UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

 (Mark One)

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2023

 OR

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to

 Commission File Number: 001-39994

 FATHOM DIGITAL MANUFACTURING CORPORATION

 (Exact name of registrant as specified in its charter)

 Delaware

 98-1571400

 (State or other jurisdiction of
 incorporation or organization)

 (I.R.S. Employer
 Identification No.)

 1050 Walnut Ridge Drive
 Hartland, WI

 53029

 (Address of principal executive offices)

 (Zip Code)

 Registrant's telephone number, including area code: ( 262) 367-8254

 Securities registered pursuant to Section 12 (b) of the Act:

 Title of each class

 Trading
 Symbol(s)

 Name of each exchange on which registered

 Class A common stock, par value $0.0001 per share

 FATH

 New York Stock Exchange

 Securities registered pursuant to Section 12(g) of the Act: None

 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No

 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

 Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements

 Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 The aggregate market value of the registrant's Class A common stock beneficially held by non-affiliates of the registrant, based on the closing price of the shares of Class A common stock on the New York Stock Exchange on April 10, 2024, was $ 10,407,262. Shares of the Class A common stock beneficially owned by each executive officer and director of the registrant and each holder of more than 10% of our Class A common stock have been excluded from this calculation because such persons may be deemed to be affiliated. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

 As of April 11, 2024, there were 3,649,866 shares of the registrant's Class A common stock outstanding and 3,327,379 shares of the registrant's vote-only, non-economic Class B common stock outstanding.

 DOCUMENTS INCORPORATED BY REFERENCE
 Portions of Fathom Digital Manufacturing Corporation's definitive Proxy Statement, to be filed with the Securities and Exchange Commission within 120 days of December 31, 2023 and delivered to stockholders in connection with the 2024 Annual Meeting of Stockholders, as applicable are incorporated by reference into Part III of this Form 10-K.

 Page

 Cautionary Note Regarding Forward-Looking Statements

 Risk Factor Summary

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item-1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 [Reserved]

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10.

 Directors, Executive Officers, and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accountant Fees and Services

 Item 15.

 Exhibits and Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 Exhibit Index

 Signatures

 Index to Financial Statements

 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 Certain statements made in this Annual Report on Form 10-K (the "Annual Report" or "Form 10-K") are "forward looking statements." Statements regarding our expectations regarding the business are "forward looking statements." In addition, words such as "estimates," "projected," "expects," "estimated," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "would," "future," "propose," "target," "goal," "objective," "outlook" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. The forward-looking statements contained in this Annual Report and in our other periodic filings are not guarantees of future performance, conditions or results and are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under "Risk Factor Summary, Item 1A. Risk Factors," and "Item7. Management's Discussion and Analysis of Financial Condition and Results of Operations" below. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those anticipated in these forward-looking statements. We may face additional risks and uncertainties that are not presently known to us, or that we deem to be immaterial, which may also impair our business, financial condition, or prospects. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 risk factor summary

 The following is a summary of the risks and uncertainties that could adversely affect our business, financial condition and results of operations and should be read in conjunction with the complete discussion of risk factors set forth in "Item 1A. Risk Factors." Some of the factors that could materially and adversely affect our business, financial conditions and results of operations include, but are not limited to the following:

 • the Merger Agreement (as defined herein), the pendency of the Merger (as defined herein), or our failure to consummate the Merger could have a material adverse effect on our business, results of operations, financial condition, and the price of our Class A common stock (the "Class A Common Stock");

 • our Credit Agreement (as defined herein) requires us to pay down $50 million of debt no later than July 31, 2024 with the proceeds of qualified equity capital, and our ability to continue as a going concern is subject to material uncertainty and is dependent on our ability to obtain sufficient qualified equity capital or otherwise restructure or refinance our outstanding indebtedness under the Credit Agreement;

 • while the Merger is pending and the Merger Agreement is in effect, we are subject to additional restrictions on our business activities;

 • we face increasing competition in many aspects of our business;

 • we may not realize the anticipated benefits of our business acquisitions, and any acquisition, strategic relationship, joint venture, or investment could disrupt our business and harm our operating results and financial condition;

 • if we are unable to manage our growth and expand our operations successfully, our reputation, brands, business, and results of operations may be harmed;

 • the implementation of our re-organization plan could result in greater costs and fewer benefits than we anticipate;

 • our success depends on our ability to deliver on-demand manufacturing capabilities and custom parts that meet the needs of our customers and to effectively respond to changes in our industry;

 • our failure to meet our customers' expectations regarding quick turnaround time, price or quality could adversely affect our business and results of operations;

 • we are subject to risks related to our dependency on our key management members and other key personnel, as well as attracting, retaining, and developing qualified personnel in a highly competitive talent market;

 • we may be subject to cybersecurity risks and changes to data protection regulation;

 • our businesses are subject to extensive domestic and foreign regulations that may subject us to significant costs and compliance requirements;

 • we are subject to risks related to the Amended and Restated Tax Receivable Agreement (as amended prior to Amendment No.1, the "TRA");

 • unfavorable global economic conditions, including increases in inflation and interest rates, could adversely affect our business, financial condition, or results of operations;

 • we may be subject to risks related to our status as an emerging growth company within the meaning of the Securities Act of 1933, as amended (the "Securities Act");

 • we are subject to the risks of our status as a "controlled company" within the meaning of the New York Stock Exchange (the "NYSE") listing standards;

 • the stock price of our Class A Common Stock has been and may continue to be volatile or may decline regardless of our operating performance;

 • the volatility of the stock price of our Class A Common Stock directly impacts the valuation of the warrants, Fathom earnout shares and Altimar Sponsor II, LLC (the "Sponsor") earnout shares and could increase the volatility in our net income (loss) in our consolidated statements of comprehensive income (loss);

 • our management team has limited experience managing a public company;

 • we have identified material weaknesses in our internal control over financial reporting. Failure to achieve and maintain effective internal control over financial reporting could result in our failure to accurately or timely report our financial condition or results of operations which could have a material adverse effect on our business and stock price;

 • there can be no assurance that we will be able to remain in compliance with the continued listing standards of the NYSE;

 • our operating results and financial conditions may fluctuate on a quarterly or annual basis;

 • the effect of legal, tax and regulatory changes; and

 • other factors detailed under "Item 1A. Risk Factors" below.

 Item 1. Business.

 Unless the context requires otherwise, references to "Fathom," "we," "the Company," "us" and "our" in this Annual Report refer to Fathom Digital Manufacturing Corporation and its consolidated subsidiaries.

 Fathom, through our operating subsidiary Fathom Holdco, LLC ("Fathom OpCo"), is a leading on-demand digital manufacturing platform in North America, providing comprehensive product development and production part manufacturing to many of the largest and most innovative companies in the world. We have extensive expertise in both additive and traditional manufacturing, enabling our agile, technology-agnostic platform to blend manufacturing technologies and processes to deliver hybridized solutions designed to meet the specific needs of our customers. This flexible problem-solving approach empowers our customers to accelerate their product development cycles, reducing manufacturing lead times for low to mid-volume production.

 We combine diverse, scaled manufacturing capabilities and deep technical know-how to enable our customers to get to market faster, putting their design and product goals above the manufacturing limitations often imposed by other service providers. We pair our expertise and manufacturing capabilities with a unified proprietary suite of software, which becomes an extension of the customer's digital product development and low to mid-volume production threads. By continuously augmenting our software suite to stay in tune with evolving Industry 4.0 trends, we believe our platform is ideally suited to serve the product development and low-to mid-volume production parts needs of the largest and most innovative companies in the world.

 Our differentiated strategy focuses on speed, problem solving, adaptive technical responsiveness, and a focus on manufacturing to meet customers' design intent, allowing our customers to iterate faster and shorten their product development and production cycles from months to days.

 Our deep technical expertise and integrated, software-driven approach underpin a comprehensive suite of capabilities, with over 25 unique manufacturing processes spread across 11 manufacturing facilities with nearly 400,000 square feet of manufacturing capacity in the United States ("U.S."). Our scale and breadth of offerings allows our customers to consolidate their supply chain and product development needs and to source through a single supplier. Fathom seamlessly blends in-house capabilities of 530+ advanced manufacturing systems across plastic and metal additive technologies (90+ industrial-grade systems), computer numerical control ("CNC") machining, injection molding and tooling, precision sheet metal fabrication, and design engineering, catering to a broad set of end markets. Fathom's manufacturing technologies and capacity are further extended through utilization of a selected group of highly qualified suppliers who specialize in injection molding and tooling and CNC machining.

 With over 35 years of industry experience, Fathom is at the forefront of the Industry 4.0 digital manufacturing revolution, serving customers in the technology, defense, aerospace, medical, automotive and IOT sectors. Fathom's certifications include: International Organization for Standardization ("ISO") 9001:2015, ISO 13485:2016, AS9100:2016, NIST800-171 and International Traffic in Arms Regulations ("ITAR") registered.

 Fathom's business was founded in 1984 under the name Midwest Composite Technologies, LLC ("MCT"). Following the merger of MCT and Kemeera, LLC in 2019, the business was rebranded to operate under the "Fathom Digital Manufacturing" name and key technical capabilities were added in direct response to the needs of our largest and most innovative corporate customers. Today, Fathom is the result of the successful integration of 13 complementary companies, acquired over the past five years, creating a robust on-demand digital manufacturing platform with a proven array of additive and traditional manufacturing capabilities.

 As a result of our scale and superior offerings, we have developed a loyal base of approximately 2,500 customers, including many of the largest and most innovative companies in the world, with excellent representation across Fortune's 500 list. During the fiscal year ended December 31, 2023, no single customer represented more than 10% of our total revenue.

 Our target market consists of the highly fragmented U.S. low-to mid-volume manufacturing market of CNC machining, injection molding, precision sheet metal and additive manufacturing. This market is projected to grow, fueled by increased demand for additive manufacturing and continuation of the trend of customers increasingly outsourcing their product development prototyping and low-to mid-volume manufacturing needs.

 Our People

 Our employees are the foundation of Fathom's enterprise and are essential to maintaining our business model and competitive advantages. As of December 31, 2023, we had 576 employees working across our U.S. locations. Our employees are distributed across functions, including engineering, production, sales, marketing, and general corporate functions. To date, we have not experienced any work stoppages and consider our relationship with our employees to be good. None of our employees are subject to a collective bargaining agreement or represented by a labor union.

 Our human capital resource objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and any future employees. The principal purpose of our equity incentive plans is to attract, retain and motivate selected employees, consultants, and directors through the granting of equity-based compensation awards and cash-based performance bonus awards.

 The health and well-being of our employees is critical to our ongoing ability to operate and serve our customers. We are committed to ensuring the safety and well-being of our employees across each location and job function – this includes providing broad benefits to support their health and wellness needs. We continue to place the utmost importance on complying with governmental regulations and health authority guidance to ensure that the appropriate steps are taken to protect the well-being of all people engaged with our business.

 Government Regulations

 We are subject to various laws, regulations and permitting requirements of federal, state, and local authorities, including those related to environmental and health and safety. We are also subject to various U.S. and foreign laws and regulations related to anti-corruption, data privacy, data use and security, embargoes, sanctions, and trade and export controls, including those of the jurisdictions in which we operate, source from, or make sales in. We believe that we are in material compliance with all such laws, regulations, and permitting requirements. Changes in current laws or regulations or the imposition of new laws and regulations in the U.S. or elsewhere regarding our business operations and activities may impede our growth, significantly increase our operating costs, and impair our business, financial condition, or results of operations.

 Environmental Matters

 We are subject to domestic environmental laws and regulations governing our operations, including, but not limited to, emissions into the air and water and the use, handling, disposal, and remediation of hazardous substances. A certain risk of environmental liability is inherent in our production activities. These laws and regulations govern, among other things, the generation, use, storage, registration, handling, and disposal of chemicals and waste materials, the presence of specified substances in electrical products, the emission and discharge of hazardous materials into the ground, air, or water, the cleanup of contaminated sites, including any contamination that results from spills due to our failure to properly dispose of chemicals and other waste materials, and the health and safety of our employees. We are required to obtain environmental permits from governmental authorities for certain operations. The cost of complying with current and future environmental laws applicable to our operations, or the liabilities arising from past releases of, or exposure to, hazardous substances, may result in future expenditures.

 Recent Information

 Agreement and Plan of Merger

 On February 16, 2024, the Company, entered into an Agreement and Plan of Merger (the "Merger Agreement"), by and among Fathom Digital Manufacturing Intermediate, LLC, a Delaware limited liability company ("Parent"), Fathom Digital Manufacturing Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent ("Company Merger Sub"), Fathom Digital Manufacturing Merger Sub 2, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Company Merger Sub ("LLC Merger Sub"), Fathom OpCo, and the Company, pursuant to which, among other things, (i) LLC Merger Sub will merge with and into Fathom OpCo with Fathom OpCo surviving the merger as a partially owned subsidiary of the Company (the "LLC Merger") and (ii) immediately following the LLC Merger, Company Merger Sub will merge with and into the Company, with the Company as the surviving corporation (the "Merger", and collectively, with the LLC Merger and the other transactions contemplated by the Merger Agreement, the "Transactions"). Parent, Company Merger Sub, and LLC Merger Sub are affiliates of CORE Industrial Partners, LLC ("CORE").

 In connection with the Transactions, Parent will acquire all of the Company's outstanding shares of its Class A Common Stock (other than (i) shares of Class A Common Stock held by the Company as treasury stock or owned by Parent or Company Merger Sub, (ii) shares of Class A Common Stock owned by CORE, (iii) shares of Class A Common Stock cancelled pursuant to the Merger Agreement, and (iv) any dissenting shares of Class A Common Stock) for $4.75 per share in cash.

 The closing of the Merger Agreement is subject to customary closing conditions. Upon the closing of the Merger, Fathom will become a privately held company.

 Corporate Information

 Fathom OpCo, a Delaware limited liability company, was formed in April 2021 for the purpose of holding a 100 percent equity interest in each of MCT Group Holdings, LLC and its subsidiaries (collectively, "MCT Holdings") and in Incodema Holdings, LLC and its subsidiaries (collectively, "Incodema Holdings"). On April 30, 2021, Incodema Holdings and MCT Holdings were recapitalized through an exchange of equity pursuant to which each member of Incodema Holdings and each member of MCT Holdings exchanged their equity interests in Incodema Holdings and MCT Holdings, respectively, for equity interests in Fathom OpCo. As a result of this reorganization, each of Incodema Holdings and MCT Holdings are wholly owned subsidiaries of Fathom OpCo.

 Our mailing address is 1050 Walnut Ridge Drive, Hartland, WI 53029, and our telephone number is (262) 367-8254. Our Class A Common Stock is listed on the NYSE under the symbol "FATH."

 Available Information

 Our website is located at www.fathommfg.com, and our investor relations website is located at  We file reports with the Securities and Exchange Commission ("SEC"), and copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") are available, free of charge, on our investor relations website as soon as reasonably practicable after we file such material electronically with or furnish it to the SEC. The SEC also maintains a website that contains our SEC filings. The address of the site is www.sec.gov. We use our  and www.fathommfg.com websites as a means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD.

 The contents of, or information accessible through, our websites are not incorporated by reference into this Annual Report or in any other report or document we file or furnish with the SEC, and any references to our websites are intended to be inactive textual references only.

 Item 1A. Risk Factors.

 We have identified the following risks and uncertainties that may have a material adverse effect on our business, financial condition, results of operations or reputation. The risks described below are not the only risks we face. Additional risks not presently known to us or that we currently believe are not material may also significantly affect our business, financial condition, results of operations or reputation. Our business could be harmed by any of these risks. In assessing these risks, you should also refer to the other information contained in this Annual Report including, but not limited to, the sections entitled "Cautionary Note Regarding Forward-Looking Statements" "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes.

 Business Risks

 Our pending merger creates incremental business risks.

 On February 16, 2024, the Company entered into a definitive agreement to be acquired by affiliates of the CORE Investors. The Merger Agreement by and among Parent, Company Merger Sub, LLC Merger Sub, Fathom OpCo and the Company provides for the Merger, with the Company surviving the Merger as a wholly owned subsidiary of Parent. Because the CORE Investors, which beneficially own approximately 62.6% of our outstanding common stock, have committed to vote their shares in favor of approval of the Merger Agreement and the Merger at the pending special stockholders meeting, the requisite stockholder approval of the transaction is expected to be obtained. However, the proposed transaction is subject to customary closing conditions and involves important risks, including, among others: the risk that we are unable to satisfy all of the conditions required to consummate the proposed transaction on the proposed terms and schedule; the potential impact of the announcement and/or consummation of the proposed transaction on Company relationships, including with employees, suppliers, clients and competitors; the risk that we will not have the ability to continue to hire and retain key personnel; the risk of potential litigation associated with the proposed transaction; the fact that the Merger Agreement subjects the Company to various restrictions on its operations between signing and closing; the risk of disruptions from the proposed transaction that impact our business, including current plans and operations; the risk of adverse effects on the market price of the Company's Class A common stock and the Company's operating results for any reason; and other risks described in the Company's SEC filings, including definitive additional materials, the merger proxy statement and other filings generally applicable to significant transactions that are or will be filed with the SEC.

 Our Credit Agreement, as amended, requires us to pay down $50 million of Term Loan debt on July 31, 2024 (the "Term Loan Paydown") with the proceeds of qualified equity capital (or, if earlier, on the date the pending Merger is consummated or the date that the Merger Agreement and the related transaction documents are terminated). If we are unable to make the Term Loan Paydown when due or otherwise restructure or refinance the Credit Agreement, the lenders could declare a default and exercise their right to accelerate the repayment of all of our indebtedness under the Credit Agreement. Accordingly, our ability to continue as a going concern is subject to material uncertainty and dependent on our ability to obtain sufficient qualified equity capital

 Our ability to continue as a going concern is subject to material uncertainty and dependent on our ability to obtain sufficient qualified equity capital. Our credit agreement, dated December 23, 2021 with JP Morgan Chase Bank, N.A., as administrative agent (as amended through the Fourth Amendment (as defined herein), the "Credit Agreement"), requires us to make the $50 million Term Loan Paydown on or before July 31, 2024 with the proceeds of qualified equity capital (or, if earlier, on the date the pending Merger is consummated or the date that the Merger Agreement and related transaction documents are terminated). In connection with the execution of the Merger Agreement, the CORE Investors and their managing partner, an affiliate of CORE Industrial Partners, entered into an equity commitment letter (the "Equity Commitment Letter") with Parent whereby they agreed, subject to the terms and conditions thereof, to provide equity financing to Parent in the aggregate amount set forth therein to facilitate consummation of the Transactions (as defined in the Merger Agreement), the payment of the Term Loan Paydown and certain other payments. The CORE Investors' obligations under the Equity Commitment Letter are subject to certain terms and conditions, including consummation of the pending Merger, and there is no assurance that such terms and conditions will be satisfied. The current financing environment in the United States is challenging and is impacted by factors beyond our control, including inflation, interest rates and volatile market conditions influenced by political events, war, and terrorism. For these reasons, among others, we cannot be certain that sufficient qualified equity capital on acceptable terms will be available if the funding of Parent contemplated by the Equity Commitment Letter is not obtained. Moreover, if such equity financing is available, it may be on terms that adversely affect the interests of our existing stockholders. If we are unable to obtain sufficient qualified equity capital to enable us to make the Term Loan Paydown when due, or otherwise restructure or refinance the Credit Agreement in those circumstances, the lenders could declare a default and exercise their right to accelerate the repayment of all of our indebtedness under the Credit Agreement.

 We face significant competition and expect to face increasing competition in many aspects of our business, which could cause our operating results to suffer.

 The digital manufacturing industry in which we operate is fragmented and highly competitive. We compete for customers with a wide variety of custom parts manufacturers and methods. Some of our current and potential competitors include captive in-house production capabilities, other custom parts manufacturers, brokers of custom parts and additive manufacturing vendors, including those utilizing 3D printing processes. Moreover, some of our existing and potential competitors are researching, designing, developing, and marketing other types of products and manufacturing capabilities. We also expect that future competition may arise from the development or improvement of allied or related techniques for digital manufacturing, including from the issuance of patents to other companies that may inhibit our ability to compete effectively. Furthermore, our competitors may attempt to adopt and improve upon key aspects of our business model, such as development of technology that automates much of the manual labor conventionally required to quote and manufacture custom parts, implementation of interactive web-based and automated user interface and quoting systems and/or building scalable operating models specifically designed for efficient custom parts production. Third-party Computer Aided Design ("CAD") software companies may develop software that mold-makers, injection molders and CNC machine shops could use to compete with our business model. Additive manufacturers may develop stronger, higher temperature resins or introduce other improvements that could more effectively compete with us on part quality. We may also, from time to time, establish alliances or relationships with other competitors or potential competitors, including 3D printer Original Equipment Manufacturers ("OEMs"). To the extent companies terminate such relationships and establish alliances and relationships with our competitors, our business could be harmed.

 Existing and potential competitors may have substantially greater financial, technical, marketing and sales, manufacturing, distribution and other resources and name recognition than us, as well as experience and expertise in intellectual property rights, any of which may enable them to compete effectively against us. For example, a number of companies that possess substantial resources have announced that they are beginning digital manufacturing initiatives, which will further strengthen the competition we face.

 Though we plan to continue to expend resources to develop new technologies, processes, and manufacturing capabilities, we cannot assure you that we will be able to maintain our current competitive position or continue to compete successfully against current and future sources of competition. One challenge in developing new business opportunities is identifying custom parts categories for which our automated quotation and digital manufacturing processes offer an attractive value proposition, and we may not be able to identify any new custom parts categories with favorable economics similar to our existing offerings. If we do not keep pace with technological change, demand for our offerings may decline and our operating results may suffer.

 Our success depends on our ability to deliver on-demand manufacturing capabilities and custom parts that meet the needs of our customers and to effectively respond to changes in our industry.

 We derive almost all of our revenue from the manufacture and sale to our customers of quick-turn, low volume custom parts for prototyping, support of internal manufacturing and limited quantity product release up to mid volume production requirements. Our business has been and, we believe, will continue to be, affected by changes in our customers' new product and product line introductions, requirements and preferences, rapid technological change and the emergence of new standards and practices, any of which could render our technology and manufacturing capabilities less attractive, uneconomical, or obsolete. To the extent that our customers' need for quick-turn to mid-volume production parts decreases significantly for any reason, it would likely have a material adverse effect on our business and operating results and harm our competitive position. In addition, CAD simulation and other technologies may reduce the demand for physical prototype parts. Therefore, we believe that to remain competitive, we must continually expend resources to enhance and improve our technology and manufacturing capabilities.

 In particular, we plan to continue to focus a significant portion of those efforts to further develop our technology in areas such as our interactive project management platform and manufacturing processes, technology offerings and broaden the range of parts that we are able to manufacture. We believe successful execution of this part of our business plan is critical for our ability to compete in our industry and grow our business, and there are no guarantees we will be able to do so in a timely fashion, or at all. Broadening the range of parts and technologies that we are able to manufacture and offer is of particular importance because limitations in manufacturability are the primary reason we are not able to fulfill many quotation requests. There are no guarantees that the resources we devote to executing on this aspect of our business plan will improve our business and operating results or result in increased demand for our custom parts and manufacturing capabilities. Failures in this area could adversely impact our operating results and harm our reputation and brands. Even if we are successful in executing in this area, our industry is subject to rapid and significant technological change, and our competitors may develop new technologies and manufacturing capabilities that are superior to ours.

 Any failure to effectively meet the needs of our customers or respond to changes in our industry on a cost-effective and timely basis, or at all, would likely have a material adverse effect on our business and operating results and harm our competitive position.

 Our failure to meet our customers' expectations regarding quick turnaround time, price or quality could adversely affect our business and results of operations.

 We believe many of our customers are facing increased pressure from global competitors to be first to market with their finished products, often resulting in a need for quick turnaround of custom parts. We believe our ability to quickly quote, manufacture and ship custom parts has been an important factor in our results to date. There are no guarantees we will be able to meet customers' increasing expectations regarding quick turnaround time. If we fail to meet our customers' expectations regarding turnaround time in any given period, our business and results of operations will likely suffer.

 Demand for our custom parts and manufacturing capabilities is sensitive to price. We believe our competitive pricing has been an important factor in our results to date. Therefore, changes in our pricing strategies can have a significant impact on our business and ability to generate revenue. Many factors, including our production and personnel costs and our competitors' pricing and marketing strategies, can significantly impact our pricing strategies. If we fail to meet our customers' price expectations in any given period, demand for our custom parts and manufacturing capabilities could be negatively impacted and our business and results of operations could suffer.

 Most of our customers have a need for specific quality of quick-turn, on-demand custom parts. We believe our ability to create parts meeting our customers' specifications and quality expectations is an important factor in our results to date. We cannot assure you that we will be able to continue to consistently manufacture custom parts that achieve the production specifications and quality that our customers expect. If we fail to meet our customers' specifications and quality expectations in any given period, demand for our custom parts and manufacturing capabilities could be negatively impacted and our business and results of operations could suffer.

 The strength of our brands is important to our business, and any failure to maintain and enhance our brands would hurt our ability to retain and expand our customer base as well as further penetrate existing customers.

 Because our custom parts and manufacturing capabilities are sold primarily through our website, the success of our business depends in part upon our ability to attract new and repeat customers to our website in order to increase business and grow our revenue. Customer awareness and the perceived value of our brands will depend largely on the success of our marketing efforts, as well as our ability to consistently provide quality custom parts within the required timeframes and positive customer experiences, which we may not do successfully. A primary component of our business strategy is the continued promotion and strengthening of our brands. We may choose to increase our branding expense materially, but we cannot be sure that this investment would be profitable. If we are unable to successfully maintain and enhance our brands, this could have a negative impact on our business and ability to generate revenue.

 Sales efforts to large customers involve risks that may not be present or that are present to a lesser extent with respect to sales to smaller organizations.

 Attracting and retaining business from large enterprise customers is an element of our business strategy. Sales to large customers involve risks that may not be present or that are present to a lesser extent with sales to smaller organizations, such as longer sales cycles, more complex customer requirements, substantial upfront sales costs, less predictability in completing some of our sales and extended payment terms. A number of factors influence the length and variability of our sales cycle, including the need to educate potential customers about the uses and benefits of our platform, our various technologies and manufacturing capabilities, the longer period of time typically taken by large customers to evaluate and test our project management platform prior to making a purchase decision and placing an order, the discretionary nature of purchasing and budget cycles and the competitive nature of evaluation and purchasing approval processes. As a result, the length of our sales cycle, from identification of the opportunity to deal closure, may vary significantly from customer to customer, with sales to large enterprises typically taking longer to complete. Moreover, larger organizations may demand more customization, which would increase our upfront investment in the sales effort with no guarantee that these customers will seek to use our manufacturing capabilities widely enough across their organization to justify our substantial upfront investment. A portion of these customers may purchase our offerings on payment terms, requiring us to assume a credit risk for non-payment in the ordinary course of business. If we fail to effectively manage these risks associated with sales to large customers, our business, financial condition, and results of operations may be adversely affected.

 Our business depends in part on our ability to process a large volume of new custom part designs from a diverse group of customers and successfully identify significant opportunities for our business based on those submissions.

 We believe the volume of new custom part designs we process and the size and diversity of our customer base give us valuable insight into the needs of our prospective customers. We utilize this industry knowledge to determine where we should focus our development resources. If the number of new custom part designs we process or the size and diversity of our customer base decrease, our ability to successfully identify significant opportunities for our business and meet the needs of existing or prospective customers could be negatively impacted. In addition, even if we do continue to process a large number of new custom part designs and work with a significant and diverse customer base, there are no guarantees that any industry knowledge we extract from those interactions will be successfully utilized to help us identify significant business opportunities or better understand the needs of our existing or prospective customers.

 Wage increases and pressure in certain geographies may prevent us from sustaining our competitive advantage and may reduce our profit margin.

 Measures are being taken in the U.S. and globally to increase minimum wages, and there is a shortage of skilled labor in certain locations leading to increased wage pressure. Similarly, with an increased global focus on environmental, social, and corporate-governance concerns and sustainability, input costs have been steadily rising. Accordingly, we may need to increase the levels of labor compensation more rapidly than in the past to remain competitive in attracting and retaining the quality and amount of labor that our business requires. To the extent that we are not able to control or recoup wage increases through our pricing, wage increases may reduce our margins and cash flows, which could adversely affect our business.

 Loss of our key management or other personnel, including the recent departure of our Chief Executive Officer and President, or our failure to attract, integrate and retain additional personnel in the future, could adversely impact our business.

 Changes to management, including turnover of our top executives, could have an adverse effect on our business. Our business has experienced significant executive management changes. In October 2023, we announced the departure of our former President and Chief Executive Officer ("CEO") and the appointment of Mr. Carey Chen, a member of our board of directors, to serve as President and CEO. In addition, we have experienced departures and transitions of other senior leadership positions.

 These leadership changes may be inherently difficult to manage and may hamper our ability to meet our financial and operational goals as new management becomes familiar with their roles and the business. Such changes may also result in added costs, uncertainty concerning our future direction, decreased employee morale, and the loss of personnel with deep institutional knowledge and industry relationships. Any of the foregoing could result in significant disruptions to our operations and impact our ability to execute on our strategy and pursue strategic initiatives.

 Further, we have increased our dependency on the remaining members of our executive management team to facilitate a smooth transition in leadership roles. Since our executive officers are at-will employees, they could terminate their employment with us at any time, and any such departure could be particularly disruptive in light of the recent leadership changes. If we are unable to mitigate these or other similar risks, our business, results of operations and financial condition may be adversely affected.

 The loss of any of these individuals, each of whom is "at will" and may terminate his or her employment relationship with us at any time, could disrupt our operations and significantly delay or prevent the achievement of our business objectives. We believe that our future success will also depend in part on our continued ability to identify, hire, train and motivate qualified personnel. High demand exists for qualified senior management and other key personnel (including technical, engineering, product, finance, and sales personnel) in the digital manufacturing industry. A possible shortage of qualified individuals in the regions where we operate might require us to pay increased compensation to attract and retain key employees, thereby increasing our costs. In addition, we face intense competition for qualified individuals from numerous companies, many of whom have substantially greater financial and other resources and name recognition than us. We may be unable to attract and retain suitably qualified individuals who are capable of meeting our growing operational, managerial, and other requirements, or we may be required to pay increased compensation in order to do so. For example, our failure to attract and retain shop floor employees may inhibit our ability to fulfill production orders for our customers. Our failure to attract, hire, integrate and retain qualified personnel could impair our ability to achieve our business objectives.

 One element of our growth strategy relies on business acquisitions. We may not realize the anticipated benefits of such acquisitions, and any acquisition, strategic relationship, joint venture, or investment could disrupt our business and harm our operating results and financial condition.

 Our business and customer base have been built in part through organic growth, but also through acquisitions of businesses that increase market share in our current markets or expand into other markets, or broaden our technology, intellectual property, or product line capabilities. We have completed 13 acquisitions during the last four years, and we intend to continue to aggressively pursue attractive opportunities to enhance or expand our offerings through acquisitions, strategic relationships, joint ventures, or

 investments that we believe may allow us to implement our growth strategy. For example, in December 2019, we acquired ICO Mold, LLC ("ICOMold") to enable us to expand our existing Search Engine Optimization ("SEO") and Search Engine Marketing ("SEM") capabilities. During 2020 and 2021, we completed six acquisitions that added CNC machining to our manufacturing capabilities, and three acquisitions that added precision sheet metal fabrication to our offerings. We cannot forecast the number, timing or size of any future acquisitions or other similar strategic transactions, or the effect that any such transactions might have on our operating or financial results. We may not be able to successfully identify future acquisition opportunities or complete any such acquisitions if we cannot reach agreement on commercially favorable terms if we lack sufficient resources to finance such transactions on our own and cannot obtain financing at a reasonable cost or if regulatory authorities prevent such transactions from being completed. Restrictions in the Merger Agreement and Credit Agreement (as defined in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Borrowings and Lines of Credit") also limit our ability to complete new acquisitions.

 Although we have substantial experience engaging in these types of transactions, such transactions may be complex, time consuming and expensive, and may present numerous challenges and risks including:

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 an acquired company, asset or technology not furthering our business strategy as anticipated;

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 difficulties entering and competing in new product or geographic markets and increased competition, including price competition;

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 integration challenges;

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 challenges in working with strategic partners and resolving any related disagreements or disputes;

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 high valuation for a company, asset or technology, or changes in the economic or market conditions or assumptions underlying our decision to make an acquisition;

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 significant problems or liabilities associated with acquired businesses, assets, or technologies, including increased intellectual property and employment-related litigation exposure;

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 acquisition of a significant amount of goodwill, which could result in future impairment charges that would reduce our earnings; and

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 requirements to record substantial charges and amortization expense related to certain purchased intangible assets, deferred stock compensation and other items, as well as other charges or expenses.

 Any one of these challenges or risks could impair our ability to realize any benefit from our acquisitions, strategic relationships, joint ventures, or investments after we have expended resources on them, as well as divert our management's attention. Any failure to successfully address these challenges or risks could disrupt our business and harm our operating results and financial condition. Moreover, any such transaction may not be viewed favorably by investors or other stakeholders.

 If we proceed with a particular acquisition, we may have to use cash, issue new equity securities with dilutive effects on existing stockholders, incur indebtedness, assume contingent liabilities, or amortize assets or expenses in a manner that might have a material adverse effect on our financial condition and results of operations. Acquisitions will also require us to record certain acquisition-related costs and other items as current period expenses, which would have the effect of reducing our reported earnings in the period in which an acquisition is consummated. In addition, we could also face unknown liabilities or write-offs due to our acquisitions, which could result in a significant charge to our earnings in the period in which they occur. We have recorded, and in the future will be required to record any goodwill or other long-lived asset impairment charges in the periods in which they occur, which could result in a significant charge to our earnings in any such period.

 Achieving the expected returns and synergies from future acquisitions will depend, in part, upon our ability to integrate the products and services, technology, administrative functions and personnel of these businesses into our offering lines in an efficient and effective manner. We cannot assure you that we will be able to do so, that any acquired businesses will perform at levels and on the timelines anticipated by our management or that we will be able to realize these synergies. In addition, acquired technologies and intellectual property may be rendered obsolete or uneconomical by our own or our competitors' technological advances. Management resources may also be diverted from operating our existing businesses to certain acquisition integration challenges. If we are unable to successfully integrate acquired businesses, our anticipated revenues and profits may be lower. Our profit margins may also be lower, or diluted, following the acquisition of companies whose profit margins are less than those of our existing businesses.

