AGNT, Inc. 10-Q

Item 1. LEGAL PROCEEDINGS See Note 10 - Commitments and Contingencies and Note 12 – Subsequent Events to the condensed consolidated financial statements for additional information regarding the Company’s legal proceedings, which is incorporated herein by reference. From time to time, we are involved in ordinary routine litigation incidental to the conduct of our business, including matters that may be certified as class or collective actions. The Company believes that it has adequately and appropriately accrued for legal matters. We recognize expense for legal claims when payments associated with the claims become probable and can be reasonably estimated. Additionally, the below captioned matter addresses certain current antitrust litigation involving the Company. Antitrust laws generally provide for joint and several liability and treble damages. We believe that additional antitrust litigation may be possible. We cannot provide any assurances that results of such litigation will not have a material adverse effect on our business, results of operations or financial condition. Litigation and other legal matters are inherently unpredictable and subject to substantial uncertainties and adverse resolutions could occur. In addition, litigation and other legal matters, including class action lawsuits, government investigations and regulatory proceedings can be costly to defend and, depending on the class size and claims, could be costly to settle. As such, the Company could incur judgments, penalties, sanctions, fines or enter into settlements of claims with liability that are materially in excess of amounts accrued and these settlements could have a material adverse effect on the Company’s financial condition, results of operations or cash flows in any particular period. ​ 28 Table of Contents Antitrust Litigation Gibson v. National Association of Realtors was filed on October 31, 2023 in the United States District Court for the Western District of Missouri, Western Division, naming the National Association of Realtors (“NAR”), the Company, Compass, Inc., Redfin Corporation, Weichert Realtors, United Real Estate, Howard Hann Real Estate Services, and Douglas Elliman, Inc. as defendants. The plaintiffs allege that the defendants engaged in a continuing contract, combination, or conspiracy to unreasonably restrain trade and commerce in violation of Section 1 of the Sherman Act because defendant NAR allegedly established mandatory anticompetitive policies and rules for the multiple listing services and its member brokers that require listing brokers to make an offer of buyer-broker compensation when listing a property. The plaintiffs argue that “but for” the challenged NAR policies and rules, these offers of buyer-broker compensation would not be made and plaintiffs seek the recovery of full commissions paid to buyers’ brokers as to brokerage and franchised operations, as applicable, in the relevant geographic area. The plaintiffs further allege that commission sharing, which provides for the broker representing the seller sharing or paying a portion of its commission to the broker representing the buyer, is anticompetitive and violates the Sherman Act, and that the brokerage/franchisor defendants, including the Company, conspired with NAR by requiring their respective brokerages/franchisees to comply with NAR’s policies, rules, and code of ethics, and engaged in other allegedly anticompetitive conduct including, but not limited to, steering and agent education that allegedly promotes the practice of paying buyer-broker compensation and discourages commission negotiation. The antitrust claims in this matter are limited both in allegations and relief sought to home sellers who, from October 31, 2019 to the present, used a listing broker affiliated with one of the brokerage/franchisor defendants in multiple listing services that primarily serve the State of Missouri, purportedly in violation of federal and Missouri antitrust laws. The plaintiffs seek a permanent injunction enjoining the defendants from requiring home sellers to pay buyer-broker commissions or from otherwise restricting competition among brokers, an award of damages and/or restitution for the period, attorneys’ fees and costs of suit. Plaintiffs allege joint and several liability and seek treble damages. The Company has closely monitored ongoing and similar antitrust litigation against our competitors in recent years. The Company is committed to upholding fair and transparent practices compliant with law and has already developed mechanisms and a plan in place that enables buyers and sellers to negotiate commissions.