~~Statement Regarding Forward-Looking Statements~~FORWARD LOOKING STATEMENTS

~~Certain statements contained in this report on Form 10-Q constitute~~This Quarterly Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements ~~give~~are not based on historical facts but rather represent current expectations ~~or forecasts~~and assumptions of future events. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Many of these risks and other factors are beyond our ability to control or predict. Forward-looking statements can be identified by ~~the fact that they do not relate strictly to historical or current facts. The~~ words such as “believe,” “expect,” “anticipate,” “estimate,” “project,” “plan,” “should,” “intend,” “may,” “will,” “could,” “can,” “would,” ~~“potential”~~“potential,” “seek,” “goal” and similar expressions identify forward-looking statements, but are not the exclusive means of doing so. Forward-looking statements may include statements about matters such as: future revenues; future industry market conditions; future changes in our capacityexpressions. These risks and operations; future operating and overhead costs; operational and management restructuring activities (including implementation of methodologies and changes in the board of directors); future employment and contributions of personnel; tax and interest rates; capital expenditures and their impact on us; nature and timing of restructuring charges and the impact thereof; productivity, business process, rationalization, investment, acquisition, consulting, operational, tax, financial and capital projects and initiatives; contingencies; environmental compliance and changes in the regulatory environment; and future working capital, costs, revenues, business opportunities, debt levels, cash flows, margins, earnings and growth.

These statements are based on assumptions and assessments made by our management in light of their experience and their perception of historical and current trends, current conditions, possible future developments anduncertainties, as well as other ~~factors they believe to be appropriate. Forward-looking statements are not guarantees, representations or warranties and are subject to~~ risks and uncertainties that could cause our actual results ~~developments and business decisions~~ to differ ~~materially~~significantly from ~~those contemplated by such forward-looking statements. Some of those risks~~management’s expectations, are described in greater detail in “Risk Factors” in Part I, Item 1A, and ~~uncertainties include the risk factors set forth~~elsewhere in ~~this report and~~ our Annual Report on Form 10-K for ~~our prior~~the fiscal year ended December 31, ~~2016,~~2020.

Forward-looking statements are based on currently available operating, financial and ~~the following: current global economic~~market information and capital market uncertainties; potential dilution to our stockholders from our recapitalization and balance sheet restructuring activities; potential inability to continue to comply with government regulations; adoption of, or changes in legislation or regulations adversely affecting our businesses; permitting constraints or delays, business opportunities that may be presented to, or pursued by, us; changes in the United States or other monetary or fiscal policies or regulations; changes in generally accepted accounting principles; geopolitical events; potential inability to implement our business strategies; potential inability to grow revenues organically; potential inability to attract and retain key personnel; assertion of claims, lawsuits and proceedings against us; potential inability to maintain an effective system of internal controls over financial reporting; potential inability or failure to timely file periodic reports with the SEC; and potential inability to list our securitiesare inherently uncertain. Investors should not place undue reliance on any securities exchange or market. Occurrence of such events or circumstances could have a material adverse effect on our business, financial condition, results of operations or cash flows or the market price of our securities. All subsequent written and oral forward-looking statements, ~~by or attributable to us or persons acting on our behalf~~which speak only as of the date they are ~~expressly qualified in their entirety by these factors.~~made and are not guarantees of future performance. Actual future results and trends may differ materially from such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking ~~statement.~~statements whether as a result of new information, future developments or otherwise, except as may be required by law.

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PART I1 – FINANCIAL INFORMATION

~~Item 1. FINANCIAL STATEMENTS~~

~~eXp World Holdings, Inc.~~

~~(unaudited)~~

~~September 30, 2017~~

Item 1.	~~Page~~

~~Condensed Consolidated Balance Sheets~~FINANCIAL STATEMENTS (UNAUDITED)	5

~~Condensed Consolidated Statements of Operations~~	6

~~Condensed Consolidated Statements of Comprehensive Income (Loss)~~	7

~~Condensed Consolidated Statements of Cash Flows~~	8

~~Notes to the Condensed Consolidated Financial Statements~~	9

EXP WORLD HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

(UNAUDITED)


	September 30, 2021	December 31, 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$ 98,064	$ 100,143
Restricted cash	69,406	27,781
Accounts receivable, net of allowance for credit losses of $1,901 and $1,879, respectively	129,843	76,951
Prepaids and other assets	8,828	7,350
TOTAL CURRENT ASSETS	306,141	212,225
Property, plant, and equipment, net	13,186	7,848
Operating lease right-of-use assets	2,639	819
Other noncurrent assets	3,009	-
Intangible assets, net	7,693	8,350
Deferred tax assets	36,020	-
Goodwill	12,945	12,945
TOTAL ASSETS	$ 381,633	$ 242,187

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$ 8,555	$ 3,957
Customer deposits	69,406	27,781
Accrued expenses	110,268	62,750
Current portion of long-term payable	906	1,416
Current portion of lease obligation - operating lease	345	746
TOTAL CURRENT LIABILITIES	189,480	96,650
Long-term payable, net of current portion	1,736	2,876
Long-term lease obligation - operating lease, net of current portion	849	74
TOTAL LIABILITIES	192,065	99,600

EQUITY
Common Stock, $0.00001 par value 900,000,000 shares authorized; 153,549,867 issued and 147,537,072 outstanding in 2021; 146,677,786 issued and 144,143,292 outstanding in 2020	1	1
Additional paid-in capital	347,670	218,492
Treasury stock, at cost: 6,012,795 and 2,534,494 shares held, respectively	(180,097)	(37,994)
Accumulated earnings (deficit)	20,800	(39,162)
Accumulated other comprehensive income	187	247
Total eXp World Holdings, Inc. stockholders' equity	188,561	141,584
Equity attributable to noncontrolling interest	1,007	1,003
TOTAL EQUITY	189,568	142,587
TOTAL LIABILITIES AND EQUITY	$ 381,633	$ 242,187

September 30, December 31,
2017 2016

ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 3,347,910 $ 1,684,608
Restricted cash 1,134,109 481,704
Accounts receivable, net of allowance $177,563 and $133,845, respectively 7,549,469 3,015,767
Prepaids and other assets 587,904 383,563

TOTAL CURRENT ASSETS 12,619,392 5,565,642

OTHER ASSETS
Fixed assets, net 1,298,215 538,405

TOTAL OTHER ASSETS 1,298,215 538,405

TOTAL ASSETS $ 13,917,607 $ 6,104,047

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable $ 412,439 $ 317,420
Customer deposits 1,134,109 481,704
Accrued expenses 7,745,153 2,742,119
Notes payable – 35,778

TOTAL CURRENT LIABILITIES 9,291,701 3,577,021

Commitments and contingencies – –

STOCKHOLDERS' EQUITY
Common Stock, $0.00001 par value 220,000,000 shares authorized; 53,995,962 shares and 52,316,679 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively 540 523
Additional paid-in capital 41,238,713 34,526,859
Accumulated deficit (36,621,221 ) (32,004,561 )
Accumulated other comprehensive income (loss) 7,874 4,205

TOTAL STOCKHOLDERS' EQUITY 4,625,906 2,527,026

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 13,917,607 $ 6,104,047

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

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EXP WORLD HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~COMPREHENSIVE INCOME

~~(UNAUDITED)~~(In thousands, except share amounts and per share data)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016

Net revenues $ 48,105,769 $ 15,756,956 $ 109,691,317 $ 36,181,796

Operating expenses
Cost of revenues 43,291,473 13,294,452 97,620,066 30,868,564
General and administrative 11,987,268 16,810,567 14,697,040 25,801,423
Professional fees 223,811 140,804 906,654 414,197
Sales and marketing 380,452 158,968 1,030,497 358,396

Total expenses 55,883,004 30,404,791 114,254,257 57,442,580

Net loss from operations (7,777,235 ) (14,647,835 ) (4,562,940 ) (21,260,784 )

Other income and (expenses)
Other income – (432 ) – 14
Interest expense (58 ) – (2,105 ) –

Total other income and (expenses) (58 ) (432 ) (2,105 ) 14

Loss from before income tax expense (7,777,293 ) (14,648,267 ) (4,565,045 ) (21,260,770 )

Income tax expense (3,277 ) (7,444 ) (51,615 ) (33,015 )

Net loss (7,780,570 ) (14,655,711 ) (4,616,660 ) (21,293,785 )

Net loss attributable to non-controlling interest in subsidiary – 8,613 – 20,913

Net loss attributable to common shareholders $ (7,750,570 ) $ (14,647,098 ) $ (4,616,660 ) $ (21,272,872 )

Net loss per share attributable to common shareholders
     Basic from continuing operations $ (0.15 ) $ (0.29 ) $ (0.09 ) $ (0.42 )
     Diluted from continuing operations $ (0.15 ) $ (0.29 ) $ (0.09 ) $ (0.42 )

Weighted average shares outstanding
     Basic 53,335,822 51,225,817 52,837,134 50,929,102
     Diluted 53,335,822 51,225,817 52,837,134 50,929,102

(UNAUDITED)


	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Revenues	$ 1,110,480	$ 564,017	$ 2,694,200	$ 1,188,963
Operating expenses
Commissions and other agent-related costs	1,030,937	517,169	2,481,254	1,079,739
General and administrative expenses	64,615	30,130	171,636	82,145
Sales and marketing expenses	3,761	1,495	8,701	3,326
Total operating expenses	1,099,313	548,794	2,661,591	1,165,210
Operating income	11,167	15,223	32,609	23,753
Other expense
Other expense, net	239	80	159	129
Equity in losses of unconsolidated affiliates	(2)	-	5	34
Total other expense, net	237	80	164	163
Income before income tax expense	10,930	15,143	32,445	23,590
Income tax (benefit) expense	(12,884)	225	(33,258)	295
Net income	23,814	14,918	65,703	23,295
Net loss attributable to noncontrolling interest	7	52	14	115
Net income attributable to eXp World Holdings, Inc.	$ 23,821	$ 14,970	$ 65,717	$ 23,410

Earnings per share
Basic	$ 0.16	$ 0.11	$ 0.45	$ 0.17
Diluted	$ 0.15	$ 0.10	$ 0.42	$ 0.16
Weighted average shares outstanding
Basic	146,862,978	138,513,465	145,610,008	135,207,101
Diluted	157,345,924	150,917,721	157,838,134	147,091,720

Comprehensive income:
Net income	$ 23,814	$ 14,918	$ 65,703	$ 23,295
Comprehensive loss attributable to noncontrolling interests	7	52	14	115
Net income attributable to eXp World Holdings, Inc.	23,821	14,970	65,717	23,410
Other comprehensive income:
Foreign currency translation (loss) gain, net of tax	(131)	(76)	(60)	(129)
Comprehensive income attributable to eXp World Holdings, Inc.	$ 23,690	$ 14,894	$ 65,657	$ 23,281