 In addition, from time to time we may enter into negotiations for acquisitions, relationships, joint ventures, or investments that are not ultimately consummated. These negotiations could result in significant diversion of management time, as well as substantial out-of-pocket costs.

 We may not timely and effectively scale and adapt our existing technology, processes, and infrastructure to meet the needs of our business.

 A key element to our continued growth is the ability to quickly and efficiently quote an increasing number of customer submissions across geographic regions and to manufacture the related custom parts. This will require us to timely and effectively scale and adapt our existing technology, processes, and infrastructure to meet the needs of our business. With respect to our website, project management platform and quoting technology, it may become increasingly difficult to maintain and improve their performance, especially during periods of heavy usage and as our solutions become more complex and our user traffic increases across geographic regions. Similarly, our manufacturing automation technology may not enable us to process the large numbers of unique designs and efficiently manufacture the related custom parts in a timely fashion to meet the needs of our customers as our business continues to grow. Any failure in our ability to timely and effectively scale and adapt our existing technology, processes and infrastructure could negatively impact our ability to retain existing customers and attract new customers, damage our reputation and brands, result in lost revenue, and otherwise substantially harm our business and results of operations.

 The implementation of our reorganization plan could result in greater costs and fewer benefits than we anticipate, which could materially harm our business, financial condition, and operating results.

 On July 7, 2022, the Board approved a reorganization plan (the "Reorganization"), designed to consolidate the Company's national footprint, streamline legacy leadership and centralize core business functions following the completion of 13 acquisitions by Fathom since 2019. These measures included consolidation of leadership and other roles through a net workforce reduction of approximately 6%, consolidation of our Oakland, California facility into our Hartland, Wisconsin headquarters, the establishment of a technology center in Fremont, California and streamlining of certain of our administrative processes. On February 17, 2023, the Company committed to additional actions to continue and expand the Reorganization, including closing a Texas location and consolidating into another Texas location, reducing the Company's workforce by an additional 14%, and prioritizing investments and operations in line with near-term revenue generation. During the third quarter of 2023, the Company expanded the Reorganization to include further workforce reductions at our Hartland and Miami facilities. On January 19, 2024, the Board authorized and directed management to close the Company's Miami Lakes, Florida manufacturing facility as a result of persistent and continuing profitability challenges experienced at the facility. The Company expects to complete these activities by the end of the second quarter 2024. In addition, these initiatives have placed and could place substantial additional demands on our management, which could lead to the diversion of management's attention from other business priorities. These initiatives could also lead to unanticipated work stoppages, low employee morale, decreased productivity, and a failure to deliver under existing and future commitments to third parties, which could harm our business. As a result of these or any other factors, we could fail to realize the anticipated benefits associated with the Reorganization, which could in turn materially harm our business, financial condition, and operating results.

 We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all. If we are unable to raise additional capital when needed, our financial condition could be adversely affected, and we may not be able to execute our growth strategy.

 We intend to continue to make acquisitions and other investments to support our business growth and may require additional funds to respond to business challenges, including the need to complement our growth strategy, increase market share in our current markets or expand into other markets, or broaden our technology, intellectual property, or manufacturing capabilities. Accordingly, we may need to obtain equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock. The Credit Agreement and any debt financing we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. In addition, we may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be adversely affected.

 Numerous factors may cause us not to maintain the revenue growth that we have historically experienced.

 Although our revenue has grown from $20.6 million for the year ended December 31, 2019 to $131.2 million for the year ended December 31, 2023, we may not be able to maintain our historical rate of revenue growth. We believe that our future revenue growth will depend on many factors, a number of which are out of our control, including among others, our ability to:

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 retain and further penetrate existing customers, as well as attract new customers;

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 consistently execute on custom part orders in a manner that satisfies our customers' product needs and provides them with a superior experience;

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 develop new technologies or manufacturing processes and broaden the range of custom parts we offer;

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 capitalize on customers' product expectations for access to comprehensive, user-friendly e-commerce capabilities 24 hours per day, 7 days per week;

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 increase the strength and awareness of our brands across geographic regions;

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 respond to changes in customers' needs, technology, and our industry;

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 react to challenges from existing and new competitors; and

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 respond to an economic slowdown which negatively impacts manufacturers' ability to innovate and bring new products to market.

 We cannot assure you that we will be successful in addressing the factors described above and continuing to grow our business and revenue.

 Errors or defects in the software we use or custom parts we manufacture could cause us to incur additional costs, lose revenue and business opportunities, damage our reputation, and expose us to potential liability.

 The sophisticated software we use and the often complex custom parts we manufacture may contain errors, defects, or other performance problems at any point in the life of the software or custom parts. If errors or defects are discovered in our current or future software or in the custom parts we manufacture for customers, we may not be able to correct them in a timely manner or provide an adequate response to our customers. We may therefore need to expend significant financial, technical and management resources, or divert some of our development resources, in order to resolve or work around those errors or defects. Particularly in the medical sector, errors or defects in our software or custom parts we manufacture could lead to claims by patients against us and our customers and expose us to lawsuits that may damage our and our customers' reputations. Claims may be made by individuals or by classes of users. Our product liability and related insurance policies may not apply or sufficiently cover any product liability lawsuit that arises from defective software we may use or the custom parts we manufacture. Customers such as our collaboration partners may also seek indemnification for third party claims allegedly arising from breaches of warranties under our collaboration agreements.

 Errors, defects, or other performance problems in the software we use or custom parts we manufacture may also result in the loss of, or delay in, the market acceptance of our platform and digital manufacturing capabilities. Such difficulties could also cause us to lose customers and, particularly in the case of our largest customers, the potentially substantial associated revenue which would have been generated by our sales to companies participating in our customer supply chains. Technical problems, or the loss of a customer with a particularly important national or global reputation, could also damage our own business reputation and cause us to lose new business opportunities.

 Interruptions to or other problems with our website, project management platform, information technology systems, manufacturing processes or other operations could damage our reputation and brands and substantially harm our business and results of operations.

 The satisfactory performance, reliability, consistency, security and availability of our website and interactive project management platform, information technology systems, manufacturing processes and other operations are critical to our reputation and brands, and to our ability to effectively service customers. Any interruptions or other problems that cause any of our website, interactive project management platform or information technology systems to malfunction or be unavailable, or negatively impact our manufacturing processes or other operations, may damage our reputation and brands, result in lost revenue, cause us to incur significant costs seeking to remedy the problem and otherwise substantially harm our business and results of operations.

 A number of factors or events could cause such interruptions or problems, including among others: human and software errors, design faults, challenges associated with upgrades, changes or new facets of our business, power loss, telecommunication failures, fire, flood, extreme weather, political instability, acts of terrorism, war, break-ins and security breaches, contract disputes, labor strikes and other workforce-related issues, capacity constraints due to an unusually large number of customers and potential customers accessing our website or project management platform or ordering parts at the same time, and other similar events. These risks are augmented by the fact that our customers come to us largely for our quick-turn low to mid-volume manufacturing capabilities and that accessibility and turnaround speed are often of critical importance to these customers. We are dependent upon our facilities through which we satisfy all of our production demands and in which we house all of the computer hardware necessary to operate our website and systems as well as managerial, customer service, sales, marketing, and other similar functions, and we have not identified alternatives to these facilities or established fully redundant systems in multiple locations. In addition, we are dependent in part on third parties for the implementation and maintenance of certain aspects of our communications and production systems, and therefore preventing, identifying, and rectifying problems with these aspects of our systems is to a large extent outside of our control.

 Moreover, the business interruption insurance that we carry may not be sufficient to compensate us for the potentially significant losses, including the potential harm to the future growth of our business that may result from interruptions in our offerings and manufacturing processes as a result of system failures.

 If a natural or man-made disaster strikes any of our manufacturing facilities, we may be unable to manufacture our products for a substantial period of time and our sales will decline.

 We manufacture the majority of our products in 11 manufacturing facilities located in the U.S. and the rest is manufactured through our supply chain partners. These facilities and the manufacturing equipment we use would be costly to replace if damaged by a natural or man-made disaster, and could require substantial lead time to repair or replace. Our facilities may be harmed by natural or man-made disasters, including, without limitation, earthquakes, floods, tornadoes, fires, hurricanes, tsunamis, nuclear disasters, terrorist attacks, or as a result of a pandemic such as the recent COVID-19 pandemic. In the event any of our facilities are affected by a disaster, we may:

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 be unable to meet the shipping deadlines of our customers;

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 experience disruptions in our ability to process submissions and generate quotations, manufacture, and ship parts, provide marketing and sales support and customer service and otherwise operate our business, any of which could negatively impact our business;

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 be forced to rely on third-party manufacturers;

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 need to expend significant capital and other resources to address any damage caused by the disaster; and

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 lose customers and be unable to reacquire those customers.

 Although we possess insurance for damage to our property and the disruption of our business from casualties, this insurance may not be sufficient to cover all of our potential losses and may not continue to be available to us on acceptable terms, or at all.

 If our present single or limited source suppliers become unavailable or inadequate, our customer relationships, results of operations and financial condition may be adversely affected.

 We acquire substantially all of the manufacturing equipment and certain of our materials that are critical to the ongoing operation and future growth of our business from third parties. We do not have long-term supply contracts with any of our suppliers and operate on a purchase-order basis. While most manufacturing equipment and materials for our products are available from multiple suppliers, certain of those items are only available from single or limited sources. Should any of our present single or limited source suppliers for manufacturing equipment or materials become unavailable or inadequate, or impose terms unacceptable to us such as increased pricing terms, we could be required to spend a significant amount of time and expense to develop alternate sources of supply, and we may not be successful in doing so on terms acceptable to us, or at all. Natural disasters, such as hurricanes or tornadoes, may affect our supply of materials, particularly resins, from time to time, and we may purchase larger amounts of certain materials in anticipation of future shortages or increases in pricing. In addition, if we were unable to find a suitable supplier for a particular type of manufacturing equipment or material, we could be required to modify our existing manufacturing processes and offerings to accommodate the situation. As a result, the loss of a single or limited source supplier could adversely affect our relationship with our customers and our results of operations and financial condition.

 We are subject to payment-related risks.

 We accept payments using a variety of methods, including credit card, customer invoicing, physical bank check and payment upon delivery. As we offer new payment options to our customers, we may be subject to additional regulations, compliance requirements and fraud risk. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and lower profitability. We rely on third parties to provide payment processing services, including the processing of credit cards, debit cards or electronic checks, and it could disrupt our business if these companies become unwilling or unable to provide these services to us. We are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers, or facilitate other types of online payments, and our business and operating results could be adversely affected.

 Workplace accidents or environmental damage could result in substantial remedial obligations and damage to our reputation.

 Accidents or other incidents that occur at our manufacturing and other facilities or involve our personnel or operations could result in claims for damages against us. In addition, in the event we are found to be financially responsible, as a result of environmental or other laws or by court order, for environmental damages alleged to have been caused by us or occurring on our premises, we could be required to pay substantial monetary damages or undertake expensive remedial obligations. The amount of any costs, including fines or damages payments that we might incur under such circumstances, could substantially exceed any insurance we have to cover such losses. Any of these events, alone or in combination, could have a material adverse effect on our business, financial condition and results of operations and could adversely affect our reputation.

 Interruptions, delays in service or inability to increase capacity at third-party data center facilities could adversely affect our business and reputation.

 Our business, brands, reputation, and ability to attract and retain customers depend upon the satisfactory performance, reliability, and availability of our project management platform, and depend upon the availability of the internet and our third-party service providers. We rely on third party data center facilities operated by Amazon Web Services ("AWS"), Ace Cloud Hosting ("Ace"), and Right Networks ("Right Networks") to host our main servers. We do not control the operation of any of AWS, Ace's, or Right Networks' data center hosting facilities, and they may be subject to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures, terrorist attacks and similar events. They may also be subject to interruptions due to system failures, computer viruses, software errors or subject to breaches of computer hardware and software security, break-ins, sabotage, intentional acts of vandalism and similar misconduct. And while we rely on service level agreements with our hosting providers, if they do not properly maintain their infrastructure or if they incur unplanned outages, our customers may experience performance issues or unexpected interruptions and we may not meet our service level agreement terms with our customers. We have experienced, and expect that in the future we may experience interruptions, delays and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions and capacity constraints. These and other similar events beyond our control could negatively affect the use, functionality, or availability of our services.

 Any damage to, or failure of, our systems, or those of our third-party providers, could interrupt or hinder the use or functionality of our website or project management platform. Resulting impairment of or interruptions of our business may reduce revenue, subject us to claims and litigation, cause customers to terminate their contracts and adversely affect our ability to attract new customers. If we are forced to switch hosting facilities for our main servers, we may not be successful in finding an alternative service provider on acceptable terms or in hosting the computer servers ourselves. Our business will also be harmed if customers and potential customers believe our systems are unreliable.

 We are subject to risks related to corporate social responsibility.

 We and our offerings face increasing public scrutiny related to environmental, social and governance ("ESG") activities, including diversity and inclusion, environmental stewardship, support for local communities, corporate governance, and transparency. Before making an investment on behalf of our products, we analyze a wide array of considerations, risks, and potential rewards related to the prospective investment. Among the pecuniary considerations we analyze are the present and future material ESG implications of investments. It is expected that investor demands and the prevailing legal environment will require us to spend additional resources and place increasing importance on ESG matters in our review of prospective investments and management of existing ones. Devoting additional resources to ESG matters could increase the amount of expenses we or our businesses are required to bear. Further, emphasis on ESG criteria in evaluating an investment by us or our offerings and products could lead to reduced profits.

 ESG matters have been the subject of increased focus by certain U.S. regulators, among others. As a result of this regulatory focus and any related legislative and regulatory initiatives, we may be required to provide additional disclosure with respect to ESG matters. This exposes us to increased disclosure risks, for example due to a lack of available or credible data, and the potential for conflicting disclosures may also expose us to an increased risk of misstatement litigation or miss-selling allegations. Failure to manage these risks could result in a material adverse effect on our business in a number of ways.

 Climate change, or legal, regulatory or market measures to address climate change, may materially adversely affect our financial condition and business operations.

 There is evidence of global climate change, which could present risks to our future operations from natural disasters and extreme weather conditions, such as hurricanes, tornadoes, earthquakes, wildfires, or flooding. Such extreme weather conditions could pose physical risks to our facilities and disrupt operation of our supply chain and our customers and may increase operational costs. Concern over climate change will likely result in new legal or regulatory requirements designed to identify or mitigate the effects of climate change on the environment. For example, in the U.S., the SEC is actively engaged in climate-related rulemaking. These proposed rules, depending on how they are finally adopted, as well as other changes the government might implement, could impose significant new burdens on us and our suppliers, with significant costs and operational impacts, and adversely impact our ability to win business and operate successfully. If such laws or regulations are more stringent than current legal or regulatory requirements, we may experience increased compliance burdens and costs to meet the regulatory obligations, and raw material sourcing, manufacturing operations and the distribution of our products may be affected.

 Industry Risks

 We face various risks related to health epidemics, pandemics, and similar outbreaks, which may have material adverse effects on our business, financial position, results of operations and/or cash flows.

 We face a wide variety of risks related to health epidemics, pandemics, and similar outbreaks, especially of infectious diseases, such as the recent COVID-19 pandemic. Since first reported in late 2019, the COVID-19 pandemic dramatically impacted the global health and economic environment, including millions of confirmed cases and deaths, business slowdowns or shutdowns, labor shortages, supply chain challenges, changes in industrial product development spending, regulatory challenges, inflationary pressures, and market volatility.

 If, for example, a new health epidemic or outbreak were to occur, we likely would experience broad and varied impacts, including potentially to our workforce and supply chain, with inflationary pressures and increased costs (which may or may not be fully recoverable or insured), schedule or production delays, market volatility and other financial impacts. If any or all of these events were to occur, we could experience adverse impacts on our overall performance, operations, and financial results. Given the tremendous uncertainties and variables, we cannot at this time predict the impact of any future health epidemics, pandemics, or similar outbreaks, but any one of such events could have a material adverse effect on our business, financial position, results of operations and/or cash flows.

 If demand for our offerings and manufacturing capabilities does not grow as expected, or if market adoption of digital manufacturing does not continue to develop, or develops more slowly than expected, our revenues may stagnate or decline and our business may be adversely affected.

 The industrial manufacturing market, which today is dominated by conventional manufacturing processes that do not involve digital manufacturing technology, is undergoing a shift towards digital manufacturing. We may not be able to develop effective strategies to raise awareness among potential customers of the benefits of digital manufacturing technologies or our offerings and manufacturing capabilities may not address the specific needs or provide the level of functionality required by potential customers to encourage the continuation of this shift towards digital manufacturing. If digital manufacturing technology does not continue to gain broader market acceptance as an alternative to conventional manufacturing processes, or if the marketplace adopts digital manufacturing technologies and capacities developed by our competitors, we may not be able to increase or sustain the level of sales of our offerings and our operating results would be adversely affected as a result.

 We could face liability if our digital manufacturing solutions are used by our customers to print dangerous objects.

 Customers may use our digital manufacturing offerings to produce parts that could be used in a harmful way or could otherwise be dangerous. For example, there have been news reports that 3D printers were used to print guns or other weapons. We have little, if any, control, or knowledge over the parts we manufacture for our customers using our offerings, and it may be difficult, if not impossible, for us to monitor and prevent customers from having certain components of weapons or other dangerous objects manufactured with our services. While we have never digitally manufactured weapons for customers, there can be no assurance that we will not be held liable if someone were injured or killed by a weapon or other dangerous object containing a component part or parts manufactured for a customer using one of our offerings.

 Because the digital manufacturing market is rapidly evolving, forecasts of market growth may not be accurate.

 Market opportunity estimates and growth forecasts included in this Annual Report are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The forecasts and estimates in this Annual Report relating to the expected size and growth of the markets for digital manufacturing technology and other markets in which we participate may prove to be inaccurate. Even if these markets experience the forecasted growth described in this Annual Report, we may not grow our business at similar rates, or at all. Our future growth is subject to many factors, including continued market adoption of our offerings, which is subject to many risks and uncertainties. Accordingly, the forecasts and estimates of market size and growth described in this Annual Report should not be taken as indicative of our future growth.

 Unfavorable global economic conditions and changes, including changes in inflation, interest rates and geopolitical matters, could adversely affect our business, financial condition, or results of operations.

 Heightened levels of inflation and the potential worsening of macroeconomic conditions, including slower growth or recession, further changes to federal government fiscal or monetary policies, tighter credit and higher interest rates, present risks for us, our suppliers, and the stability of the broader manufacturing industrial base. We have experienced pricing increases from our suppliers, and we have increased compensation to our employees to help ensure employee retention. To the extent inflation or other factors increase our business costs, it may not be feasible to pass price increases on to our customers or offset higher costs through manufacturing efficiencies. Inflation could also adversely affect the ability of our customers to purchase our products and higher interest rates could adversely affect the ability of our customers to invest in product innovation and development that generate demand for our custom parts. An economic downturn could result in a variety of risks to our business, including weakened demand for our products and our inability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy could also result in further constraints on our suppliers or cause future customers to delay making payments for our products. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

 In addition, the ongoing trade war between the U.S. and China may impact the cost of raw materials, finished products or other materials used in our offerings and our ability to sell our offerings in China. Overall, the U.S.-China trade relationship remains stalled as economic and national security concerns continue to be a challenge. Other changes in U.S. social, political, regulatory, and economic conditions or in laws and policies governing foreign trade, manufacturing, development, and investment could also adversely affect our business. We could experience interruptions in production due to the processing of customs formalities or reduced customer spending in the wake of weaker economic performance. If global economic conditions remain volatile for a prolonged period our results of operations could be adversely affected.

 Intellectual Property and Infrastructure-Related Risks

 We may not be able to adequately protect or enforce our intellectual property rights, which could impair our competitive position.

 Our success and future revenue growth will depend, in part, on our ability to protect our intellectual property. We rely primarily on patents, licenses, trademarks, and trade secrets, as well as non-disclosure agreements and other methods, to protect our proprietary technologies and processes globally. Despite our efforts to protect our proprietary technologies and processes, it is possible that competitors or other unauthorized third parties may obtain, copy, use or disclose our technologies and processes. We cannot assure you that any of our existing or future patents will not be challenged or invalidated in court or patent office proceedings that could be time-consuming, expensive and distract us from operating our business. In addition, competitors could circumvent our patents by inventing around them. As such, any rights granted under these patents may not provide us with meaningful protection. We may not be able to obtain foreign patents corresponding to our U.S. patents. Even if foreign patents are granted, effective enforcement in foreign countries may not be available. If our patents and other intellectual property do not adequately protect our proprietary technology, our competitors may be able to offer product lines similar to ours. Our competitors may also be able to develop similar technology independently or design around our patents. Any of the foregoing events would lead to increased competition and lower our revenue or gross margin, which would adversely affect our net income.

 We may incur substantial costs enforcing or acquiring intellectual property rights and defending against third-party claims as a result of litigation or other proceedings. Our failure to expand our intellectual property portfolio could adversely affect the growth of our business and results of operations.

 We may incur substantial expense and costs in protecting, enforcing and defending our intellectual property rights against third parties. Intellectual property disputes may be costly and can be disruptive to our business operations by diverting attention and energies of management and key technical personnel and by increasing our costs of doing business. Third-party intellectual property claims asserted against us could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from providing our offerings to customers, subject us to injunctions prohibiting or restricting our sale of our offerings, or require us to redesign our offerings, causing severe disruptions to our operations or the marketplaces in which we compete or require us to satisfy indemnification commitments with our customers, including contractual provisions under various license arrangements. In addition, we may incur significant costs in acquiring the necessary third-party intellectual property rights for use in our offerings. Any of these could have an adverse effect on our business and financial condition.

 Patent applications in the U.S and most other countries are confidential for a period of time until they are published, and the publication of discoveries in scientific or patent literature typically lags actual discoveries by several months or more. As a result, the nature of claims contained in unpublished patent filings around the world is unknown to us, and we cannot be certain that we were the first to conceive inventions covered by our patents or patent applications or that we were the first to file patent applications covering such inventions. Furthermore, it is not possible to know in which countries patent holders may choose to extend their filings under the Patent Cooperation Treaty or other mechanisms.

 In addition, we may be subject to intellectual property infringement claims from individuals, vendors, and other parties, including those that are in the business of asserting patents, but are not commercializing products or services in the field of digital manufacturing, or our customers may seek to invoke indemnification obligations to involve us in such intellectual property infringement claims. Furthermore, although we maintain certain procedures to screen custom parts we manufacture on behalf of customers for infringement on the intellectual property rights of others, we cannot be certain that our procedures will be effective in preventing any such infringement. Any third-party lawsuits or other assertion to which we are subject, alleging infringement of trademarks, patents, trade secrets or other intellectual property rights either by us or by our customers may have a significant adverse effect on our financial condition.

 Cybersecurity risks and cyber incidents, including cyber-attacks, could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and confidential information in our possession and damage to our business relationships, any of which could negatively impact our business, financial condition, and operating results.

 There has been an increase in the frequency and sophistication of the cyber and security threats we face, with attacks ranging from those common to businesses generally to those that are more advanced and persistent, which may target us due to our substantial reliance on information technology. Cyber-attacks and other security threats could originate from a wide variety of sources, including cyber criminals, nation state hackers, hacktivists, and other outside parties. As a result of the generally increasing frequency and sophistication of cyber-attacks, and our substantial reliance on technology, we may face a heightened risk of a security breach or disruption with respect to sensitive information resulting from an attack by computer hackers, foreign governments or cyber terrorists.

 The operation of our business is dependent on computer hardware and software systems, as well as data processing systems and the secure processing, storage, and transmission of information, which are vulnerable to security breaches and cyber incidents. A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity, or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data, or causing operational disruption. In addition, we and our employees may be the target of fraudulent emails or other targeted attempts to gain unauthorized access to proprietary or other sensitive information. The result of these incidents may include disrupted operations, misstated or unreliable financial data, fraudulent transfers, or requests for transfers of money, liability for stolen information, increased cybersecurity protection and insurance costs, litigation, and damage to our business relationships, causing our business and results of operations to suffer. Our reliance on information technology is substantial, and accordingly the risks posed to our information systems, both internal and those provided by third-party service providers are critical. We have implemented processes, procedures and internal controls designed to mitigate cybersecurity risks and cyber intrusions and rely on industry accepted security measures and technology to securely maintain confidential and proprietary information maintained on our information systems; however, these measures, as well as our increased awareness of the nature and extent of a risk of a cyber-incident, do not guarantee that a cyber-incident will not occur and/or that our financial results, operations or confidential information will not be negatively impacted by such an incident, especially because the cyber-incident techniques change frequently or are not recognized until launched and because cyber-incidents can originate from a wide variety of sources.

 Those risks are exacerbated by the rapidly increasing volume of highly sensitive data, including our and our customers' proprietary business information and intellectual property, and personally identifiable information of our employees and customers, that we collect and store in our data centers and on our networks. The secure processing, maintenance and transmission of this information are critical to our operations. A significant actual or potential theft, loss, corruption, exposure, fraudulent use or misuse of employee, customer or other personally identifiable or our or our customers' proprietary business data, whether by third parties or as a result of employee malfeasance (or the negligence or malfeasance of third party service providers that have access to such confidential information) or otherwise, non-compliance with our contractual or other legal obligations regarding such data or intellectual property or a violation of our privacy and security policies with respect to such data could result in significant remediation and other costs, fines, litigation or regulatory actions against us and significant reputational harm.

 Our proprietary digital manufacturing software contains third-party open-source software components. Our use of such open-source software may expose us to additional risks and harm our intellectual property and failure to comply with the terms of the underlying open source software licenses could restrict our ability to sell our offerings.

 Our proprietary digital manufacturing software contains components that are licensed under so-called "open-source," "free" or other similar licenses. Open-source software is made available to the general public on an "as-is" basis under the terms of a non-negotiable license. We currently combine our proprietary software with open-source software, but not in a manner that we believe requires the release of the source code of our proprietary software to the public. We do not plan to integrate our proprietary software with open-source software in ways that would require the release of the source code of our proprietary software to the public; however, our use of open-source software may entail greater risks than use of third-party commercial software. Open-source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code. In addition, if we combine our proprietary software with open-source software in a certain manner, we could, under certain open-source licenses, be required to release to the public or remove the source code of our proprietary software. As is standard practice among technology companies, Fathom leverages open-source software in the development of its internal software. Open-source software is commonly used as a foundation to which Fathom develops upon, allowing us to customize the software based on the specific needs of Fathom. This approach enables faster development of high quality software. We may also face claims alleging noncompliance with open-source license terms or infringement or misappropriation of proprietary software. These claims could result in litigation, require us to purchase a costly license or remove the open-source software. In addition, if the license terms for open-source software that we use change, we may be forced to re-engineer our solutions, incur additional costs, or discontinue the sale of certain of our offerings if re-engineering could not be accomplished on a timely basis. Although we monitor our use of open-source software to avoid subjecting our offerings to unintended conditions, there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to commercialize our offerings. We cannot guarantee that we have incorporated open-source software in our proprietary software in a manner that will not subject us to liability or in a manner that is consistent with our current policies and procedures.

 Compliance-Related Risks

 Government regulation of the Internet and e-commerce is evolving, and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and results of operations.

 We are subject to general business regulations and laws as well as regulations and laws specifically governing the Internet and e-commerce. Existing and future laws and regulations may impede the growth of the Internet or other online services. These regulations and laws may cover taxation, restrictions on imports and exports, customs, tariffs, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, the provision of online payment services, broadband residential Internet access and the characteristics and quality of the types of custom parts we manufacture or may manufacture in the future. It is not clear how existing laws governing issues such as property use and ownership, sales and other taxes, fraud, libel, and personal privacy apply to the Internet and e-commerce, especially where these laws were adopted prior to the advent of the Internet and do not contemplate or address the unique issues raised by the Internet or e-commerce. Those laws that do reference the Internet are being interpreted by the courts and their applicability and reach are therefore uncertain. The costs of compliance with these regulations may increase in the future as a result of changes in the regulations or the interpretation of them. Further, any failures on our part to comply with these regulations may subject us to significant liabilities. Those current and future laws and regulations or unfavorable resolution of these issues may substantially harm our business and results of operations.

 Aspects of our business are subject to privacy, data use and data security regulations, which may impact the way we use data to target customers.

 Privacy and security laws and regulations may limit the use and disclosure of certain information and require us to adopt certain cybersecurity and data handling practices that may affect our ability to effectively market our manufacturing capabilities to current, past, or prospective customers. In many jurisdictions consumers must be notified in the event of a data security breach, and such notification requirements continue to increase in scope and cost. The changing privacy laws in the U.S., Europe and elsewhere, including the General Data Protection Regulation ("GDPR") in the European Union, which became effective May 25, 2018, and the California Consumer Privacy Act of 2018, which was enacted on June 28, 2018 and became effective on January 1, 2020, create new individual privacy rights and impose increased obligations, including disclosure obligations, on companies handling personal data. The impact of these continuously evolving laws and regulations could have a material adverse effect on the way we use data to digitally market and pursue our customers.

 Our business involves the use of hazardous materials, and we and our suppliers must comply with environmental, health and safety laws and regulations, which can be expensive and restrict how we do business.

 Our business involves the controlled storage, use and disposal of hazardous materials. We and our suppliers are subject to federal, state, and local laws and regulations governing the use, manufacture, storage, handling, and disposal of these hazardous materials. Although we believe that the safety procedures utilized by us and our suppliers for handling and disposing of these materials comply with the standards prescribed by these laws and regulations, we cannot eliminate the risk of accidental contamination or injury from these materials. In the event of an accident, federal, state, or local authorities may curtail our use of these materials and interrupt our business operations. We do not currently maintain hazardous materials insurance coverage. If we are subject to any liability as a result of activities involving hazardous materials, our business and financial condition may be adversely affected, and our reputation and brands may be harmed.

 If we are unable to meet regulatory quality standards applicable to our manufacturing and quality processes for the parts we manufacture, our business, financial condition or operating results could be harmed.

 As a manufacturer of CNC-machined and injection-molded custom parts, we conform to certain international standards, including International Organization for Standardization ("ISO"), 9001:2015 for our injection molding facilities and the AS9100:2016 standard for our CNC-machining facilities in Hartland, WI, Tempe, AZ, Newark, NY. We conform to the ISO 9001:2015 standard for our plastics manufacturing and the AS9100:2016 standard for our metals manufacturing in Hartland, WI, Tempe, AZ, and Newark, NY. We conform to the ISO 9001:2015 for our sheet metal custom parts and the AS9100:2016 standards for our CNC-machined custom parts in Hartland, WI, Tempe, AZ, and Newark, NY. We also conform to international standard ISO 9001:2015 at our manufacturing facilities in Hartland, WI, Newark, NY, Denver, CO, Round Rock, TX, Tempe, AZ, Miami Lakes, FL, and Elk Grove, IL. We conform to the NIST800-171 standard at our facilities in Oakland, CA and Tempe, AZ. We conform to the ITAR standard at our facilities in Hartland, WI, Ithaca, NY, Denver, CO, Tempe, AZ, and Newark, NY. Additionally, we conform to international standard ISO 13485 at our manufacturing facilities in Round Rock, TX and Miami Lakes, FL. If any system inspection reveals that we are not in compliance with applicable standards, regulators may take action against us, including issuing a corrective action request or discontinuing our certifications. If any of these actions were to occur, it could harm our reputation as well as our business, financial condition, and operating results.

 We are subject to environmental, health and safety laws and regulations related to our operations and the use of our digital manufacturing systems and consumable materials, which could subject us to compliance costs and/or potential liability in the event of non-compliance.

 We are subject to environmental laws and regulations governing our manufacturing operations, including, but not limited to, emissions into the air and water and the use, handling, disposal, and remediation of hazardous substances. A certain risk of environmental liability is inherent in our production activities. These laws and regulations govern, among other things, the generation, use, storage, registration, handling and disposal of chemicals and waste materials, the emission and discharge of hazardous materials into the ground, air or water, the cleanup of contaminated sites, including any contamination that results from spills due to our failure to properly dispose of chemicals and other waste materials, and the health and safety of our employees. Under these laws, regulations, and requirements, we could also be subject to liability for improper disposal of chemicals and waste materials. Accidents or other incidents that occur at our facilities or involve our personnel or operations could result in claims for damages against us. In the event we are found to be financially responsible, as a result of environmental or other laws or by court order, for environmental damages alleged to have been caused by us or occurring on our premises, we could be required to pay substantial monetary damages or undertake extensive remedial obligations. If our operations fail to comply with such laws or regulations, we may be subject to fines and other civil, administrative, or criminal sanctions, including the revocation of permits and licenses necessary to continue our business activities. In addition, we may be required to pay damages or civil judgments in respect of third-party claims, including those relating to personal injury (including exposure to hazardous substances that we generate, use, store, handle, transport, manufacture or dispose of), property damage or contribution claims. Some environmental laws allow for strict and joint and several liabilities for remediation costs, regardless of fault. We may be identified as a potentially responsible party under such laws. The amount of any costs, including fines or damages payments that we might incur under such circumstances, could substantially exceed any insurance we have to cover such losses. Any of these events, alone or in combination, could have a material adverse effect on our business, financial condition and results of operations and could adversely affect our reputation.

 The cost of complying with current and future environmental, health and safety laws applicable to our operations, or the liabilities arising from past releases of, or exposure to, hazardous substances, may result in future expenditures. Any of these developments, alone or in combination, could have an adverse effect on our business, financial condition, and results of operations.

 We are subject to anti-corruption laws, trade controls, economic sanctions and similar laws and regulations. Our failure to comply with these laws and regulations could subject us to civil, criminal, and administrative penalties and harm our reputation.

