[144] Fathom Holdings Inc. SEC Filing

Rhea-AI Filing Summary

On 30 Jun 2025 HeartCore Enterprises (Nasdaq: HTCR) obtained written consent from holders of 59.55% of its voting power to approve two material actions without a meeting:

• Financing approvals (Nasdaq Rules 5635(b)&(d)) – The company may issue ≥20% of its common stock through a two-part deal with Crom Structured Opportunities Fund I, LP. (1) It sold 2,000 Series A Convertible Preferred shares for $2 m and issued 750,000 commitment shares. The preferred pays 10% annual dividends and converts at 90% of the average of the two lowest VWAPs in the prior five trading days, subject to a 4.99% ownership cap and an aggregate 19.99% Exchange Cap until stockholder approval becomes effective. (2) An Equity Purchase Agreement (ELOC) lets Crom buy up to $25 m of common stock in periodic “advances” (minimum $25k, maximum $500k or 50% of recent trading value) through 30 Jun 2027; HeartCore will issue an additional $250k of commitment shares. Both agreements could constitute a Nasdaq change-of-control.
• Reverse stock split – The board may effect a split between 1-for-2 and 1-for-30, with fractional shares rounded up, to increase the share price and protect listing status.

The information statement will be mailed in July 2025; actions may not take effect until 20 days thereafter and can be abandoned by the board at its discretion.

Positive

• Access to up to $25 m in equity capital via ELOC enhances funding flexibility through 2027.
• Immediate $2 m cash infusion from Series A preferred strengthens liquidity.
• Reverse split authority aims to preserve Nasdaq listing and broaden institutional interest.
• 4.99% ownership cap limits any single investor’s voting power, reducing change-of-control risk during issuance phase.

Negative

• Potentially massive dilution well above 20% once Exchange Cap lifted, pressuring EPS and share price.
• Conversion at 90% of low VWAP plus 10% dividend creates continuous discount selling pressure.
• Reverse split risk of reduced liquidity and post-split price declines.
• Governance concerns from approving transactions without minority shareholder vote.

Insights

Financial Analyst

TL;DR: Dilutive financing adds up to $27 m liquidity but at steep discount; reverse split targets Nasdaq compliance.

The SPA/ELOC package provides immediate $2 m cash and access to another $25 m on flexible terms, strengthening HeartCore’s balance sheet. However, the 10% dividend, 90%-of-VWAP conversion, and commitment shares make the cost of capital high and heavily dilutive once the 19.99% cap is lifted. The 4.99% beneficial-ownership limit mitigates single-holder control but not aggregate dilution. A wide 1:2–1:30 reverse split range signals management’s need to regain the $1 bid price, yet splits often pressure share prices post-implementation. Overall impact is capital-positive but valuation-negative; I classify it as neutral.

Corporate Governance Expert

TL;DR: Majority insiders pushed through highly dilutive measures without minority vote, raising governance concerns.

CEO Yamamoto and Director Sadasivam control 59.55% of votes and used Section 228 written consent to bypass a shareholder meeting. While legal, this eliminates minority input on a transaction that could shift control to an outside fund and massively expand share count. The reverse split further concentrates decision power in the board’s hands. Such actions can erode investor confidence and raise proxy-advisory red flags. Governance impact: negative.

Form 144 Filer Information	UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 144 NOTICE OF PROPOSED SALE OF SECURITIES PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF 1933
FORM 144

144: Filer Information

Filer CIK
Filer CCC
Is this a LIVE or TEST Filing?	LIVE TEST
Submission Contact Information
Name
Phone
E-Mail Address

144: Issuer Information

Name of Issuer

SEC File Number

Address of Issuer

Phone

Name of Person for Whose Account the Securities are To Be Sold

See the definition of "person" in paragraph (a) of Rule 144. Information is to be given not only as to the person for whose account the securities are to be sold but also as to all other persons included in that definition. In addition, information shall be given as to sales by all persons whose sales are required by paragraph (e) of Rule 144 to be aggregated with sales for the account of the person filing this notice.

Relationship to Issuer

Relationship to Issuer

144: Securities Information

Title of the Class of Securities To Be Sold	Name and Address of the Broker	Number of Shares or Other Units To Be Sold	Aggregate Market Value	Number of Shares or Other Units Outstanding	Approximate Date of Sale	Name the Securities Exchange
Common	Merrill Lynch 4242 Six Forks Road Suite 1800 Raleigh NC 27609	125000	186250.00	27776484	07/22/2025	NASDAQ

Furnish the following information with respect to the acquisition of the securities to be sold and with respect to the payment of all or any part of the purchase price or other consideration therefor:

144: Securities To Be Sold

Title of the Class	Date you Acquired	Nature of Acquisition Transaction	Name of Person from Whom Acquired	Is this a Gift?	Date Donor Acquired	Amount of Securities Acquired	Date of Payment	Nature of Payment *
Common	09/11/2018	Conversion of Series B shares to Common Shares	Issuer			125000	09/11/2018	No Payment, Conversion of Series B shares to Common Shares

* If the securities were purchased and full payment therefor was not made in cash at the time of purchase, explain in the table or in a note thereto the nature of the consideration given. If the consideration consisted of any note or other obligation, or if payment was made in installments describe the arrangement and state when the note or other obligation was discharged in full or the last installment paid.

Furnish the following information as to all securities of the issuer sold during the past 3 months by the person for whose account the securities are to be sold.

144: Securities Sold During The Past 3 Months

Name and Address of Seller	Title of Securities Sold	Date of Sale	Amount of Securities Sold	Gross Proceeds
Joshua K. Harley 4905 Reserve Ct Parker TX 75002	Common	07/16/2025	34478	46025.16
Joshua K. Harley 4905 Reserve Ct Parker TX 75002	Common	07/17/2025	10231	13880.96
Joshua K. Harley 4905 Reserve Ct Parker TX 75002	Common	07/18/2025	22883	30116.72
Joshua K. Harley 4905 Reserve Ct Parker TX 75002	Common	07/21/2025	50717	73833.31

144: Remarks and Signature

Remarks

Date of Notice

ATTENTION:

The person for whose account the securities to which this notice relates are to be sold hereby represents by signing this notice that he does not know any material adverse information in regard to the current and prospective operations of the Issuer of the securities to be sold which has not been publicly disclosed. If such person has adopted a written trading plan or given trading instructions to satisfy Rule 10b5-1 under the Exchange Act, by signing the form and indicating the date that the plan was adopted or the instruction given, that person makes such representation as of the plan adoption or instruction date.

Signature

ATTENTION: Intentional misstatements or omission of facts constitute Federal Criminal Violations (See 18 U.S.C. 1001)

FAQ

How much new capital can HeartCore Enterprises (HTCR) raise under the Equity Purchase Agreement?

The investor may buy up to $25 million of common stock in periodic advances through 30 June 2027.

What are the key terms of the Series A Convertible Preferred Stock?

HeartCore issued 2,000 shares for $2 m, paying 10% annual dividends and convertible at 90% of the two-lowest 5-day VWAPs, subject to a 4.99% ownership cap.

What reverse stock split ratio did HTCR approve?

The board may implement a split between 1-for-2 and 1-for-30; the exact ratio is at its discretion.

Why was shareholder approval needed under Nasdaq Rules 5635(b) and 5635(d)?

Because the financing could issue ≥20 % of outstanding shares and may trigger a change of control.

When will the approved actions become effective?

Not earlier than 20 days after the information statement is mailed in July 2025; the board may still abandon them.