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

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EXP WORLD HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

(UNAUDITED)


	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Common stock:
Balance, beginning of period	$ 1	$ 1	$ 1	$ 1
Balance, end of period	1	1	1	1
Treasury stock:
Balance, beginning of period	(126,906)	(20,610)	(37,994)	(8,623)
Repurchases of common stock	(53,191)	(9,343)	(142,103)	(21,330)
Balance, end of period	(180,097)	(29,953)	(180,097)	(29,953)
Additional paid-in capital:
Balance, beginning of period	295,035	160,643	218,492	130,682
Shares issued for stock options exercised	938	2,244	2,695	4,710
Agent growth incentive stock compensation	6,483	2,980	15,184	8,878
Agent equity stock compensation	41,838	19,929	101,691	39,226
Stock option compensation	3,376	1,879	9,608	4,179
Balance, end of period	347,670	187,675	347,670	187,675
Accumulated earnings (deficit):
Balance, beginning of period	2,734	(61,853)	(39,162)	(70,293)
Net income	23,821	14,970	65,717	23,410
Dividends declared and paid	(5,755)	-	(5,755)	-
Balance, end of period	20,800	(46,883)	20,800	(46,883)
Accumulated other comprehensive income:
Balance, beginning of period	318	147	247	200
Foreign currency translation loss	(131)	(76)	(60)	(129)
Balance, end of period	187	71	187	71
Noncontrolling interest:
Balance, beginning of period	1,015	204	1,003	161
Net loss	(8)	(52)	(15)	(115)
Contributions by noncontrolling interests	-	-	19	106
Balance, end of period	1,007	152	1,007	152
Total equity	$ 189,568	$ 111,063	$ 189,568	$ 111,063

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

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EXP WORLD HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~COMPREHENSIVE INCOME (LOSS)~~CASH FLOWS

~~(UNAUDITED)~~(In thousands)

(UNAUDITED)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016

Net loss $ (7,780,570 ) $ (14,655,711 ) $ (4,616,660 ) $ (21,293,785 )
Other comprehensive loss:
Foreign currency translation adjustments, net of tax 856 10,515 3,669 15,604
Comprehensive loss (7,779,714 ) (14,645,196 ) (4,612,991 ) (21,278,181 )
Comprehensive loss attributable to non-controlling interest in subsidiary – 8,613 – 20,913
Comprehensive loss attributable to common shareholders $ (7,779,714 ) $ (14,636,583 ) $ (4,612,991 ) $ (21,257,268 )


	Nine Months Ended September 30,
	2021	2020
OPERATING ACTIVITIES
Net income	$ 65,703	$ 23,295
Reconciliation of net income to net cash provided by operating activities:
Depreciation expense	3,572	2,403
Amortization expense - intangible assets	939	382
Amortization expense - long-term payable	-	152
Allowance for credit losses on receivables	22	1,209
Equity in loss of unconsolidated affiliates	5	34
Agent growth incentive stock compensation expense	18,129	10,476
Stock option compensation	9,608	4,179
Agent equity stock compensation expense	101,691	39,226
Deferred income taxes	(36,020)
Changes in operating assets and liabilities:
Accounts receivable	(52,913)	(66,490)
Prepaids and other assets	(1,510)	494
Customer deposits	41,625	15,128
Accounts payable	4,597	16
Accrued expenses	44,561	58,702
Long-term payable	(150)	-
Other operating activities	(1,446)	-
NET CASH PROVIDED BY OPERATING ACTIVITIES	198,413	89,206
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(9,159)	(3,691)
Acquisition of businesses	(1,500)	(1,362)
Intangible assets acquired	-	(573)
Investments in unconsolidated affiliates	(3,004)	(25)
NET CASH (USED IN) INVESTING ACTIVITIES	(13,663)	(5,651)
FINANCING ACTIVITIES
Repurchase of common stock	(142,103)	(21,330)
Proceeds from exercise of options	2,695	4,710
Transactions with noncontrolling interests	19	106
Dividends declared and paid	(5,755)	-
NET CASH (USED IN) FINANCING ACTIVITIES	(145,144)	(16,514)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash	(60)	(129)
Net change in cash, cash equivalents and restricted cash	39,546	66,912
Cash, cash equivalents and restricted cash, beginning balance	127,924	47,074
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE	$ 167,470	$ 113,986

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for income taxes	$ 1,060	$ 676
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Termination of lease liabilities	$ 346	$ 200
Lease liabilities arising from obtaining right-of-use assets	2,381	33
Property, plant and equipment purchases in accounts payable	150	111
Liabilities incurred associated with a business acquisition	-	1,500
Liabilities assumed in business acquisition	-	140

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

~~EXP WORLD HOLDINGS, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(UNAUDITED)~~

Nine Months Ended September 30,
2017 2016

OPERATING ACTIVITIES
Net loss $ (4,616,660 ) $ (21,293,785 )
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation 207,189 38,110
Stock compensation expense 7,076,363 1,527,110
Stock option expense (benefit) (523,043 ) 21,183,498

Changes in operating assets and liabilities:
Accounts receivable (4,533,702 ) (992,031 )
Prepaids and other assets (321,576 ) (320,114 )
Restricted cash (652,405 ) (384,761 )
Customer deposits 652,405 384,761
Accounts payable 95,019 305,438
Accrued expenses 5,013,111 189,655

          CASH PROVIDED BY OPERATING ACTIVITIES 2,396,701 637,881

INVESTING ACTIVITIES
Acquisition of property and equipment (849,764 ) (281,203 )

          CASH USED IN INVESTING ACTIVITIES (849,764 ) (281,203 )

FINANCING ACTIVITIES
Proceeds from issuance of common stock 142,158 –
Common stock issuance transaction costs – –
Repurchase and retirement of common stock (3,607 ) –
Repurchase and retirement of subsidiary common stock – (1,000 )
Proceeds from exercise of options 20,000 1,000
Principal payments of notes payable (35,778 ) –

          CASH PROVIDED BY FINANCING ACTIVITIES 122,773 –

Effect of changes in exchange rates on cash and cash equivalents (6,408 ) 15,604

Net change in cash and cash equivalents 1,663,302 372,282

Cash and cash equivalents, beginning of period 1,684,608 571,814

CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,347,910 $ 944,096
– –
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for interest $ 920 $ –
Cash paid for income taxes $ 57,484 $ 33,015

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Fixed asset purchases in accounts payable $ 117,235 $ –

~~The accompanying notes are an integral part~~Table of ~~these condensed consolidated financial statements.~~Contents

eXp World Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

~~September 30, 2017~~(UNAUDITED)

(~~Expressed~~Amounts in ~~U.S. dollars)~~thousands, except share amounts and per share data or noted otherwise)

~~1. BACKGROUND AND BASIS OF PRESENTATION~~

1.	DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

eXp World Holdings, Inc. ~~(the~~(collectively with its subsidiaries, the “Company” ~~or “we”~~ or “eXp”) was incorporated in the State of Delaware on July 30, 2008. Through various operating subsidiaries, the Company isprimarily operates a cloud-based real estate brokerage operating throughout the United States and most of the Canadian provinces. Since the fourth quarter of 2019, the Company expanded operations into the United Kingdom (U.K.), Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Germany and Panama. Our real estate brokerage is now one of the largest and fastest growing real estate brokerage companies in ~~most U.S.~~the United States ~~the District of Columbia~~by agent count, and ~~the provinces of Alberta and Ontario, Canada.~~is continuing to expand internationally. The Company focuses on a number of cloud-based technologies in order to grow ~~an international~~a global brokerage without the burden of physical bricks and mortar or redundant staffing costs.

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article ~~8-03~~10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

These interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 11, 2021 (“2020 Annual Report”).

In our opinion, the accompanying interim unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for a fair ~~presentation~~presentation. On January 15, 2021, the Company’s Board of Directors approved a 2-for-one stock split in the form of a stock dividend to stockholders of record as of January 29, 2021 (the “Stock Split”). The Stock Split was effected on February 12, 2021. All shares, restricted stock units (“RSU”), stock options, and per share information have been ~~included.~~retroactively adjusted to reflect the stock split. Operating results for the ~~three-month~~three and ~~nine-month~~nine month periods ended September 30, ~~2017 and 2016~~2021 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017.~~2021.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~2. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES~~

Principles of Consolidation

The accompanying ~~unaudited condensed~~ consolidated financial statements include the accounts of eXp World Holdings, Inc., its wholly-owned subsidiaries, and ~~its subsidiaries; eXp Realty Holdings, Inc.; First Cloud Mortgage, Inc. (dormant as~~including those entities in which we have a variable interest of ~~December 31, 2016~~which we are the primary beneficiary. If the Company has a variable interest in an entity but it is not the primary beneficiary of the entity or exercises control over the operations and ~~through September 30, 2017); eXp Realty Associates, LLC; eXp Realty, LLC; eXp Realty~~has less than 50% ownership, it will use the equity method or the cost method of ~~California, Inc.; eXp Realty of Canada, Inc.;~~accounting for investments. Entities in which the Company has less than a 20% investment and ~~eXp Realty of Connecticut, LLC. All inter-company accounts~~where the Company does not exercise significant influence are accounted for under the cost method. Intercompany transactions and ~~transactions have been~~balances are eliminated upon consolidation.

Variable interest entities and noncontrolling interests

A company is deemed to be the primary beneficiary of a variable interest entity (“VIE”) and must consolidate the entity if the company has both: (i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Joint ventures

A joint venture is a contractual arrangement whereby the Company and other parties undertake an economic activity through a jointly controlled entity. Joint control exists when strategic, financial, and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control. Joint ventures are accounted for using the equity method and are recognized initially at cost.

Use of ~~Estimates~~

Estimates

The preparation of financial statements in conformity with ~~US generally accepted accounting principles~~U.S. GAAP requires 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 financial statements

Table of Contents

and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to ~~provisions~~allowance for ~~doubtful accounts,~~credit losses, legal contingencies, income taxes, revenue recognition, stock-based compensation, ~~expense accruals,~~goodwill, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Reclassifications

When necessary, the Company will reclassify certain amounts in prior-period financial statements to conform to the current period’s presentation. No material reclassifications occurred during the current period.

Restricted cash

Restricted cash consists of cash held in escrow by the Company on behalf of real estate buyers. The Company recognizes a corresponding customer deposit liability until the funds are released. Once the cash transfers from escrow, the Company reduces the respective customers’ deposit liability.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statements of cash flows.