 We service customers located in a number of countries. Doing business with foreign customers subjects us to U.S. and other anti-corruption laws and regulations imposed by governments around the world with jurisdiction over such commerce with foreign customers, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010, as well as the laws of the countries where we do business. Failure to comply with these anti-corruption laws and regulations could subject us to civil, criminal, and administrative penalties and harm our reputation. We are also subject to various U.S., international, and regional trade laws, including trade and economic sanctions and export controls, imposed by governments around the world with jurisdiction over our commerce with foreign customers. We are also subject to embargoes, sanctions, and trade and export controls imposed by the U.S. and other governments restricting or prohibiting sales to or transactions with specific persons or jurisdictions or the provision of certain items, based on their classification, to certain jurisdictions or persons or for certain end use purposes. Failure to comply with these embargoes, sanctions, and trade and export controls could subject us to civil, criminal, and administrative penalties and harm our reputation. These embargoes, sanctions, and trade and export controls can change rapidly with little to no notice, and therefore, our current and future offerings could become subject to heightened restrictions, which could increase our compliance costs and our risks of potential non-compliance in these areas.

 Risks of Being a Public Company

 Our management team has limited experience managing a public company.

 Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage being a public company that is subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could harm our business, results of operations and financial condition.

 The requirements of being a public company may strain our resources, divert management's attention, and affect its ability to attract and retain qualified board members.

 As a public company listed in the U.S., we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and any rules promulgated thereunder, as well as the rules of NYSE. The requirements of these rules and regulations increase our legal and financial compliance costs, make some activities more difficult, time-consuming, or costly, and increase demand on its systems and resources. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls for financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight will be required and, as a result, management's attention may be diverted from other business concerns. These rules and regulations can also make it more difficult for us to attract and retain qualified independent members of our board of directors. Additionally, these rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance. We may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. The increased costs of compliance with public company reporting requirements and our potential failure to satisfy these requirements could have a material adverse effect on our operations, business, financial condition, or results of operations.

 We have identified material weaknesses in our internal control over financial reporting, resulting from pervasive control deficiencies in our process level controls. Failure to achieve and maintain effective internal control over financial reporting could result in our failure to accurately or timely report our financial condition or results of operations, which could have a material adverse effect on our business and stock price.

 We are required to comply with the SEC rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of our controls over financial reporting. We are required to make an annual assessment of our internal controls over financial reporting pursuant to Section 404. This assessment includes disclosure of certain material weaknesses identified by our management in our internal control over financial reporting. Our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting until our first annual report required to be filed with the SEC, following the later of the date we are deemed to be an "accelerated filer" or a "large accelerated filer," each as defined in the Exchange Act, or the date we are no longer an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 ("JOBS") Act.

 As of December 31, 2023, based on the Company's implementation of a structured internal controls design and testing process during 2023, we have identified material weaknesses in certain components of the 2013 COSO framework, including the control environment and control activities.

 • Our information technology general controls intended to restrict access to data and application were not adequate resulting in appropriate access and improper segregation of duties at both the system (pervasive) and end user levels across multiple locations. Management determined that ineffective information technology general controls represent a material weakness.

 • A comprehensive system of formal policies, procedures and controls has not been fully designed or implemented to ensure appropriate document retention and achieve complete, accurate and timely financial accounting, reporting and disclosures. Management determined that the ineffective pervasive controls represent a material weakness.

 • Management determined that the Company has design deficiencies over revenue, specifically around (i) customer and supplier onboarding; (ii) document retention; and (iii) a lack of evidence to support control performance. Management determined that the collective ineffective controls over revenue constitute a material weakness.

 • Management determined that the Company did not maintain effective controls over the completeness, existence, accuracy, and presentation and disclosure of the accounting for income taxes and related liabilities, including (i) quarterly and year-end income tax provision and reporting; (ii) significant transactions and business events; (iii) uncertain tax positions; (iv) the tax receivable agreement liability valuation derived from our Up-C tax structure; (v) and tax related disclosures. Management determined that the ineffective controls over income tax accounting constitute a material weakness.

 • Management determined that the Company has design deficiencies over the completeness, accuracy, existence, and presentation and disclosure of inventory. Specifically, we did not maintain effective controls related to (i) validation of the inventory costing, including unit of measure; (ii) consistent verification of inventory existence throughout the year; and (iii) reconciliation of inventory accounts. Management determined that the ineffective controls over inventory accounting constitute a material weakness.

 A "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our consolidated financial statements will not be prevented or detected on a timely basis.

 The CORE Investors have substantial influence over our management and policies, and their interests may conflict with ours or yours in the future. The CORE investors have entered into a Support Agreement with the Company in connection with our pending merger which will ensure stockholder approval of the Merger Agreement and Merger at the pending special stockholders meeting.

 CORE Industrial Partners Fund I, L.P. and CORE Industrial Partners Fund I Parallel, L.P. (the "CORE Investors") beneficially own approximately 62.6% of our common stock, which generally vote together as a single class on matters submitted to a vote of our stockholders, including the election of directors. As a result, the CORE Investors have the ability to influence our business and affairs through their ability to control matters generally submitted to our stockholders for approval, including the election of directors, "negative control" rights through their ownership of our common stock combined with certain supermajority voting provisions of our certificate of incorporation (our "Charter") and amended and restated bylaws (our "Bylaws"), and the provisions in the Investor Rights Agreement described below. If the other holders of our Class A common stock are dissatisfied with the performance of our board of directors, they have no ability to remove any of our directors, unless for cause and then only upon the affirmative vote of holders of 66-2 3% of our outstanding Class A common stock and Class B common stock, voting as a single class.

 The CORE Investors and their managing partner, an affiliate of CORE Industrial Partners, entered into a Support Agreement with Fathom and Parent pursuant to which, among other things, the CORE Investors have agreed to take certain actions required by Fathom subject to the terms, conditions and limitations set forth therein, including to (i) vote all shares of Fathom Common Stock beneficially owned by the CORE Investors in favor of the Merger Agreement and the Merger at the pending special stockholders meeting to consider and approve the Merger Agreement and the Merger, (ii) not exercise dissenters' rights, appraisal rights or vote in favor of an alternative proposal or other action that would reasonably be expected to prevent, interfere with, adversely affect or delay the Merger and (iii) not sell, assign, transfer, encumber or otherwise dispose of any shares of Fathom held by the CORE Investors, or enter into any contract, option or other arrangement or understanding with respect to the sale, assignment, transfer, encumbrance or other disposition of any shares of Fathom Common Stock held by the CORE Investors, other than as provided under certain customary exceptions. Accordingly, the Support Agreement is expected to result in a majority of outstanding shares of Fathom Common Stock being voted in favor of the proposal to approve and adopt the Merger Agreement at the pending special stockholders meeting, with the result that such proposal will be adopted.

 In addition, in connection with Fathom OpCo's previous business combination with Altimar Acquisition Corp. II (the "Business Combination"), we entered into the Investor Rights Agreement with the CORE Investors which provides for an initial ten-person board of directors, consisting of nine individuals designated by the CORE Investors, and one independent director mutually agreed by the CORE Investors and the Sponsor. The CORE Investors have certain continued nomination rights for a number of directors ranging from the majority of the board of directors to one director, while they beneficially own shares of common stock in excess of certain ownership percentage of the amount owned by the CORE Investors at the closing of the Business Combination ("Closing"), as determined in accordance with the Investor Rights Agreement. In addition, for so long as the CORE Investors beneficially own shares of common stock representing at least 5% of the amount owned by the CORE Investors at Closing, the CORE Investors will have the right to designate a person to attend meetings of our board (including any meetings of any committees thereof) in a non-voting observer capacity.

 The CORE Investors and their affiliates engage and will continue to engage in a broad spectrum of activities, including investments in the manufacturing and industrial industries generally, and engage and may continue to engage in the same or similar activities or related lines of business as those in which we are engaged or may engage in, directly or indirectly. In the ordinary course of their business activities, the CORE Investors and their affiliates may engage in activities in which their interests conflict with our interests or those of our other shareholders, such as investing in or advising businesses that directly or indirectly compete with certain portions of our business or are suppliers or partners of ours. Our Charter provides that none of the CORE Investors, any of their affiliates or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his director and officer capacities) or its affiliates will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. The CORE Investors and their affiliates also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. In addition, the CORE Investors and their affiliates may have an interest in pursuing acquisitions, divestitures, and other transactions that, in their judgment, could enhance their investment, even though such transactions might involve risks to you.

 Because we are a "controlled company" for purposes of the corporate governance requirements of the NYSE, our stockholders will not have, and may never have, the protections that these corporate governance requirements are intended to provide.

 Because we are a "controlled company" for purposes of the corporate governance requirements of the NYSE, we are not required to comply with the provisions requiring that a majority of our directors be independent, the compensation of our executives be determined by independent directors or nominees for election to our board of directors be selected by independent directors. If we choose to take advantage of any or all of these exemptions, our stockholders may not have the protections that these rules are intended to provide.

 Under SEC Rules, we are an "emerging growth company" and a "smaller reporting company" and the reduced SEC disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.

 We are an emerging growth company, as defined in the Jumpstart Our Business Startups ("JOBS") Act. As an emerging growth company, we may follow reduced disclosure requirements and do not have to make all of the disclosures that public companies that are not emerging growth companies do. We will remain an emerging growth company until the earlier of (a) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more (as adjusted for inflation); (b) the last day of the fiscal year following the fifth anniversary of the date of the completion of the initial public offering of Fathom; (c) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (d) the date on which we are deemed to be a "large accelerated filer" under the rules of the SEC, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:

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 not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

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 not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

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 reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and

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 exemptions from the requirements of holding a nonbinding advisory vote of stockholders on executive compensation, stockholder approval of any golden parachute payments not previously approved and having to disclose the ratio of the compensation of our chief executive officer to the median compensation of our employees.

 In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for complying with new or revised accounting standards; and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates for any such new or revised accounting standards.

 We may choose to take advantage of some, but not all, of the available exemptions for emerging growth companies. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our share price may be more volatile.

 In order to satisfy our obligations as a public company, we have hired, and may need to hire additional qualified accounting and financial personnel with appropriate public company experience.

 As a public company, we must establish and maintain effective disclosure and financial controls and make changes in our corporate governance practices. We have hired and may need to hire additional accounting and financial personnel with appropriate public company experience and technical accounting knowledge. It may be difficult to retain such personnel, or to recruit additional qualified personnel if needed. Our existing operating expenses and operations will be impacted by the direct costs of our employment of additional accounting and financial personnel and the indirect consequences related to the diversion of management resources from research and development efforts.

 The Company may be subject to securities litigation, which is expensive and could divert management attention.

 Following the Business Combination, the per share price of our Class A common stock or the price per Warrant has been volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities litigation, including class action litigation. Litigation of this type could result in substantial costs and diversion of management's attention and resources, which could have a material adverse effect on our business, financial condition, and results of operations. Any adverse determination in litigation could also subject the Company to significant liabilities.

 Because we became a publicly traded company by means other than a traditional underwritten initial public offering, the Company's stockholders may face additional risks and uncertainties.

 Because we became a publicly traded company by means of consummating the Business Combination rather than by means of a traditional underwritten initial public offering, there was no independent third-party underwriter selling the shares of the Company's Class A common stock or warrants to purchase shares of Class A common stock ("the Warrants"), and, accordingly, the Company's stockholders do not have the benefit of an independent review and investigation of the type normally performed by an unaffiliated, independent underwriter in a public securities offering. Due diligence reviews typically include an independent investigation of the background of the company, any advisors and their respective affiliates, review of the offering documents and independent analysis of the plan of business and any underlying financial assumptions. Although Altimar II performed a due diligence review and investigation of Fathom in connection with the Business Combination, the lack of an independent due diligence review and investigation in connection with that process increases the risk of investment in the Company because Altimar II's due diligence review and investigation may not have uncovered facts that would be important to a potential investor.

 In addition, because the Company did not become a publicly traded company by means of a traditional underwritten initial public offering, security or industry analysts may not provide, or be less likely to provide, coverage of the Company. Investment banks may also be less likely to agree to underwrite secondary offerings on behalf of the Company than they might otherwise be if the Company became a publicly traded company by means of a traditional underwritten initial public offering because they may be less familiar with the Company as a result of more limited coverage by analysts and the media. The failure to receive research coverage or support in the market for the Company's Class A common stock could have an adverse effect on the Company's ability to develop a liquid market for the Company's Class A common stock.

 Risks Related to our Structure and Governance

 Delaware law, our Charter and our Bylaws contain certain provisions, including anti-takeover provisions, which limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.

 Our Charter and the Delaware General Corporation Law ("DGCL") contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our board of directors and therefore depress the trading price of Fathom's Class A common stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of our board of directors or taking other corporate actions, including effecting changes in management. Among other things, our Charter and Bylaws include provisions regarding:

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 a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board;

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 the ability of our board to issue shares of preferred stock, including "blank check" preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

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 the limitation of the liability of, and the indemnification of, Fathom's directors and officers;

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 the right of our board to elect a director to fill a vacancy created by the expansion of our board or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our board;

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 the requirement that directors may only be removed from our board for cause;

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 the requirement that a special meeting of stockholders may be called only by our board or the chairman of our board, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors;

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 controlling the procedures for the conduct and scheduling of our board and stockholder meetings;

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 the ability of our board to amend the Bylaws, which may allow our board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; and

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 advance notice procedures with which stockholders must comply to nominate candidates to our board or to propose matters to be acted upon at a stockholders' meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the composition of our board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of the Company.

 These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board or management.

 In addition, as a Delaware corporation, Fathom generally is subject to provisions of Delaware law, including the DGCL, although Fathom has elected not to be governed by Section 203 of the DGCL.

 Any provision of our Charter, our Bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for stockholders to receive a premium for their shares of Fathom's capital stock and could also affect the price that some investors are willing to pay for Fathom's common stock.

 In addition, the provisions of the Investor Rights Agreement, as described herein, provide the stockholders party thereto with certain board representation and other consent rights that could also have the effect of delaying or preventing a change in control.

 Our Charter designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by Fathom's stockholders, which could limit Fathom's stockholders' ability to obtain a favorable judicial forum for disputes with Fathom or its directors, officers, or other employees.

 The Charter provides that, unless Fathom consents in writing to the selection of an alternative forum, (a) any derivative action or proceeding brought on behalf of Fathom, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee, agent or stockholder of Fathom to Fathom or Fathom's stockholders, or any claim for aiding and abetting such alleged breach, (c) any action asserting a claim against Fathom or any current or former director, officer, other employee, agent or stockholder of Fathom (i) arising pursuant to any provision of the DGCL, our Charter (as it may be amended or restated) or our Bylaws or (ii) as to which the DGCL confers jurisdiction on the Delaware Court of Chancery or (d) any action asserting a claim against Fathom or any current or former director, officer, other employee, agent or stockholder of Fathom governed by the internal affairs doctrine of the law of the State of Delaware shall, as to any action in the foregoing clauses (a) through (d), to the fullest extent permitted by law, be solely and exclusively brought in the Delaware Court of Chancery; provided, however, that the foregoing shall not apply to any claim arising under federal securities laws, including the Securities Act as to which the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum. Notwithstanding the foregoing, the provisions of Article XI of our Charter will not apply to suits brought to enforce any liability or duty created by the Exchange Act, or any other claim for which the federal district courts of the United States of America shall be the sole and exclusive forum. Further, Section 22 of the Securities Act of 1933, as amended ("Securities Act"), creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by that act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce this forum selection provision as written as to claims arising under the Securities Act.

 This choice-of-forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with Fathom or its directors, officers, stockholders, agents, or other employees, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our Charter inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, Fathom may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect Fathom's business, financial condition and results of operations and result in a diversion of the time and resources of Fathom's management and board of directors.

 Our Charter does not limit the ability of the CORE Investors to compete with us.

 The CORE Investors and their affiliates engage in a broad spectrum of activities, including investments in the financial services and technology industries. In the ordinary course of their business activities, the CORE Investors and their affiliates may engage in activities where their interests conflict with Fathom's interests or those of its stockholders. Our Charter provides that none of the CORE Investors, any of their affiliates or any director who is not employed by Fathom (including any non-employee director who serves as one of its officers in both his director and officer capacities) or its affiliates will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which Fathom operates. The CORE Investors and their affiliates also may pursue, in their capacities other than as directors of Fathom, acquisition opportunities that may be complementary to Fathom's business, and, as a result, those acquisition opportunities may not be available to Fathom. In addition, the CORE Investors may have an interest in pursuing acquisitions, divestitures, and other transactions that, in their judgment, could enhance their investment, even though such transactions might involve risks to you.

 We are a holding company, and our only material asset is our interest in Fathom OpCo, and we are accordingly dependent upon distributions made by Fathom OpCo to pay dividends, taxes, and other expenses, including payments under the TRA.

 We are a holding company with no material assets other than our Class A common units in Fathom OpCo ("New Fathom Units") which correspond on a one-to-one basis with the outstanding shares of our Class A common stock. As a result, Fathom has no independent means of generating revenue or cash flow. Our ability to pay taxes, and other expenses, including payments under the TRA, described in Note 21 - Income Taxes within our consolidated financial statements, will depend on the financial results and cash flows of Fathom OpCo and its subsidiaries and the distributions we receive from Fathom OpCo. Deterioration in the financial condition, earnings, or cash flow of Fathom OpCo and its subsidiaries for any reason could limit or impair Fathom OpCo's ability to pay such distributions. Additionally, to the extent that we need funds and Fathom OpCo and/or its subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or Fathom OpCo and/or its subsidiaries are otherwise unable to provide such funds, it could materially adversely affect Fathom's liquidity and financial condition.

 Subject to the discussion below, Fathom OpCo will continue to be treated as a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, taxable income will be allocated to holders of New Fathom Units. Accordingly, we will be required to pay income taxes on our allocable share of any net taxable income of Fathom OpCo. Under the terms of the Second Amended and Restated Limited Liability Company Agreement of Fathom Holdco, LLC, dated as of December 23, 2021 (the "Fathom Operating Agreement"), Fathom OpCo is obligated to make tax distributions to holders of the New Fathom Units (including us) calculated at certain assumed tax rates. In addition to tax expenses, we will also incur expenses related to our operations, including our payment obligations under the TRA, which likely will be significant, and some of which will be reimbursed by Fathom OpCo (excluding payment obligations under the TRA). We intend to cause Fathom OpCo to make ordinary distributions and tax distributions to holders of New Fathom Units on a pro rata basis in amounts sufficient to cover all applicable taxes, relevant operating expenses, payments by us under the TRA and dividends, if any, declared by us. However, as discussed above, Fathom OpCo's ability to make such distributions may be subject to various limitations and restrictions including, but not limited to, retention of amounts necessary to satisfy the obligations of Fathom OpCo and its subsidiaries and restrictions on distributions that would violate any applicable restrictions contained in Fathom OpCo's or its subsidiaries' debt agreements, or any applicable law, or that would have the effect of rendering Fathom OpCo or a subsidiary insolvent. To the extent that Fathom is unable to make payments under the TRA for any reason, such payments will be deferred and will accrue interest until paid; provided, however, that nonpayment for a specified period may constitute a breach of a material obligation under the TRA and therefore accelerate payments under the TRA, which could be substantial.

 Additionally, although Fathom OpCo and its subsidiaries generally will not be subject to any entity-level U.S. federal income tax, they may be liable for audit adjustments to prior year tax returns, absent an election to the contrary. In the event Fathom OpCo's calculations of taxable income are incorrect, Fathom OpCo, its subsidiaries and/or their respective owners, including us, in later years may be subject to material liabilities as a result of such audits.

 If Fathom OpCo were treated as a corporation for U.S. federal income tax or state tax purposes, then the amount available for distribution by Fathom OpCo could be substantially reduced and the value of our common stock will likely be adversely affected.

 An entity that would otherwise be classified as a partnership for U.S. federal income tax purposes (such as Fathom OpCo) may nonetheless be treated as, and taxable as, a corporation if it is a "publicly traded partnership" unless an exception to such treatment applies. An entity that would otherwise be classified as a partnership for U.S. federal income tax purposes will be treated as a "publicly traded partnership" if interests in such entity are traded on an established securities market or interests in such entity are readily tradable on a secondary market or the substantial equivalent thereof. If Fathom OpCo were determined to be treated as a "publicly traded partnership" (and taxable as a corporation) for U.S. federal income tax purposes, Fathom OpCo would be taxable on its income at the U.S. federal income tax rates applicable to corporations and distributions by Fathom OpCo to its partners (including Fathom) could be taxable as dividends to such partners to the extent of the earnings and profits of Fathom OpCo. In addition, we would no longer have the benefit of increases in the tax basis of Fathom OpCo's assets as a result of exchanges of New Fathom Units for shares of Fathom Class A common stock. Pursuant to the Fathom Operating Agreement, the Exchange TRA Parties (as defined in the TRA) may, from time to time, subject to the terms of the Fathom Operating Agreement, exchange their interests in Fathom OpCo and have such interests redeemed by Fathom OpCo for cash or Fathom stock. While such exchanges could be treated as trading in the interests of Fathom OpCo for purposes of testing "publicly traded partnership" status, the Fathom Operating Agreement requires us to impose restrictions on exchanges that we determine to be necessary or advisable so that Fathom OpCo is not treated as a "publicly traded partnership" for U.S. federal income tax purposes. Accordingly, while such position is not free from doubt, Fathom OpCo is expected to be operated such that it is not treated as a "publicly traded partnership" taxable as a corporation for U.S. federal income tax purposes and we intend to take the position that Fathom OpCo is not so treated as a result of exchanges of its interests pursuant to the Fathom Operating Agreement.

 Pursuant to the TRA, we will be required to make payments to Blocker TRA Parties and Exchange TRA Parties (each as defined in the TRA) for certain tax benefits we may claim, and those payments will likely be substantial. If the pending merger is consummated, the TRA will automatically terminate in full without any tax benefit payments or early termination payment.

 The Exchange TRA Parties (as defined in the TRA) may in the future exchange their New Fathom Units, together with the cancellation of an equal number of shares of Class B common stock, for shares of Fathom Class A common stock, or cash pursuant to the Fathom Operating Agreement. Such transactions are expected to result in increases in our allocable share of the tax basis of the tangible and intangible assets of Fathom OpCo and its subsidiaries. These increases in tax basis may increase (for income tax purposes) depreciation and amortization deductions and therefore reduce the amount of income or franchise tax that Fathom would otherwise be required to pay in the future had such sales and exchanges never occurred. Additionally, in connection with the closing of the Business Combination, we acquired the Blockers (as defined in the TRA) from the Blocker TRA Parties (as defined in the TRA). Certain tax assets and attributes of the Blockers may be available to reduce the amount of income or franchise tax that we would otherwise be required to pay in the future had we not acquired the Blockers.

 In connection with the Business Combination, we entered into the TRA, which generally provides for the payment by it of 85% of the net cash savings, if any, in U.S. federal, state and local, income and franchise tax (computed using certain assumptions to address the impact of state and local taxes) that it actually realizes (or in certain cases is deemed to realize) as a result of tax basis in certain assets and other tax attributes of the Blockers and of Fathom at the time of the Business Combination (including as a result of any cash payments made to Fathom OpCo in exchange for New Fathom Units pursuant to the Business Combination), any increases in tax basis and other tax benefits related to the payment of cash consideration pursuant to the Business Combination Agreement and any increases in tax basis and other tax benefits resulting from any exchange of New Fathom Units for shares of Class A common stock or cash in the future and tax benefits related to entering into and making payments under the TRA. We will retain the benefit of the remaining 15% of such tax savings.

 Payments under the TRA are our obligation not Fathom OpCo's. The actual increase in our allocable share of Fathom OpCo's tax basis in its assets, as well as estimating the amount and timing of any payments due to the TRA Parties based on future exchanges under the TRA, is by its nature, imprecise. For purposes of the TRA, savings in tax generally are calculated by comparing Fathom's actual tax liability (determined by using the actual applicable U.S. federal income tax rate and assumed combined state and local income tax rate) to the amount that Fathom would have been required to pay had it not been able to utilize any of the tax benefits subject to the TRA. The amounts payable, as well as the timing of any payments under the TRA will vary depending upon a number of factors, including the timing of exchanges, the market price of the Class A common stock at the time of the exchange, the extent to which such exchanges are taxable, the depreciation and amortization periods that will apply to any increases in tax basis, the U.S. federal income tax rate then applicable, and the amount and timing of the recognition of Fathom's income. Many of the factors that may determine the amount of payments that we will make under the TRA are outside of its control. As of December 31, 2023, the Company determined that making a future payment under the TRA was not probable because the Company does not believe it will have sufficient taxable income to utilize deductions of certain tax attributes that would generate cash savings in U.S. federal, state and local income tax or franchise tax to require a payment under the TRA. As a result, the Company remeasured the TRA liability at zero in the consolidated balance sheets and recorded a gain of $28,270 in the consolidated statements of operations for the fiscal year ended December 31, 2023.

 Any payments made by us under the TRA will generally reduce the amount of overall cash flow that might have otherwise been available to us. To the extent that we are unable to make timely payments under the TRA for any reason, the unpaid amounts will be deferred and will accrue interest until paid; however, nonpayment for a specified period may constitute a breach of a material obligation under the TRA and therefore accelerate payments due under the TRA, as further described below. Furthermore, our future obligation to make payments under the TRA could make us a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax benefits that may be realized or deemed realized under the TRA.

 On February 16, 2024, and in connection with the execution of the merger agreement, the TRA was amended by the Company, Fathom OpCo and the other parties signatory to the amendment. As so amended, the TRA will automatically terminate in full without any payment, including any Tax Benefit Payment or Early Termination Payment (each capitalized term as defined in the TRA), upon the consummation of the merger, and the merger will not constitute a Change of Control (as defined in the TRA) thereunder. The consummation of the merger is subject to the satisfaction or waiver (if permitted) of certain conditions as set forth in the merger agreement, and there is no assurance that the merger will be consummated or upon the timetable presently contemplated.

 In certain cases, payments under the TRA may exceed the actual tax benefits Fathom realizes or be accelerated.

 Payments under the TRA will be based on the tax reporting positions that Fathom determines under the procedures and assumptions set forth in the TRA, and the U.S. Internal Revenue Service ("IRS") or another taxing authority may challenge all or any part of the tax basis increases, as well as other tax positions that Fathom takes, and a court may sustain such a challenge. In the event that any tax benefits initially claimed by Fathom are disallowed, the Exchange TRA Parties and the Blocker TRA Parties (each as defined in the TRA) will not be required to reimburse Fathom for any excess payments that may previously have been made under the TRA, for example, due to adjustments resulting from examinations by taxing authorities. Rather, excess payments made to such holders will be netted against any future cash payments otherwise required to be made by Fathom under the TRA, if any, after the determination of such excess. However, a challenge to any tax benefits initially claimed by Fathom may not arise for a number of years following the initial time of such payment or, even if challenged early, such excess cash payment may be greater than the amount of future cash payments that Fathom might otherwise be required to make under the terms of the TRA and, as a result, there might not be future cash payments against which to net. Actual tax benefits realized by Fathom may differ from tax benefits calculated under the TRA as a result of the use of certain assumptions in the TRA, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. As a result, in certain circumstances Fathom could make payments under the TRA in excess of Fathom's actual income or franchise tax savings, which could materially impair Fathom's financial condition.

 Moreover, the TRA provides that, in certain events, including a change of control, breach of a material obligation under the TRA, or Fathom's exercise of early termination rights, Fathom's obligations under the TRA will accelerate and Fathom will be required to make a lump-sum cash payment to the Exchange TRA Parties and the Blocker TRA Parties and other applicable parties to the TRA equal to the present value of all forecasted future payments that would have otherwise been made under the TRA, which lump-sum payment would be based on certain assumptions, including those relating to Fathom's future taxable income. The lump-sum payment would likely be substantial and could exceed the actual tax benefits that Fathom realizes subsequent to such payment because such payment would be calculated assuming, among other things, that Fathom would have certain tax benefits available to it and that Fathom would be able to use the potential tax benefits in future years. Assuming no material changes in the relevant tax law, we expect that if we experienced a change of control or the TRA had been terminated at December 31, 2023, the estimated lump-sum payment would be approximately $36.9 million (calculated using a discount rate equal to a per annum rate of LIBOR plus 100 basis points, applied against an undiscounted liability of approximately $60.9 million).

 There may be a material negative effect on Fathom's liquidity if the payments required to be made by Fathom under the TRA exceed the actual income or franchise tax savings that Fathom realizes. Furthermore, Fathom's obligations to make payments under the TRA could also have the effect of delaying, deferring, or preventing certain mergers, asset sales, other forms of business combinations or other changes of control.

 On February 16, 2024, and in connection with the execution of the merger agreement, the TRA was amended by the Company, Fathom OpCo and the other parties signatory to the amendment. As so amended, the TRA will automatically terminate in full without any payment, including any Tax Benefit Payment or Early Termination Payment (each capitalized term as defined in the TRA), upon the consummation of the merger, and the merger will not constitute a Change of Control (as defined in the TRA) thereunder. The consummation of the merger is subject to the satisfaction or waiver (if permitted) of certain conditions as set forth in the merger agreement, and there is no assurance that the merger will be consummated or upon the timetable presently contemplated.

 Fathom OpCo may directly or indirectly make distributions of cash to us substantially in excess of the amounts we use to make distributions to our stockholders and pay our expenses (including our taxes and payments by Fathom under the TRA). To the extent we do not distribute such excess cash as dividends to our shareholders, the direct or indirect holders of New Fathom Units would benefit from any value attributable to such cash as a result of their ownership of our stock upon an exchange of their New Fathom Units.

 We are entitled to receive a pro rata portion of any distributions made by Fathom OpCo. Any cash received from such distributions will first be used to satisfy any tax liability and then to make any payments required to be made by Fathom under the TRA. Subject to having available cash and subject to limitations imposed by applicable law and contractual restrictions, the Fathom Operating Agreement requires Fathom OpCo to make certain distributions to holders of New Fathom Units (including Fathom) pro rata to facilitate the payment of taxes with respect to the income of Fathom OpCo that is allocated to them. To the extent that the tax distributions we directly or indirectly receive exceed the amounts we actually require to pay taxes, TRA payments and other expenses (which is likely to be the case given that the assumed tax rate for such distributions will generally exceed our effective tax rate), we will not be required to distribute such excess cash. Our board of directors may, in its sole discretion, choose to use such excess cash for certain purposes, including to make distributions to the holders of our stock. Unless and until our board of directors chooses, in its sole discretion, to declare a distribution, we will have no obligation to distribute such cash (or other available cash other than any declared dividend) to our stockholders.

 No adjustments to the exchange ratio of New Fathom Units for shares of our common stock will be made as a result of either (i) any cash distribution by us or (ii) any cash that we retain and do not distribute to our stockholders. To the extent we do not distribute such cash as dividends and instead, for example, hold such cash balances or use such cash for certain other purposes, this may result in shares of our stock increasing in value relative to the New Fathom Units. The holders of New Fathom Units may benefit from any value attributable to such cash balances if they acquire shares of our stock in an exchange of New Fathom Units.

 If our pending merger is consummated, the Warrants will automatically cease to represent a Warrant exercisable for Class A common stock and will become a Warrant exercisable for the per share merger consideration in the merger.

 In the event that the our pending merger is consummated, then, at the effective time of the merger, each outstanding Warrant will, in accordance with its terms, automatically and without any required action on the part of the holder thereof or any other person, cease to represent a Warrant exercisable for Class A common stock and will become a Company Warrant exercisable for the per share merger consideration for Class A common stock in the merger of $4.75 in cash (the "Per Share Price"). If following consummation of our merger a Registered Holder (as defined in the Warrant Agreement) properly exercises a Warrant within thirty (30) days following the public disclosure of the consummation of the merger pursuant to a Current Report on Form 8-K filed with the SEC, the Warrant Price (as defined in the Warrant Agreement) with respect to such exercise will be reduced by an amount (in dollars) equal to the difference of (i) the Warrant Price in effect prior to such reduction minus (ii) (A) the Per Share Price (but in no event less than zero) minus (B) the Black-Scholes Warrant Value (as defined in the Warrant Agreement). The merger agreement is subject to customary closing conditions and there is no assurance that the merger will be consummated.

 We may amend the terms of the Warrants in a manner that may be adverse to holders of Public Warrants with the approval by the holders of at least 50% of the then outstanding Public Warrants. As a result, the exercise price of the Warrants could be increased, the exercise period could be shortened and the number of shares of Class A common stock purchasable upon exercise of a Warrant could be decreased, all without approval of each Warrant affected.

 Our Warrants were issued in registered form under a Warrant Agreement between Continental Stock Transfer and Trust Company, as Warrant Agent, and us. The Warrants collectively consist of (i) 9,900,000 warrants to purchase one of Altimar II's Class A ordinary shares acquired by the Sponsor in a private placement simultaneously with the closing of the Altimar II IPO (the "Private Placement Warrants") and (ii) 8,625,000 warrants issued in the Altimar II IPO, entitling the holder thereof to purchase one of Altimar II's Class A ordinary shares (the "Public Warrants" and, collectively with the Private Placement Warrants, the "Warrants"). Upon closing of the Business Combination, the shares issuable upon exercise of the Private Placement Warrants and the Public Warrants became shares of Fathom's Class A common stock. The Warrant Agreement provides that the terms of the Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding Public Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants. Accordingly, we may amend the terms of the Public Warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding Public Warrants approve of such amendment. Although our ability to amend the terms of the Public Warrants with the consent of at least 50% of the then outstanding Public Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the Warrants, convert the Warrants into cash, shorten the exercise period or decrease the number of shares of Class A common stock, as applicable, purchasable upon exercise of a Warrant.

 The volatility in our stock price directly impacts the valuation of our Warrants, and the earnout shares and could increase the volatility in our net income (loss) in our consolidated statements of comprehensive income (loss).

 The change in fair value of our Warrants and earnout shares is the result of changes in the price of our Class A common stock at each reporting period. The change in fair value of Warrants, Fathom earnout share liabilities, and Sponsor earnout share liabilities represents the mark-to-market fair value adjustments of these instruments in connection with the Business Combination. Significant changes in our stock price may adversely affect our net income (loss) in our consolidated statements of comprehensive income (loss).

 Risks Relating to the Ownership of Our Common Stock

 There can be no assurance that we will be able to remain in compliance with the continued listing standards of the NYSE.

