a conversion price of $4.25 per share of common stock, representing an initial conversion premium of approximately 85.0% above the last reported sale price of Fathom's common stock on September 26, 2024. The 2024 Notes will mature on October 1, 2026, unless repurchased or converted in accordance with their terms prior to such date. The 2024 Notes may not be converted by either purchaser into shares of common stock if such conversion would result in the purchaser and its affiliates owning an aggregate of in excess of 19.99% of the then-outstanding shares of the Company’s common stock.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

Fathom Holdings Inc. 10-Q