Cash and cash equivalents

Restricted cash

Total
Balance, December 31, 2019

$ 40,087

$ 6,987

$ 47,074
Balance, September 30, 2020

$ 91,871

$ 22,115

$ 113,986
Balance, December 31, 2020

$ 100,143

$ 27,781

$ 127,924
Balance, September 30, 2021

$ 98,064

$ 69,406

$ 167,470

Recently ~~Issued~~Adopted Accounting ~~Pronouncements~~

Principles and Change in Accounting Principle

In ~~January 2017,~~December 2019, the ~~Company implemented accounting treatment as promulgated by FASB as~~Financial Accounting Standards Board (“FASB”) issued in Accounting Standards Update (“ASU”) 2019-12 – Income Taxes (Topic 740) (“ASU ~~No. 2016-09 Compensation – Stock Compensation (Topic 718)~~2019-12”). ~~The new standard simplifies several aspects of the accounting~~ASU 2019-12 removes certain exceptions for ~~share-based payments, including~~investments, intraperiod allocations and interim calculations and adds guidance to reduce complexity in accounting for income ~~taxes, forfeitures~~taxes. ASU 2019-12 is effective for fiscal years, and ~~statutory tax withholding requirements, and classification~~interim periods within ~~the statement~~those fiscal years, beginning after December 15, 2020; early adoption is permitted. The adoption of ~~cash flows. The Company made an election to account for forfeitures of non-vested equity awards in the periods in which they occur. The treatments implemented did not have a~~ASU 2019-12 had no material impact on the ~~accompanying unaudited~~Company’s condensed consolidated financial statements ~~as presented.~~and related disclosures.

Recently Issued Accounting Pronouncements

In ~~May 2016,~~March 2020, the FASB issued ~~ASU 2016-02 Leases (Topic 842). Under~~guidance which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions that reference the ~~new~~London Inter-Bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. This guidance is optional for a ~~lessee~~limited period of time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. This guidance is ~~required~~effective from March 12, 2020 through December 31, 2022. Entities may elect to ~~recognize lease liabilities~~adopt the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. In January 2021, the FASB amended this Update to clarify certain optional expedients and ~~corresponding right-of-use assets, initially measured at the present value~~exceptions for contract modifications and hedge accounting that apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of lease payments, on the balance sheet for operating leases with terms greater than one year. Lessor accounting remains largely unchanged from existing lease accounting. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. If the lessee makes the election, the lessee would recognize lease expense on a straight-line basis over the lease term.reference rate reform. The Company ~~is still evaluating our lease~~does not have any material contracts, ~~however,~~hedging or other transactions that reference LIBOR, and we do not expect ~~material changes~~ to utilize the ~~timing~~expedients and ~~recognition of lease expense as a result of adoption of the ASU. This ASU update is effective~~exceptions provided in ~~annual reporting periods beginning after December 15, 2018 and the interim periods within that year.~~this guidance.

3.	EXPECTED CREDIT LOSSES

In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers (Topic 606). The objective of the revenue standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to remove inconsistencies in requirements, provide a robust framework, improve comparability across entities and industries, provide more useful information to users and simplify the preparation of financial statements. The Company is ~~still evaluating~~exposed to credit losses primarily through trade and other financing receivables arising from revenue transactions. The Company uses the ~~potential impacts~~aging schedule method to estimate current expected credit losses (“CECL”) based on days of delinquency, including information about past events and current economic conditions. The Company’s accounts receivable is separated into three categories to evaluate allowance under the ~~new revenue standard may have~~CECL impairment model. The receivables in each category share similar risk characteristics. The three categories include agent non-commission based fees, agent short-term advances, and commissions receivable for real estate property settlements.

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The Company analyzed uncollectible accounts for the three categories of receivables and concluded that only agent non-commission based fees receivables and agent short-term advances carry any risk of expected credit losses. Current economic conditions and forecasts of future economic conditions do not affect expected credit losses of uncollectable real estate property settlements. The collection of these payments is in-substance guaranteed because they represent commission payments on closed transactions, and the Company has no historical experience or expectation of losses related to these receivables. Receivables from real estate property settlements totaled $125,490 and $73,838 as of September 30, 2021 and December 31, 2020 respectively. As of September 30, 2021 and December 31, 2020 agent non-commission based fees receivable and short-term advances totaled $6,254 and $4,992, of which the Company recognized expected credit losses of $1,901 and $1,879, respectively.

The Company increases the allowance for expected credits losses when the Company determines all or a portion of a receivable is uncollectable. The Company recognizes recoveries as a ~~result of adoption of~~decrease to the ASU however, we do not expect the new standard to have a material impact on financial results as the Company recognizes revenue at the completion of a residential real estate sale transaction, on a gross basis, which will not result in a changeallowance for expected credit losses.

Changes in the ~~timing~~allowance were not material for the three and ~~recognition of revenue. This ASU is effective in annual reporting periods beginning after December 15, 2017~~nine months ended September 30, 2021.

4.	PLANT, PROPERTY AND EQUIPMENT, NET

Plant, property and ~~the interim periods within that year.~~

~~3. FIXED ASSETS, NET~~

~~Fixed assets,~~equipment, net consisted of the following:

	As of September 30, 2017			As of December 31, 2016


							September 30, 2021	December 31, 2020
Computer hardware and software	$	1,518,785		$	219,590		$ 19,358	$ 13,828
Furniture, fixture and equipment		5,910			5,910
Furniture, fixture, and equipment							20	20
Total depreciable property and equipment		1,524,695			225,500		19,378	13,848
Less: accumulated depreciation and amortization		(304,405	)		(97,216	)
Less: accumulated depreciation							(10,308)	(6,738)
Depreciable property, net		1,220,290			128,284		9,070	7,110
Assets under development		77,925			410,121		4,116	738
Fixed assets, net	$	1,298,215		$	538,405
Property, plant, and equipment, net							$ 13,186	$ 7,848

~~Depreciation~~For the three months ended September 30, 2021 and 2020, depreciation expense was $1,376 and $852, respectively. For the nine months ended September 30, 2021 and 2020, depreciation expense was $3,572 and $2,403, respectively.

5.	GOODWILL AND INTANGIBLE ASSETS

Goodwill was $12,945 and $12,945 as of September 30, 2021 and December 31, 2020. The Company has a risk of future impairment to the extent that individual reporting unit performance does not meet projections. Additionally, if current assumptions and estimates, including projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates, and other market factors, are not met, or if valuation factors outside of the Company’s control change unfavorably, the estimated fair value of goodwill could be adversely affected, leading to a potential impairment in the future. For the three and nine months ended September 30, 2021, 0 events occurred that indicated it was more likely than not that goodwill was impaired.

Definite-lived intangible assets were as follows:


	September 30, 2021			December 31, 2020
	Gross	Accumulated	Net Carrying	Gross	Accumulated	Net Carrying
	Amount	Amortization	Amount	Amount	Amortization	Amount
Trade name	$ 2,868	($ 482)	$ 2,386	$ 2,868	($ 267)	$ 2,601
Existing technology	1,678	(1,005)	673	1,396	(415)	981
Non-competition agreements	125	(118)	7	125	(87)	38
Customer relationships	1,895	(314)	1,581	1,895	(170)	1,725
Licensing agreement	210	0	210	210	(41)	169
Intellectual property	2,836	0	2,836	2,836	0	2,836
Total intangible assets	$ 9,612	($ 1,919)	$ 7,693	$ 9,330	($ 980)	$ 8,350

Definite-lived intangible assets are amortized using the straight-line method over an asset’s estimated useful life. Amortization expense for definite-lived intangible assets for the three months ended September 30, 2021 and 2020 was $318 and $152, respectively. Amortization expense for definite-lived intangible assets for the nine months ended September 30, ~~2017~~2021 and ~~2016~~2020 was ~~$207,189~~$939 and ~~$38,110,~~$382, respectively. ~~Depreciation expense~~The Company has 0 indefinite-lived assets.

6.	LEASES

The Company’s lease portfolio consists of office leases with lease terms ranging from less than one year to seven years, with the weighted average lease term being three years.

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Certain leases provide for increases in future lease payments once the term of the lease has expired, as defined in the lease agreements. These leases generally also include real estate taxes.

Short term leases, having a lease term at commencement of 12 months or less, are not capitalized and the expenses are recognized in the period incurred.

Included below is other information regarding leases for the ~~three months ended September 30, 2017 and 2016 was $112,487 and $12,555, respectively.~~periods presented:

~~4. STOCKHOLDERS’ EQUITY~~


	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Other information
Operating lease expense	$ 147	$ 103	$ 358	$ 328
Short-term lease expense	13	2	37	12
Cash paid for operating leases	1,397	103	1,858	327
Weighted-average remaining lease term (years) – operating leases⁽¹⁾	7.0	3.8	7.0	3.8
Weighted-average discount rate – operating leases	5.043%	4.851%	5.043%	4.851%

(1)

The Company’s lease terms include options to extend the lease when it is reasonably certain the Company will exercise its option. Additionally, the Company considered any historical and economic factors in determining if a lease renewal or termination option would be exercised.

As of September 30, ~~2017,~~2021, expirations of lease obligations by fiscal year were as follows:


Period Ending December 31,
Remaining 2021		$ 84
2022		281
2023		166
2024		90
2025		90
2026 and thereafter		495
Total lease payments		1,206
Less: interest		(12)
Total operating lease liabilities		$ 1,194

7.DEBT

The Company issued unsecured promissory notes in the aggregate principal amount of $1.5 million in connection with the acquisition of Showcase Web Sites, L.L.C. (“Showcase”) in July 2020. The promissory notes accrue interest of 8% per annum, and interest is payable monthly beginning six months after the closing date.

On March 2, 2021, the Company ~~had 53,995,962 shares~~repaid all outstanding promissory notes issued to the previous owners of Showcase and notes payable assumed as part of the acquisition. The repayments totaled approximately $1.7 million representing the principal balance plus accrued interest and unpaid fees. The repayments of the notes payable did 0t result in a gain or loss on early extinguishment.