 On March 29, 2023, we were notified by the NYSE that the average closing price of our Class A common stock over a prior 30 consecutive trading day period was below $1.00 per share, which is the minimum average closing price per share required to maintain listing on the NYSE under Section 802.01C of the NYSE Listed Company Manual ("Section 802.01C"). Under Section 802.01C, we had a period of six months following the receipt of this notice to regain compliance with the minimum share price requirement, or until our next annual meeting of stockholders if stockholder approval is required to cure the share price non-compliance, as would be the case to effectuate a reverse stock split. Under the appliable NYSE rules, we could regain compliance at any time during the six-month cure period if on the last trading day of any calendar month during the cure period, the Common

 Stock has (i) a closing price of at least $1.00 per share and (ii) an average closing price of at least $1.00 per share over the 30-trading day period ending on the last trading day of such month.

 In order to regain compliance with the NYSE's price criteria, and after obtaining stockholder approval at our 2023 annual meeting, we completed a 1-for-20 reverse stock split of our Class A common stock and Class B common stock on September 28, 2023, and trading of our Class A common stock on an as split basis commenced on the NYSE on September 29, 2023. In its letter to us dated October 5, 2023, the NYSE confirmed that the Company had regained compliance with its minimum share price criteria as of October 4, 2023. There is no assurance that we will not violate the NYSE's minimum share price criteria in the future.

 In addition, our common stock could also be delisted if (i) our average market capitalization over a consecutive 30 trading-day period is less than $15 million, or (ii) our common stock trades at an "abnormally low" price. In either case, our common stock would be suspended from trading on the NYSE immediately, and the NYSE would begin the process to delist our common stock, subject to our right to appeal under NYSE rules. Additionally, the NYSE considers a listed company to be out of compliance with its continued listing standards if the company's average global market capitalization over a 30 consecutive trading-day period is less than $50.0 million and, at the same time, the company's stockholders' equity is less than $50.0 million. If the company does not regain compliance within a cure period up to a maximum of 18 months, it will be subject to delisting. If any of these were to occur, there is no assurance that any appeal we undertake in these or other circumstances would be successful, nor is there any assurance that we will remain in compliance with the other NYSE continued listing standards.

 If we fail to satisfy the NYSE's continued listing standards, our common stock will be subject to delisting. Delisting from the NYSE would likely have a negative effect on the liquidity and market price of our common stock, reduce the number of investors willing to hold or acquire our common stock, limit or reduce the amount of analyst coverage we receive, and impair your ability to sell or purchase our common stock when you wish to do so. In addition, a delisting from the NYSE might negatively impact our reputation and, as a consequence, our business. Additionally, if we were delisted from the NYSE and we are not able to list our common stock on another national exchange we will not be eligible to use Form S-3 registration statements, which would delay our ability to raise funds in the future, limit the type of offerings of common stock we could undertake, and increase the expenses of any offering.

 In the event of a delisting of our common stock, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our securities to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the NYSE minimum share price requirement or prevent future non-compliance with the NYSE's listing standards. Additionally, if our common stock is not listed on, or becomes delisted from, the NYSE for any reason, and is quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our common stock may be more limited than if we were quoted or listed on the NYSE or another national securities exchange. You may be unable to sell your common stock unless a market can be established or sustained.

 Our operating results and financial condition may fluctuate on a quarterly and annual basis.

 Our operating results and financial condition fluctuate from quarter-to-quarter and year-to-year and are likely to continue to vary due to a number of factors, many of which are not within our control. Both our business and the digital manufacturing industry are changing and evolving rapidly, and our historical operating results may not be useful in predicting our future operating results. If our operating results do not meet the guidance that we provide to the marketplace or the expectations of securities analysts or investors, the market price of our common stock will likely decline. Fluctuations in our operating results and financial condition may be due to a number of factors, including:

 • the degree of market acceptance of digital manufacturing and, specifically, our services;

 • our ability to compete with competitors and new entrants into our markets;

 • the mix of offerings that we sell during any period;

 • the timing of our sales and deliveries of our offerings to customers;

 • the geographic distribution of our sales;

 • changes in our pricing policies or those of our competitors, including our response to price competition;

 • changes in the amount that we spend to develop and manufacture new technologies;

 • changes in the amounts that we spend to promote our services;

 • expenses and/or liabilities resulting from litigation;

 • delays between our expenditures to develop and market new or enhanced solutions and the generation of revenue from those solutions;

 • unforeseen liabilities or difficulties in integrating our acquisitions or newly acquired businesses;

 • disruptions to our information technology systems;

 • general economic and industry conditions that affect customer demand;

 • changes in accounting rules and tax laws.

 In addition, our revenues and operating results may fluctuate from quarter-to-quarter and year-to-year due to our sales cycle and seasonality among our customers. Generally, our digital manufacturing solutions are subject to the adoption and capital expenditure cycles of our customers. Additionally, for our more complex solutions, which may require additional facilities investment, potential customers may spend a substantial amount of time performing internal assessments prior to making a purchase decision. This may cause us to devote significant effort in advance of a potential sale without any guarantee of receiving any related revenues. As a result, revenues and operating results for future periods are difficult to predict with any significant degree of certainty, which could lead to adverse effects on our inventory levels and overall financial condition.

 Due to the foregoing factors, and the other risks discussed in this Part I, Item 1A: "Risk Factors" and elsewhere in this Annual Report, you should not rely on quarter-over-quarter and year-over-year comparisons of our operating results as an indicator of our future performance.

 Our stock price has been and may continue to be volatile or may decline regardless of our operating performance.

 You may lose some or all of your investment. The trading price of our common stock has been and may continue to be volatile. The stock market recently has experienced extreme volatility. This volatility has often been unrelated or disproportionate to the operating performance of particular companies. You may not be able to resell your shares at an attractive price due to a number of factors such as those described in this "Risk Factors" section and the following:

 • our operating and financial performance and prospects;

 • our quarterly or annual earnings or those of other companies in our industry compared to market expectations;

 • conditions that impact demand for our services;

 • future announcements concerning our business, our customers' businesses, or our competitors' businesses;

 • the public's reaction to our press releases, other public announcements, and filings with the SEC;

 • the market's reaction to our reduced disclosure and other requirements as a result of being an "emerging growth company" under the JOBS Act or a "smaller reporting company" under SEC rules;

 • the size of our public float;

 • coverage by or changes in financial estimates by securities or industry analysts or failure to meet their expectations;

 • market and industry perception of our success, or lack thereof, in pursuing our growth strategy;

 • strategic actions by us or our competitors, such as acquisitions or restructurings;

 • changes in laws or regulations which adversely affect the manufacturing industry generally or the digital manufacturing industry or Fathom specifically;

 • changes in accounting standards, policies, guidance, interpretations, or principles;

 • changes in our senior management or key personnel;

 • issuances, exchanges, or sales, or expected issuances, exchanges, or sales of our capital stock;

 • changes in our dividend policy;

 • adverse resolution of new or pending litigation against us; and

 • changes in general market, economic and political conditions in the U.S. and global economies or financial markets, including those resulting from government policies, interest rate changes, pandemics, natural disasters, terrorist attacks, acts of war or other military conflicts, and responses to such events.

 Furthermore, the trading price of our Class A common stock may be adversely affected by third parties trying to drive down the market price. Short sellers and others, some of whom post anonymously on social media, may be positioned to profit if our stock declines and their activities can negatively affect our stock price.

 These broad market, industry and other factors may materially reduce the market price of our common stock, regardless of our operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock continues to be low. As a result, you may suffer a loss on your investment.

 If securities or industry analysts publish inaccurate or unfavorable research or reports about our business, our stock price and trading volume could decline.

 The trading market for our common stock depends, in part, on the research and reports that third-party securities analysts publish about us and the industry in which we operate. We may be unable or slow to attract research coverage and if one or more analysts cease coverage of us, the price and trading volume of our securities would likely be negatively impacted. If any of the analysts that may cover us change their recommendation regarding our common stock adversely, or provide more favorable relative recommendations about our competitors or publish inaccurate research or reports, the price of our common stock would likely decline. If any analyst that may cover us ceases covering us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price or trading volume of our common stock to decline. Moreover, if one or more of the analysts who cover us downgrades our common stock, or if our reporting results do not meet their expectations, the market price of our common stock could decline.

 Item 1B. Unresolved Staff Comments.

 None.

 Item 1C. Cybersecurity.

 We deploy several processes for assessing, identifying and managing material risks from cybersecurity threats. These processes include, but are not limited to, security assessments, physical access restrictions, internal and external penetration testing, endpoint detection and response, and employee security awareness programs and training.

 Our cybersecurity processes have been integrated into our overall risk management processes, and we engage assistance from third parties as we deem necessary or appropriate. We believe that we have processes in place to oversee and identify risks from cybersecurity threats associated with our use of third-party services providers to our business.

 Our Information Technology team, under the direction of the Chief Executive Officer, is tasked with monitoring cybersecurity and operational risks related to information security and system disruption. They have many years of experience in various technology-related functions including security, auditing, compliance and systems. Our executive officers are briefed regularly on information security, including discussion of processes such as those listed above to monitor the prevention, detection, mitigation and remediation of cybersecurity incidents.

 Our Board is charged with providing oversight of our risk management process, including risks from cybersecurity threats. Periodically, the Board reviews risk assessments, including cybersecurity risks, prepared by management and/or third-party providers.

 There have been no previous cybersecurity incidents which have materially affected us to date, including our business strategy, results of operations or financial condition. However, any future potential risks from cybersecurity threats, including, but not limited to, exploitation of vulnerabilities, ransomware, denial of service, or other similar threats may materially affect us, including our execution of business strategy, reputation, results of operations and/or financial condition.

 Item 2. Properties.

 Our corporate headquarters is located in leased office space in Hartland, Wisconsin. We currently use approximately 400,000 square feet of manufacturing capacity across 11 facilities located throughout the U.S., including Texas, Florida, Arizona, Colorado, California, Wisconsin, Minnesota, New York, and Illinois. With the exception of our Minnesota and Illinois locations, which we own, all of our facilities are located in leased premises.

 We believe that the facilities we currently occupy are adequate for the purposes for which they are being used and are well maintained. In general, no difficulty is anticipated in negotiating renewals as leases expire or in finding other satisfactory space if the premises become unavailable. See Note 15 "Leases" to our consolidated financial statements included in this Annual Report for additional information.

 Item 3. Legal Proceedings.

 We may from time to time be involved in litigation and claims incidental to the conduct of our business. We are not currently subject to any pending legal (including judicial, regulatory, administrative or arbitration) proceedings that we expect to have a material impact on our consolidated financial statements. However, given the inherent unpredictability of these types of proceedings and the potentially large and/or indeterminate amounts that could be sought, an adverse outcome in certain matters could have a material effect on Fathom's financial results in any particular period. See Note 19 "Commitments and Contingencies" to our consolidated financial statements for additional information.

 Item 4. Mine Safety Disclosures.

 Not applicable.

 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 Market for Registrant's Common Equity

 Our Class A Common Stock is currently listed on NYSE under the symbol "FATH." Our public warrants (the "Public Warrants") were formerly listed on NYSE under the symbol "FATH.WS." On September 21, 2023, the NYSE notified the Company, and on September 22, 2023, the Company publicly announced, that the NYSE had determined to (a) commence proceedings to delist the Company's Public Warrants, each whole warrant exercisable to purchase one share of the Company's Class A Common Stock, par value $0.0001 per share, at a price of $11.50 per share, and (b) immediately suspend trading in the Public Warrants due to "abnormally low" trading price levels. As such, the Public Warrants were delisted from the NYSE.

 Holders of Record

 As of April 3, 2024, there were 29 holders of record of Class A common stock and 11 holders of record of Class B common stock. Such numbers do not include beneficial owners holding our securities through nominee names. Our Class B common stock is not registered and we do not intend to list the Class B common stock on any exchange or stock market.

 Dividends

 We do not intend to declare or pay cash dividends in the foreseeable future. Our management anticipates that all earnings and other cash resources, if any, will be retained for investment in our business.

 Sales of Unregistered Securities

 None.

 Issuer Purchases of Equity Securities

 None.

 Item 6. [Reserved]

 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

 The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Fathom Digital Manufacturing Corporation's financial statements and notes thereto included elsewhere in this Annual Report. This discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth elsewhere in this Annual Report. Unless otherwise indicated herein, the financial figures presented herein are expressed in thousands of U.S. dollars. The terms "Fathom," the "Company," "we," "us," and "our" as used herein refer to the business and operations of Fathom Digital Manufacturing Corporation and its consolidated subsidiaries.

 Recent Developments

 Agreement and Plan of Merger

 On February 16, 2024, the Company, entered into an Agreement and Plan of Merger (the "Merger Agreement"), by and among Fathom Digital Manufacturing Intermediate, LLC, a Delaware limited liability company ("Parent"), Fathom Digital Manufacturing Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent ("Company Merger Sub"), Fathom Digital Manufacturing Merger Sub 2, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Company Merger Sub ("LLC Merger Sub"), Fathom OpCo, and the Company, pursuant to which, among other things, (i) LLC Merger Sub will merge with and into Fathom OpCo with Fathom OpCo surviving the merger as a partially owned subsidiary of the Company (the "LLC Merger") and (ii) immediately following the LLC Merger, Company Merger Sub will merge with and into the Company, with the Company as the surviving corporation (the "Merger", and collectively, with the LLC Merger and the other transactions contemplated by the Merger Agreement, the "Transactions"). Parent, Company Merger Sub and LLC Merger Sub are affiliates of CORE.

 In connection with the Transactions, Parent will acquire all of the Company's outstanding shares of Class A Common Stock (other than (i) shares of Class A Common Stock held by the Company as treasury stock or owned by Parent or Company Merger Sub, (ii) shares of Class A Common Stock owned by CORE, (iii) shares of Class A Common Stock cancelled pursuant to the Merger Agreement and (iv) any dissenting shares of Class A Common Stock) for $4.75 per share in cash.

 The closing of the Merger Agreement is subject to customary closing conditions. Upon the closing of the Merger, Fathom will become a privately held company.

 Overview

 Fathom Digital Manufacturing Corporation was incorporated in Delaware in December 2021. However, our roots stretch back over 35 years with the founding of several of our subsidiaries.

 We are a leading national on-demand digital manufacturing platform at the forefront of the Industry 4.0 revolution. Industry 4.0 utilizes e-commerce, automation, and data sharing in a cyber-physical system to communicate and cooperate in the manufacturing process over the Internet of Things ("IoT"). Using our expansive manufacturing footprint and extensive expertise in both additive and traditional manufacturing, we provide comprehensive product development and on-demand manufacturing services to many of the largest and most innovative companies in the world. Our unified suite of manufacturing technologies, processes, and proprietary software enables us to deliver hybridized solutions that meet the specific needs of our customers, empowering them to tackle complex manufacturing problems and accelerate product development cycles.

 Our differentiated strategy focuses on speed, problem solving, adaptive technical responsiveness, and a technology agnostic approach across our 25 plus manufacturing processes to meet customers' design intent. This allows our customers to iterate faster, often shortening their product development and production cycles from months to days.

 We seamlessly blend in-house capabilities consisting of plastic and metal additive technologies, injection molding and tooling, computer numerical control ("CNC") machining, and precision sheet metal fabrication. We operate over 530 advanced manufacturing systems across 25 unique manufacturing processes and a 400,000 sq. ft. manufacturing footprint, spanning 11 facilities located primarily within the U.S. We believe we are positioned to serve the largest geographic markets in which our customers are located and enable cost effective and rapid turnaround times for our customers. Our scale and the breadth of offerings allow our customers to consolidate their supply chain and product development needs through the ability to source through a single manufacturing supplier. Fathom's manufacturing technologies and capacity are further extended through the utilization of a selected group of highly qualified suppliers that specialize in injection molding and tooling and CNC machining.

 We continue to invest significantly in the enhancement and expansion of our technologies, processes, and capabilities with the aim of better serving the needs of a broader set of customers and end-markets. As a result of our efforts described above, we have developed a loyal base of approximately 2,500 customers, including many of the most innovative companies in the world. Our

 customers span across a diverse range of end-markets, including, but not limited to, the aerospace, defense, technology, medical, automotive, and IoT sectors. This diverse customer base has allowed for no single customer to represent more than 5.4% and 7.1% of our revenue in 2023 and 2022, respectively.

 We believe the market for our on-demand digital manufacturing services across manufacturing applications is largely unsaturated as companies continue to realize the efficiency and effectiveness of our rapid quotation system and 3D CAD driven manufacturing processes. Our market is projected to grow, fueled by demand for additive manufacturing and continuation of the trend of customers increasingly outsourcing their prototyping and low-to-medium volume production needs. We believe our position as the only on-demand digital manufacturing platform purpose-built to serve the rapid prototyping and low-to-medium volume production needs of the largest and most innovative companies, coupled with our competitive strengths, will allow us to maintain and extend our market leading position.

 Factors Affecting the Comparability of our Results of Operations

 As a result of a number of factors, our historical results of operations are not comparable from period to period and may not be comparable to our financial results of operations in future periods. Set forth below is a brief discussion of the key factors that may impact the comparability of our results of operations in future operations.

 Impact of the Previous Business Combination

 Fathom is subject to corporate level tax rates at the federal, state, and local levels. Fathom OpCo was and is treated as a flow-through entity for U.S. federal income tax purposes, and as such, has generally not been subject to U.S. federal income tax at the entity level. Accordingly, other than for certain consolidated subsidiaries of Fathom OpCo prior to the consummation of the Business Combination (as defined below) that are structured as corporations and unless otherwise specified, the historical results of operations and other financial information presented does not include any provision for U.S. federal income tax.

 Fathom pays U.S. federal and state income taxes as a corporation on its share of taxable income. Fathom OpCo's 2021 Business Combination with Altimar Acquisition Corp. II was accounted for as a business combination using the acquisition method of accounting. Accordingly, the assets and liabilities, including any identified intangible assets, were recorded at their preliminary fair values at the date of completion of the Business Combination, with any excess of the purchase price over the preliminary fair value recorded as goodwill. The application of business combination accounting required the use of significant estimates and assumptions.

 As a result of the application of accounting for the Business Combination, the historical consolidated financial statements of Fathom OpCo are not necessarily indicative of Fathom's future results of operations, financial position and cash flows. For example, increased tangible and intangible assets resulting from adjusting the basis of tangible and intangible assets to their fair value would result in increased depreciation and amortization expense in the periods following the consummation of the Business Combination.

 In connection with the Business Combination, we entered into the TRA with certain of our pre-Business Combination owners that provides for the payment by Fathom to such owners of 85% of the benefits that Fathom is deemed to realize as a result of the Company's share of existing tax basis acquired in the Business Combination and other tax benefits related to entering into the TRA.

 Additionally, in connection with the Business Combination, we have accounted for the issuance of warrants and earnout shares as liabilities which require re-measurement to fair value at the end of each reporting period, as applicable, and adopted the Fathom 2021 Omnibus Incentive Plan which will result in higher share-based compensation expenses.

 Key Factors Affecting Our Results

 Our financial position and results of operations depend to a significant extent on the following factors:

 Industry Opportunity and Competitive Landscape

 As discussed above, the market in which we operate is projected to grow, fueled by increased demand for additive manufacturing and continuing trends in customer outsourcing of production needs. We operate in a large, fragmented, and competitive industry, competing for customers with a range of digital manufacturers, digital manufacturing brokers, and regional design bureaus. We believe we are uniquely positioned as the only full-service outsourced solution built specifically to cater to the manufacturing needs of enterprise-level corporate customers. In particular, we believe we compare favorably to other industry participants on the basis of the following competitive factors:

 •

 Fathom owns a wide breadth of advanced manufacturing processes, including additive 2.0 and emerging technologies;

 •

 We have a proven track record of serving blue-chip, enterprise-level corporate customers;

 •

 We offer our clients turnaround times in as little as 24-hours, nationwide;

 •

 Our unified digital customer experience is supplemented by embedded support teams;

 •

 Fathom provides the industry's only team of dedicated customer-facing engineers, unlocking the broadest parts envelope and providing customers with high-value customized parts;

 •

 Our list of certifications validates our capabilities and precision (tight tolerances, handling of sensitive client data, etc.);

 •

 We possess a wealth of material expertise, technical design capabilities, and engineering resources which we leverage to deliver superior customer results regardless of manufacturing process and production material; and

 •

 Our successful and proven acquisition integration playbook for strategic growth opportunities.

 Customer Product Life Cycle and Connectivity

 We believe that a number of trends affecting our industry have affected our results of operations and may continue to do so. For example, we believe that many of our target customers are facing three mega trends which are disrupting long-term product growth models including (i) increased pressure to shorten product life-cycles, (ii) manufactured parts on-demand, and (iii) expectation to deliver products that are personalized and customized to unique customer specifications. We believe we continue to be well positioned to benefit from these trends given our proprietary technology alignment with Industry 4.0 trends that enables us to automate and integrate processes involved in manufacturing custom parts. The COVID-19 pandemic has also impacted the manufacturing environment. For example, the pandemic accelerated the digitization of manufacturing as companies pivoted to a work-from-home and socially distanced manufacturing plant environment. As a result, the adoption of e-commerce was accelerated, which allows opportunity for us to provide valuable solutions to manufacturers looking to build resiliency in their supply chains through fast, on-demand manufacturers. While our business may be positively affected by these trends, our results may also be favorably or unfavorably impacted by other trends that affect product developer and engineer orders for custom parts in low volumes, including, among others, economic conditions, changes in product developer and engineer preferences or needs, developments in our industry and among our competitors, and developments in our customers' industries. For a more complete discussion of the risks facing our business, see Item 1A. "Risk Factors" of this Annual Report.

 Manufacturing Facilities and Capacity

 We believe our combined facilities are adequate for our development and production needs in the near future. Should we need to add space or transition into new facilities, we believe we have the ability to expand our footprint on commercially reasonable terms.

 Comparison of Years Ended December 31, 2023 and 2022

 Revenue

 $

 131,292

 $

 Cost of revenue

 93,608

 111,991

 Gross profit

 37,684

 49,150

 Operating expenses

 Selling, general, and administrative

 37,503

 49,869

 Depreciation and amortization

 18,482

 18,179

 Restructuring

 4,855

 1,897

 -

 Total operating expenses

 60,840

 1,259,463

 Operating loss

 (23,157

)

 (1,210,313

)

 Interest expense and other (income) expense

 Interest expense

 15,571

 9,015

 Other expense

 Other income

 (37,299

)

 (99,160

)

 Total interest expense and other expense (income), net

 (21,634

)

 (89,795

)

 Net loss before income tax

 (1,523

)

 (1,120,518

)

 Income tax benefit

 (79

)

 (6,662

)

 (1,443

)

 (1,113,856

)

 Net loss attributable to Fathom OpCo non-controlling interest

 (17,502

)

 (623,552

)

 Net income (loss) attributable to controlling interest

 (490,304

)

 Comprehensive loss:

 Loss from foreign currency translation adjustments

 -

 (107

)

 Comprehensive income (loss), net of tax

 $

 $

 (490,411

)

 Revenue

 Revenue was $131,292 for the year ended December 31, 2023 compared to $161,141 for the year ended December 31, 2022. The decrease of $29,849, or 18.5%, was driven by ongoing softness in the macro-economic environment and heightened competitive pressures, mainly impacting the company's precision sheet metal, CNC, injection molding, and additive product lines.

 Gross Profit

 Gross profit, or revenue less cost of revenue, was $37,684, or 28.7% of revenue, for the year ended December 31, 2023 compared to $49,150, or 30.5% of revenue, for the year ended December 31, 2022. The decrease of $11,466, or 23.3%, in gross profit from 2022 was primarily driven by lower sales volume and the associated overhead absorption impacts.

 Operating Expenses

 Selling, general and administrative ("SG&A") expenses were $37,503 for the year ended December 31, 2023 compared to $49,869 for the year ended December 31, 2022. The $12,366 decrease in SG&A expenses was primarily driven by a reduction in third-party professional fees from higher 2022 costs associated with the Business Combination, reduced stock based compensation expense, reduced insurance costs from favorable rates, lower headcount, and the impact of the Reorganization.

 Depreciation and amortization expenses were $18,482 for the year ended December 31, 2023 compared to $18,179 for the year ended December 31, 2022. The increase of $303, or 1.7%, was due to additional capital expenditures in 2022 and 2023.

 Restructuring costs were $4,855 for the year ended December 31, 2023 compared to $1,897 for the year ended December 31, 2022. The increase of $2,958 relates to the reorganization activities that the Company has performed each quarter during 2023 compared to just the six months in 2022, primarily related to the combination of our Texas facilities in 2023 and consolidation of executive and finance positions.

 The goodwill impairment charge of $1,189,518 for the year ended December 31, 2022 represents a full write down of the carrying amount of goodwill based on a decrease in the Company's fair value based upon a quantitative assessment. There was no goodwill impairment charge recorded during the year ended December 31, 2023.

 Operating Loss

 Operating loss was $23,157 for the year ended December 31, 2023 compared to $1,210,313 for the year ended December 31, 2022. The lower operating loss was primarily driven by goodwill impairment charge during the year ended December 31, 2022.

 Interest Expense and Other Expense (Income)

 Interest expense was $15,571 for the year ended December 31, 2023 compared to $9,015 for the year ended December 31, 2022. The increase in interest expense of $6,556, or 72.7%, is primarily due to a 4.0% rise in interest rates on our total debt as well as an additional $8,000 in borrowing on our revolving credit facility since December 2022.

 Other income (net) was $37,299 for the year ended December 31, 2023 compared to $98,810 for the year ended December 31, 2022. The decrease in other income of $61,861, or 62.4%, represents the changes in fair value in the earnout share liabilities and the warrant liability during the year ended December 31, 2023 and December 31, 2022 of $9,462 and $97,910, respectively, due to a decrease in the Company's Class A Common Stock share price, partially offset by the full write-off of our TRA liability of $28,270 due to the remote probability of future payments.

 Income Taxes

 We recorded a tax benefit of $79 for the year ended December 31, 2023 compared to a tax benefit of $6,662 for the year ended December 31, 2022. Our income tax benefit for the year ended December 31, 2023 is driven by the federal income tax at the statutory rate of $324, along with the remeasurement of earnout shares of $1,418 and the TRA and warrant liability of $1,357, partially offset by $3,835 for the non-controlling interest impact. Our income tax benefit for the year ended December 31, 2022 was driven by the federal income tax at the statutory rate of $235,309, partially offset by $130,904 for the non-controlling interest impact and $104,768 related to goodwill, which is not tax deductible following our goodwill impairment charges.

 Non-GAAP Information

 This Annual Report includes Adjusted Net Income (Loss) and Adjusted Earnings Before Interest Taxes Depreciation and Amortization ("Adjusted EBITDA"), which are non-GAAP financial measures that we use to supplement our results presented in accordance with U.S. GAAP. We believe Adjusted Net Income (Loss) and Adjusted EBITDA are useful in evaluating our operating performance, as they are similar to measures reported by our public competitors and regularly used by security analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. Adjusted Net Income (Loss) and Adjusted EBITDA are not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry. These non-GAAP financial measures supplement and should be considered in addition to and not in lieu of our, U.S. GAAP results.

 We include these non-GAAP financial measures because they are used by management to evaluate Fathom's core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. Adjusted EBITDA excludes certain expenses that are required in accordance with U.S. GAAP because they are non-recurring (for example, in the case of transaction-related costs), non-cash (for example, in the case of depreciation and amortization) or are not related to our underlying business performance (for example, in the case of interest income and expense).

 Adjusted Net Loss

 We define and calculate Adjusted Net Loss as net loss before the impact of any increase or decrease in the estimated fair value of the Company's Public Warrants and earnout shares as well as transaction-related costs and certain other non-cash and non-core items.

 The table below presents our Adjusted Net Loss reconciled to our net loss, the closest U.S. GAAP measure, for the periods indicated:

 $

 (1,443

)

 $

 (1,113,856

)

 Stock compensation

 4,127

 7,386

 Inventory step-up amortization

 -

 3,241

 -

 Restructuring

 4,855

 1,897

 Change in fair value of warrant liability (1)

 (2,708

)

 (31,120

)

 Change in fair value of earnout share liabilities(1)

 (6,754

)

 (66,790

)

 Change in value of TRA liability (2)

 (27,828

)

 (600

)

 Integration, non-recurring, non-operating, cash, and non-cash costs (3)

 2,211

 4,780

 Adjusted net loss

 $

 (27,540

)

 $

 (5,544

)

 (1) Represents the impacts from the change in fair value related to the earnout share liabilities, the warrant liabilities, and the TRA liability;

 (2) Represents the change in value of the TRA liability, including the $28,270 write-off;

 (3) Represents adjustments for other integration, non-recurring, non-operating, cash, and non-cash costs related primarily to integration costs and severance.

 Adjusted EBITDA

 We define and calculate Adjusted EBITDA as net losses before the impact of interest income or expense, income tax expense and depreciation and amortization, and further adjusted for the following items: transaction-related costs, the impact of any increase or decrease in the estimated fair value of the Company's warrants and earnout shares, and certain other non-cash and non-core items, as described in the reconciliation included below.

 The table below presents our Adjusted EBITDA reconciled to net loss, the closest U.S. GAAP measure, for the periods indicated.

 $

 (1,443

)

 $

 (1,113,856

)

 Depreciation and amortization

 25,137

 24,896

 Interest expense, net

 15,571

 9,015

 Income tax benefit

 (79

)

 (6,662

)

 Stock compensation

 4,127

 7,386

 Inventory step-up amortization

 -

 3,241

 -

 Restructuring

 4,855

 1,897

 Change in fair value of warrant liability (1)

 (2,708

)

 (31,120

)

 Change in fair value of earnout share liabilities (1)

 (6,754

)

 (66,790

)

 Change in value of TRA liability (2)

 (27,828

)

 (600

)

 Contingent consideration

 -

 (148

)

 Integration, non-recurring, non-operating, cash, and non-cash costs (3)

 2,211

 4,780

 Adjusted EBITDA

 $

 13,089

 $

 21,557

 (1) Represents the impacts from the change in fair value related to the earnout share liabilities, the warrant liabilities, and the TRA liability;

 (2) Represents the change in value of the TRA liability, including the $28,270 write-off;

 (3) Represents adjustments for other integration, non-recurring, non-operating, cash, and non-cash costs related primarily to integration costs and severance.

 Liquidity and Capital Resources

 We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital and capital expenditure needs, contractual obligations, and other commitments, with cash flows from operations and other sources of funding. Apart from the Term Loan Paydown (as defined below), our current liquidity needs relate mainly to our working capital requirements, capital equipment investments, and business development efforts, as well as compensation of and benefits to our employees.

 We had $5,573 in cash as of December 31, 2023. We believe our operating cash flows, together with our unsecured promissory note described below, amounts available under the Credit Agreement and our cash on hand, will be sufficient to meet our anticipated working capital and capital expenditure requirements during the next 12 months; assuming that the funding from Parent as contemplated by the Equity Commitment Letter is obtained, or if not, we are otherwise able to obtain on acceptable terms additional qualified equity capital sufficient to permit us to make the Term Loan Paydown when due.

 Beyond the next twelve months, and assuming that we are successful in obtaining sufficient qualified equity capital sufficient to permit us to make the Term Loan Paydown when due, we expect our capital expenditures and working capital requirements to continue to increase, as we seek to expand our product offerings across more of the U.S. Our capital expenditures in 2023 of $5,010 equaled approximately 3.8% of annual revenue. We believe that our annual future growth capital expenditures, excluding buildings and maintenance capital we might purchase for our operations, are likely to be approximately 3.0 %- 7.0% of annual revenue. To the extent that our available resources are insufficient to satisfy our short-term and long-term cash requirements, we may need to seek additional equity or debt financing. If the needed financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to decrease our level of investment in new product launches and related marketing initiatives or to scale back our existing operations, which could have an adverse impact on our business and financial prospects.

 Cash Flow Analysis

 (dollars in thousands)

 Net cash provided by (used in):

 Operating Activities

 $

 (1,647

)

 $

 3,080

 Investing Activities

 (4,993

)

 (13,189

)

 Financing Activities

 1,500

 Operating Activities

 Net cash used in operating activities was $1,647 for the year ended December 31, 2023 compared to net cash provided by operating activities of $3,080 for the year ended December 31, 2022. This decrease of $4,727 is primarily due to a larger operating loss.

 Investing Activities

 Cash used in investing activities was $4,993 for the year ended December 31, 2023 compared to $13,189 for the year ended December 31, 2022. The decrease of $8,196 was driven by a reduction in capital expenditures for the year ended December 31, 2023.

 Financing Activities

 Cash provided by financing activities was $1,500 for the year ended December 31, 2023 compared to $572 for the year ended December 31, 2022. Proceeds provided by financing activities for the year ended December 31, 2023 came from a $8,000 draw on the revolver facility and proceeds from issuance of common stock under our ESPP, partially offset by principal payments on our Term Loan of $4,689. The cash provided by financing activities for the year ended December 31, 2022 was driven by the proceeds driven by a $10,000 draw on the revolver facility and proceeds from issuance of common stock under our ESPP, partially offset by principal payments on our Term Loan of $3,125, tax payments for employee shares withheld in lieu of taxes of $2,976, debt financing fees of $411 related to the Credit Agreement, and contingent consideration payments of $2,750.

 Credit Agreement

 Our Credit Agreement contains financial and other covenants, including minimum EBITDA, minimum liquidity, net leverage ratio and net interest coverage requirements, which restrict our business activities and our ability to execute our strategic objectives.

 As more fully described below under "Borrowings and Lines of Credit," the Credit Agreement was amended on February 16, 2024 (such February 2024 amendment, the "Fourth Amendment"), in part to provide necessary financial covenant relief (as the context requires). In addition, the Fourth Amendment waived any default or event of default arising under the Credit Agreement relating to, among other things, the failure to comply with certain minimum EBITDA and liquidity requirements as of and for periods ended December 31, 2023.

 Under the Fourth Amendment, the Company is required to make a repayment of $50,000 of the outstanding principal balance of the term loan (the "Term Loan") under the Credit Agreement held by certain term lenders (the "Term Loan Paydown") no later than the earlier of (i) July 31, 2024, the date on which the Merger Agreement and certain related agreements will terminate if the Transactions are not consummated by such date or (ii) the date on which the Transactions are consummated. The Term Loan Paydown must be funded with qualified equity capital and will constitute a permanent reduction of the Term Loan. In connection with the execution of the Merger Agreement, CORE Investors and its managing partner, an affiliate of CORE Industrial Partners, entered into the Equity Commitment Letter with Parent whereby they agreed, subject to the terms and conditions thereof, to provide equity financing to Parent in the aggregate amount set forth therein to facilitate consummation of the Transactions (as defined in the Merger Agreement), including the Merger, the payment of the Term Loan Paydown and certain other payments. CORE's obligations under the Equity Commitment letter are subject to certain terms and conditions, including consummation of the pending Merger, and there is no assurance that such terms and conditions will be satisfied.

 If the funding of Parent as contemplated by the Equity Commitment Letter is not obtained, our cash on hand, cash flows from operating activities and other presently available capital resources will not be sufficient to permit us to make the Term Loan Paydown. Accordingly, in such circumstances, we will need to obtain sufficient qualified equity capital (or otherwise restructure or refinance our indebtedness) in order to make the Term Loan Paydown and to continue to fund our ongoing operations. We may not be able to obtain such necessary additional equity capital or to effect other alternative measures to permit us to make the Term Loan Paydown when due. In such event, we would be in default under the Credit Agreement, and the lenders could terminate their commitments to loan money under the revolving credit facility, declare all outstanding principal and interest under the Credit Agreement to be due and payable, and, foreclose against the assets securing our borrowings, and we could be forced into bankruptcy or liquidation. In the event that the funding of Parent as contemplated by the Equity Commitment Letter is not obtained, the Company intends to explore possible capital transactions that would provide the Company with the necessary resources to make the Term Loan Paydown when due; however, there can be no assurance that such efforts will be successful in accessing the necessary capital or executing alternative measures to satisfy the Term Loan Paydown requirement.

 Failure to comply with the covenants contained in the Credit Agreement, if not waived or further amended on acceptable terms, could give rise to an event of default and, if not cured, entitle the lenders to accelerate the indebtedness outstanding thereunder and terminate our ability to borrow in the future under the Credit Agreement. Our ability to expand and grow our business will depend on many factors, including our working capital needs and our operating cash flows.

 Borrowings and Lines of Credit

 Credit Agreement

 On December 23, 2021, Fathom OpCo entered into the Credit Agreement, which included a $50,000 revolving credit facility and a $125,000 term loan (the "Term Loan"). The Company's borrowings under the revolving credit facility were $45,000 and $37,000 at December 31, 2023 and December 31, 2022, respectively. The loans borrowed under the Credit Agreement will mature in December 2026, except for $50,000 principal amount of the Term Loan which must be repaid (the "Term Loan Paydown") no later than July 31, 2024 (or earlier in the circumstance described below). The Company expects to be able to satisfy the obligations relating to the Term Loan Paydown, but there is no assurance that it will be successful. Due to this uncertainty, and the ability of our lenders to declare a default and exercise their right to accelerate repayment of our indebtedness under the Credit Agreement in the event of our failure to satisfy such obligations, all of our indebtedness under the Credit Agreement is classified as current-portion of long-term debt as of December 31, 2023. See Note 2. Basis of Presentation in the accompanying notes to the financial statements for more information.

 As previously disclosed, the Credit Agreement was amended in November 2022, March 2023, and November 2023 (such amendment, the "Third Amendment"), in each case to, among other things, modify certain financial covenants in the Credit Agreement.

 The Company entered into the Fourth Amendment to modify, among other things, certain financial covenants. In addition, the Fourth Amendment waived any default or event of default arising under the Credit Agreement relating to, among other things, the failure to comply with certain minimum EBITDA requirements as of and for periods ended December 31, 2023.

 The Fourth Amendment requires the interest coverage ratio as of the last day of any fiscal quarter, commencing with the fiscal quarter ending on September 30, 2024, to not be less than the applicable ratio set forth opposite such fiscal quarter below:

 Fiscal Quarter

 Interest Coverage Ratio

 Each fiscal quarter ending on and after September 30, 2024 through and including December 31, 2024

 1.15 to 1.00

 Each fiscal quarter ending on and after March 31, 2025 through and including December 31, 2025

 1.25 to 1.00

 Fiscal quarter ending on March 31, 2026

 1.35 to 1.00

 Fiscal quarter ending on June 30, 2026

 1.45 to 1.00

 Fiscal quarter ending on September 30, 2026 and thereafter

 1.55 to 1.00

 In addition, the Fourth Amendment requires the net leverage ratio as of the last day of any fiscal quarter, commencing with the fiscal quarter ending on September 30, 2024, to not exceed the applicable ratio set forth opposite such fiscal quarter below:

 Fiscal Quarter

 Net Leverage Ratio

 Fiscal quarter ending on September 30, 2024

 7.75 to 1.00

 Fiscal quarter ending on December 31, 2024

 7.25 to 1.00

 Fiscal quarter ending on March 31, 2025

 6.75 to 1.00

 Fiscal quarter ending on June 30, 2025

 6.25 to 1.00

 Fiscal quarter ending on September 30, 2025

 5.75 to 1.00

 Fiscal quarter ending on December 31, 2025

 5.25 to 1.00

 Fiscal quarter ending on March 31, 2026

 4.75 to 1.00

 Fiscal quarter ending on June 30, 2026

 4.25 to 1.00

 Fiscal quarter ending on September 30, 2026 and thereafter

 4.00 to 1.00

 The Fourth Amendment also requires Minimum EBITDA (as defined and calculated pursuant to the Fourth Amendment) commencing with the fiscal quarter ending September 30, 2023, to not be less than $1,500 (tested on a standalone quarterly basis).

 Further, the Fourth Amendment requires the Company's minimum unrestricted cash and cash equivalents on account, together with the amounts available to be drawn under the revolving credit facility under the Credit Agreement (as defined in the Credit Agreement, "Liquidity") to not be less than $13,500 as of the last day of the months ending on September 30, 2023, October 31, 2023, and November 30, 2023, $10,000 as of December 31, 2023, and $6,000 as of the last day of any month ending on February 29, 2024 through and including December 31, 2024.

 Under certain circumstances, the Fourth Amendment permits the Company, at its election and in its sole discretion, to designate the last day of any fiscal quarter ending on or after March 31, 2025 as the "Covenant Changeover Date". On and after the Covenant Changeover Date, the Fourth Amendment will require the interest coverage ratio as of the last day of any fiscal quarter ending on or after the Covenant Changeover Date to not be less than 2.50 to 1.00 and the net leverage ratio as of the last day of any fiscal quarter ending on or after the Covenant Changeover Date to not exceed 3.50 to 1.00, provided that, in the case of the maximum net leverage ratio requirement, if a qualified material acquisition is consummated after the Covenant Changeover Date, the Company may elect to increase the maximum net leverage ratio requirement to 4.00 to 1.00 with respect to the fiscal quarter in which such qualified material acquisition is consummated and each of the three immediately following fiscal quarters, provided that no such election may be made to so increase the maximum net leverage ratio requirement to 4.00 to 1.00 unless, as of the end of at least two consecutive fiscal quarters immediately preceding such election, the net leverage ratio was not greater than 3.50 to 1.00. Following the Covenant Changeover Date, certain additional restrictions on the availability of certain baskets in the Third Amendment relating to restricted payments, restricted debt payments, and sale and leaseback transactions will cease to apply.

 Failure to comply with the covenants contained in the Fourth Amendment (if not waived or further amended on acceptable terms) could give rise to an event of default and, if not cured, entitle the lenders to accelerate the indebtedness outstanding thereunder and terminate our ability to borrow in the future under the Credit Agreement.

 The Fourth Amendment requires the Company to make the Term Loan Paydown of $50,000 no later than the earlier of July 31, 2024, the date on which the Merger Agreement or certain related agreements is terminated or the date on which the Transactions are consummated.

 The Credit Agreement previously permitted the Company to exercise a right to cure financial covenant defaults by means of raising cash through the sale of certain eligible equity interests of the Company as described in the Credit Agreement commencing with

 the fiscal quarter ending on June 30, 2024. The Fourth Amendment permits the Company to exercise this right commencing with the fiscal quarter ending on September 30, 2024.

 The Fourth Amendment also provides that the margin applicable to Term SOFR Loans increases to 4.25% until the first business day after the delivery of financial statements and the related compliance certificate required to be delivered under the Third Amendment for the fiscal quarter ending on June 30, 2024, and thereafter to the extent the Company's net leverage ratio equals or exceeds 5.00 to 1.0 on the applicable date.

 In connection with the preparation and execution of the Fourth Amendment, the Company incurred reasonable and documented expenses of the Administrative Agent and $76 in customary arranger and lender consent fees, with certain portions thereof being payable on the Closing Date of the applicable amendment and the remainder being payable at the earlier of the Term Loan Pay Down, July 31, 2024 and the date on which the loans are accelerated and the commitments are terminated in accordance with the Credit Agreement.

 The foregoing description of the Fourth Amendment is a summary and is qualified in its entirety by reference to the full text of the Fourth Amendment, which is attached to this Annual Report as Exhibit 10.19 and incorporated herein by reference.

 The Company recorded deferred financing costs of $713 and $1,237, respectively for the three and twelve months ended December 31, 2023 in conjunction with the Credit Agreement and subsequent amendments and the applicable principal balances are presented within Long-Term debt, net on the Company's consolidated balance sheets. The Company amortizes the deferred financing costs using the effective interest method.

 The revolving credit facility under the Credit Agreement is available for working capital and other general corporate purposes and includes a letter of credit sub-facility of up to $5,000. The Credit Agreement also includes an uncommitted incremental facility, which, subject to certain conditions, provides for additional term loan facilities, an increase in commitments under the Credit Agreement and/or an increase in commitments under the revolving credit facility, in an aggregate amount of up to $100,000.

 Unsecured Promissory Note and Guarantee Agreement

 On April 1, 2024, Fathom Manufacturing, LLC (the "Borrower"), an indirect wholly-owned subsidiary of Fathom, entered into an Unsecured Promissory Note (the "Promissory Note") in favor of CORE Industrial Partners Fund I, L.P. (the "Lender"), on behalf of CORE Industrial Partners Fund I, L.P. ("Main Fund") and CORE Industrial Partners Fund I Parallel, L.P. ("Parallel Fund" and collectively with the Main Fund and the Lender, the "Lending Parties" and each, a "Lending Party"). Pursuant to the Promissory Note, the Borrower may incur, and the Lending Parties have collectively committed to provide, on an unsecured basis, up to $2,500 of term loans that will mature on September 30, 2024 and will accrue interest, payable in kind, at the rate of 5% per annum. Term loans made under the Promissory Note are expected to be used for working capital purposes. The Borrower may prepay the Term Loans from time to time without any premium or penalty. The Lender is affiliated with CORE Industrial Partners, LLC. On April 1, 2024, the Company drew the full $2,500 unsecured promissory note.

 Concurrent with the execution of the Promissory Note, certain indirect wholly-owned subsidiaries of the Company (including the Borrower) (collectively, the "Guarantors" and each, a "Guarantor") entered into a Guarantee Agreement dated as of April 1, 2024 (the "Guarantee Agreement") pursuant to which the Guarantors have agreed to guarantee, on an unsecured basis, in full the payment and performance of the obligations of the Borrower under the Promissory Note.

 The Company's debt as of December 31, 2023 and December 31, 2022 is as follows:

 As of December 31, 2023

 As of December 31, 2022

 Debt Description

 Interest Rate

 Amount

 Interest Rate

 Amount

 Credit Agreement Revolver

 9.62

 %

 45,000

 8.20

 %

 37,000

 Credit Agreement Term Loan

 9.70

 %

 117,187

 8.43

 %

 121,875

 Total principal long-term debt

 162,187

 158,875

 Debt issuance costs

 (2,386

)

 (1,804

)

 Total debt

 157,071

 Less: current portion of long-term debt

 42,744

 Long-term debt, net of current portion

 $

 —

 $

 114,327

 Going Concern Consideration

 The audited consolidated financial statements included in this Annual Report have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. To satisfy the obligation to pay the $50,000 Term Loan Paydown due July 31, 2024 (or, if earlier, on the date the pending Merger is

 consummated or the date that the Merger Agreement and related transaction documents are terminated), the Company will need to obtain sufficient qualified equity capital or otherwise restructure or refinance the Credit Agreement. In connection with the execution of the Merger Agreement, CORE and its managing partner, an affiliate of CORE Industrial Partners, entered into the Equity Commitment Letter with Parent whereby they agreed, subject to the terms and conditions thereof, to provide equity financing to Parent in the aggregate amount set forth therein to facilitate consummation of the Transactions (as defined in the Merger Agreement), including the Merger, the payment of the Term Loan Paydown and certain other payments. CORE's obligations under the Equity Commitment letter are subject to certain terms and conditions, including consummation of the pending Merger, and there is no assurance that such terms and conditions will be satisfied. If the funding of Parent as contemplated by the Equity Commitment Letter is not obtained, the Company will need to obtain sufficient other qualified equity capital or otherwise restructure or refinance the Credit Agreement. At this time, we expect to be able to successfully complete one of these actions if the necessity arises; however, there is no assurance that we will be successful, and our inability to obtain such capital or complete such actions would likely have a material adverse effect on the Company. This uncertainty raises substantial doubt about the Company's ability to continue as a going concern within one year after the issuance date of the accompanying audited consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 In connection with the Business Combination, we entered into the TRA with certain of our pre-Business Combination owners that provides for the payment by Fathom to such owners of 85% of the benefits that Fathom is deemed to realize as a result of the Company's share of existing tax basis acquired in the Business Combination and other tax benefits related to entering into the TRA.

 Actual tax benefits realized by Fathom may differ from tax benefits calculated under the TRA as a result of the use of certain assumptions in the TRA, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. While the amount of existing tax basis, the anticipated tax basis adjustments and the actual amount and utilization of tax attributes, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors. As of December 31, 2023, the Company determined that making a future payment under the TRA was not probable because the Company does not believe it will have sufficient taxable income to utilize deductions of certain tax attributes that would generate cash savings in U.S. federal, state and local income tax or franchise tax to require a payment under the TRA. As a result, the Company remeasured the TRA liability at zero in the consolidated balance sheets and recorded a gain of $28,270 in the consolidated statements of operations for the fiscal year ended December 31, 2023.

 On April 4, 2023, the TRA was amended and restated by Fathom and CORE, which holds a controlling interest in Fathom. The purpose of the amendment was (i) the technical correction of an inadvertent omission from the original TRA of certain intended tax benefits to affiliates of CORE which directly or indirectly owned interests in Fathom OpCo prior to the Business Combination through entities taxed as C-Corporations and (ii) to replace LIBOR with SOFR as the reference interest rate in the agreement for the several interest rates applicable under the agreement. The correction described in clause (i) of the immediately preceding sentence did not affect Fathom's accounting for the TRA.

 On February 16, 2024, and in connection with the execution of the Merger Agreement, the TRA was further amended by the Company, Fathom OpCo and the other parties signatory to the amendment. As so amended, the TRA will automatically terminate in full without any payment, including any Tax Benefit Payment or Early Termination Payment (each capitalized term as defined in the TRA), upon the consummation of the Merger, and the Merger will not constitute a Change of Control (as defined in the TRA) thereunder. The consummation of the Merger is subject to the satisfaction or waiver (if permitted) of certain customary conditions as set forth in the Merger Agreement, and there is no assurance that the Merger will be consummated or upon the timetable presently contemplated.

 On February 16, 2024, the Company entered into an amendment to the TRA that results in the automatic termination of the TRA, without any payment, upon consummation of the Merger discussed in Note 22.

 Critical Accounting Policies and Use of Estimates

 Preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. See Note 2—Significant Accounting Policies in the accompanying notes to our consolidated financial statements which describes the significant accounting policies used in preparation of the consolidated financial statements. We believe that the most complex and sensitive judgments, because of their potential significance to the consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain and are described subsequently. Actual results could differ from management's estimates.

 Goodwill and Intangible Assets

 We recognize goodwill in accordance with ASC 350, Intangibles—Goodwill and Other ("ASC 350"). Goodwill is the excess of cost of an acquired entity over the fair value amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is not amortized.

 As a result of sustained decreases in the Company's publicly quoted share price of its Class A Common Stock, lower market multiples for a relevant peer group, and challenging macroeconomic conditions, the Company concluded during the third quarter of the 2022 fiscal year that there were impairment indicators and conducted a quantitative goodwill impairment assessment, including additional testing of its definite-lived intangibles, and other long-lived assets as of September 30, 2022. As a result of this assessment, the Company did not identify an impairment to its definite-lived intangible assets or other long-lived assets, but the Company recorded a $1,066,564 non-deductible, non-cash goodwill impairment charge for the three and nine months ended September 30, 2022 in our unaudited consolidated statements of comprehensive income (loss). During the fourth quarter of the 2022 fiscal year, the stock price of the Company's Class A Common Stock experienced a further sustained decline, and the Company observed further deterioration in the macroeconomic conditions, triggering a further impairment analysis as of December 31, 2022. As a result of this assessment the Company did not identify an impairment to its definite-lived intangible assets or other long-lived assets, but it did result in the recognition of an additional impairment charge for the remaining goodwill of $122,954 for the quarter ended December 31, 2022, in our consolidated statements of comprehensive loss.

 The Company estimated the fair value of the Company using an equal allocation between the discounted cash flow method under the income approach and the public company guideline method under the market approach. The significant assumptions used in the valuation include revenue growth rates, future gross profit margins and operating expenses used to calculate projected future cash flows, determination of the weighted average cost of capital, and future economic and market conditions. The terminal value is based on an exit revenue multiple which requires significant assumptions regarding the selections of appropriate multiples that consider relevant market trading data. The Company bases its estimates and assumptions on its knowledge of the digital manufacturing industry, recent performance, expectations of future performance and other assumptions the Company believes to be reasonable.

 We recognize intangibles assets in accordance with ASC 350. Acquired intangible assets subject to amortization are stated at fair value and are amortized using the straight-line method over the estimated useful lives of the assets. Intangible assets that are subject to amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Assets not subject to amortization are tested for impairment at least annually. As of December 31, 2023 and December 31, 2022, no impairment charges for intangible assets have been recognized.

 The estimates of fair value are based on the best information available as of the date of the assessment, which primarily incorporates management assumptions about expected future cash flows. Although these assets are not currently impaired, there can be no assurance that future impairments will not occur. See Note 7— Intangible Assets in the accompanying notes to the consolidated financial statements for more information.

 Revenue Recognition from Contracts with Customers

 The Company accounts for revenue in accordance with ASC 606. Revenue is recognized in five steps. The Company identifies the contract with the customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to the performance obligations, and recognizes revenue when (or as) each performance obligation is satisfied. Collectability is a required component of a valid contract. The Company assesses collectability based on a number of factors, including the customer's past payment history and current creditworthiness. If collectability is not considered probable at inception, the Company would recognize revenue upon cash collection.

 The Company provides high quality, advanced rapid prototyping, precision manufacturing and finishing services in low-to-mid volume production scenarios. The Company's suite of on-demand digital manufacturing services includes additive manufacturing, machining, and molding technologies as well as sheet metal cutting, etching, and forming solutions for customers in the aerospace and defense, electronics, medical, automotive, consumer, and industrial industries, among others. As a result, the majority of revenue recognized in a reporting period is based on completed, invoiced contracts.

 A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. Substantially all of the Company's Additive Manufacturing, CNC Machining, Urethane Casting, Precision Sheet Metal, and Chemical Etching contracts have a single performance obligation. The majority of the Company's injection molding contracts have multiple performance obligations including one obligation to produce the mold and sample part and a second obligation to produce production parts. For injection molding contracts with multiple performance obligations, the Company allocates revenue to each performance obligation based on its relative standalone selling price. For the year ended December 31, 2022 and through March 31, 2023, the Company was not able to support over time revenue recognition for performance obligations to produce the mold and sample part and therefore recognized revenue for each performance obligation on a point-in time basis upon shipment. During the 2023 fiscal year, the Company established additional processes and controls to support recognizing revenue using the input method basis for those performance obligations where appropriate on a go forward basis. This change in revenue recognition policy is immaterial to the overall financial statements included in this Form 10-K.

 Contingent Liabilities

 Our contingent liabilities, which are included within the "Other non-current liabilities" caption on our consolidated balance sheets, are uncertain by nature and their estimation requires significant management judgment as to the probability and estimation of the amount of liability. These contingencies include, but may not be limited to, warrants, TRA liabilities, earnout shares, litigation, and management's evaluation of complex laws and regulations, including those relating to indirect taxes, and the extent to which they may apply to our business and industry. See Note 18 - Fair Value Measurement and Note 19 - Commitments and Contingencies in the accompanying notes to our consolidated financial statements for more information.

 We regularly review our contingencies to determine whether the likelihood of a liability is probable and to assess whether a reasonable estimate of the liability can be made. Determination of whether a liability estimate can be made is a complex undertaking that considers the judgement of management, third-party research, the prospect of negotiation and interpretations by regulators and courts, among other information. When liabilities are probable of occurring and can be reasonably estimated, an estimated contingent liability is recorded. We continually reevaluate our indirect tax and other positions for appropriateness.

 Shared Based Compensation

 Our historical and outstanding stock-based compensation awards, including the issuances of options and other stock awards under our equity compensation plans, have typically included service-based or performance-based vesting conditions. For awards with only service-based vesting conditions, we record compensation cost for these awards using the straight-line method over the vesting period. For awards with performance-based vesting conditions, we recognize compensation cost on a tranche-by-tranche basis.

 Share-based compensation expense is measured based on the grant-date fair value of the share-based awards and is recognized over the requisite service period of the awards. We use the Black-Scholes option pricing model to value our stock option awards. The Black-Scholes model requires management to make a number of key assumptions, including expected volatility, expected term, risk-free interest rate and expected dividends. The risk-free interest rate is estimated using the rate of return on U.S. treasury notes with a life that approximates the expected term. The expected term assumption used in the Black-Scholes model represents the period of time that the options are expected to be outstanding and is estimated using the midpoint between the requisite service period and the contractual term of the option.

 The assumptions underlying these valuations represent management's best estimates, which involve inherent uncertainties and the application of management judgment. As a result, if factors or expected outcomes change and our management uses significantly different assumptions or estimates, our stock-based compensation expense for future periods could be materially different, including as a result of adjustments to share-based compensation expense recorded for prior periods.

 Impact of Changes in Accounting on Recent and Future Trends

 The FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASC 326"), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments including trade receivables and available for sale debt securities. ASC 326 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The new standard was effective for the Company beginning January 1, 2023, and was applied using a modified retrospective transition method. The FASB subsequently issued other related ASUs that amend ASU No. 2016-13 to provide clarification and additional guidance. The Company concluded that the adoption of ASC 326 did not have a material impact on the consolidated financial statements.

 In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which is intended to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for the Company beginning January 1, 2024 and requires

 the use of a retrospective approach to all prior periods presented. The Company plans to adopt the standard on January 1, 2024 and is evaluating the impact on the Consolidated Financial Statements, but does not anticipate that it will have a material impact.

 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for the Company beginning January 1, 2025 and allows the use of a prospective or retrospective approach. The Company plans to adopt the standard on January 1, 2025 and has not yet determined the impact on the Consolidated Financial Statements.

 Emerging Growth Company Accounting Election

 Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 ("JOBS Act") exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. Altimar II was an emerging growth company as defined in Section 2(a) of the Securities Act of 1933, as amended, and elected to take advantage of the benefits of this extended transition period. Fathom is expected to remain an emerging growth company at least through the end of the 2024 and is expected to continue to take advantage of the benefits of the extended transition period until such applicable period. This may make it difficult or impossible to compare Fathom's financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions for emerging growth companies because of the potential differences in accounting standards used.

 Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

 We are exposed to market risk in the form of changes in interest rates, foreign currency exchange rates and commodity prices for raw materials. We may, from time to time, enter into derivative financial instruments to manage these risks; however, we do not utilize such instruments or contracts for speculative or trading purposes. In the event that we enter into a derivative financial instrument, it is possible that such future dated contracts could no longer serve as a hedge if the projected cash flow does not occur as anticipated at the time of contract initiation.

 Interest Rate Risk

 We are exposed to interest rate risks as a result of our borrowing and investing activities, which principally includes long-term borrowings, used to maintain liquidity and to fund our business operations and capital requirements. We have a $125.0 million Term Loan and a $50.0 million revolving credit facility that allows for borrowings at a variable interest rate. As of December 31, 2023 we had $45.0 million in outstanding borrowings under the revolving credit facility. We may enter into interest rate swaps from time to time to manage our mix of fixed and variable interest rate debt effectively. As of December 31, 2023 and 2022, there were no interest rate swaps or other derivative instruments in place. The nature and amount of our long-term debt may vary from time to time as a result of business requirements, market conditions and other factors.

 Commodity Price Risk

 We continually address the impact of changes in commodity prices on our results of operations and cash flow. Our exposure to changes in commodity prices is principally indirect as we do not directly purchase exchange-traded commodities, but rather purchase raw materials that are a result of further downstream processing, primarily inputs resulting from processing crude oil, natural gas, iron ore, gold, silver, and copper. We generally manage the risk of changes in commodity prices that impact our raw material costs by seeking to (i) offset increased costs through increases in prices, (ii) alter the nature and mix of raw materials used to manufacture our finished goods or (iii) enter into commodity-linked sales or purchase contracts, all to the extent possible based on competitive and other economic factors. We may also from time to time enter into derivative financial instruments to mitigate such impact, however, as of December 31, 2023 and 2022, we had no derivative financial instruments in place.

 Item 8. Financial Statements and Supplementary Data.

 Our consolidated financial statements and the related notes, together with the Report of the Independent Registered Public Accounting Firm thereon, are set forth below in the F-pages of this Annual Report and are incorporated herein by reference.

 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

 Not applicable.

 Item 9A. Controls and Procedures.

 Evaluation of Disclosure Controls and Procedures

 The Company's management, with the participation of our President and Chief Executive Officer and our Chief Financial Officer, our principal executive officer and principal financial officer, respectively, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2023.

 Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our President and Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.

 Based on the evaluation of our disclosure controls and procedures, our President and Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2023, due to the material weaknesses in our internal control over financial reporting described below.

 Management's Report on Internal Control over Financial Reporting

 The Company's management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as defined in the Exchange Act Rules 13a-15(f). Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013 framework).

 As a result of this evaluation, management has concluded that, as of December 31, 2023, our internal control over financial reporting was not effective due to the material weaknesses in internal control over financial reporting described below. As an emerging growth company, the Company is not required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm in this Annual Report.

 A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim consolidated and financial statements will not be prevented or detected on a timely basis.

 Material Weaknesses in Internal Control over Financial Reporting

 As of December 31, 2023, based on the Company's implementation of a structured internal controls design and testing process during 2023, we continue to have material weaknesses in certain components of the 2013 COSO framework, including the control environment and control activities.

 • Our information technology general controls intended to restrict access to data and application were not adequate resulting in appropriate access and improper segregation of duties at both the system (pervasive) and end user levels across multiple locations. Management determined that ineffective information technology general controls represent a material weakness.

 • A comprehensive system of formal policies, procedures and controls has not been fully designed or implemented to ensure appropriate document retention and achieve complete, accurate and timely financial accounting, reporting and disclosures. Management determined that the ineffective pervasive controls represent a material weakness.

 • Management determined that the Company has design deficiencies over revenue, specifically around (i) customer and supplier onboarding; (ii) document retention; and (iii) a lack of evidence to support control performance. Management determined that the collective ineffective controls over revenue constitute a material weakness.

 • Management determined that the Company did not maintain effective controls over the completeness, existence, accuracy, and presentation and disclosure of the accounting for income taxes and related liabilities, including (i) quarterly and year-end income tax provision and reporting; (ii) significant transactions and business events; (iii) uncertain tax positions; (iv) the tax receivable agreement liability valuation derived from our Up-C tax structure; (v) and tax related disclosures. Management determined that the ineffective controls over income tax accounting constitute a material weakness.

 • Management determined that the Company has design deficiencies over the completeness, accuracy, existence, and presentation and disclosure of inventory. Specifically, we did not maintain effective controls related to (i) validation of the inventory costing, including unit of measure; (ii) consistent verification of inventory existence throughout the year; and (iii) reconciliation of inventory accounts. Management determined that the ineffective controls over inventory accounting constitute a material weakness.

 These material weaknesses could result in a misstatement of account balances or disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected.

 In light of the material weakness described above, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with U.S. GAAP. Accordingly, we believe that the consolidated financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

 Changes in Internal Control Over Financial Reporting

 There were no changes in the Company's internal control over financial reporting that occurred during our most recently completed fiscal quarter ended December 31, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 Item 9B. Other Information.

 During the year ended December 31, 2023, none of our officers or directors adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

 Not applicable.

 Item 10. Directors, Executive Officers, and Corporate Governance.

 The following information will be included in Fathom's Proxy Statement related to its 2024 Annual Meeting of Stockholders to be filed in definitive form within 120 days after Fathom's fiscal year end of December 31, 2023 (the "Proxy Statement") and is incorporated herein by reference:

 • Information regarding directors of Fathom who are standing for reelection and any persons nominated to become directors of Fathom is set forth under the sections entitled "Corporate Governance" and "Proposal No. 1 – Election of Directors."

 • Information regarding Fathom's Audit Committee and designated "audit committee financial experts" is set forth under "Corporate Governance – Committees of the Board – Audit Committee."

 • Information on Fathom's code of business ethics and conduct for directors, officers and employees is set forth in the section entitled "Corporate Governance – Code of Business Ethics and Conduct" and information on Fathom's Corporate Governance Guidelines is set forth in the section entitled "Corporate Governance – Corporate Governance Guidelines."

 If the Merger is consummated and the Company becomes a privately held company in connection therewith, Fathom will provide the information required by Item 10 in an amendment to this Form 10-K.

 Item 11. Executive Compensation.

 The following information will be included in the Proxy Statement and is incorporated herein by reference:

 • Information regarding compensation of Fathom's named executive officers is set forth under "Executive Compensation."

 • Information regarding compensation of Fathom's directors is set forth under "Corporate Governance – Director Compensation Program" and " – 2023 Director Compensation Table."

 • The report of the Compensation Committee of Fathom's Board is set forth under the section entitled "Executive Compensation."

 If the Merger is consummated and the Company becomes a privately held company in connection therewith, Fathom will provide the information required by Item 11 in an amendment to this Form 10-K.

 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 The following information will be included in the Proxy Statement and is incorporated herein by reference:

 • Information regarding security ownership of certain beneficial owners, directors and executive officers is set forth under "Corporate Governance—Security Ownership of Certain Beneficial Owners, Directors and Management."

 • Information regarding Fathom's equity compensation plans is set forth in the section entitled "Equity Compensation Plan Information."

 If the Merger is consummated and the Company becomes a privately held company in connection therewith, Fathom will provide the information required by Item 12 in an amendment to this Form 10-K.

 Item 13. Certain Relationships and Related Transactions, and Director Independence.

 The following information will be included in the Proxy Statement and is incorporated herein by reference:

 • Information regarding transactions with related persons is set forth under "Corporate Governance—Certain Relationships and Related Party Transactions."

 • Information regarding director independence is set forth in the section entitled "Corporate Governance – Director Independence."

 If the Merger is consummated and the Company becomes a privately held company in connection therewith, Fathom will provide the information required by Item 13 in an amendment to this Form 10-K.

 Item 14. Principal Accountant Fees and Services.

 Information regarding principal accountant fees and services is set forth under the sections in the Proxy Statement entitled "Fees Paid to Independent Registered Public Accounting Firm" and "Proposal No. 2 – Ratification of Retention of Independent Registered Public Accounting Firm," which information is incorporated herein by reference.

 If the Merger is consummated and the Company becomes a privately held company in connection therewith, Fathom will provide the information required by Item 14 in an amendment to this Form 10-K.

 Item 15. Exhibits and Financial Statement Schedules.

 (a) The following documents are filed as a part of the report:

 (1) Consolidated financial statements:

 See Index to Financial Statements on page F-1.

 (2) Financial statement schedules:

 Schedules not listed have been omitted because the information required to be set forth therein is not applicable or is included in the consolidated financial statements or the related notes.

 (3) See the Exhibit Index on the following page.

 Item 16. Form 10-K Summary.

 None.

 Exhibit Index

 Exhibit
 Number

 Description

 2.1

 Business Combination Agreement, dated as of July 15, 2021, by and among Altimar Acquisition Corp. II, Fathom Holdco, LLC, and the other parties thereto (incorporated by reference to Annex C of the proxy statement/prospectus contained in and forming a part of Altimar II's Registration Statement on Form S-4 (File No. 333-259639), as amended by Amendment No. 3 thereto filed on November 30, 2021).

 2.2

 Amendment No. 1 to Business Combination Agreement, dated as of November 16, 2021, by and among Altimar Acquisition Corp. II, Fathom Holdco, LLC, and the other parties thereto (incorporated by reference to Exhibit 2.1 to Altimar II's Current Report on Form 8-K filed with the SEC on November 16, 2021).

 2.3

 Agreement and Plan of Merger, dated as of February 16, 2024, by and among Fathom Digital Manufacturing Intermediate, LLC, Fathom Digital Manufacturing Merger Sub, Inc., Fathom Digital Manufacturing Merger Sub 2, LLC,, Fathom Holdco, LLC, and Fathom Digital Manufacturing Corporation (incorporated by reference to Exhibit 2.1 to Fathom's Current Report on Form 8-K filed with the SEC on February 20, 2024).

 3.1

 Certificate of Domestication of Altimar Acquisition Corp. II (incorporated by reference to Exhibit 3.1 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021).

 3.2

 Certificate of Incorporation of Fathom Digital Manufacturing Corporation (incorporated by reference to Exhibit 3.2 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021).

 3.3

 Amended and Restated Bylaws of Fathom Digital Manufacturing Corporation (incorporated by reference to Exhibit 3.3 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021).

 4.1

 Description of Securities (incorporated by reference to Exhibit 4.1 to Fathom's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 filed with the SEC on May 16, 2022).