8.STOCKHOLDERS’ EQUITY

The following table represents a share reconciliation of the Company’s common stock issued for the periods presented:


	Three Months Ended September 30,		Nine Months Ended September 30,
(Shares of Common Stock)	2021	2020	2021	2020
Common stock:
Balance, beginning of quarter	151,146,986	141,160,576	146,677,786	132,398,616
Shares issued for stock options exercised	337,234	1,306,046	2,682,142	5,706,624
Agent growth incentive stock compensation	990,147	937,768	1,615,173	1,607,204
Agent equity stock compensation	1,075,500	1,241,594	2,574,766	4,933,540
Balance, end of quarter	153,549,867	144,645,984	153,549,867	144,645,984

The Company’s stockholder approved equity plans described below are administered under the 2013 Stock Option Plan and ~~outstanding.~~the 2015 Equity Incentive Plan. Although a limited number of awards under the plan remain outstanding, no awards have been granted under the 2013 Stock Option Plan since 2015. The ~~following provides a detailed description~~purpose of the ~~stock based transactions completed since January 1, 2017:~~

~~In January 2017,~~equity plans is to retain the services of valued employees, directors, officers, agents, and consultants and to incentivize such persons to make contributions to the Company ~~issued the remaining 49,231 shares~~and motivate excellent performance.

Table of restricted common stock to accredited investors following receipt of $160,000 of gross proceeds from the Company’s December 2016 private placement. The Company received total gross cash proceeds from the private placement of $760,000.Contents

During the nine months ended September 30, 2017, the Company issued 25,000 shares of restricted common stock upon the exercise of stock options, and received cash consideration totaling $20,000 upon payment of the exercise price for the options.

~~During the nine months ended September 30, 2017, the Company repurchased and retired 1,307 shares of common stock for cash consideration totaling $3,607.~~

During the nine months ended September 30, 2017, the Company issued 1,655,590 shares of restricted common stock in exchange for services totaling $7,076,363, which includes the expense activity in our 2015 Agent Equity Program ~~and Real Estate Agent Growth and Other Incentive Programs.~~

~~2015 Agent Equity Program~~

The Company provides agents and brokers the opportunity to elect to receive 5% of commissions earned from each completed ~~residential~~ real estate transaction in the form of ~~restricted~~ common ~~stock.~~stock (the “Agent Equity Program” or “AEP”). If agents and brokers elect to receive portions of their commissions in ~~restricted~~ common stock, they are entitled to receive the equivalent number of shares of common stock, based on the fixed monetary value of the commission payable. The Company recognizes a 10% discount on these issuances as an additional cost of sales charge during the periods presented.

During the three months ended September 30, 2021 and 2020, the Company issued 1,075,500 and 1,241,594 shares of common stock, respectively, to agents and brokers with a value of $41,838 and $19,929, respectively, inclusive of discount. During the nine months ended September 30, ~~2017~~2021 and ~~2016,~~2020, the Company issued ~~1,197,567~~2,574,766 and ~~648,608~~4,933,540 shares ~~respectively,~~ of ~~restricted~~ common stock, respectively, to agents and brokers ~~for $3,173,490~~with a value of $101,691 and ~~$844,811,~~$39,226, respectively, ~~for the settlement~~inclusive of ~~commissions payable.~~discount.

~~Real Estate~~ Agent Growth ~~and Other~~ Incentive ~~Programs~~

Program

The Company administers an equity incentive program whereby agents and brokers become eligible to receive awards of the Company’s common stock through agent attraction and performance ~~benchmarks. Agents who qualify,~~benchmarks (the “Agent Growth Incentive Program” or “AGIP”). The incentive program encourages greater performance and ~~who remain~~awards agents with ~~the Company in good standing for the term of the applicable agreement, are awarded restricted~~ common stock based on ~~production~~achievement of performance milestones.

~~Under this program,~~ Awards typically vest after performance benchmarks are reached and three years of subsequent service is provided to the ~~Company~~Company. Share-based performance awards ~~restricted common stock to our agents and brokers that become issuable upon~~are based on a fixed-dollar amount of shares based on the achievement of ~~certain milestones for both the individual and the recruited agents. Subsequent to achieving and maintaining the milestones,~~performance metrics. As such, the awards ~~vest ratably over service periods~~are classified as liabilities until the number of share awards becomes fixed once the performance metric is achieved.

For the three ~~years.~~

~~The following table illustrates~~months ended September 30, 2021, the Company’s ~~restricted~~ stock ~~activity for~~compensation attributable to the ~~following periods:~~

Shares
Weighted
Average Grant
Date Fair Value

Balance, December 31, 2015 1,293,056 $ 0.45
Granted 2,452,965 3.65
Issued (503,922 ) 4.30
Forfeited (688,142 ) 0.62
Balance, December 31, 2016 2,553,957 2.82
Granted 1,719,744 3.27
Issued (383,492 ) 2.57
Forfeited (313,875 ) 2.24
Balance, September 30, 2017 3,576,334 $ 2.99

AsAgent Growth Incentive Program was $6,817 of ~~September 30, 2017, unvested restricted~~which the total amount of stock compensation attributable to liability classified awards ~~of approximately 2,084,000 shares had total unrecognized compensation costs totaling approximately $6,570,000.~~

~~Pre-2013 Stock Options~~

As of September 30, 2017, the Company had outstanding options to purchase 6,006,838 shares of common stock, accounted for in accordance with the intrinsic value method. The required re-measurement of the intrinsic value of the awards resulted in the recognition of a stock option benefit of $5,502,948 forwas $1,830. For the nine months ended September 30, ~~2017;~~2021, the Company’s stock compensation attributable to the Agent Growth Incentive Program was $18,129 of which the total amount of stock compensation attributable to liability classified awards was $4,453. Stock compensation expense related to the Agent Growth Incentive Program is included in general and anadministrative expense in the condensed consolidated statements of ~~$2,478,062~~comprehensive income (loss).

The following table illustrates changes in the Company’s stock compensation liability for the periods presented:


		Amount
Balance, December 31, 2020		$ 2,093
Stock grant liability increase at March 31, 2021		1,221
Stock grant liability increase at June 30, 2021		1,402
Stock grants reclassified from liability to equity at September 30, 2021		(1,496)
Stock grant liability increase at September 30, 2021		1,830
Balance, September 30, 2021		$ 5,050

Stock Option Awards

During the three months ended September 30, ~~2017; included in general~~2021, and ~~administrative expenses in accompanying consolidated statements of operations. As of September 30, 2017,~~2020, the ~~fully vested outstanding options subject to re-measurement in accordance with the intrinsic value method had a weighted average remaining contractual term of 4.98 years.~~

~~Post-2013 Stock Option Awards~~

~~During the nine months ended September 30, 2017, the~~Company granted 176,263 and 2,255,416 stock options, respectively, to ~~purchase 2,783,231 shares of common stock,~~employees with an estimated grant date fair value of ~~$9,586,791. The assumptions used to estimate the grant date fair value of the awards issued for~~$23.26 and $9.07 per share, respectively. For the nine months ended September 30, ~~2017 include:~~2021, and 2020, the Company granted 370,594 and 3,441,772 stock options, respectively, to employees with an estimated grant date fair value of $24.05 and $10.67 per share, respectively. The fair value was calculated using a Black Scholes-Merton option pricing model.

Stock Repurchase Plan

In December 2018, the Company’s board of directors (the “Board”) approved a stock repurchase program authorizing the Company to purchase up to $25.0 million of its common stock, which was later amended in November 2019 and again in June 2020 increasing the authorized repurchase amount to $75.0 million. In December 2020, the Board approved another amendment to the repurchase plan, increasing the total amount authorized to be purchased from $75.0 million to $400.0 million. Purchases under the repurchase program may be made in the open market or through a 10b5-1 plan and are expected ~~volatility~~to comply with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The timing and number of shares repurchased depends upon market conditions. The repurchase program does not require the Company to acquire a specific number of shares. The cost of the shares that are repurchased is funded from cash and cash equivalents on hand.

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For accounting purposes, common stock repurchased under the stock repurchase programs is recorded based upon the settlement date of the applicable trade. Such repurchased shares are held in treasury and are presented using the cost method. These shares are not retired and are considered issued but not outstanding. The following table shows the changes in treasury stock for the periods presented:


	Three Months Ended September 30,		Nine Months Ended September 30,
(Shares of Treasury Stock)	2021	2020	2021	2020
Treasury stock:
Balance, beginning of quarter	4,725,296	2,047,778	2,534,494	925,364
Repurchases of common stock	1,287,499	321,974	3,478,301	1,444,388
Balance, end of quarter	6,012,795	2,369,752	6,012,795	2,369,752

9.EARNINGS PER SHARE

Basic earnings per share is computed based on ~~historical~~net income attributable to eXp stockholders divided by the basic weighted-average shares outstanding during the period. Dilutive earnings per share is computed consistently with the basic computation while giving effect to all dilutive potential common shares and common share equivalents that were outstanding during the period. The Company uses the treasury stock ~~prices ranging from 142%~~method to ~~157%; an average expected term~~reflect the potential dilutive effect of ~~6.25 years; risk free rates based on U.S. Treasury instruments for~~unvested stock awards and unexercised options. The Company uses the ~~expected term~~if-converted method to reflect the potential dilutive effect of ~~approximately 2.2%;~~a $1.0 million payment obligation relating to the November 2018 acquisition of Virbela, LLC, that may be paid in cash or common stock in November 2021.

The following table sets forth the calculation of basic and ~~no dividend payments.~~diluted earnings per share attributable to common stock during the periods presented:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Numerator:
Net income attributable to common stock	$ 23,821	$ 14,970	$ 65,717	$ 23,410
Denominator:
Weighted average shares - basic	146,862,978	138,513,465	145,610,008	135,207,101
Dilutive effect of common stock equivalents	10,482,946	12,404,256	12,228,126	11,884,619
Weighted average shares - diluted	157,345,924	150,917,721	157,838,134	147,091,720
Earnings (loss) per share:
Earnings per share attributable to common stock- basic	$ 0.16	$ 0.11	$ 0.45	$ 0.17
Earnings per share attributable to common stock- diluted	0.15	0.10	0.42	0.16

~~In January 2017,~~For the ~~Company modified certain terms of previously~~three months ended September 30, 2021 and 2020 total outstanding ~~option awards to purchase 500,000~~ shares of common stock ~~including accelerating portions~~excluded 132,704 and 154,870 shares, respectively, from the computation of the award to vest prior to the original terms and the forfeiture of unvested options to purchase 275,000 shares of common stock. As a result of this modification, the Company recognized approximately $368,000 of additional stock option expense during the nine months ended September 30, 2017.

~~The following table illustrates the Company’s stock option activity (inclusive of awards accounted for under the intrinsic value and fair value) for the following periods:~~

Options Weighted Average Price Intrinsic Value Weighted Average Remaining Contractual Term (Years)
Balance, December 31, 2015 7,281,250 $ 0.17 $ 0.17 6.75
Granted 4,130,000 1.53 – 9.75
Exercised (159,678 ) 0.13 1.42 –
Forfeited (504,014 ) 1.19 3.36 –
Balance, December 31, 2016 10,747,558 0.67 3.56 7.75
Granted 2,783,231 3.75 – 6.23
Exercised (25,000 ) 0.80 2.62 –
Forfeited (2,537,970 ) 2.30 1.06 –
Balance, September 30, 2017 10,967,819 1.47 2.80 6.81
Exercisable at September 30, 2017 7,274,946 0.42 3.00 5.65
Vested at September 30, 2017 7,607,170 $ 0.50 $ 2.97 5.79

diluted earnings per share because their effect would have been anti-dilutive.