 4.2

 Warrant Agreement, dated February 4, 2021, by and between Altimar Acquisition Corp. II and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 of Altimar II's Current Report on Form 8-K filed with the SEC on February 9, 2021).

 4.3

 Forfeiture and Support Agreement, dated as of July 15, 2021, by and among Altimar Sponsor II, LLC, Altimar Acquisition Corp. II, Fathom Holdco, LLC, and the other parties thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Altimar II with the SEC on July 19, 2021).

 4.4

 Amendment to the Forfeiture and Support Agreement, dated as of November 16, 2021, by and among Altimar Sponsor II, LLC, Altimar Acquisition Corp. II, Fathom Holdco, LLC, and the other parties thereto (incorporated by reference to Exhibit 10.2 to Altimar II's Current Report on Form 8-K filed with the SEC on November 16, 2021).

 10.1*

 Amended and Restated Tax Receivable Agreement, dated as of April 4, 2023, by and among Fathom Digital Manufacturing Corporation, and the other parties thereto.

 10.2

 Investor Rights Agreement, dated as of December 23, 2021, by and among Fathom Digital Manufacturing Corporation and the other parties thereto (incorporated by reference to Exhibit 10.2 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021).

 10.3

 Registration Rights Agreement, dated December as of December 23, 2021, by and among Fathom Digital Manufacturing Corporation, Altimar Sponsor II, LLC and the other parties thereto (incorporated by reference to Exhibit 10.3 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021.

 10.4

 Second Amended and Restated Limited Liability Company Agreement of Fathom Holdco, LLC, dated as of December 23, 2021 (incorporated by reference to Exhibit 10.4 to Fathom's Current Report on Form 8-K filed with the SEC on December 30,2021).

 10.5

 Credit Agreement, dated as of December 23, 2021, among Fathom Guarantor, LLC, Fathom Borrower, LLC, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.5 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021).

 10.6

 First Amendment dated as of November 10, 2022 to Credit Agreement, dated as of December 23, 2021, among Fathom Guarantor, LLC, Fathom Manufacturing, LLC, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to Fathom's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 filed with the SEC on November 14, 2022).

 10.7

 Second Amendment dated as of March 24, 2023 to Credit Agreement, dated as of December 23, 2021, as amended by the First Amendment thereto dated as of November 10, 2022, among Fathom Guarantor, LLC, Fathom Manufacturing, LLC, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, incorporated by reference to Exhibit 10.1 to Fathom's Current Report on Form 8-K filed with the SEC on March 30, 2023.

 10.8#

 Form of Fathom Digital Manufacturing Corporation 2021 Omnibus Incentive Plan (incorporated by reference to Annex H of the preliminary proxy statement/prospectus contained in and forming a part of Altimar II's

 Registration Statement on Form S-4 (File No. 333-259639), as amended by Amendment No. 3 thereto filed with the SEC on November 30, 2021).

 10.9#

 Form of Fathom Digital Manufacturing Corporation 2021 Employee Stock Purchase Plan (incorporated by reference to Annex I of the preliminary proxy statement/prospectus contained in and forming a part of Altimar II's Registration Statement on Form S-4 (File No. 333-259639), as amended by Amendment No. 3 thereto filed with the SEC on November 30, 2021).

 10.10#

 Form of Rollover RSU Award Agreement (incorporated by reference to Exhibit 10.8 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021).

 10.11#

 Form of Initial RSU Award Agreement for Non-Employee Directors (incorporated by reference to Exhibit 10.9 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021).

 10.12#

 Form of Employee Restricted Share Award Agreement (Business Combination Phantom Equity Settlement) (incorporated by reference to Exhibit 10.10 to Fathom's Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on April 8, 2022).

 10.13#

 Form of Indemnification Agreement (incorporated by reference to Exhibit 10.10 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021).

 10.14#

 Letter agreement regarding terms of employment dated December 23, 2021 by and between Fathom Digital Manufacturing Corporation and Ryan Martin (incorporated by reference to Exhibit 10.11 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021).

 10.15#

 Letter agreement regarding terms of employment dated December 23, 2021 by and between Fathom Digital Manufacturing Corporation and Richard Stump (incorporated by reference to Exhibit 10.12 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021).

 10.16#

 Employment Agreement dated as of December 23, 2021 by and between Fathom Digital Manufacturing Corporation and Mark Frost (incorporated by reference to Exhibit 10.13 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021).

 10.17#

 Fathom Digital Manufacturing Corporation Executive Severance and Change in Control Plan (incorporated by reference to Exhibit 10.14 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021).

 10.18#

 Form of Severance Plan Participation Agreement (incorporated by reference to Exhibit 10.15 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021).

 10.19

 Fourth Amendment, dated as of February 16, 2024, to the Credit Agreement, dated as of December 23, 2021, as previously amended by the First Amendment, Second Amendment and Third Amendment thereto, by and among Fathom Guarantor, LLC, Fathom Manufacturing, LLC, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to Fathom's Current Report on Form 8-K filed with the SEC on February 20, 2024).

 10.20

 Amendment No. 1, dated as of February 16, 2024 to the Amended and Restated Tax Receivable Agreement, dated as of April 4, 2023, by and among Fathom Digital Manufacturing Corporation, Fathom Holdco, LLC, and certain other parties thereto (incorporated by reference to Exhibit 10.2 to Fathom's Current Report on Form 8-K filed with the SEC on February 20, 2024).

 10.21

 Amendment No. 1, dated as of February 16, 2024 to the Second Amended and Restated Limited Liability Agreement of Fathom Holdco, LLC dated as of December 23, 2021 (incorporated by reference to Exhibit 10.3 to Fathom's Current Report on Form 8-K filed with the SEC on February 20, 2024).

 10.22

 Support Agreement, dated as of February 16, 2024, by and among Fathom Digital Manufacturing Corporation, Fathom Digital Manufacturing Intermediate, LLC, and the stockholders party thereto (incorporated by reference to Exhibit 10.4 to Fathom's Current Report on Form 8-K filed with the SEC on February 20, 2024).

 10.23

 Unsecured Promissory Note, dated as of April 1, 2024, by and among Fathom Manufacturing, LLC, CORE Industrial Partners Fund I, L.P and CORE Industrial Partners Fund I Parallel, L.P. (incorporated by reference to Exhibit 10.1 to Fathom's Current Report on Form 8-K filed with the SEC on April 2, 2024).

 10.24

 Guarantee Agreement, dated as of April 1, 2024, by and among certain indirect wholly-owned subsidiaries of Fathom Digital Manufacturing Corporation and CORE Industrial Partners Fund I, L.P. (incorporated by reference to Exhibit 10.2 to Fathom's Current Report on Form 8-K filed with the SEC on April 2, 2024).

 21.1

 List of Subsidiaries (incorporated by reference to Exhibit 21.1 to Fathom's Current Report on Form 8-K filed with the SEC on December 30, 2021).

 23.1*

 Consent of Grant Thornton LLP.

 24.1

 Power of Attorney (included on the signature page to this Annual Report).

 31.1*

 Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2*

 Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1*

 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 32.2*

 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 97.1*

 Clawback Policy

 101.INS*

 101.SCH*

 101.CAL*

 101.DEF*

 101.LAB*

 101.PRE*

 104*

 * Filed herewith.

 # Indicates a management plan or compensatory arrangement.

 Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

 SIGNATURES

 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 Fathom Digital Manufacturing Corporation

 Date: April 16, 2024

 By:

 /s/ Carey Chen

 Carey Chen

 Chief Executive Officer

 Power of attorney

 Each person whose signature appears below appoints Carey Chen and Mark Frost, and each of them, any of whom may act without the joinder of the other, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him or her and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or would do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report has been signed below by the following persons on behalf of registrant and in the capacities indicated below as of April 15, 2024.

 Name

 Title

 Date

 /s/ Carey Chen

 Director and Chief Executive Officer

 Carey Chen

 (Principal Executive Officer)

 /s/ Mark Frost

 Chief Financial Officer

 Mark Frost

 (Principal Financial Officer and Principal Accounting Officer)

 /s/ TJ Chung

 TJ Chung

 /s/ Caralynn Nowinski Collens

 Caralynn Nowinski Collens

 /s/ Adam DeWitt

 Adam DeWitt

 /s/ David Fisher

 David Fisher

 /s/ Maria Green

 Maria Green

 /s/ Peter Leemputte

 Peter Leemputte

 /s/ John May

 John May

 /s/ Robert Nardelli

 Robert Nardelli

 INDEX TO FINANCIAL STATEMENTS

 Report of Independent Registered Public Accounting Firm (PCAOB ID: 248)

 Consolidated Financial Statements

 Consolidated Balance Sheets as of December 31, 2023 and 2022

 Consolidated Statements of Comprehensive Income (Loss) for the fiscal years ended December 31, 2023 and December 31, 2022.

 Consolidated Statement of Shareholders' Equity and Redeemable Non-controlling Interest for the fiscal years ended December 31, 2023 and December 31, 2022.

 Consolidated Statements of Cash Flows for fiscal years ended December 31, 2023 and December 31, 2022.

 Notes to Consolidated Financial Statements

 Report of Independent Registered Public Accounting Firm

 Board of Directors and Shareholders

 Fathom Digital Manufacturing Corporation

 Opinion on the financial statements

 We have audited the accompanying consolidated balance sheets of Fathom Digital Manufacturing Corporation (a Delaware corporation) and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of comprehensive income (loss), shareholders' equity and redeemable non-controlling interest, and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

 Going concern

 The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, as of December 31, 2023, the Company does not have sufficient cash on hand and cash flows from operations to satisfy a debt obligation arising from its amended credit facility due no later than July 31, 2024. On February 16, 2024, the Company amended its credit facility, which requires a $50,000,000 prepayment due no later than July 31, 2024. The required prepayment is contingent upon third-party support, which is outside of the Company's control. There is no guarantee the necessary support will be obtained, and therefore, the Company has concluded that substantial doubt exists about the ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 Basis for opinion

 These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 /s/ GRANT THORNTON LLP

 We have served as the Company's auditor since 2021.

 Milwaukee, WI

 Consolidated Balance Sheets

 (In thousands, except share and unit amounts)

 December 31,

 2023

 2022

 Assets

 Current assets

 Cash

 $

 5,573

 $

 Accounts receivable, net (1)

 21,518

 28,641

 10,015

 12,350

 Prepaid expenses and other current assets

 2,025

 3,588

 Total current assets

 39,131

 55,292

 Property and equipment, net

 46,277

 47,703

 Right-of-use lease assets, net

 10,941

 12,565

 Intangible assets, net

 233,272

 251,412

 Other non-current assets

 Total assets

 $

 329,763

 $

 367,147

 Liabilities and Shareholders' Equity

 Current liabilities

 Accounts payable (2)

 9,018

 7,982

 Accrued expenses

 7,780

 8,176

 Current lease liability

 2,113

 2,374

 Other current liabilities

 4,828

 Current portion of debt, net

 42,744

 Total current liabilities

 179,404

 66,104

 Long-term debt, net

 -

 114,327

 Fathom earnout shares liability

 5,960

 Sponsor earnout shares liability

 Warrant liability

 2,780

 Payable to related parties pursuant to the tax receivable agreement (includes $ 0 and $ 3,974 at fair value, respectively)

 -

 25,360

 Noncurrent operating lease liability

 9,199

 11,083

 Total liabilities

 188,811

 226,544

 Commitments and Contingencies:

 Contingently Redeemable Preferred Equity:

 Redeemable non-controlling interest in Fathom OpCo

 68,402

 Shareholders' and Members' Equity:

 Class A common stock, $ 0.0001 par value; 15,000,000 shares authorized; issued and outstanding 3,526,432 and 3,290,438 shares as of December 31, 2023 and December 31, 2022, respectively (3)

 -

 -

 Class B common stock, $ 0.0001 par value; 9,000,000 shares authorized; issued and outstanding 3,327,379 and 3,507,653 shares as of December 31, 2023 and December 31, 2022, respectively (3)

 -

 -

 Class C common stock, $.0001 par value; 500,000 shares authorized; 0 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively (3)

 -

 -

 Preferred Stock, $.0001 par value; 500,000 shares authorized; 0 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively (3)

 -

 -

 Additional paid-in-capital

 594,401

 587,955

 Accumulated other comprehensive loss

 ( 107

)

 ( 107

)

 Accumulated deficit

 ( 521,744

)

)

 Shareholders' equity attributable to Fathom Digital Manufacturing Corporation

 72,550

 Total Liabilities, Shareholders' Equity, Members' Equity, and Redeemable Non-Controlling Interest

 $

 329,763

 $

 367,147

 (1) Inclusive of allowance for expected credit losses of $ 575 as of December 31, 2023 and allowance for doubtful accounts of $ 856 as of December 31, 2022, respectively.

 (2) Inclusive of accounts payable to related parties of $ 0 and $ 1,007 as of December 31, 2023, and December 31, 2022, respectively.

 (3) Periods presented have been adjusted to reflect the 20-for-1 reverse stock split effective on September 28, 2023. Additional information regarding the reverse stock split may be found in Note 2- Basis of Presentation.

 The accompanying notes are an integral part of these consolidated financial statements.

 Consolidated Statements of Comprehensive Income (Loss)

 (In thousands, except units, shares, per unit, and per share amounts)

 Revenue

 $

 131,292

 $

 Cost of revenue (1) (2)

 93,608

 111,991

 Gross profit

 37,684

 49,150

 Operating expenses

 Selling, general, and administrative

 37,503

 49,869

 Depreciation and amortization

 18,482

 18,179

 Restructuring

 4,855

 1,897

 -

 Total operating expenses

 60,840

 1,259,463

 Operating loss

 ( 23,157

)

 ( 1,210,313

)

 Interest expense and other expense (income)

 Interest expense

 15,571

 9,015

 Other expense

 Other income

 ( 37,299

)

 ( 99,160

)

 Total interest expense and other expense (income), net

 ( 21,634

)

 ( 89,795

)

 Net loss before income tax

 ( 1,523

)

 ( 1,120,518

)

 Income tax benefit

 ( 79

)

)

 ( 1,443

)

 ( 1,113,856

)

 Net loss attributable to Fathom OpCo non-controlling interest (Note 14)

)

)

 Net income (loss) attributable to controlling interest

)

 Comprehensive loss:

 Loss from foreign currency translation adjustments

 -

 ( 107

)

 Comprehensive income (loss), net of tax

 $

 $

 ( 490,411

)

 Earnings per Share:

 Net income (loss) per share attributable to shares of Class A common stock

 Basic (3)

 $

 4.64

 $

 ( 169.75

)

 Diluted (3)

 $

 2.35

 $

 ( 169.75

)

 Weighted average shares outstanding

 Basic (3)

 3,463,747

 2,888,334

 Diluted (3)

 6,822,942

 2,888,334

 (1) Inclusive of $ 6,655 and $ 6,716 of depreciation and amortization for the years ended December 31, 2023 and December 31, 2022, respectively.

 (2) Inclusive of $ 5,689 and $ 9,120, of cost of revenue related to inventory purchases from a related party for the years ended December 31, 2023 and December 31, 2022, respectively. See Note 16 for further information.

 (3) Periods presented have been adjusted to reflect the 20-for-1 reverse stock split effective on September 28, 2023. See Note 2 for further information.

 The accompanying notes are an integral part of these consolidated financial statements.

 Consolidated Statement of Shareholders' Equity and Redeemable Non-Controlling Interest

 (In thousands, except share amounts)

 Class A Common Shares

 Class B Common Shares

 Par Value ($ 0.0001 per share)

 Par Value ($ 0.0001 per share)

 Additional Paid-in Capital

 Accumulated Deficit

 Accumulated Other Comprehensive Loss

 Total Equity Attributable to Fathom

 Redeemable Non-controlling Interest

 Balance at January 1, 2023

 3,290,438

 $

 -

 3,507,653

 $

 -

 $

 587,955

 $

)

 $

 ( 107

)

 $

 $

 Equity based compensation

 -

 -

 -

 -

 4,127

 -

 -

 4,127

 -

 Net income (loss)

 -

 -

 -

 -

 -

 -

)

 Vesting of restricted shares, net of tax withholding

 30,175

 -

 -

 -

 -

 -

 -

 -

 -

 Issuance of Class A common stock under Employee Share Purchase Plan

 25,545

 -

 -

 -

 -

 -

 -

 Exchange of Class B common stock and Fathom OpCo units

 180,274

 -

 ( 180,274

)

 -

 -

 -

 -

 -

 -

 Non-controlling interest remeasurement

 -

 -

 -

 -

 4,654

 -

 -

 4,654

 ( 4,654

)

 TRA liability on capital transactions

 -

 -

 -

 -

 ( 2,468

)

 -

 -

 ( 2,468

)

 -

 Balance at December 31, 2023

 3,526,432

 $

 -

 3,327,379

 $

 -

 $

 594,401

 $

 ( 521,744

)

 $

 ( 107

)

 $

 72,550

 $

 68,402

 The accompanying notes are an integral part of these consolidated financial statements.

 Consolidated Statement of Shareholders' Equity and Redeemable Non-Controlling Interest

 (In thousands, except share amounts)

 Class A Common Shares

 Class B Common Shares

 Par Value ($ 0.0001 per share)

 Par Value ($ 0.0001 per share)

 Additional Paid-in Capital

 Accumulated Deficit

 Accumulated Other Comprehensive Loss

 Total Equity Attributable to Fathom

 Redeemable Non-controlling Interest

 Balance at January 1, 2022

 2,539,283

 $

 -

 4,214,749

 $

 -

 $

 466,359

 $

 ( 47,581

)

 $

 -

 $

 418,778

 $

 841,982

 Equity based compensation

 -

 -

 -

 -

 7,386

 -

 -

 7,386

 -

 Adoption of ASC 842

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

)

 -

)

)

 Other comprehensive loss

 -

 -

 -

 -

 -

 -

 ( 107

)

 ( 107

)

 -

 Vesting of restricted shares, net of tax withholding

 37,347

 -

 -

 -

 ( 2,976

)

 -

 -

 ( 2,976

)

 -

 Issuance of Class A common stock under Employee Share Purchase Plan

 6,712

 -

 -

 -

 -

 -

 -

 Exchange of Class B common stock and Fathom OpCo units

 707,096

 -

 ( 707,096

)

 -

 -

 -

 -

 -

 -

 Non-controlling interest remeasurement

 -

 -

 -

 -

 127,872

 -

 -

 127,872

 ( 127,872

)

 TRA liability on capital transactions

 -

 -

 -

 -

 ( 21,360

)

 -

 -

 ( 21,360

)

 -

 Tax impact of exchange of Class B common stock and Fathom OpCo units

 -

 -

 -

 -

 10,524

 -

 -

 10,524

 -

 Balance at December 31, 2022

 3,290,438

 $

 -

 3,507,653

 $

 -

 $

 587,955

 $

)

 $

 ( 107

)

 $

 $

 The accompanying notes are an integral part of these consolidated financial statements.

 Consolidated Statements of Cash Flows

 (In thousands)

 Cash Flows from Operating Activities

 Net income (loss)

 $

 $

)

 Adjustments to reconcile net income (loss) to net cash from operating activities:

 Depreciation and amortization

 25,137

 24,896

 Amortization of inventory step-up

 -

 3,241

 -

 Gain on disposal of property and equipment

 ( 6

)

 ( 197

)

 Share-based compensation

 4,127

 7,386

 Noncash lease expense, net

 1,065

 Deferred taxes

 -

 ( 6,417

)

 Bad debt expense

 Non-controlling interest share of Fathom OpCo Net Loss

)

)

 Change in fair value of Fathom earnout shares liability

 ( 5,844

)

 ( 58,340

)

 Change in fair value of Sponsor earnout shares liability

 ( 910

)

 ( 8,450

)

 Change in fair value of warrant liability

 ( 2,708

)

 ( 31,120

)

 Change in fair value of tax receivable agreement

 ( 27,828

)

 ( 600

)

 Change in fair value of contingent consideration

 -

 ( 148

)

 Amortization of debt financing costs

 Changes in operating assets and liabilities that provided cash:

 Accounts receivable

 6,929

 ( 4,182

)

 1,317

 ( 2,426

)

 Prepaid expenses and other assets

 1,659

 1,351

 Accounts payable

 ( 3,282

)

 ( 1,167

)

 Accrued liabilities and other

 1,593

 Net cash (used in) provided by operating activities

 ( 1,647

)

 3,080

 Cash Flows from Investing Activities

 Purchase of property and equipment

 ( 4,993

)

 ( 13,189

)

 Net cash used in investing activities

 ( 4,993

)

 ( 13,189

)

 Cash Flows from Financing Activities

 Proceeds from revolving credit facility, net

 8,000

 10,000

 Payments on debt

 ( 4,689

)

 ( 3,125

)

 Payments on finance leases

 ( 318

)

 ( 316

)

 Tax payment for shares withheld in lieu of taxes

 -

 ( 2,976

)

 Payment of debt issuance costs

 ( 945

)

 ( 411

)

 Proceeds from issuance of common stock under ESPP

 Payments for contingent consideration

 ( 682

)

 ( 2,750

)

 Net cash provided by financing activities

 1,500

 Effect of exchange rate changes on cash, and cash equivalents

 -

 ( 107

)

 Net decrease in cash

 ( 5,140

)

 ( 9,644

)

 Cash, beginning of period

 20,357

 Cash, end of period

 $

 5,573

 $

 Supplemental Cash Flows Information:

 Cash paid for interest

 $

 14,171

 $

 5,714

 Cash paid for taxes

 Cash paid to related parties (Note 16)

 5,501

 9,120

 Significant non-cash transactions:

 Property and equipment noncash transaction

 $

 1,485

 Right-of-use assets acquired through lease liabilities

 11,986

 Deferred financing fees

 -

 The accompanying notes are an integral part of these consolidated financial statements.

 Notes to Consolidated Financial Statements

 (dollars in thousands, unless otherwise noted)

 Note 1 - Nature of Business
 Fathom Digital Manufacturing Corporation ("Fathom," or the "Company") was incorporated as a Delaware corporation on December 23, 2021. Fathom was previously named Altimar Acquisition Corp. II ("Altimar II") before deregistering as an exempted company in the Cayman Islands. On December 23, 2021, Altimar II and Fathom Holdco, LLC ("Fathom OpCo") closed a series of transactions (collectively, the "Business Combination") pursuant to the Business Combination Agreement dated as of July 15, 2021, as amended (the "Agreement"), that resulted in the combined Company becoming a publicly traded company on the New York Stock Exchange ("NYSE"). Fathom, through its consolidated subsidiary, Fathom OpCo, is a leading on-demand digital manufacturing platform in North America, providing comprehensive product development and manufacturing services to many of the largest and most innovative companies in the world.
 Fathom OpCo was formed on April 16, 2021, as a limited liability company in accordance with the provisions of the Delaware Limited Liability Company Act, for the purpose of holding a 100 percent equity interest in MCT Group Holdings, LLC and its subsidiaries ("MCT Holdings") and holding a 100 percent equity interest in Incodema Holdings, LLC and its subsidiaries ("Incodema Holdings").

 Note 2 - Significant Accounting Policies

 Basis of Presentation
 The accompanying consolidated financial statements comprise the financial statements of Fathom and its controlled subsidiaries for the fiscal years ending December 31, 2023 and December 31, 2022.
 The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission ("SEC").
 All material intercompany balances have been eliminated in consolidation in each period presented.

 The audited consolidated financial statements included in this Annual Report have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. To satisfy the obligation to pay the $ 50,000 Term Loan Paydown due July 31, 2024 (or, if earlier, on the date the pending Merger is consummated or the date that the Merger Agreement and related transaction documents are terminated), the Company will need to obtain sufficient qualified equity capital or otherwise restructure or refinance the Credit Agreement. In connection with the execution of the Merger Agreement, the CORE Investors and their managing partner, an affiliate of CORE Industrial Partners, entered into the Equity Commitment Letter with Parent whereby they agreed, subject to the terms and conditions thereof, to provide equity financing to Parent in the aggregate amount set forth therein to facilitate consummation of the Transactions (as defined in the Merger Agreement), including the Merger, the payment of the Term Loan Paydown and certain other payments. The CORE Investors' obligations under the Equity Commitment letter are subject to certain terms and conditions, including consummation of the pending Merger, and there is no assurance that such terms and conditions will be satisfied. If the funding of Parent as contemplated by the Equity Commitment Letter is not obtained, the Company will need to obtain sufficient other qualified equity capital or otherwise restructure or refinance the Credit Agreement. At this time, we expect to be able to successfully complete one of these actions if the necessity arises; however, there is no assurance that we will be successful, and our inability to obtain such capital or complete such actions would likely have a material adverse effect on the Company. This uncertainty raises substantial doubt about the Company's ability to continue as a going concern within one year after the issuance date of the accompanying audited consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 Principles of Consolidation

 The consolidated financial statements include the accounts of the Company, its controlled subsidiaries, and certain variable interest entities ("VIEs") where the Company is the primary beneficiary. The Company is deemed to be the primary beneficiary of a VIE when it has both (1) the power to direct the activities of the VIE that most significantly impact the entity's economic performance, and (2) exposure to benefits and/or losses that could potentially be significant to the entity. Assets and liabilities of VIEs and their respective results of operations are consolidated from the date that the Company became the primary beneficiary through the date that the Company ceases to be the primary beneficiary. Fathom consolidates the accounts of Fathom OpCo since Fathom OpCo has been determined to be a VIE and Fathom is the primary beneficiary of Fathom OpCo.

 Reverse Stock Split
 On September 15, 2023, the Company's Board of Directors approved a reverse stock split ratio of 20-for-1 (the "Reverse Stock Split"). On September 28, 2023, the effective date of the Reverse Stock Split, the number of the Company's issued and outstanding shares of common stock decreased from 70,113,787 shares to 3,505,689 shares, net of fractional shares redeemed. The number of authorized shares and par value per common share remained unchanged. No fractional shares were issued as a result of the Reverse Stock Split. Stockholders who would otherwise have been entitled to receive a fractional share received a cash payment in lieu thereof. Prior to the effective date of the Reverse Stock Split, the Company had listed warrants to purchase a total of 18,524,320 shares of Common Stock, with each whole warrant being exercisable for one share of Common Stock at $ 11.50 per share. After the effective date of the Reverse Stock Split, every twenty shares of Common Stock that may have been purchased pursuant to the warrants immediately prior to the Reverse Stock Split represented one share of Common Stock that may be purchased pursuant to such warrants immediately following the Reverse Stock Split. Correspondingly, the exercise price per share of Common Stock attributable to such warrants was proportionately increased, such that the exercise price immediately following the Reverse Stock Split was $ 230.00, which equals the product of twenty multiplied by $ 11.50, the exercise price per share immediately prior to the Reverse Stock Split. The number of shares of Common Stock subject to the warrants was proportionately decreased by twenty times, to an aggregate of 926,216 shares. The share, per share and trading price amounts in the consolidated financial statements and the accompanying notes have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented.

 Use of Estimates

 The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company's 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

 Making estimates requires the Company's management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which the Company's management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

 Income Taxes

 The Company accounts for income taxes and related accounts using the asset/liability method in accordance with ASC Topic 740, Income Taxes ("ASC 740"). Under ASC 740, the Company accrues income taxes payable or refundable and recognizes deferred tax assets and liabilities based on differences between U.S. GAAP and tax bases of assets and liabilities. The Company measures deferred tax assets and liabilities using enacted tax rates in effect for the years in which the differences are expected to reverse and recognizes the effect of a change in enacted rates in the period of enactment. A valuation allowance is established if it is more likely than not that some portion or all of the deferred income tax assets will not be realized.

 The Company establishes assets and liabilities for uncertain tax positions taken or expected to be taken in income tax returns, using a more-likely than-not recognition threshold. The Company recognizes penalties and interest related to uncertain tax positions as income tax expense. See Note 20 "Income Taxes," of these Notes to Consolidated Financial Statements for further discussion.

 Credit Risk, Major Customers, and Suppliers
 The Company extends trade credit to its customers on terms that are generally practiced in the industry. During 2023 and 2022, the Company did not have any customers or suppliers that comprised a significant percentage of the Company's operations. The Company maintains its cash balances within accounts at financial institutions backed by the Federal Deposit Insurance Corporation with some balances being in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash balances

 Trade Accounts Receivable and Allowance for Expected Credit Losses
 Receivables are stated at amortized cost net of allowance for credit losses. The Company performs ongoing evaluations of its customers' current creditworthiness, as determined by the review of their credit information to determine if events have occurred subsequent to the recognition of revenue and the related receivable that provides evidence that such receivable will be realized in an amount less than that recognized at the time of sale. Estimates of credit losses are based on historical losses, current economic conditions, geographic considerations, and in some cases, evaluating specific customer accounts for risk of loss.
 Trade accounts receivables are stated at net invoice amounts. An allowance for expected credit losses is established based on a specific assessment of all invoices that remain unpaid following normal customer payment periods. In addition, a general valuation allowance is established for the remaining accounts receivable that have not been specifically assessed based on historical loss experience as well as geographic and general economic conditions. All amounts deemed to be uncollectible are charged against the allowance for doubtful accounts in the period that determination is made. The allowance for expected credit losses was $ 575 as of December 31, 2023 and allowance for doubtful accounts was $ 876 as of December 31, 2022.

 Inventory is stated at the lower of cost or net realizable value ("NRV"), with NRV based on selling prices in the ordinary course of business, less costs of completion, disposal, and transportation. Costs are determined on the first-in, first-out ("FIFO") method.

 Property and Equipment
 Property and equipment are recorded at cost less accumulated depreciation and amortization. The straight-line method is used for computing depreciation. Assets are depreciated over their estimated useful lives. The costs of leasehold improvements are amortized over the lesser of the length of the related leases or the estimated useful lives of the assets. Costs of maintenance and repairs are charged to expense when incurred. See Note 6 for further information.

 Goodwill
 The Company recognizes goodwill in accordance with ASC Topic 350, Goodwill and Other ("ASC 350"). Goodwill is the excess of costs of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is not amortized.
 Goodwill is tested for impairment annually as of the first day of the fourth quarter, and is tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment charge for goodwill is recognized only when the estimated fair value of a reporting unit, including goodwill, is less than its carrying amount. The impairment test requires the comparison of the fair value for the Company, our sole reporting unit, with its carrying amount, including goodwill. In performing the impairment test, the Company determined the fair value of its reporting unit using an equal allocation between the discounted cash flow ("DCF") method under the income approach and the public company guideline method under the market approach. The significant assumptions used in the valuation include revenue growth rates, future gross profit margins and operating expenses used to calculate projected future cash flows, determination of the weighted average cost of capital, and future economic and market conditions. The terminal value is based on an exit revenue multiple, which requires significant assumptions regarding the selections of appropriate multiples that consider relevant market trading data. The Company bases its estimates and assumptions on its knowledge of the digital manufacturing industry, recent performance, expectations of future performance and other assumptions the Company believes to be reasonable.

 Goodwill impairment expense of $ 0 and $ 1,189,518 was incurred for the years ending December 31, 2023 and December 31, 2022, respectively.

 Intangible Assets

 Acquired intangible assets subject to amortization are stated at cost and are amortized using the straight-line method over the estimated useful lives of the assets. Intangible assets that are subject to amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. During 2023 and 2022, there were no impairments of intangible assets.

 New Fathom Units

 In conjunction with the Business Combination, Fathom OpCo restructured its classes of members' units whereby, subsequent to the Business Combination, Fathom OpCo's equity consists solely of Class A common units (the "New Fathom Units"). Prior to the Business Combination, Fathom OpCo's members' equity consisted of Class A common units and Class B common units. See Note 14 for further information.

 Warrant Liability

 The Company accounts for both the Public Warrants (the "Public Warrants") and Private Placement Warrants (the "Private Placement Warrants") (collectively as the "Warrants") as liability-classified instruments based on an assessment of the Warrants' specific terms and applicable authoritative guidance per ASC Topic 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC Topic 815, Derivatives and Hedging ("ASC 815"). The assessment considers whether the Warrants are freestanding financial instruments pursuant to ASC 480, whether Warrants meet the definition of a liability pursuant to ASC Topic 480 and whether the Warrants meet all of the requirements for equity classification under ASC 815, including whether the Warrants are indexed to the Company's Class A common stock. This assessment, which requires the use of professional judgment, is conducted at the time of issuance of the Warrants and as of each subsequent quarterly period end date while the Warrants are outstanding.

 Since both the Public Warrants and Private Placement Warrants are liability-classified, the Warrants are required to be recorded at fair value on the date of issuance and each balance sheet date thereafter. Changes in the fair value of the Warrants are recognized as a non-cash gain or loss on the consolidated statement of comprehensive loss. On September 22, 2023, the Company publicly announced, that the NYSE had determined to commence proceedings to delist the Company's warrants. The Public Warrants were determined to have no value as of December 31, 2023, and the fair value of the Private Placement Warrants was estimated using a Monte Carlo simulation approach. See Note 9 and Note 18 for further information.

 Fathom Earnout Shares

 The Company issued 450,000 shares of Class A common stock and New Fathom Units that are subject to certain vesting and transfer restrictions (collectively, the "Fathom Earnout Shares") as part of the Business Combination. The Fathom Earnout Shares vest in three tranches of 150,000 shares. The first tranche of the Fathom Earnout Shares vest if the volume weighted average price ("VWAP") of the Company's Class A common stock with respect to a trading day is greater than or equal to $ 250 for any 20 trading days within a consecutive 30 -trading-day period. The second tranche of Fathom Earnout Shares vest if the VWAP of the Company's Class A common stock with respect to a trading day is greater than or equal to $ 300 for any 20 trading days within a consecutive 30 -trading-day period. The third tranche of Fathom Earnout Shares vest if the VWAP of the Company's Class A common stock with respect to a trading day is greater than or equal to $ 400 for any 20 trading days within a consecutive 30 -trading-day period.

 The Fathom Earnout Shares were issued as part of the Business Combination and are accounted for as contingent consideration, and thus purchase consideration, and classified as a liability. This classification requires the Company to re-measure the Fathom Earnout Shares at fair value with each reporting date. See Note 3 for further information.

 Sponsor Earnout Shares

 Prior to Altimar II's initial public offering, Altimar II Sponsor, LLC (the "Sponsor") received 431,250 Class B Ordinary Shares ("Founder Shares") of the Company in exchange for an investment of $ 25.