For the nine months ended September 30, ~~2017~~2021 and 2020 total outstanding shares of common stock excluded 75,680 and 162,063 shares, respectively, from the computation of diluted earnings per share because their effect would have been anti-dilutive.

10.INCOME TAXES

Our quarterly tax provision is computed by applying the estimated annual effective tax rate to the year-to-date pre-tax income or loss and adjust for discrete tax items in the period. Our provision for (benefit from) income taxes amounted to ($12.9) million and $0.2 million for the three months ended September 30, ~~2016,~~2021 and 2020, respectively, and ($33.3) million and $0.3 million for the nine months ended September 30, 2021 and 2020, respectively. The increase in income tax benefit was primarily attributable to the release of the valuation allowance and higher deductible stock-based compensation.

We periodically evaluate the realizability of our deferred tax assets based on all available evidence, both positive and negative. The realization of the net deferred tax assets is dependent on our ability to generate sufficient future taxable income during the periods prior to the expiration of tax attributes to fully utilize these assets. As of June 30, 2021, based on our assessment of the realizability of our net deferred tax assets, we reached the conclusion that our valuation allowance on our US federal and state net deferred tax assets was no longer needed and therefore we recorded a valuation allowance release of $13 million, as a discrete item. As of September 30, 2021, the valuation allowance release discrete item amounted to $22 million due to the change in the annual forecast of the pre-tax income.

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11.FAIR VALUE MEASUREMENT

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy prioritizes the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

●

Level 1 – Inputs are quoted market prices in active markets for identical assets or liabilities (these are observable market inputs).

●

Level 2 – Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability (includes quoted market prices for similar assets or identical or similar assets in markets in which there are few transactions, prices that are not current or prices that vary substantially).

●

Level 3 – Inputs are unobservable inputs that reflect the entity's own assumptions in pricing the asset or liability (used when little or no market data is available).

The Company holds funds in a money market account, which are considered Level 1 assets. The Company values its money market funds at fair value on a recurring basis.

As of September 30, 2021 and December 31, 2020, the fair value of the Company’s money market funds was $43,385 and $53,380, respectively.

There have been 0 transfers between Level 1, Level 2 and Level 3 in the period presented. The Company did not have any Level 2 or Level 3 financial assets or liabilities in the period presented.

12.SEGMENT INFORMATION

Historically, management has not made operating decisions and assessed performance based on geographic locations. Rather, the chief operating decision-maker makes operating decisions and assesses performance based on the products and services of the identified operating segments. While management does consider real estate and brokerage services, the acquired technology and affiliated services provided to be identified operating segments, the profits and losses and assets of the technology and affiliated services business units are not material.

Operating Segments

The Company primarily operates as a cloud-based real estate brokerage. The real estate brokerage business represents 99.2% and 99.6% of the total revenue of the Company ~~recognized~~for the three months ended September 30, 2021 and 2020, respectively. The real estate brokerage business represents 99.3% and 99.7% of the total ~~stock-based compensation~~revenue of ~~($523,043)~~the Company for the nine months ended September 30, 2021 and ~~$21,183,498, respectively, associated with all equity~~2020, respectively. The real estate brokerage business represents 99.2% and ~~equity-linked awards, inclusive~~98.9% of ~~intrinsic value re-measurement.~~the total assets of the Company as of September 30, 2021 and December 31, 2020, respectively.

The Company offers software subscriptions to customers to access its virtual reality software platform. Additionally, the Company offers professional services for implementation and consulting services. However, the operations and assets of the technology segment are not managed by the Company’s chief operating decision-maker as a separate reportable segment.

Services provided through First Cloud and Silverline are in the emerging stages of development as contributing segments and are not material to the Company’s total revenue, total net income or total assets as of September 30, 2021 and 2020, respectively.

The Company aggregates the identified operating segments for reporting purposes and has 1 reportable segment.

Geographical Information

The Company primarily operates within the real estate brokerage markets in the United States and Canada. During the previous two years, the Company expanded operations into the U.K., Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama and Germany.

The Company’s management analyzes geographical locations on a forward-looking basis to identify growth opportunities. For the three months ended September 30, ~~2017~~2021 and ~~September 30, 2016, the Company recognized total stock-based compensation~~2020, approximately 8% and 6%, respectively, of ~~$4,979,213 and $14,632,458, respectively, associated with all equity and equity-linked awards, inclusive of intrinsic value re-measurement.~~

~~As of September 30, 2017, the total unrecognized compensation cost associated with options was approximately $8,518,000.~~

~~5. RELATED PARTY TRANSACTIONS~~

~~In January 2017, and as part of her agreement to join~~ the Company’s ~~Board~~total revenue was generated outside of ~~Directors, Ms. Laurie Hawkes was granted an option to purchase a total of 350,000 shares of common stock from a significant stockholder at an exercise price of $4.22 per share. The Company estimated~~ the ~~grant date fair value of these options using a Black-Scholes model with the assumptions described in Footnote 4. The aggregate grant date fair value of this award was $1,333,501. During~~U.S. For the nine months ended September 30, ~~2017, the Company recognized compensation cost totaling $254,522 associated with this award.~~

~~Because the options were granted by a significant stockholder~~2021 and ~~not the Company, upon the exercise~~2020, approximately 8% and 5%, respectively, of the ~~options, the Company will not receive any cash proceeds and will not be obligated to issue additional shares.~~

~~6. DEBT~~

~~Line of Credit~~

We have a $500,000 line of credit with a variable interest rate computed on a 360-day year. The line of credit agreement requires us to comply with various financial covenants as well as customary affirmative and negative covenants that restrict our ability to, among other things, incur debt and liens, make significant investments, dispose of assets and make distributions without prior consent. The line of credit is secured by accounts receivable. The line of credit contains certain financial covenants, including a fixed charge coverage ratio and a tangible net worth. At September 30, 2017, we were in compliance with allCompany’s total revenue was generated outside of the ~~financial covenants under~~U.S. Assets held outside of the ~~line of credit.~~

AsU.S. were 9% and 7% as of September 30, ~~2017, we had no amount outstanding under~~2021 and December 31, 2020

The Company’s technology services and affiliated services are currently provided primarily in the ~~line~~U.S.

Table of ~~credit and have~~Contents

13.SUBSEQUENT EVENTS

OnOctober 26, 2021 , the ~~entire amount remaining available~~Company’s Board of ~~$500,000.~~Directors declared a dividend of $0.04 per share which is expected to be payable on November 29, 2021, to stockholders of record as of the close of business on November 15, 2021. The ex-dividend date is November 12, 2021. The dividend will be paid in cash.

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Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read together with our ~~unaudited~~ condensed consolidated financial statements and related notes ~~appearing~~included elsewhere in this report. ~~This discussion contains~~Management’s Discussion and Analysis of Financial Conditions and Results of Operations contain forward-looking ~~statements based upon current expectations that involve numerous risks, uncertainties and assumptions.~~statements. Our actual results could differ materially from those anticipated in these forward-looking ~~statements~~statements. See “Item 1 A. – Risk Factors” in our 2020 Annual Report for ~~many reasons. Those reasons include, without limitation, those described at~~a discussion of certain risks, uncertainties and assumptions associated with these statements.

This MD&A is divided into the ~~beginning of this report under “Statement regarding forward-looking statements,” as well as those that may be set forth elsewhere~~following sections:

●

Overview

●

Market Conditions and Industry Trends

●

Key Business Metrics

●

Recent Business Developments

●

Results of Operations

●

Non-U.S. GAAP Financial Measures

●

Liquidity and Capital Resources

●

Critical Accounting Policies and Estimates

All dollar amounts are in ~~this report. Except~~USD thousands except share amounts and per share data and as otherwise ~~required by law,~~noted.

OVERVIEW

eXp World Holdings empowers the new economy through its people, platforms and personal and professional development solutions. Through our brokerage, eXp Realty, we operate one of the world’s fastest-growing real estate brokerages. We are focused on being the most agent-centric company on the planet and offer our agents a generous commission model, and a thriving community built on our proprietary and unique cloud-based brokerage and collaboration suite.

While we do not ~~intend to update any information contained in these forward-looking statements. The following discussion also addresses matters we~~ consider ~~important for an understanding~~acquisitions a critical element of our ~~financial position~~ongoing business, we seek opportunities to expand and enhance our portfolio of solutions.

Strategy

Our strategy is to grow organically in North America and certain international markets by increasing our independent agent and broker network. Through our cloud-based operations and technology platform, we strive to achieve customer-focused efficiencies that allow us to increase market share and attain strong returns as we scale our business within the markets in which we operate. By building partnerships and strategically deploying capital, we seek to grow the business and enter into attractive verticals and associated businesses.

Throughout 2021, we continued to make progress in achieving our strategic goals, including an 82% increase in our agent count, going from 35,877 agents as of September 30, ~~2017, and the results~~2020 to 65,269 agents as of ~~operations for the three and nine months ended~~ September 30, ~~2017, which may not~~2021. The expected outcome of these activities will be ~~indicative of~~to better position us to deliver on our full potential, to provide a platform for future ~~results through the year ended December 31, 2017 or beyond.~~

growth opportunities, and to achieve our long-term financial goals.

~~OVERVIEW~~MARKET CONDITIONS AND INDUSTRY TRENDS

~~eXp World Holdings, Inc., (the “Company”, “eXp”, “we”, “us”, “our”),~~Our business is ~~a cloud-based residential real estate brokerage. Our operations are focused~~dependent on the ~~use~~economic conditions within the markets for which we operate. Changes in these conditions can have a positive or negative impact on our business. The economic conditions influencing the housing markets primarily include economic growth, interest rates, unemployment, consumer confidence, mortgage availability and supply and demand.

In periods of ~~cloud-based technologies~~economic growth, demand typically increases resulting in ~~order to grow an international brokerage without~~accelerated home sales transactions and rising home sales prices. Similarly, a decline in economic growth, increasing interest rates and declining consumer confidence generally decreases demand. Additionally, regulations imposed by local, state, and federal government agencies, and geopolitical instability, can also negatively impact the ~~burden of physical bricks and mortar or redundant staffing costs. Our technology focus includes~~housing markets for which we operate.

For the ~~development of a proprietary cloud based real estate transactional platform.~~

~~Continued Accelerated Growth~~ ~~– During the nine-month~~ period ended September 30, ~~2017, we~~2021, the COVID-19 pandemic has continued to be contained due to the rate of inoculation and efficacy of vaccines. However, there is still volatility and uncertainty surrounding the outlook of the global economy due to inconsistencies in lifting restrictions across geographic markets and new variants to the virus. We believe that the economy will continue

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to rebound depending on the continued pace, rate, and effectiveness of lifting public health restrictions on businesses and individuals and how quickly people become comfortable engaging in public activities.

According to National Association of Realtors (“NAR”), the housing market is past the recovery phase from the initial downturn during the beginnings of the COVID-19 pandemic. Current home sales are now at a pre-pandemic level, which is due to a significant increase in demand. The sizable shift to remote work, which has led to current homeowners looking for larger homes and vacation homes, and the continued historic low interest rates have accelerated housing demand. As of September 2021, existing home sales increased ~~our net~~7% on a seasonally adjusted annual rate. This is mostly driven by some improvement in supply; however, housing inventory is still down year-over-year. While the demand is driving home prices up, more buyers are waiting on more inventory and prices to stabilize. According to NAR housing statistics, total housing inventory at the end of September 2021 was down 13.0% from the same time in prior year with only 2.4 months of inventory supply, while the existing-home median price reached a historic record high of $352.8 as of September 2021, which is a 13.3% increase from the same period in 2020. The demand for homebuying remains high. NAR reported that pending home sales rebounded in August by 8%, which is a positive indicator of continued housing demand. This NAR index measures housing contract activity and is based on signed real estate ~~brokerage agent~~contracts for existing single-family homes and ~~broker base by 104%, from approximately 2,400 as of December 31, 2016~~condos. The Company continues to ~~over 4,900. These increases were incurred in both new~~monitor the macro and ~~existing geographical markets~~microeconomic environments but sees the demand for housing continuing throughout the year due to continued low interest rates and ~~contributed~~overall promising economic outlook.

The Company is positioned to ~~net revenue increases of 203% and 205% as compared to the nine months and three months ended September 30, 2016, respectively.~~

~~RECENT BUSINESS DEVELOPMENTS~~

Advancements during the three months ended September 30, 2017 centered on the addition of scaling the corporate operations of the Company to match current and ongoing growth of the business. During this period the Company hired a new chief operating officer for our eXp Realty division who most recently held leadership positions at both Realty Executives and HomeSmart International. This new role will focus on cross collaboration efforts across the entire organization in addition to working with our agent advisory council. We also hired a new vice president of employee experience. As the organization continuescontinue to grow in ~~an effort to support our rapidly growing agent base, we believe it is important to continue building our culture~~light of a series of fluctuations in ~~alignment with long term goals of the Company.~~

~~On September 27, 2017, the Company and Alan Goldman, Chief Financial Officer, entered into an employment agreement memorializing the terms of his employment as previously disclosed.~~

As detailed in a Current Report on Form 8-K filed on August 2, 2017, on July 27, 2017 we entered into a separation agreement and release with Mr. Russell Cofano our former President and General Counsel who resigned on July 28, 2017. A summary of that agreement is contained in Form 8-K, and the agreement is filed as Exhibit 10.1 to the Form 8-K.

economic activity. The Company launched eXp Enterprise (“Enterprise”) earlier this year. Enterprise is a new proprietary platform that manages all of the Company’s critical processes and information, including agent details, transactions, commissions and revenue share. It allows for a flow of real time information to eXp agents, while also providing a singular platform for eXp staff to perform a variety of back office functions in a scalable and efficient manner. The platform has already led to improvements in the areas of agent onboarding, transaction processing, and financial oversight. This platform will lend itself to constantly enhance and build out capabilities that meet the needs of company stakeholders into the future. To provide additional support to eXp agents in 44 states, the Company redefined the role of the State Administrative Broker and created a new role: Regional Development Leader (“RDL”). The RDL role is designed to deal with the multitude of request from agents considering moving to eXp, allowing the State Administrative Broker to work more closely with a growing base of current agents.

During the nine months ended September 30, 2017, the Company also created a variety of new marketing and communications collateral, allowing stakeholders to have more transparency into the organization while providing more ways to provide feedback. Collateral provided to agents included tools to assist with social media, public relations, and a variety of internal communication pieces to help agents be more productive and in-the-know.

~~The Company expects to continue to add staff and make strategic additions to~~continued its ~~executive team in future periods.~~

~~MARKET CONDITIONS AND TRENDS~~

~~According to the National Association of REALTORS (“NAR”) home sale transactions of single family homes volume was projected to increase 10.4% in~~growth trajectory through the third quarter of ~~2017 as compared to the same period~~2021 with a year-over-year increase in ~~2016 as a result~~revenue of ~~both~~127% and an increase in agent count of 82%. However, the ~~number~~Company continues to monitor the continued course of ~~home sale transactions, combined with average home sale price growth (preliminary). Also according~~COVID-19, specifically in key areas of operations and the spread of new variants and the overall economic conditions affecting the real estate market through the end of 2021.

Regardless of whether the housing market continues to grow or slows, we believe that we are positioned to leverage our low-cost, high-engagement model, affording agents and brokers increased income and ownership opportunities while offering a scalable solution to brokerage owners looking to survive and thrive in a series of fluctuations in economic activity.

National Housing Inventory

Throughout 2020 and into 2021, increased demand and low mortgage interest rates caused inventory levels to decline to record lows. With continued overall uncertainty of the overall economy, fewer individuals are listing their homes. Additionally, construction of new homes has slowed due to increased costs of raw materials, tight labor market, and delays in the supply chains as the global economy continues to recover. Due to these factors, and others, year-over-year inventory has decreased further. According to NAR, inventory of existing homes for sale in the U.S. was 1.27 million as of September 2021 (preliminary) compared to 1.46 million at the end of September 2020. NAR indicated the need for new home construction due to the high demand of homes and the record-low inventory levels.

Mortgage Interest Rates

According to NAR, mortgage interest rates on commitments for 30-year, conventional, fixed-rate mortgages averaged 2.9% for the third quarter of 2021 compared to 3.0% for the third quarter of 2020. Mortgage rates are forecasted to increase minimally to 3.3% throughout the end of 2021, with an expected increase in interest rates in 2022 to 3.6%. Low mortgage rates are expected to continue to contribute to overall high demand for homebuying.

Housing Affordability Index

According to NAR, the composite housing affordability index ~~has continued~~decreased to 151.3 for August 2021 (preliminary) from 165.8 for August 2020. The housing affordability index continues to be at ~~historically~~ favorable levels. When the index is above 100, it indicates that a family earning the median income has sufficient income to purchase a median-priced home, assuming a ~~20 percent~~20% down payment and ability to qualify for a mortgage. The ~~composite housing affordability index was~~ ~~149.9 for August (preliminary) 2017 and163.7 for 2016.~~ ~~The housing affordability index remains significantly higher than the average of 127 for the period from 1970 through 2016.~~

~~The~~ favorable housing affordability index is due ~~in part~~ to favorable mortgage rate conditions. ~~Mortgage rates increased approximately 60 basis points from September 30, 2016~~However, the steady year-over- year decline is attributable to ~~September 30, 2017, but continue~~the increase in the average home price due to ~~be at historically low levels. While any increase to mortgage rates can adversely impact housing affordability, we believe that rising wages, improving consumer confidence and continued~~ low inventory levels ~~will result in favorable demand conditions and existing home sale volume growth.~~driving up demand.

According to the Federal Housing Finance Agency, mortgage rates on commitments for 30-year, conventional, fixed-rate first mortgages averaged 3.88% for 2016 and the rate rose to 4.19% in August 2017. To the extent that mortgage rates increase further, consumers continue to have financing alternatives such as adjustable rate mortgages or shorter term mortgages which can be utilized to obtain a mortgage rate that is lower than a comparable 30-year fixed-rate mortgage.

Partially offsetting the positive impact of low mortgage rates are low housing inventory levels. According to NAR, the inventory of existing homes for sale in the U.S. is 1.90 million (preliminary) and 2.03 million at the end of September 2017 and September 2016, respectively. The July 2017 inventory represents a national average supply of 4.2 months at the current home sales pace which is below the 6.1 months 25-year average.

~~Additional factors offsetting the positive impact of low mortgage rates include the ongoing rise in home prices,less than favorable mortgage underwriting standards and some would-be home sellers having limited or negative equity in homes.~~ Mortgage credit conditions tightened significantly during the housing downturn, with banks limiting credit availability to more creditworthy borrowers and requiring larger down payments, stricter appraisal standards, and more extensive mortgage documentation. Although mortgage credit conditions appear to be easing, mortgages remain less available to some borrowers and it frequently takes longer to close a residential transaction due to current mortgage and underwriting requirements.

The Company continues to monitor developments in our regulatory environment. Currently, federal officials are discussing various potential changes to laws and regulations that could impact the Company’s businesses, including tax reform that could affect the mortgage interest deductions and state and local tax deductions. Changes in these tax incentives for homeownership, and more generally in the regulatory environment in which the Company and our customers operate could impact the volume of mortgage originations in the United States and the Company’s competitive position and results of operations. At this time, the nature and impact of any future changes is unknown.

~~Existing~~ Home Sales Transactions

According to NAR, ~~for the year ended December 31, 2016,~~seasonally adjusted existing home sale transactions increased to ~~5.5~~6.3 million.In for September 2021 (preliminary) compared to 6.4 million for September 2020. NAR anticipates transactions to continue with current pace; however, due to low inventory levels, recovery may not be sustainable.

According to NAR, the ~~first nine months of 2017, NAR~~nationwide existing home ~~sale transactions increased 4.2 million year to date, but decreased 4.3%~~sales median price for September 2021 (preliminary) was $352.8 compared to $311.5 in September 2020. Due to low supply and high demand, the ~~same period~~average sale price is expected to continue to increase, year over year, through the end of ~~2016.During~~2021.

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KEY BUSINESS METRICS

Management uses our results of operations, financial condition, cash flows, and key business metrics related to our business and industry to evaluate our performance and make strategic decisions.

The following table outlines the ~~same period, eXp Realty home~~key business metrics that we periodically review:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020

	(in thousands, except transactions and agent count)
Performance:
Agent count	65,269	35,877	65,269	35,877
Transactions	130,029	75,392	319,338	156,927
Volume	$ 46,623,702	$ 23,608,704	$ 111,248,926	$ 47,562,826
Revenue	$ 1,110,480	$ 564,017	$ 2,694,200	$ 1,188,963
Gross margin	7.2%	8.3%	7.9%	9.2%
Adjusted EBITDA	$ 23,054	$ 21,818	$ 64,857	$ 41,193

(1)

Adjusted EBITDA is not a measurement of our financial performance under generally accepted accounting principles in the U.S. and should not be considered as an alternative to net income, operating income, or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, see “Non-U.S. GAAP Financial Measures”.