 In conjunction with the Business Combination, the holders of the Founder Shares forfeited 129,375 Founder Shares and received 63,375 shares of Class A common stock, (the "Sponsor Earnout Shares" and, together with the Fathom Earnout Shares, the "Earnout Shares") which vest only if the stock price of the Company reaches $ 250 for any 20 days within a consecutive 30 -trading-day period. The remaining 238,500 Founder Shares were cancelled and replaced with 238,5000 shares of Class A common stock of the Company which are recorded as equity in the Company's consolidated balance sheet as of December 31, 2023, and December 31, 2022.

 The Company classifies the Sponsor Earnout Shares as a liability measured at fair value upon the consummation of the Business Combination, the date of issuance, and each subsequent reporting date. The Sponsor Earnout Shares were not included as part of the consideration transferred in the Business Combination since the Sponsor Earnout Shares do not represent payments to any of the sellers in the Business Combination.

 Redeemable Non-Controlling Interest

 Redeemable non-controlling interest represents the Company's non-controlling interest in consolidated subsidiaries which are not attributable, directly, or indirectly, to the controlling Class A common stock ownership of the Company. The Company's comprehensive loss in 2023 and 2022 is reduced by the portion of Fathom OpCo's comprehensive loss that is attributable to noncontrolling interests.

 The Company's non-controlling interest is representative of the fact that the Company directly owns 51.45 % of Fathom OpCo's New Fathom Units while the holders of the non-controlling interest in Fathom OpCo hold 48.55 %. Since the non-controlling interest may be redeemed for cash and redemption is considered outside of the Company's control, the non-controlling interest is recorded in temporary or "mezzanine" equity on the consolidated balance sheet as of December 31, 2023. See Note 14 for further information.

 In connection with the Business Combination, Fathom entered into the Tax Receivable Agreement ("TRA"), which generally provides for the payment by it of 85 % of the net cash savings, if any, in U.S. federal, state and local, income, and franchise tax (computed using certain assumptions to address the impact of state and local taxes) that it actually realizes (or in certain cases is deemed to realize) as a result of tax basis in certain assets and other tax attributes.

 The TRA is a direct obligation of the Company, and not of its subsidiaries. Since the payments under the TRA will be made to selling shareholders of Fathom OpCo, the fair value of the TRA as of the date of the Business Combination was considered part of the consideration transferred as part of the Business Combination with Fathom OpCo.

 Subsequent to the initial recognition of the TRA as part of the Business Combination on December 23, 2021, the TRA is recorded at fair value. Any changes in fair value of the TRA subsequent to the Business Combination are recorded as non-cash gains or losses in the Company's consolidated statement of comprehensive loss in 2023 and 2022. See Note 20 for further information.

 Subsequent to the Business Combination, the Company recorded additional liabilities under the TRA when Class A Units of Fathom OpCo are exchanged for Class A common stock. Liabilities resulting from these exchanges will be recorded on a gross undiscounted basis and are not remeasured at fair value. During the year ended December 31, 2023, an additional TRA liability of $ 2,468 was established as a result of these exchanges.

 As of December 31, 2023, the Company determined that making a future payment under the TRA was not probable because the Company does not believe it will have sufficient taxable income to utilize deductions of certain tax attributes that would generate cash savings in U.S. federal, state and local income tax or franchise tax to require a payment under the TRA. As a result, the

 Company remeasured the TRA liability at zero in the consolidated balance sheets and recorded a gain of $ 28,270 in the consolidated statements of operations for the fiscal year ended December 31, 2023.

 On February 16, 2024, the Company entered into an amendment to the TRA that results in the automatic termination of the agreement, without any payment, upon consummation of the Merger discussed in Note 22.

 Foreign Currency Exchange and Translation

 The expression of assets and liabilities in a foreign currency amount gives rise to exchange gains and losses when such obligations are paid in U.S. dollars. Foreign currency exchange rate adjustment (i.e., differences between amounts recorded and actual amounts owed or paid) are reported in the consolidated statements of comprehensive income (loss) as foreign currency fluctuations occur. Foreign currency exchange rate adjustments are reported in the consolidated statements of cash flows using the exchange rates in effect at the time of the cash flows.

 Assets and liabilities of the Company's operations in China are translated into U.S. dollars at the rate of exchange in effect at the close of the period. Income and expenses are translated at an average rate of exchange for the period. The aggregate effect of translating the financial statements is included in other comprehensive loss.

 Fair Value Measurements

 The fair value of the Company's assets and liabilities, which qualify as financial instruments under ASC Topic 820, Fair Value Measurement ("ASC 820"), approximates the carrying amounts represented in the accompanying consolidated balance sheets, primarily due to their short-term nature, except for the Earnout Shares liability and Warrant liabilities, see Note 18 for further information. The framework for determining fair value is based on a hierarchy that prioritizes the inputs and valuation techniques used to measure fair value. There are three levels of inputs that may be used to measure fair value:

 Fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

 Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets and liabilities in active markets and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

 Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset. These Level 3 fair value measurements are based primarily on management's own estimates using pricing models, discounted cash flow methodologies, or similar techniques considering the characteristics of the asset.

 In instances whereby inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Company's assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

 Debt Issuance Costs
 The Company incurred debt issuance costs in connection with the $ 125,000 Term Loan established under the New Credit Agreement, and also in entering into the Amended Credit Agreement in November 2022, March 2023, and November 2023 as disclosed in Note 10. These costs are recorded as a reduction in the recorded balance of the outstanding debt. The costs are amortized over the term of the related debt and reported as a component of interest expense by using the effective interest method.

 Revenue Recognition

 The Company accounts for revenue in accordance with ASC 606. Revenue is recognized in five steps. The Company identifies the contract with the customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to the performance obligations, and recognizes revenue when (or as) each performance obligation is satisfied. Collectability is a required component of a valid contract. The Company assesses collectability based on a number of factors, including the customer's past payment history and current creditworthiness. If collectability is not considered probable at inception, the Company would recognize revenue upon cash collection.

 The Company provides high quality, advanced rapid prototyping, precision manufacturing and finishing services in low-to-mid volume production scenarios. The Company's suite of on-demand digital manufacturing services includes additive manufacturing, machining, and molding technologies as well as sheet metal cutting, etching, and forming solutions for customers in the aerospace and defense, electronics, medical, automotive, consumer, and industrial industries, among others. As a result, the majority of revenue recognized in a reporting period is based on completed, invoiced contracts.

 A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. Substantially all of the Company's Additive Manufacturing, CNC Machining, Urethane Casting, Precision Sheet Metal, and Chemical Etching contracts have a single performance obligation and is recognized on a point-in-time basis upon shipment. The majority of the Company's injection molding contracts have multiple performance obligations including one obligation to produce the mold and sample part and a second obligation to produce production parts. For injection molding contracts with multiple performance obligations, the Company allocates revenue to each performance obligation based on its relative standalone selling price. For the year ended December 31, 2022, and through March 31, 2023 the Company was not able to support over time revenue recognition for performance obligations to produce the mold and sample part and therefore recognized revenue for each performance obligation on a point-in time basis upon shipment. During 2023, the Company established additional processes and controls to support recognizing revenue using the input method basis for those performance obligations where appropriate on a go forward basis. This change in revenue recognition policy is immaterial to the overall financial statements included in this Form 10-K.

 The Company's payments terms are consistent with industry standards and never exceed 12 months. The Company has elected to treat shipping and handling as fulfillment activities and not a separate performance obligation.

 Segment Reporting

 In accordance with the Financial Accounting Standards Board's ("FASB") authoritative guidance on segment reporting, the Company has one operating segment and one reportable segment. The Company has one line of business, which is product development and on-demand manufacturing services.

 Other Comprehensive Loss

 U.S. GAAP generally requires that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, however, such as foreign currency translation adjustments, are reported as a direct adjustment to the equity section of the consolidated balance sheets. Such items, along with net income, are considered components of comprehensive income or loss.

 Recent Accounting Pronouncements

 The FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASC 326"), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments including trade receivables and available for sale debt securities. ASC 326 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The new standard was effective for the Company beginning January 1, 2023, and was applied using a modified retrospective transition method. The FASB subsequently issued other related ASUs that amend ASU No. 2016-13 to provide clarification and additional guidance. The Company concluded that the adoption of ASC 326 did not have a material impact on the consolidated financial statements.

 In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which is intended to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for the Company beginning January 1, 2024 and requires the use of a retrospective approach to all prior periods presented. The Company plans to adopt the standard on January 1, 2024 and is evaluating the impact on the Consolidated Financial Statements, but does not anticipate that it will have a material impact.

 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for the Company beginning January 1, 2025 and allows the use of a prospective or retrospective approach. The Company plans to adopt the standard on January 1, 2025 and has not yet determined the impact on the Consolidated Financial Statements.

 Note 3 -Immaterial Error Correction of Previously Issued Financial Statements
 The Company has made certain adjustments to previously reported amounts for correcting immaterial errors in our consolidated financial statements as of and for the year ended December 31, 2022. These adjustments corrected our cost of revenue and inventory for errors identified in the prior year physical inventory valuations, existence and reconciliations.
 We evaluated these matters in accordance with SAB No. 99, Materiality and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements and determined that their related impact was not material to the financial statements for any prior annual or interim periods. The Company will correct previously reported financial information for these immaterial matters in our future filings, as applicable.
 The following table presents the effect of the adjustments to our prior period consolidated balance sheet.

 As Reported

 Adjustments

 As Adjusted

 Assets

 Current assets

 $

 15,718

 $

 ( 3,368

)

 $

 12,350

 Total current assets

 58,660

 ( 3,368

)

 55,292

 Total assets

 370,515

 ( 3,368

)

 367,147

 Total liabilities

 $

 226,544

 $

 -

 $

 226,544

 Commitments and Contingencies:

 Contingently Redeemable Preferred Equity:

 Redeemable non-controlling interest in Fathom OpCo

 92,207

 ( 1,649

)

 Shareholders' Equity:

 Accumulated deficit

 ( 536,084

)

)

)

 Shareholders' Equity attributable to Fathom Digital Manufacturing Corporation

 51,764

)

 Total Liabilities, Shareholders' Equity and Redeemable Non-Controlling Interest

 $

 370,515

 $

 ( 3,368

)

 $

 367,147

 A summary of the adjustments to our prior period consolidated statement of comprehensive loss is presented below:

 Year Ended December 31, 2022

 As Reported

 Adjustments

 As Adjusted

 Revenue

 $

 $

 -

 $

 Cost of revenue

 108,623

 3,368

 111,991

 Gross profit

 52,518

 3,368

 49,150

 Operating loss

 ( 1,206,945

)

 3,368

 ( 1,210,313

)

 Net loss before income tax

 ( 1,117,150

)

 3,368

 ( 1,120,518

)

 Income tax benefit

)

 -

)

 ( 1,110,488

)

 3,368

 ( 1,113,856

)

 Net loss attributable to Fathom OpCo non-controlling interest

 ( 621,903

)

 ( 1,649

)

)

 Net loss attributable to controlling interest

 ( 488,585

)

)

)

 Comprehensive loss:

 Loss from foreign currency translation adjustments

 ( 107

)

 -

 ( 107

)

 Comprehensive loss, net of tax

 $

 ( 488,692

)

 $

)

 $

 ( 490,411

)

 The following table presents the effect of the adjustments to our prior period consolidated statement of cash flows.

 Twelve Months Ended December 31, 2022

 As Reported

 Adjustments

 As Adjusted

 Cash Flows from Operating Activities

 Net loss attributable to controlling interest

 $

 ( 488,585

)

 $

)

 $

)

 Adjustments to reconcile net loss to net cash from operating activities:

 Non-controlling interest share of Fathom OpCo net loss

 ( 621,903

)

 ( 1,649

)

)

 ( 5,794

)

 3,368

 ( 2,426

)

 Net cash provided by operating activities

 3,080

 -

 3,080

 Net cash used in investing activities

 ( 13,189

)

 -

 ( 13,189

)

 Net cash provided by financing activities

 -

 Effect of exchange rate changes on cash, and cash equivalents

 ( 107

)

 -

 ( 107

)

 Net decrease in cash

 ( 9,644

)

 -

 ( 9,644

)

 Cash, beginning of period

 20,357

 -

 20,357

 Cash, end of period

 $

 $

 -

 $

 The following table presents the effect of the adjustments to our prior period consolidated statement of shareholders' equity and redeemable non-controlling interest.

 As Reported

 Adjustments

 As Adjusted

 Accumulated deficit

 $

 ( 536,084

)

 $

)

 $

)

 Redeemable non-controlling Interest

 92,207

 ( 1,649

)

 Shareholders' equity attributable to Fathom

 51,764

)

 Note 4 – Revenue

 Below is a listing of the Company's major sales product lines:

 • Additive Manufacturing - utilizes plastic and metal 3D printing technology to provide a wide variety of high-quality, precision rapid prototyping solutions and low volume production.

 • Injection Molding - uses our 3D CAD machining technology for the automated design and manufacture custom tooling and small to medium part production runs.

 • CNC Machining - delivers high-quality precision parts by way of modern machining methods to drive more outstanding results.

 • Precision Sheet Metal - produces efficient quick-turn custom sheet metal parts from prototype to mid-volume production runs.

 Ancillary Product Lines

 • Urethane Casting - used during prototyping, includes finished looking parts for final tests and presentations, and low volume production.

 • Chemical Etching - provides customers the ability to quickly make complex precision parts and decorative items – beyond hard tool capability and without the cost – fabricated in dead soft or full hard material without burrs or metal distortion.

 The remaining other product lines include, but are not limited to, in-house assistance, and industrial design, engineering services, finishing and assembly services, and customer crating and packaging.

 Revenue by product line for the year ended December 31, 2023 and 2022 was as follows:

 January 1 - December 22, 2023

 January 1 - December 22, 2022

 Revenue:

 Additive Manufacturing

 $

 11,747

 $

 14,917

 Injection Molding

 21,734

 25,210

 CNC Machining

 51,329

 58,388

 Precision Sheet Metal

 39,161

 55,307

 Ancillary Product Lines

 7,321

 7,319

 Total revenue

 $

 131,292

 $

 The Company's deferred revenue balance as of December 31, 2023, and December 31, 2022 was $ 683 and $ 767, respectively. Deferred revenue is the result of billings in excess of revenue being recognized and is recorded in other current liabilities on the Company's balance sheet.

 Note 5 - Inventory

 Inventory consists primarily of finished goods, raw materials, and work in process, which are recorded at the lower of cost or net realizable value, which approximates first-in, first-out ("FIFO") cost. The Company periodically reviews its inventory for slow-moving, damaged, and discontinued items and provides allowances to reduce such items identified to their net recoverable amounts.

 The Company's inventory consisted of the following at December 31 2023 and December 31, 2022:

 December 31,
2023

 December 31,
2022

 Raw materials

 $

 3,950

 $

 5,147

 Work in process

 3,856

 4,461

 Finished goods

 2,508

 3,648

 10,314

 13,256

 Allowance for obsolescence

 ( 299

)

 ( 906

)

 Total

 $

 10,015

 $

 12,350

 Note 6 - Property and Equipment

 Property and equipment consisted of the following as of December 31, 2023,and December 31, 2022:

 Estimated Useful Life

 Machinery and equipment

 $

 43,045

 $

 39,516

 6 - 10

 Furniture and fixtures

 3,743

 3,100

 Computer equipment

 Property and leasehold improvements

 7,164

 6,839

 3 - 23

 Construction in progress

 4,116

 3,893

 n/a

 Auto / transportation equipment

 3 - 5

 Total

 58,746

 54,034

 Accumulated depreciation

 ( 12,469

)

 ( 6,331

)

 Total

 $

 46,277

 $

 47,703

 Depreciation expense included in operating expenses for the years ended December 31, 2023 and December 31, 2022 was $ 1,202 and $ 845, respectively. Depreciation expense included in cost of revenues for the years ended December 31, 2023 and December 31, 2022 was $ 5,795 and $ 5,841, respectively.

 Note 7 – Goodwill and Intangible Assets, net

 The changes in the carrying amount of goodwill for the years ended December 31, 2023 and December 31, 2022, were as follows:

 Dec. 31, 2021

 Measurement period adjustments

 Dec. 31, 2022

 Measurement period adjustments

 Goodwill acquired

 Dec. 31, 2023

 Goodwill

 $

 1,189,464

 $

 $

 ( 1,189,518

)

 $

 -

 $

 -

 $

 -

 $

 -

 As a result of sustained decreases in the Company's publicly quoted share price, lower market multiples for a relevant peer group, and challenging macroeconomic conditions, the Company concluded during the third quarter of 2022 that there were impairment indicators and conducted a quantitative goodwill impairment assessment, including additional testing of its definite-lived intangibles, and other long-lived assets as of September 30, 2022. As a result of this assessment, the Company did not identify an impairment to its definite-lived intangible assets or other long-lived assets, but the Company recorded a $ 1,066,564 non-deductible, non-cash goodwill impairment charge for the three and nine months ended September 30, 2022 in our unaudited consolidated statements of comprehensive income (loss). During the fourth quarter of 2022, the Company's stock price experienced an additional sustained decline, and the Company evidenced further deterioration in the macroeconomic conditions, triggering a further impairment analysis as of December 31, 2022. As a result of this assessment the Company did not identify an impairment to its definite-lived intangible assets or other long-lived assets, but it did result in the recognition of an additional impairment charge for the remaining goodwill of $ 122,954 for the quarter ended December 31, 2022, in our consolidated statements of comprehensive loss. There were no goodwill impairment charges for the year ended December 31, 2023.

 Intangible assets other than goodwill as of December 31, 2023 and December 31, 2022, were as follows:

 Year Ended December 31, 2023

 Gross

 Accumulated Amortization

 Net

 Useful Life (in years)

 Trade name

 $

 70,000

 $

 ( 9,448

)

 $

 60,552

 Customer relationships

 180,000

 ( 19,181

)

 160,819

 Developed software

 4,300

 ( 1,741

)

 2,559

 Developed technology

 15,700

 ( 6,358

)

 9,342

 Total intangible assets

 $

 270,000

 $

 ( 36,728

)

 $

 233,272

 Year Ended December 31, 2022

 Gross

 Accumulated Amortization

 Net

 Useful Life (in years)

 Trade name

 $

 70,000

 $

 ( 4,782

)

 $

 65,218

 Customer relationships

 180,000

 ( 9,707

)

 170,293

 Developed software

 4,300

 ( 881

)

 3,419

 Developed technology

 15,700

 ( 3,218

)

 12,482

 Total intangible assets

 $

 270,000

 $

 ( 18,588

)

 $

 251,412

 The weighted average amortization period for each category of intangible assets is the same of the useful life disclosed above.

 Aggregate amortization expense related to intangible assets, was $ 18,140 and $ 18,209 for the years ended December 31, 2023 and 2022, respectively. There are no intangible assets with indefinite useful lives.

 Estimated amortization expense for each of the next five years and thereafter:

 Year ended

 Total

 2024

 $

 18,140

 2025

 18,140

 2026

 18,041

 2027

 14,140

 2028

 14,140

 Thereafter

 150,671

 Total

 $

 233,272

 Note 8 – Warrant Liability

 The Company's total Warrant liability as of December 31, 2023 was equal to the fair value of the private Placement Warrants. The Company's total Warranty liability as of December 31, 2022, was equal to the fair value of the Public Warrants plus the fair value of the Private Placement Warrants.

 On September 21, 2023, the NYSE notified the Company and on September 22, 2023, the Company publicly announced, that the NYSE had determined to (a) commence proceedings to delist the Company's Public Warrants, each whole warrant exercisable to purchase one share of the Company's Class A common stock, par value $ 0.0001 per share (the "Class A common stock"), at a price of $ 11.50 per share, and listed to trade on the NYSE under the symbol "FATH.WS", and (b) immediately suspend trading in the Public Warrants due to "abnormally low" trading price levels. As such, the Public Warrants were determined to have no value as of December 31, 2023.

 As of December 31, 2023 and December 31, 2022, there were 431,216 Public Warrants outstanding. The Public Warrants became exercisable after February 4, 2022, or one year after the IPO of the Company (i.e., Altimar II's IPO).

 Prior to the September 2023 delisting, the Public Warrants were redeemable when the price per share of Class A common stock equals or exceeds $ 360.00. Should the Public Warrants have become exercisable, the Company would have redeemed the outstanding Warrants (except as described with respect to the Private Placement Warrants):

 • in whole and not in part;

 • at a price $ 0.01 per Warrant;

 • upon a minimum of 30 days ' prior written notice of redemption to each holder of the Warrant; and

 • if, and only if, the closing price of the Class A ordinary shares equals or exceeds $ 360.00 per share (as adjusted) for any 20 trading days within a 30 -trading day period ending three trading days before the Company sends the notice of redemption to the holders of the Warrants.

 Had the Company called the Public Warrants for redemption, as described above, the Company's management would have the option to require any holder that wished to exercise the Public Warrants to do so on a "cashless basis," as described in the Warrant agreement. The exercise price and number of shares of Class A common stocks issuable upon exercise of the Public Warrants would have been adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger, or consolidation. However, except as described below, the Public Warrants would not have been adjusted for issuances of Class A common stock at a price below its exercise price. Additionally, in no event would the Company have been required to net cash settle the Public Warrants.

 As of December 31, 2023, and December 31, 2022, there were 495,000 Private Placement Warrants outstanding. The Private Placement Warrants are identical to the Public Warrants underlying the units sold in the initial public offering, except that the Private Placement Warrants and the shares of Class A common stock issuable upon the exercise of the Private Placement Warrants were not transferable, assignable, or salable until 30 days after the completion of the Business Combination, or January 22, 2022. Additionally, the Private Placement Warrants are exercisable on a cashless basis and non-redeemable, except as described so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

 The below table summarizes the number of outstanding Warrants and the fair value as of December 31, 2023. See Note 18 for further information.

 Fair Value

 # of Warrants

 Public Warrants

 $

 -

 431,216

 Private Placement Warrants

 $

 495,000

 The below table summarizes the number of outstanding Warrants and the fair value as of December 31, 2022. See Note 18 for further information.

 Fair Value

 # of Warrants

 Public Warrants

 $

 431,216

 Private Placement Warrants

 $

 2,060

 495,000

 Note 9 – Reorganization

 In July 2022, the Company's Board of Directors approved a reorganization plan (the "Reorganization") designed to consolidate the Company's national footprint, streamline legacy leadership, and centralize core business functions following the completion of 13 acquisitions by Fathom since 2019.

 Pursuant to the Reorganization, the Company intended to:
 • Consolidate its existing facility in Oakland, California into Fathom headquarters in Hartland, Wisconsin, improving utilization and reducing costs;

 • Establish a Fathom technology center in Fremont, California that will focus on new and emerging technologies, specifically in the additive market; and

 • Consolidate leadership and other roles through a net workforce reduction of approximately 6 %, create an accounting shared service organization to streamline company-wide processes and create economies of scale while pursuing additional shared-service systems in other administrative functions.

 The Company completed the workforce reductions and the relocation of its Oakland, California facility to Hartland, Wisconsin location during the fourth quarter of 2022.

 On February 17, 2023, the Company committed to additional actions to continue and expand the Reorganization, including consolidating our Austin, Texas facilities, reducing the Company's workforce by an additional 14 % to respond to market conditions and prioritizing investments and operations in line with near-term revenue generation.

 During the third quarter, the Company expanded the Reorganization to include further workforce reductions at our Hartland and Miami facilities. The Company expects to complete these activities by the end of the second quarter of 2024.

 Reorganization charges are presented on the face of our consolidated statement of comprehensive loss as an operating expense and were $ 4,855, inclusive of inventory write-off of $ 2,310, and $ 1,897 for the years ended December 31, 2023 and December 31, 2022, respectively.

 The following table summarizes activity in the liability related to the Company's reorganization plan.

 Liability balance at December 31, 2022

 $

 Charges

 1,460

 Payments

 ( 1,125

)

 Liability balance at December 31, 2023

 $

 The reorganization liability resides in other current liabilities within our consolidated balance sheet and as of December 31, 2023, consists of employee termination costs. Cash payments are expected to be disbursed by the end of the third quarter of 2024.
 On January 19, 2024, the Board of Directors of the Company authorized and directed management to close the Company's Miami Lakes, Florida manufacturing facility as a result of persistent and continuing profitability challenges experienced at the facility. The Company expects to incur pre-tax charges related to the closure totaling approximately $ 3,200, consisting of approximately $ 600 in severance and other employee-related costs, approximately $ 2,400 in fixed asset and facility related write-down expenses, and $ 200 in other associated costs. The Company expects to incur substantially all of the total closure-related charges in the second quarter of 2024. The total cash expenditure associated with the closure are expected to be approximately $ 800. The facility in Miami Lakes, which is the subject of a lease expiring in March 2024, currently employs approximately 50 people.

 The Company anticipates that the initiative will be substantially complete by the end of the second quarter of 2024.

 Note 10 – Debt

 Credit Agreement
 On December 23, 2021, Fathom OpCo entered into the Credit Agreement, which included a $ 50,000 revolving credit facility and a $ 125,000 term loan (the "Term Loan"). The Company's borrowings under the revolving credit facility were $ 45,000 and $ 37,000 at December 31, 2023 and December 31, 2022, respectively. The loans borrowed under the Credit Agreement will mature in December 2026, except for $ 50,000 principal amount of the Term Loan which must be repaid (the "Term Loan Paydown") no later than July 31, 2024 (or earlier in the circumstance described below). The Company expects to be able to satisfy the obligations relating to the Term Loan Paydown, but there is no assurance that it will be successful. Obligations under the Credit Agreement are secured by a pledge of substantially all of the assets of Fathom OpCo and its subsidiaries.
 The loans borrowed under the Credit Agreement will mature in December 2026, except for $ 50,000 principal amount of the Term Loan held by term lenders consenting to the Third Amendment (as defined below) which must be repaid (the "Term Loan Paydown") no later than the earlier of July 31, 2024, the date on which the Merger Agreement and certain related agreements are terminated if the transactions contemplated by the Merger Agreement are not consummated or the date on which the transactions contemplated by the Merger Agreement are consummated. The Company expects to be able to satisfy the obligations relating to the Term Loan Paydown, but there is no assurance that it will be successful. Due to this uncertainty, and the ability of our lenders to declare a default and exercise their right to accelerate repayment of our indebtedness under the Credit Agreement in the event of our failure to satisfy such obligations, all of our indebtedness under the Credit Agreement is classified as current portion of long-term debt as of December 31, 2023. See Note 2. Basis of Presentation.
 As previously disclosed, the Credit Agreement was amended in November 2022, March 2023, and November 2023 (such amendment, the "Third Amendment"), in each case to, among other things, modify certain financial covenants in the Credit Agreement.
 On February 16, 2024, the Company entered into the Fourth Amendment to modify, among other things, certain financial covenants. In addition, the Fourth Amendment waived any default or event of default arising under the Credit Agreement relating to, among other things, the failure to comply with certain minimum EBITDA requirements as of and for periods ended December 31, 2023.
 The Fourth Amendment requires the interest coverage ratio as of the last day of any fiscal quarter, commencing with the fiscal quarter ending on September 30, 2024 to not be less than the applicable ratio set forth opposite such fiscal quarter below:

 Fiscal Quarter

 Interest Coverage Ratio

 Each fiscal quarter ending on and after September 30, 2024 through and including December 31, 2024

 1.15 to 1.00

 Each fiscal quarter ending on and after March 31, 2025 through and including December 31, 2025

 1.25 to 1.00

 Fiscal quarter ending on March 31, 2026

 1.35 to 1.00

 Fiscal quarter ending on June 30, 2026

 1.45 to 1.00

 Fiscal quarter ending on September 30, 2026 and thereafter

 1.55 to 1.00

 In addition, the Fourth Amendment requires the net leverage ratio as of the last day of any fiscal quarter commencing with the fiscal quarter ending on September 30, 2024, to not exceed the applicable ratio set forth opposite such fiscal quarter below:

 Fiscal Quarter

 Net Leverage Ratio

 Fiscal quarter ending on September 30, 2024

 7.75 to 1.00

 Fiscal quarter ending on December 31, 2024

 7.25 to 1.00

 Fiscal quarter ending on March 31, 2025

 6.75 to 1.00

 Fiscal quarter ending on June 30, 2025

 6.25 to 1.00

 Fiscal quarter ending on September 30, 2025

 5.75 to 1.00

 Fiscal quarter ending on December 31, 2025

 5.25 to 1.00

 Fiscal quarter ending on March 31, 2026

 4.75 to 1.00

 Fiscal quarter ending on June 30, 2026

 4.25 to 1.00

 Fiscal quarter ending on September 30, 2026 and thereafter

 4.00 to 1.00

 The Fourth Amendment also requires Minimum EBITDA (as defined and calculated pursuant to the Fourth Amendment) for the fiscal quarter ending September 30, 2023 to not be less than $ 1,500.
 Further, the Fourth Amendment requires the Company's minimum unrestricted cash and cash equivalents on account, together with the amounts available to be drawn under the revolving credit facility under the Credit Agreement (as defined in the Credit Agreement, "Liquidity") to not be less than $ 13,500 as of the last day of the months ending on September 30, 2023, October 31, 2023, and November 30, 2023, $ 10,000 as of December 31, 2023, and $ 6,000 as of the last day of any month ending on February 29, 2024 through and including December 31, 2024.
 Under certain circumstances, the Fourth Amendment permits the Company, at its election and in its sole discretion, to designate the last day of any fiscal quarter ending on or after March 31, 2025 as the "Covenant Changeover Date". On and after the Covenant Changeover Date, the Fourth Amendment will require the interest coverage ratio as of the last day of any fiscal quarter ending on or after the Covenant Changeover Date to not be less than 2.50 to 1.00 and the net leverage ratio as of the last day of any fiscal quarter ending on or after the Covenant Changeover Date to not exceed 3.50 to 1.00, provided that, in the case of the maximum net leverage ratio requirement, if a qualified material acquisition is consummated after the Covenant Changeover Date, the Company may elect to increase the maximum net leverage ratio requirement to 4.00 to 1.00 with respect to the fiscal quarter in which such qualified material acquisition is consummated and each of the three immediately following fiscal quarters, provided that no such election may be made to so increase the maximum net leverage ratio requirement to 4.00 to 1.00 unless, as of the end of at least two consecutive fiscal quarters immediately preceding such election, the net leverage ratio was not greater than 3.50 to 1.00. Following the Covenant Changeover Date, certain additional restrictions on the availability of certain baskets in the Fourth Amendment relating to restricted payments, restricted debt payments, and sale and leaseback transactions will cease to apply.
 Failure to comply with the covenants contained in the Credit Agreement (if not waived or further amended on acceptable terms) could give rise to an event of default and, if not cured, entitle the lenders to accelerate the indebtedness outstanding thereunder and terminate our ability to borrow in the future under the Credit Agreement.
 The Fourth Amendment requires the Company to make the Term Loan Paydown of $ 50,000 no later than the earlier of July 31, 2024, the date on which the Merger Agreement and certain related agreements are terminated if the transactions contemplated by the Merger Agreement are not consummated or the date on which the transactions contemplated by the Merger Agreement are consummated.
 The Credit Agreement previously permitted the Company to exercise a right to cure financial covenant defaults by means of raising cash through the sale of certain eligible equity interests of the Company as described in the Credit Agreement commencing with the fiscal quarter ending on June 30, 2024. The Fourth Amendment permits the Company to exercise this right commencing with the fiscal quarter ending on September 30, 2024.
 The Fourth Amendment also provides that the margin applicable to Term SOFR Loans increases to 4.25 % until the first business day after the delivery of financial statements and the related compliance certificate required to be delivered under the Fourth Amended Credit Agreement for the fiscal quarter ending on June 30, 2024, and thereafter to the extent the Company's net leverage ratio equals or exceeds 5.00 to 1.0 on the applicable date.
 In connection with the preparation and execution of the Fourth Amendment and the amendment to the Credit Agreement completed in February 2024, the Company incurred reasonable and documented expenses of the Administrative Agent and $ 76 in customary arranger and lender consent fees, with certain portions thereof being payable on the Closing Date of the applicable amendment and the remainder being payable at the earlier of the Term Loan Pay Down, July 31, 2024 and the date on which the loans are accelerated and the commitments are terminated in accordance with the Credit Agreement.
 The Company recorded deferred financing costs of $ 713 and $ 1,237, respectively for the three and twelve months ended December 31, 2023 in conjunction with the Credit Agreement and subsequent amendments and the applicable principal balances are presented within Long-Term debt, net on the Company's consolidated balance sheets. The Company amortizes the deferred financing costs using the effective interest method.
 The revolving credit facility under the Credit Agreement is available for working capital and other general corporate purposes and includes a letter of credit sub-facility of up to $ 5,000. The Credit Agreement also includes an uncommitted incremental facility,

 which, subject to certain conditions, provides for additional term loan facilities, an increase in commitments under the Credit Agreement and/or an increase in commitments under the revolving credit facility, in an aggregate amount of up to $ 100,000.
 The Company's debt as of December 31, 2023, and December 31, 2022, is as follows:

 As of December 31, 2023

 As of December 31, 2022

 Debt Description

 Interest Rate

 Amount

 Interest Rate

 Amount

 Credit Agreement Revolver

 9.62

 %

 45,000

 8.20

 %

 37,000

 Credit Agreement Term Loan

 9.70

 %

 117,187

 8.43

 %

 121,875

 Total principal long-term debt

 162,187

 158,875

 Debt issuance costs

 ( 2,386

)

 ( 1,804

)

 Total debt

 157,071

 Less: current portion of long-term debt

 42,744

 Long-term debt, net of current portion

 $

 —

 $

 114,327

 The balance of the Term Loan matures as follows:

 Year ended

 Total

 2024

 $

 117,187

 2025

 -

 2026

 -

 2027

 -

 2028

 -

 Thereafter

 -

 Total

 $

 117,187

 Interest on all debt is payable in 90-day increments, with the unpaid amount due upon maturity. Interest expense associated with long-term debt for the years ended December 31, 2023 and December 31, 2022 was $ 15,541 and $ 8,882, respectively. Included in interest expense, net on the accompanying consolidated statements of comprehensive loss is amortization of debt issuance costs of $ 655 and $ 420, for the years ended December 31, 2023 and December 31, 2022, respectively.
 In December 2022, the Company entered into a financing agreement through its insurance broker to spread the payment of its annual director's and officer's insurance premium over a ten-month period. Total financed payments of $ 1,265, including a $ 35 financing fee at 6.13 % annual rate, were made between January 2023 and October 2023. For the 2024 coverage period, the Company did not enter into a third-party financing arrangement and paid the full premium in February 2024.