We periodically evaluate trends in certain metrics to track the Company’s performance.

Our strength is attracting real estate agent and broker professionals that contribute to our growth. Brokerage real estate transactions are recorded when our agents and brokers represent buyers and/or sellers in the purchase or sale, respectively, of a home. The number of real estate transactions ~~increased 223% compared~~is a key driver of our revenue and profitability. Real estate transaction volume represents the total sales value for all homes sold by our agents and brokers and is influenced by several market factors, including, but not limited to, the ~~same period~~pricing and quality of our services and market conditions that affect home sales, such as macroeconomic factors, local inventory levels, mortgage interest rates, and seasonality. Real estate transaction revenue represents the commission revenue earned by the Company for closed brokerage real estate transactions.

We continue to increase our agents and brokers significantly in ~~2016.~~the United States and Canada through the execution of our growth strategies. Since 2019, we expanded operations to the U.K., Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama and Germany. The rate of growth of our agent and broker base is difficult to predict and is subject to many factors outside of our control, including macroeconomic factors affecting the real estate industry in general. With the favorable economic outlook and our unique business model, we anticipate to continuously grow for the remainder of the year.

Settled home sales transactions and volume resulted from closed real estate transactions and typically change directionally with changes in the market’s existing home sales transactions as reported by NAR, as disproportionate variances are representative of company-specific improvements or shortfalls to the norm. Our home sale ~~transactions were impacted by~~transaction growth was directly related to the growth of our agent base over the prior comparative period.

We utilize gross margin, a financial statement measure based on U.S. GAAP to assess eXp’s financial performance from period to period. Gross margin is calculated from U.S. GAAP reported amounts and equals the difference between revenue and cost of sales (i.e., gross profit) as a percentage of total revenue. Commissions and other agent-related costs represent the cost of sales for the Company. The cost of sales does not include depreciation, amortization, or stock compensation expenses as the Company’s assets are not directly used in the production of revenue. Gross margin is based on the information provided in our results of operations or our consolidated statements of comprehensive income (loss), and is an important measure of our potential profitability and brokerage performance. For the three months ended September 30, 2021 and 2020, gross margin was 7.2% and 8.3%, respectively. For the nine months ended September 30, 2021 and 2020, gross margin was 7.9% and 9.2%, respectively. Gross margin decreased year-over-year primarily due to rising home prices and increased demand which ~~grew from approximately 2,400 at~~resulted in agents reaching their commission capping requirements sooner, entitling them to a higher percentage of the ~~end~~home sale commission. We continue to monitor our gross margin through efforts to improve our cost structure.

Management also reviews Adjusted EBITDA, which is a non-U.S. GAAP financial measure, to understand and evaluate our core operating performance. Adjusted EBITDA has grown significantly for the three and nine months ended September 30, 2021 and 2020 due to our revenue growth and improved leverage of ~~2016~~our cost structure.

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RECENT BUSINESS DEVELOPMENTS

Real Estate Brokerage Initiatives

Global Expansion of Our Real Estate Cloud Brokerage

During the fourth quarter of 2020, the Company expanded into South Africa, India, Mexico, Portugal and France. In addition, the Company expanded into Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, and Germany in the first nine months of 2021. The Company continues to ~~over 4,900 by~~pursue growth opportunities into new global markets. In addition to the ~~end~~international expansion, the Company also continues to focus on growth in the United States and existing international markets.

Agent and Employee Experience

The Company has embarked on an initiative to better understand both its agents and employees’ experience. In doing so, we have adopted many of the principles of the Net Promoter Score® (“NPS”) across many aspects of our organization. NPS is a measure of customer satisfaction and is measured on a scale between -100 and 100. An NPS above 50 is considered excellent. The Company’s cumulative agent NPS was 71 through the third quarter of ~~2017.~~2021. Whether the overall question is "How likely are you to recommend eXp to your colleagues, friends, or family?" or more granular inquiries as to specific workflows or service offerings, we believe this will ensure we are delivering on the most important values to our agents and employees. In turn, this often leads to enthusiastic fans of eXp who will promote our Company and continue leading us through strong organic growth.

This also ties into one of our core values of transparency. While we strive for high satisfaction, it is equally important to investigate a low or unfavorable trending of NPS scores. As NPS scores are often leading indicators to agents and employees’ future actions, we are able to learn quickly what may be a “pain point” or product that is not meeting its desired objective. We then take that information and translate it into action with an effort to remediate the specific root cause(s) driving the lower score. This fast and iterative approach has already led to improvements in such parts of our business such as agent onboarding, commission transaction processing, and employee benefits.

AsAgent Ownership

The Company maintains an equity incentive program whereby agents and brokers of eXp Realty can become eligible to receive awards of the Company’s common stock through the achievement of production and agent attraction benchmarks. The equity incentive program continues to be a key element in creating a culture of agent-ownership.

Our agent compensation plans represent a key lever in our strategy to attract and retain independent agents and brokers. The costs attributable to these plans are also a significant component of our commission structure and results of operations. Agents and brokers can elect to receive 5% of their ~~most recent releases, NAR is forecasting existing home sales~~commission payable in the form of Company common stock issued at a 10% discount. Our operational strategy and the importance of the agent compensation plans to ~~increase 3%~~our strategy have not changed. Our stock repurchase program and agent growth incentive program are more fully disclosed in ~~2017~~Note 8 – Stockholders’ Equity to the condensed consolidated financial statements.

Technology Products and ~~another 2% in 2018.~~

~~Existing Home Sale Price~~Services

We ~~believe primary drivers~~continue developing the core Virbela software platform and its underlying infrastructure through our subsidiary, eXp World Technologies, LLC, to accommodate for the increasing use and scale required to support our eXp Realty division. In 2019, we released a new product centered on the concept of an open campus whereby small and independent organizations may utilize sub spaces as part of a larger campus similar to collaborative environments that currently exist in the physical brick-and-mortar world. In the first quarter of 2020, Virbela began offering virtual events services. Given the current environment due to the ~~long-term demand~~COVID-19 pandemic, there is an acute need for ~~housing and~~virtual workplace collaboration. For the growth of our company to support that demand are housing affordability, the general economic health of the U.S. economy, demographic trends such as population growth, the increase in household formation, mortgage rate levels and mortgage availability,~~job growth, the inherent benefits of owning a home versus renting and the influence of local housing dynamics of supply versus demand.~~ ~~As of~~period ended September 30, ~~2017,~~2021, Virbela continues to see growing demand from organizations exploring remote and hybrid operating models, including global Fortune-2000 firms with the need to connect distributed teams. As a result, Virbela continues to invest in product and infrastructure improvements, along with new feature development. Lastly, we ~~believe that these factors are generally favorable.However, significant changes~~expect to ~~one or~~continue to service existing and new business-to-business enterprise-level contracts in the coming year.

Affiliated Services

Recent acquisitions and partnerships have allowed us to begin offering to customers more ~~of these drivers could cause the demand for housing~~products and services complementary to ~~slow, negatively affecting all~~our real estate brokerage ~~firms, including~~business. These affiliated services include mortgage origination, title, escrow, and settlement services, which we can now provide as a more inclusive offering in addition to our brokerage services. We anticipate continued growth and investment in these service offerings through 2021; however, actual performance will depend directly on utilization by eXp ~~Realty.~~ ~~Regardless of whether the housing market continues to grow or slows, eXp~~ Realty ~~expects to adhere to its low-cost, high-engagement model, affording a growing number of~~ agents and brokers ~~increased income~~ and ~~ownership opportunities while offering a scalable solution~~the on-going and fluctuating government implemented restrictions due to ~~brokerage owners looking~~the COVID-19 pandemic. Overall, these services are de minimis to ~~survive and thrive in a wide range of economic conditions.~~our overall operations.

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Results of Operations

~~Comparison of the~~ Three Months Ended September 30, ~~2017~~2021 compared to the Three Months Ended September 30, ~~2016~~2020

Three Months Ended

% of

Three Months Ended

% of

Change
2021 vs. 2020

September 30, 2021

Revenue

September 30, 2020

Revenue

$

%

(In thousands, except share amounts and per share data)
Statement of Operations Data:

Revenues

$ 1,110,480

100%

$ 564,017

100%

$ 546,463

97%
Operating expenses

Commissions and other agent-related costs

1,030,937

93%

517,169

92%

513,768

99%
General and administrative expenses

64,615

6%

30,130

5%

34,485

114%
Sales and marketing expenses

3,761

-%

1,495

-%

2,266

152%
Total operating expenses

1,099,313

99%

548,794

97%

550,519

100%
Operating income

11,167

1%

15,223

3%

(4,056)

(27)%
Other expense

Other expense, net

239

-%

80

-%

159

199%
Equity in losses of unconsolidated affiliates

(2)

-%

-

-%

(2)

N/A
Other expense, net

237

-%

80

-%

157

196%
Income before income tax expense

10,930

1%

15,143

3%

(4,213)

(28)%
Income tax (benefit) expense

(12,884)

(1)%

225

-%

(13,109)

(5,826)%
Net income

23,814

2%

14,918

3%

8,896

60%
Add back: Net loss attributable to noncontrolling interest

7

-%

52

-%

(45)

(87)%
Net income attributable to eXp World Holdings, Inc.