 Note 11 – Other income and expense, net

 Other Income and expense, net is comprised of the following for the years ended December 31, 2023 and December 31, 2022:

 Loss on sale of assets

 $

 $

 Other

 Other expense

 Gain on sale of assets

 -

 ( 221

)

 Change in fair value of earnout shares

 ( 6,754

)

 ( 66,790

)

 Change in fair value of contingent consideration

 -

 ( 148

)

 Change in fair value of warrants

 ( 2,708

)

 ( 31,120

)

 Change in fair value of TRA

 ( 27,828

)

 ( 600

)

 Other

 ( 9

)

 ( 281

)

 Other income

 ( 37,299

)

 ( 99,160

)

 Note 12 - Share Based Compensation
 On December 23, 2021, the Company executed the Fathom Digital Manufacturing 2021 Omnibus Incentive Plan (the "2021 Omnibus Plan") to encourage the profitability and growth of the Company through short-term and long-term incentives that are

 consistent with the Company's objectives. The 2021 Omnibus Plan provides that the Company may grant options, stock appreciation rights, restricted shares, restricted stock units, performance-based awards (including performance-based restricted shares and restricted stock units), other share-based awards, other cash-based awards, and any combination of the foregoing.
 Share based compensation expense included in selling, general and administrative expenses totaled $ 4,127 and $ 7,537 for the years ended December 31, 2023 and December 31, 2022, respectively. There were no material related tax benefits for the years ended December 31, 2023 and December 31, 2022. There was $ 5,873 of total unrecognized compensation expense related to non-vested share-based compensation arrangements. This cost is expected to be recognized over the remaining weighted-average vesting period of 1.60 years.
 The Company elects to account for forfeitures as they occur rather than estimate the expected forfeitures.
 Stock Options
 Generally, stock option awards vest ratably each year on the anniversary date over a three-year period, have an exercise term of seven years, and any vested options must be exercised within 90 days of the employee leaving the Company. The compensation cost of option awards is charged to expense based upon the graded-vesting method over the vesting periods applicable to the option awards. The graded-vesting method provides for vesting of portions of the overall awards at interim dates and results in greater expense in earlier years than the straight-line method.
 When options are granted, we calculate the fair value using multiple Black-Scholes option valuation models. Expected volatilities are based upon a selection of public guideline companies. The risk-free rate was based upon U.S. Treasury rates.
 Key assumptions used in the valuation models were as follows for the year ended December 31, 2023:

 2023

 Expected term (years)

 4.5

 Expected volatility

 62.0

 %

 Expected dividend yield

 0.0

 %

 Risk-free interest rate

 3.51

 %

 Fair value of share

 $

 0.32

 The following table represents stock option activity for the year ended December 31, 2023:

 Weighted Average Exercise Price per Share

 Average Remaining Contractual Term

 Aggregate Intrinsic Value

 Outstanding at January 1, 2023

 15,853

 $

 174.13

 6.17

 $

 -

 Granted

 95,369

 11.67

 7.00

 -

 Exercised

 -

 -

 -

 Forfeited

 ( 37,370

)

 31.17

 -

 -

 Expired

 -

 -

 -

 -

 Non-vested at December 31, 2023

 73,852

 $

 36.68

 6.05

 $

 -

 Exercisable at December 31, 2023

 -

 -

 -

 -

 The weighted average grant date fair value of options granted during 2023 was $ 11.67.

 At December 31, 2023, there was approximately $ 633 of total unrecognized compensation cost related to unvested stock options granted under the 2021 Omnibus Plan. That cost is expected to be recognized over a weighted average period of 1.76 years as of December 31, 2023.

 The Company uses authorized and unissued shares to satisfy share award exercises.

 RSU's

 RSUs are subject to the continued service of the recipient through the vesting date, which is generally from issuance. Beginning December 2021, RSUs granted vest ratably each year on the anniversary date generally over a three-year period rather than at the end of the three year period. Once vested, the recipient will receive one share of common stock for each restricted stock unit. The grant-date fair value per share used for RSUs was determined using the closing price of our Common Stock on the NYSE on the date of the grant. We apply this grant-date fair value per share to the total number of shares that we anticipate will fully vest and amortize the fair value to compensation expense over the vesting period using the straight-line method.

 The following table represents RSU activity for the year ended December 31, 2023:

 Shares

 Weighted Average Grant Date Fair Value

 Aggregate Intrinsic Value

 Non-vested at January 1, 2023

 308,862

 $

 185.63

 $

 -

 Granted

 174,431

 10.40

 -

 Vested

 ( 24,226

)

 174.00

 -

 Forfeited

 ( 33,317

)

 165.60

 -

 Non-vested at December 31, 2023

 425,750

 $

 95.17

 $

 -

 The fair value of the time-based awards issued during 2023 were valued using the closing stock price for the Company's Class A common stock on the date of grant.

 At December 31, 2023, there was approximately $ 3,103 of total unrecognized compensation cost related to unvested restricted stock units granted under the 2021 Omnibus Plan. That cost is expected to be recognized over a weighted average period of 1.53 years as of December 31, 2023.

 ESPP
 Our 2022 Employee Stock Purchase Plan (ESPP) allows eligible employees to purchase a variable number of shares of our common stock during each offering period at a discount through payroll deductions of up to 15 % of their eligible compensation, subject to plan limitations. The ESPP provides for six-month offering periods with a single purchase period. At the end of each offering period, employees are able to purchase shares at 85 % of the lower of the fair market value of our common stock on the first trading day of the offering period or on the last trading day of the offering period. We determine the fair value of stock-based compensation related to our ESPP in accordance with ASC 718 using the component measurement approach and the Black-Scholes standard option pricing model.
 Employees purchased 25,545 shares of common stock under the ESPP at an average exercise price of $ 3.79 during 2023. As of December 31, 2023, 35,282 shares remained available for future issuance under the ESPP.
 We calculate the fair value of the shares under the ESPP using a Black-Scholes option valuation model. Expected volatilities are based upon a selection of public guideline companies. The risk-free rate was based upon U.S. Treasury rates.

 The fair value of each offering period was estimated using the Black-Scholes option pricing model with the following assumptions:

 2023

 Expected term (years)

 0.5 - 2.0

 Expected volatility

 62.5

 %

 Expected dividend yield

 0.0

 %

 Risk-free interest rate

 3.00

 %

 Fair value of share

 $

 4.81

 Note 13 –Earnings Per Share

 Basic net earnings per share is computed based on the weighted average number of common shares outstanding. Diluted net earnings per share is computed based on the weighted average number of common shares outstanding, increased by the number of any additional shares that would have been outstanding had any potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased from the proceeds from issuance of the potentially dilutive shares. For the purposes of the diluted earnings per share calculation, share options, warrants, time vested restricted stock, earnout shares and conversion of Fathom OpCo units are excluded from the calculation for the year ended December 31, 2021, as the inclusion would be anti-dilutive due to the losses reported in the year.

 Only the Company's Class A common stock participates in the Company's undistributed earnings. As such, the Company's undistributed earnings are allocated entirely to shares of Class A common stock based on the weighted Class A common stock outstanding.

 The Company's basic and diluted earnings per share calculation is as follows:

 Year Ended December 31

 2023

 2022

 Class A

 Class A

 Numerator

 $

 ( 1,443

)

 $

 ( 1,113,856

)

 Less: Net loss attributable to non-controlling interests

)

)

 Net income (loss) attributable to Class A common stock

 $

 $

)

 Denominator

 Basic - weighted-average shares outstanding

 3,463,747

 2,888,334

 Effect of dilutive securities

 Assumed exchange for shares of Class A common stock

 3,359,195

 -

 Diluted - weighted-average shares outstanding:

 6,822,942

 2,888,334

 Net income (loss) per share

 Basic

 $

 4.64

 $

 ( 169.75

)

 Diluted

 $

 2.35

 $

 ( 169.75

)

 Note 14 – Shareholders' Equity and Noncontrolling Interest

 The Company's equity consists of a total of 25,000,000 authorized shares across all classes of capital stock. The 25,000,000 authorized shares consist of 500,000 authorized shares of preferred stock with a par value of $ 0.0001 per share, 15,000,000 authorized shares of Class A common stock with a par value of $ 0.0001 per share, 9,000,000 shares of Class B common stock with a par value of $ 0.0001 par value per share, and 500,000 shares of Class C common stock with a par value of $ 0.0001 per share.

 As of December 31, 2023, the Company had no outstanding shares of preferred stock, 3,526,432 outstanding shares of Class A common stock, 3,327,379 outstanding shares of Class B common stock, and no outstanding shares of Class C common stock.

 Shares of Class A common stock are entitled to economic rights and one vote per share. Shares of Class B common stock have no economic rights and one vote per share. The number of shares of Class B common stock is equal to the number of New Fathom Units held by the continuing Fathom Owners (as defined below). The New Fathom Units owned by the legacy pre-Business Combination owners (the "Continuing Fathom Unitholders") of Fathom OpCo are exchangeable on a one-for-one basis for shares of Class A common stock (with corresponding surrender of an equal number of shares of Class B common stock for cancellation by the Company). The Company and Fathom OpCo also have the option to redeem the Class A units for cash in lieu of shares of Class A common stock. Due to the potential that the Class A units of Fathom OpCo may be redeemed for cash and the redemption is considered outside of the control of the Company, the Company has accounted for the non-controlling interest in Fathom OpCo within temporary or "mezzanine" equity on the Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022.

 The Company's shares of Class C common stock have identical rights to shares of the Company's Class A common stock. However, there are no outstanding shares of Class C common stock as of December 31, 2023 and December 31, 2022. Further, the Company's certificate of incorporation prohibits any future issuance of shares of Class C common stock.

 The Company's shares of preferred stock are authorized but unissued as of December 31, 2023 and December 31, 2022. The Company, acting without shareholder approval, may approve the issuance of one of more series of such preferred shares. In connection with such approval, the Company will approve a "Certificate of Designation" that will set forth the terms of the series of preferred stock, including terms such as dividends and redemption rights.

 Due to the New Fathom Units held by parties other than the Company, upon the closing of the Business Combination, the Company recorded a non-controlling interest at fair value, which was $ 842,850. The non-controlling interest is reflective of the fact that the Company owned a 37.6 % economic interest in Fathom OpCo whereas the Continuing Fathom Unitholders hold the remaining 62.4 % economic interest in Fathom OpCo.

 The table below demonstrates the calculation of the comprehensive loss attributable to the non-controlling interest holders for 2023 and 2022.

 Fathom OpCo comprehensive loss

 $

 ( 36,944

)

 $

 ( 1,110,488

)

 Noncontrolling interest percentage

 48.6

 %

 51.6

 %

 Comprehensive loss attributable to noncontrolling interest

 $

)

 $

)

 Note 15 - Leases

 The Company leases certain manufacturing facilities, office space, and equipment and determines if an arrangement is a lease at inception. Amounts associated with operating leases and financing leases are included in right-of-use lease assets ("ROU assets"), current lease liabilities and long-term lease liabilities in the Company's consolidated balance sheet.

 ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

 If the leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The incremental borrowing rate is determined using a portfolio approach based on the rate of interest that we would pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses quoted interest rates obtained from financial institutions as an input to derive its incremental borrowing rate as the discount rate for the lease.

 Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of Topic 842, we combine lease and non-lease components.

 Certain leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or more, and the exercise of lease renewal options under these leases is at our sole discretion. Lease terms include the non-cancellable portion of the underlying leases along with any reasonably certain lease periods associated with available renewal periods. Certain of the Company's operating leases include variable rental payments based on a percentage change of certain consumer price indices ("CPI"). Variable rental payments are recognized in the consolidated statement of comprehensive income (loss) in the period in which the obligation for those payments is incurred. The depreciable life of assets and leasehold improvements are limited by the expected lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

 Balance Sheet Location

 Assets

 Prepaid expenses and other current assets

 $

 $

 Right-of-use lease assets, net

 8,896

 10,312

 Right-of-use lease assets, net

 2,045

 2,253

 Total lease assets

 $

 11,004

 $

 12,708

 Liabilities

 Current

 Current lease liability

 $

 1,883

 $

 2,174

 Current lease liability

 Non-Current

 Long-term lease liability

 7,285

 8,958

 Long-term lease liability

 1,914

 2,125

 Total lease liability

 $

 11,312

 $

 13,457

 The following table sets forth our lease costs included in our consolidated statement of comprehensive loss:

 Operating lease cost

 $

 2,802

 $

 3,295

 Short-term lease cost

 —

 Financing lease cost:

 Amortization of ROU assets

 Interest on lease liabilities

 Sublease income

 ( 68

)

 ( 137

)

 Total lease costs

 $

 3,122

 $

 3,525

 Weighted-average remaining lease term (years)

 6.0

 6.6

 7.2

 8.1

 Weighted-average discount rate

 6.4

 %

 6.0

 %

 5.7

 %

 5.6

 %

 Maturities of Leases

 Operating Leases

 Financing Leases

 Total

 2024

 $

 2,417

 $

 $

 2,762

 2025

 2,061

 2,416

 2026

 1,634

 1,992

 2027

 1,428

 1,794

 2028

 1,264

 Thereafter

 2,905

 3,743

 Total future lease payments

 11,347

 2,624

 13,971

 Less: Discount

 2,179

 2,659

 Present value of lease liability

 $

 9,168

 $

 2,144

 $

 11,312

 Note 16 - Related Party Transactions
 Between January 1, 2023 and August 31, 2023 and for the year ended December 31, 2022, an employee of the Company had a non-controlling ownership interest in an affiliated entity, Fathom Precision International Ltd., which supplies services to the Company. Purchases from such affiliate totaled $ 5,501 from January to August 2023 and $ 9,120 for the year ended December 31, 2022.

 Note 17 — Segment Reporting
 Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. In consideration of ASC 280, we are not organized around specific services or geographic regions. Our chief operating decision maker uses consolidated financial information to evaluate our performance, which is the same basis upon which the results and performance of the Company are communicated to the Company's Board. The chief operating decision maker bases all significant decisions regarding the allocation of our resources on a consolidated basis. Based on the information described above and in accordance with the applicable literature, management has concluded that we are organized and operate as one operating and reportable segment.

 Note 18 – Fair Value Measurement
 The fair value of the Company's financial assets and liabilities reflects the Company's management's estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
 • Level 1 — Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

 • Level 2 — Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

 • Level 3 — Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

 The following table presents information about the Company's liabilities that are measured at fair value on a recurring basis as of December 31, 2023.

 Fair Value Measurements as of December 31, 2023

 Description

 Level 1

 Level 2

 Level 3

 Total

 Liabilities:

 $

 -

 $

 -

 $

 -

 $

 -

 Sponsor Earnout Shares Liability

 -

 -

 Fathom Earnout Shares Liability

 -

 -

 Warrant liability – Public Warrants

 -

 -

 -

 -

 Warrant liability – Private Placement Warrants

 -

 -

 $

 -

 $

 -

 $

 $

 The following table presents information about the Company's liabilities that are measured at fair value on a recurring basis as of December 31, 2022.

 Fair Value Measurements as of December 31, 2022

 Description

 Level 1

 Level 2

 Level 3

 Total

 Liabilities:

 $

 -

 $

 -

 $

 4,000

 $

 4,000

 Fathom OpCo acquisitions contingent consideration

 -

 -

 Sponsor Earnout Shares Liability

 -

 -

 Fathom Earnout Shares Liability

 -

 -

 5,960

 5,960

 Warrant liability – Public Warrants

 -

 -

 Warrant liability – Private Placement Warrants

 -

 -

 2,060

 2,060

 $

 $

 -

 $

 13,650

 $

 14,370

 The following table presents a reconciliation of the beginning and ending balances of recurring level 3 fair value measurements.

 Level 3 Liabilities

 Tax Receivable Agreement liability

 Fathom OpCo acquisitions contingent consideration

 Sponsor Earnout shares liability

 Fathom Earnout shares liability

 Warrant liability – Private Placement Warrants

 Total

 Balance at December 31, 2022

 $

 4,000

 $

 $

 $

 5,960

 $

 2,060

 $

 13,650

 Payments

 -

 ( 682

)

 -

 -

 -

 $

 ( 682

)

 Net (gain) loss (1)

 ( 4,000

)

 ( 18

)

 ( 910

)

 ( 5,844

)

 ( 1,988

)

 $

 ( 12,760

)

 Ending balance at December 31, 2023

 $

 -

 $

 -

 $

 $

 $

 $

 (1) Net gains on changes in recurring level 3 fair value measurements are recognized in other income and net losses on change in recurring level 3 fair value measurements are recognized in other expense in our consolidated statement of comprehensive loss.

 The fair value of the TRA is based on multiple inputs and assumptions input into a Monte Carlo simulation model. The significant inputs into this model are the following: a corporate tax rate of 24.8 %, an annual TRA payment date of February 17, existing non-controlling interest percentage of 48.7 %, initial amortization deductions of $ 46,070, $ 43,126 of taxable income forecast by 2032, a sell-down schedule which reflects the expected sale of New Fathom Units by legacy Fathom OpCo shareholders, a Class A common stock price as of December 31, 2023 of $ 4.46, volatility of 79.0 %, correlation between taxable income and the Class A common stock price of 25.0 %, and a cost of debt of 12.15 %.

 As of December 31, 2023, the Company determined that making a future payment under the TRA was not probable because the Company does not believe it will have sufficient taxable income to utilize deductions of certain tax attributes that would generate cash savings in U.S. federal, state and local income tax or franchise tax to require a payment under the TRA. As a result, the Company remeasured the TRA liability at zero in the consolidated balance sheets and recorded a gain of $ 28,270 in the consolidated statements of operations for the fiscal year ended December 31, 2023.

 Earnout Shares Liability

 The Earnout Shares are accounted for as liabilities in the Company's consolidated balance sheet. The fair values for the Earnout Shares are estimated using a Monte Carlo simulation assuming Geometric Brownian Motion in a risk-neutral framework. The Monte Carlo simulation considers daily simulated stock prices as a proxy for the Company's daily volume-weighted average price ("VWAP"). The key inputs into the valuation of the Earnout Shares are an expected term of 2.98 years, a risk-free rate of 3.97 %, operating asset volatility of 58.4 %, and equity volatility of 97.0 %. The operating asset volatility and the equity volatility assumptions are based on a blended average of operating and equity volatility, respectively, of publicly traded companies within the Company's peer group.

 Warrants

 The Public and Private Placement Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within Warrant liability in the accompanying consolidated balance sheet as of December 31, 2023, and December 31, 2022. The Warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within a change in fair value of Warrant liabilities in the statement of operations.

 During the third quarter of 2023 the Company's public warrants were delisted from the NYSE, see Note. As such, the Public Warrants were determined to have no value as of December 31, 2023.

 The Private Placement warrants are valued using a Black-Scholes option pricing approach, which is considered to be a Level 3 fair value measurement. The volatility for the Private Placement warrants, a key input into the valuation, was estimated to be 97.0 % based on the publicly traded per share price of the Company's Class A common stock as of December 31, 2023. Other key inputs into the valuation include a term of 2.98 years, a strike price of $ 230.00 per share, and an assumption that the Private Placement warrants will remain outstanding until maturity since, unlike the Public Warrants, the Private Placement warrants are not redeemable.

 In instances whereby inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Company's assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

 Note 19 – Commitments and Contingencies

 The Company is subject to various claims and lawsuits that arise in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material effect on the consolidated balance sheet of the Company.

 Note 20 – Income Taxes

 As of December 31, 2023, tax years 2019 through 2023 remain open and subject to examination by the Internal Revenue Service and the majority of the states where Fathom OpCo has activities. Upon audit, tax authorities may challenge tax positions of the Company or Fathom OpCo. A tax position successfully challenged by a taxing authority could result in an adjustment to the Company's provision for income taxes in the period in which a final determination is made. For the years ended December 31, 2023 and December 31, 2022, the Company did not recognize income tax expense or benefits associated with uncertain tax positions.

 Significant components of the Company's tax expense (benefit) for the years ended December 31, 2023 and December 31, 2022, are as follows:

 Current expense (benefit)

 State

 $

 $

 -

 Federal

 ( 219

)

 Subtotal

 ( 79

)

 Deferred tax benefit

 State

 -

 ( 1,564

)

 Federal

 -

 ( 5,348

)

 Subtotal

 -

 ( 6,912

)

 Total

 $

 ( 79

)

 $

)

 A reconciliation of the expected statutory federal tax and the total income tax benefit for the years ended December 31, 2023 and December 31, 2022 are as follows:

 Federal statutory rate ( 21 %)

 $

 ( 324

)

 $

 ( 235,309

)

 State income taxes, net of federal benefit

 ( 2,910

)

 Non-controlling interest in Fathom Holdco, LLC

 3,835

 130,904

 Remeasurement of Fathom and Sponsor earnout shares

 ( 1,418

)

 ( 14,026

)

 Remeasurement of TRA and warrant liability

 ( 1,357

)

 ( 6,661

)

 Valuation allowance

 ( 869

)

 10,369

 -

 104,768

 Other

 ( 86

)

 6,203

 Total

 $

 ( 79

)

 $

)

 The tax effect of temporary differences that give rise to deferred tax assets and liabilities as of December 31, 2023 and December 31, 2022 are as follows:

 Deferred tax assets

 Net operating losses

 $

 5,559

 $

 2,575

 Transaction costs

 Interest expense carryforwards

 2,950

 Stock based compensation

 1,077

 Investment in Fathom Holdco LLC

 2,981

 8,586

 Other

 Total deferred tax assets

 13,121

 13,487

 Valuation allowance

 ( 13,121

)

 ( 13,487

)

 Total deferred tax assets after valuation allowance

 -

 -

 Deferred tax liabilities

 Total deferred tax liabilities

 -

 -

 Total net deferred tax liabilities

 $

 -

 $

 -

 Net Operating Losses

 As of December 31, 2023, the Company has federal and state net operating loss ("NOLs") carryforwards of $ 21,700 and $ 27,610, respectfully. The U.S. federal NOLs are not subject to expiration. Utilization of the federal and state net operating losses may be subject to annual limitations due to the "change in ownership" provisions of the Internal Revenue Code and equivalent state tax provisions. The annual limitations are not expected to restrict the use of any portion of the net operating losses prior to expiration. Nonetheless, the Company believes that it is more likely than not that the benefit from federal and state NOL carryforwards will not be realized.

 Valuation Allowance

 The Company recorded a full valuation allowance against the deferred tax assets as of December 31, 2023 and December 31, 2022. The change in the valuation allowance during the 2023 period was the result of an increase in deferred tax assets and the corresponding additional valuation allowance established against the ending deferred tax asset balance. The Company does not believe it is more likely than not that its deferred tax assets will be realized and has therefore established a full valuation allowance against it deferred tax assets as of December 31, 2023 and December 31, 2022.

 Tax Receivable Agreement, Warrants, Fathom Earnout Shares, and Sponsor Earnout Shares

 The Company entered into a TRA with members of Fathom OpCo which calls for certain payments to be made to members of Fathom OpCo on account of (i) tax savings generated at the Company related to tax attributes of the Company and Fathom OpCo acquired by the Company in the Business Combination and (ii) future exchanges of Fathom OpCo units for cash or Class A common stock of the Company (See Note 2 for further information). Payments required under the TRA for units acquired in the Business Combination are not anticipated to give rise to substantial amounts of future deductible tax differences. Changes in the fair value of the TRA liability established in connection with the transactions contemplated by the Business Combination give rise to permanent differences between financial and taxable income. Payments required under the TRA for units exchanges subsequent to the business combination may give rise to substantial amounts of future deductible tax differences. TRA amounts attributable to subsequent exchanges are not remeasured to fair value. The Company's Fathom Earnout Shares liability and Sponsor Earnout Shares liability to be paid in the form of equity does not give rise to future deductible tax basis for U.S. federal income tax purposes, and accordingly, changes in the fair value of the Fathom Earnout Shares liability and the Sponsor Earnout Shares liability give rise to permanent differences between financial and taxable income. The Company's Warrants are treated as equity instruments for U.S. federal income tax purposes, and accordingly, changes in the fair value of the Warrant liability give rise to permanent differences between financial and taxable income.

 Note 21 – Variable Interest Entities

 Based upon the criteria set forth in ASC 810 - Consolidation, the Company consolidates variable interest entities ("VIEs") in which it has a controlling financial interest and is therefore deemed the primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the VIE activities that most significantly impact economic performance; and (b) the obligation to absorb the VIE losses and the right to receive benefits that are significant to the VIE. The Company has determined that Fathom OpCo meets the definition of a VIE and that the Company is the primary beneficiary of Fathom OpCo beginning on the date of the Business Combination, and therefore the Company must consolidate Fathom OpCo from the date of the Business Combination.

 The following table presents a summary of the total assets, liabilities, and equity of the Company's consolidated VIE at December 31, 2023 and December 31, 2022, which is comprised solely of Fathom OpCo.

 Year Ended December 31, 2023 Fathom OpCo Standalone

 Year Ended December 31, 2022 Fathom OpCo Standalone

 Total assets

 $

 329,493

 $

 370,245

 Total liabilities

 188,603

 191,514

 Total equity

 140,890

 178,731

 Note 22 – Subsequent Events

 The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued.

 Expansion of Reorganization Plan
 On January 19, 2024, the Board of Directors of the Company authorized and directed management to close the Company's Miami Lakes, Florida manufacturing facility as a result of persistent and continuing profitability challenges experienced at the facility. The Company expects to incur pre-tax charges related to the closure totaling approximately $ 3,200, consisting of approximately $ 600 in severance and other employee-related costs, approximately $ 2,400 in fixed asset and facility related write-down expenses, and $ 200 in other associated costs. The Company expects to incur substantially all of the total closure-related charges in the second quarter of 2024. The total cash expenditure associated with the closure are expected to be approximately $ 800. The facility in Miami Lakes, which is the subject of a lease expiring in March 2024, currently employs approximately 50 people.
 The Company anticipates that the initiative will be substantially complete by the end of the second quarter of 2024.

 Amendment of Credit Agreement
 The Company entered into the Fourth Amendment to modify, among other things, certain financial covenants. In addition, the Fourth Amendment waived any default or event of default arising under the Credit Agreement relating to, among other things, the failure to comply with certain minimum EBITDA requirements as of and for periods ended December 31, 2023.
 The Fourth Amendment requires the interest coverage ratio as of the last day of any fiscal quarter, commencing with the fiscal quarter ending on September 30, 2024 to not be less than the applicable ratio, as defined in Note 10. In addition, the Fourth Amendment requires the net leverage ratio as of the last day of any fiscal quarter commencing with the fiscal quarter ending on September 30, 2024, to not exceed the applicable ratio. See Note 10 - "Debt" of these Notes to Consolidated Financial Statements for the applicable ratios of any given fiscal quarter.
 The Fourth Amendment also requires Minimum EBITDA (as defined and calculated pursuant to the Fourth Amendment) for the fiscal quarter ending September 30, 2023 to not be less than $ 1,500.
 Further, the Fourth Amendment requires the Company's minimum unrestricted cash and cash equivalents on account, together with the amounts available to be drawn under the revolving credit facility under the Credit Agreement (as defined in the Credit Agreement, "Liquidity") to not be less than $ 13,500 as of the last day of the months ending on September 30, 2023, October 31, 2023 and November 30, 2023, $ 10,000 as of December 31, 2023 and $ 6,000 as of the last day of any month ending on February 29, 2024 through and including December 31, 2024.
 Under certain circumstances, the Fourth Amendment permits the Company, at its election and in its sole discretion, to designate the last day of any fiscal quarter ending on or after March 31, 2025 as the "Covenant Changeover Date". On and after the Covenant Changeover Date, the Fourth Amendment will require the interest coverage ratio as of the last day of any fiscal quarter ending on or after the Covenant Changeover Date to not be less than 2.50 to 1.00 and the net leverage ratio as of the last day of any fiscal quarter ending on or after the Covenant Changeover Date to not exceed 3.50 to 1.00, provided that, in the case of the maximum net leverage ratio requirement, if a qualified material acquisition is consummated after the Covenant Changeover Date, the Company may elect to increase the maximum net leverage ratio requirement to 4.00 to 1.00 with respect to the fiscal quarter in which such qualified material acquisition is consummated and each of the three immediately following fiscal quarters, provided that no such election may be made to so increase the maximum net leverage ratio requirement to 4.00 to 1.00 unless, as of the end of at least two consecutive fiscal quarters immediately preceding such election, the net leverage ratio was not greater than 3.50 to 1.00. Following the Covenant Changeover Date, certain additional restrictions on the availability of certain baskets in the Third Amendment relating to restricted payments, restricted debt payments and sale and leaseback transactions will cease to apply.
 Failure to comply with the covenants contained in the Fourth Amendment (if not waived or further amended on acceptable terms) could give rise to an event of default and, if not cured, entitle the lenders to accelerate the indebtedness outstanding thereunder and terminate our ability to borrow in the future under the Credit Agreement.
 The Fourth Amendment requires the Company to make the Term Loan Paydown of $ 50,000 no later than the earlier of July 31, 2024, the date on which the Merger Agreement or certain related agreements is terminated or the date on which the Transactions are consummated.
 The Credit Agreement previously permitted the Company to exercise a right to cure financial covenant defaults by means of raising cash through the sale of certain eligible equity interests of the Company as described in the Credit Agreement commencing with the fiscal quarter ending on June 30, 2024. The Fourth Amendment permits the Company to exercise this right commencing with the fiscal quarter ending on September 30, 2024.

 Agreement and Plan of Merger

 On February 16, 2024, the Company, entered into an Agreement and Plan of Merger (the "Merger Agreement"), by and among Fathom Digital Manufacturing Intermediate, LLC, a Delaware limited liability company ("Parent"), Fathom Digital Manufacturing Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent ("Company Merger Sub"), Fathom Digital Manufacturing Merger Sub 2, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Company Merger Sub ("LLC Merger Sub"), Fathom OpCo, and the Company, pursuant to which, among other things, (i) LLC Merger Sub will merge with and into Fathom OpCo with Fathom OpCo surviving the merger as a partially owned subsidiary of the Company (the "LLC Merger") and (ii) immediately following the LLC Merger, Company Merger Sub will merge with and into the Company, with the

 Company as the surviving corporation (the "Merger", and collectively, with the LLC Merger and the other transactions contemplated by the Merger Agreement, the "Transactions"). Parent, Company Merger Sub, and LLC Merger Sub are affiliates of CORE Industrial Partners, LLC ("CORE").

 In connection with the Transactions, Parent will acquire all of the Company's outstanding shares of its Class A Common Stock (other than (i) shares of Class A Common Stock held by the Company as treasury stock or owned by Parent or Company Merger Sub, (ii) shares of Class A Common Stock owned by CORE, (iii) shares of Class A Common Stock cancelled pursuant to the Merger Agreement, and (iv) any dissenting shares of Class A Common Stock) for $ 4.75 per share in cash.

 The closing of the Merger Agreement is subject to customary closing conditions. Upon the closing of the Merger, Fathom will become a privately held company.

 Amendment No. 1 to the TRA

 On February 16, 2024, the Company further amended the TRA. As amended, the TRA will automatically terminate in full without any payment, including any Tax Benefit Payment or Early Termination Payment (each as defined in Amendment No. 1) upon the consummation of the Merger, and the Merger will not constitute a Change of Control (as defined in Amendment No. 1) thereunder.

 Amendment No. 1 to Second Amended and Restated Limited Liability Company Agreement of Fathom OpCo

 On February 16, 2024, the Company, in its capacity as the managing member of Fathom OpCo, and Fathom OpCo amended the Second Amended and Restated Limited Liability Agreement of Fathom OpCo (the "LLC Agreement Amendment"). As amended, and among other things, the Company shall have the right to cause the exchange of certain outstanding shares of vote-only Class B Common Stock, together with the corresponding Class A Units of Fathom OpCo (other than those units held by the Company), for an equal number of shares of the Company's Class A Common Stock, immediately prior to and conditioned upon the effective time of the LLC Merger.

 Unsecured Promissory Note and Guarantee Agreement

 On April 1, 2024, Fathom Manufacturing, LLC (the "Borrower"), an indirect wholly-owned subsidiary of Fathom Digital Manufacturing Corporation (the "Company"), entered into an Unsecured Promissory Note (the "Promissory Note") in favor of CORE Industrial Partners Fund I, L.P. (the "Lender"), on behalf of CORE Industrial Partners Fund I, L.P. ("Main Fund") and CORE Industrial Partners Fund I Parallel, L.P. ("Parallel Fund" and collectively with the Main Fund and the Lender, the "Lending Parties" and each, a "Lending Party"). Pursuant to the Promissory Note, the Borrower may incur, and the Lending Parties have collectively committed to provide, on an unsecured basis, up to $ 2.5 million of term loans that will mature on September 30, 2024 and will accrue interest, payable in kind, at the rate of 5 % per annum. Term loans made under the Promissory Note are expected to be used for working capital purposes. The Borrower may prepay the Term Loans from time to time without any premium or penalty. The Lender is affiliated with CORE Industrial Partners, LLC. On April 1, 2024, the Company drew the $ 2,500 unsecured promissory note.

 Concurrent with the execution of the Promissory Note, certain indirect wholly-owned subsidiaries of the Company (including the Borrower) (collectively, the "Guarantors" and each, a "Guarantor") entered into a Guarantee Agreement dated as of April 1, 2024 (the "Guarantee Agreement") pursuant to which the Guarantors have agreed to guarantee, on an unsecured basis, in full the payment and performance of the obligations of the Borrower under the Promissory Note.

 Consistent with the Company's Related Person Policy and Procedures, the foregoing transactions were approved by the Audit Committee of the Board of Directors of the Company. Additionally, the foregoing transactions were approved by the Special Committee established in connection with the pending Merger.