23,821

2%

14,970

3%

8,851

59%
Adjusted EBITDA⁽¹⁾

$ 23,054

2%

$ 21,818

4%

$ 1,236

6%
Earnings per share

Basic

$ 0.16

$ 0.11

$ 0.05

45%
Diluted

$ 0.15

$ 0.10

$ 0.05

50%
Weighted average shares outstanding

Basic

146,862,978

138,513,465

Diluted

157,345,924

150,917,721

(1) Adjusted EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income, operating income or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, see “Non-U.S. GAAP Financial Measures.”
Revenue
~~Revenues~~
~~During~~Our total revenues were $1.1 billion for the ~~three-month period~~three months ended September 30, ~~2017 net~~2021 compared to $564.0 million for the same period in 2020, an increase of $546.5 million, or 97%. Total revenues increased ~~$32.35 million~~for the third quarter of 2021 primarily as a result of an increase in real estate brokerage commissions, which is directly attributable to ~~$48.11 million as~~increases in our agent count and closed transactions compared to the ~~three-month~~same period in 2020. Additionally, the average home sale price for eXp closed transactions increased 15% to $359 during the three months ended September 30, ~~2016 when we generated $15.76 million. The~~2021 from $313 for the same period in 2020.
Commission and Other Agent Related Costs
Commission and other agent-related costs were $1.0 billion for the three months ended September 30, 2021 compared to $517.2 million for the same period in 2020, an increase of $513.8 million, or 99%. Commissions and other agent related costs increased as a result of an increase in our agent count and closed transactions compared to the ~~prior~~same period isin 2020. Rising home prices and increased demand also contributed to agents reaching their commission capping requirements sooner, entitling them to a ~~direct result~~higher percentage of the ~~increase in our sales agent base by over 173% to over 4,900.~~home sale commission.
~~Operating Expenses~~

Three Months Ended
September 30,

2017 2016 Change

Operating expenses:
Cost of revenues $ 43,291,473 $ 13,294,452 $ 29,997,021
General and administrative 11,987,268 16,810,567 (4,823,299 )
Professional fees 223,811 140,804 83,007
Sales and marketing 380,452 158,968 221,484
Total operating expenses $ 55,883,004 $ 30,404,791 $ 25,478,213
~~Cost of revenues includes costs related to sales agent commissions~~General and revenue sharing. These costs are highly correlated with recognized net revenues. As such, the increase of $30.0 million in the current three-month period ended September 30, 2017 as compared to the three-month period ended September 30, 2016 was driven by the higher amount of net revenues and agent commission rates.
Administrative Expense
General and administrative ~~includes~~expenses were $64.6 million for the three months ended September 30, 2021 compared to $30.1 million for the same period in 2020, an increase of $34.5 million or 114%. General and administrative expenses include costs related to wages,

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including stock compensation, and other general overhead expenses. General and administrative expenses increased primarily as a result of an increase of $21.3 million in compensation and personnel related expenses including salaries, employee benefits, and payroll taxes and payroll processing fees, an increase of $3.3 million in computer and software expenses, and an increase of $4.7 million in stock compensation expense. These increased costs are a result of the Company’s growth in agent count and real estate transaction volumes, and the investment of employee and technology in supporting the growth in 2021.

Sales and Marketing

Sales and marketing expenses increased to $3.8 million for the three months ended September 30, 2021 compared to $1.5 million the same period in 2020. This is due to an increase of $1.2 million in advertising as we continue to expand our real estate operations and software services.

Other Expense

There were no significant changes in other expense for the three months ended September 30, 2021 compared to the same period in 2020.

Income Tax Benefit (Expense)

The Company’s provision for (benefit from) income taxes amounted to ($12.9) million and $0.2 million for the three months ended September 30, 2021 and 2020, respectively, which represented effective tax rates of negative 117.90% and 1.38%, respectively. The increase in income tax benefit was primarily attributable to the release of the valuation allowance and higher deductible stock-based compensation.

Nine Months Ended September 30, 2021 compared to the Nine Months Ended September 30, 2020

Nine Months Ended

% of

Nine Months Ended

% of

Change
2021 vs. 2020

September 30, 2021

Revenue

September 30, 2020

Revenue

$

%

(In thousands, except share amounts and per share data)
Statement of Operations Data:

Revenues

$ 2,694,200

100%

$ 1,188,963

100%

$ 1,505,237

127%
Operating expenses

Commissions and other agent-related costs

2,481,254

92%

1,079,739

91%

1,401,515

130%
General and administrative expenses

171,636

6%

82,145

7%

89,491

109%
Sales and marketing expenses

8,701

-%

3,326

-%

5,375

162%
Total operating expenses

2,661,591

99%

1,165,210

98%

1,496,381

128%
Operating income

32,609

1%

23,753

2%

8,856

37%
Other expense

Other expense, net

159

-%

129

-%

30

23%
Equity in losses of unconsolidated affiliates

5

-%

34

-%

(29)

(85)%
Total other expense, net

164

-%

163

-%

1

1%
Income before income tax expense

32,445

1%

23,590

2%

8,855

38%
Income tax (benefit) expense

(33,258)

(1)%

295

-%

(33,553)

(11,374)%
Net income

65,703

2%

23,295

2%

42,408

182%
Add back: Net loss attributable to noncontrolling interest

14

-%

115

-%

(101)

(88)%
Net income attributable to eXp World Holdings, Inc.

65,717

2%

23,410

2%

42,307

181%
Adjusted EBITDA⁽¹⁾

$ 64,857

2%

$ 41,193

3%

$ 23,664

57%
Earnings per share

Basic

$ 0.45

$ 0.17

$ 0.28

165%
Diluted

$ 0.42

$ 0.16

$ 0.26

163%
Weighted average shares outstanding

Basic

145,610,008

135,207,101

Diluted

157,838,134

147,091,720

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(1)

Adjusted EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income, operating income or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, see “Non-U.S. GAAP Financial Measures.”

Revenue

Our total revenues were $2.7 billion for the nine months ended September 30, 2021 compared to $1.2 billion for the same period in 2020, an increase of $1.5 billion, or 127%. Total revenues increased for the nine month period primarily as a result of an increase in real estate brokerage commissions, which is directly attributable to increases in our agent count and closed transactions compared to the same period in 2020. Additionally, the average home sale price for eXp closed transactions increased 15% to $348 during the nine months ended September 30, 2021 from $303 for the same period in 2020.

Commission and Other Agent Related Costs

Commission and other agent-related costs were $2.5 billion for the nine months ended September 30, 2021 compared to $1.1 billion for the same period in 2020, an increase of $1.4 billion, or 130%. Commissions and other agent related costs increased as a result of an increase in our agent count and closed transactions compared to the same period in 2020. Rising home prices and increased demand also contributed to agents reaching their commission capping requirements sooner, entitling them to a higher percentage of the home sale commission.

General and Administrative Expense

General and administrative expenses were $171.6 million for the nine months ended September 30, 2021 compared to $82.1 million for the same period in 2020, an increase of $89.5 million or 109%. General and administrative expenses include costs related to wages, including stock compensation, ~~dues, operating leases, utilities, travel~~ and other general overhead expenses. ~~The decrease~~General and administrative expenses increased primarily as a result of ~~$4.82~~an increase of $53.3 million in ~~general~~personnel related expenses including salaries, employee benefits, and ~~administrative~~payroll taxes and payroll processing fees, an increase of $9.1 million in computer and software expenses, and an increase of $13.2 million in stock compensation expense. These increased costs are a result of the Company’s growth in ~~the three-month period ended September 30, 2017 as compared to the three-month period ended September 30, 2016 was driven primarily by the increase in compensation of $2.57 million~~agent count and real estate transaction volumes, and the ~~decrease~~investment of employee and technology in ~~stock options and stock compensation expense of $7.90 million.~~

Professional fees include costs related to legal, accounting and other consultants. Costs increased $0.08 million during the three-month period ended September 30, 2017 as compared to the three-month period ended September 30, 2016. Professional fees were higher due to higher audit costs as compared to the same period last year in addition to other non-recurring transactions, specifically as it relates to performing diligence and contract review and preparation to supportsupporting the growth ~~of new agent~~in 2021.

Sales and ~~broker bases as well as entry into new geographical markets.~~

Marketing

Sales and marketing ~~includes costs related~~expenses increased to ~~lead capture, digital and print media, and trade shows, in addition to other promotional materials. The cost increase of approximately $0.22~~$8.7 million was due to increased cost in lead capture and other internet marketing related to our growth in agent and broker headcount for the three-month period ended September 30, 2017 as compared to the three-month period ended September 30, 2016.

~~Results of Operations~~

~~Comparison of the Nine Months Ended September 30, 2017 to the Nine Months Ended September 30, 2016~~

~~Revenues~~

~~During the nine-month period ended September 30, 2017 net revenues increased $73.51~~from $3.3 million to $109.69 million as compared to the nine-month period ended September 30, 2016 when we generated $36.18 million. The increase as compared to the prior period is a direct result of the increases in sales agent base by over 173% to over 4,900.

~~Operating Expenses~~

Nine Months Ended
September 30,

2017 2016 Change

Operating expenses:
Cost of revenues $ 97,620,066 $ 30,868,564 $ 66,751,502
General and administrative 14,697,040 25,801,423 (11,104,383 )
Professional fees 906,654 414,197 492,457
Sales and marketing 1,030,497 358,396 672,101
Total operating expenses $ 114,254,257 $ 57,442,580 $ 56,811,677
Cost of revenues includes costs related to sales agent commissions and revenue sharing. These costs are highly correlated with recognized net revenues. As such, the increase of $66.75 million in the current nine-month period ended September 30, 2017 as compared to the nine-month period ended September 30, 2016 was driven by the higher amount of net revenues and agent commission rates.
General and administrative includes costs related to wages, stock compensation, dues, operating leases, utilities, travel, and other general overhead expenses. The decrease of $11.10 million in general and administrative costs in the nine-month period ended September 30, 2017 as compared to the nine-month period ended September 30, 2016 was driven primarily by the increase in compensation of $5.81 million and the decrease in stock options and stock compensation expense of $ 18.47 million.
Professional fees include costs related to legal, accounting, and other consultants. Costs increased $0.49 million during the nine-month period ended September 30, 2017 as compared to the nine-month period ended September 30, 2016. Professional fees were higher due to higher audit costs as compared to the same period last year in addition to other non-recurring transactions, specifically as it relates to performing diligence and contract review and preparation to support the growth of new agent and broker bases as well as entry to new geographical markets.
Sales and marketing includes costs related to lead capture, digital and print media, and trade shows, in addition to other promotional materials. The cost increase of approximately $0.67 million was due to increased cost in lead capture and other internet marketing related to our growth in agent and broker headcount for the nine-month period ended September 30, 2017 as compared to the nine-month period ended September 30, 2016.
~~LIQUIDITY AND CAPITAL RESOURCES~~
September 30, December 31,
2017 2016

Current assets $ 12,619,392 $ 5,565,642
Current liabilities (9,291,701 ) (3,577,021 )
Net working capital $ 3,327,691 $ 1,988,621
Our working capital as of September 30, 2017 increased as compared to December 31, 2016. Our increased sales volumes, resulting in increased receivables and restricted cash were off-set by corresponding increases in accrued expenses related to commissions payable.
17
~~The following table presents our cash flows~~ for the nine months ended September 30, ~~2017~~2021 compared to the same period in 2020, an increase of $5.4 million or 162%. This is due to an increase of $2.0 million in advertising and ~~2016:~~lead capture costs as we continue to expand our real estate operations and software services.
Nine Months ended
September 30,
2017 2016 Change

Cash provided by operating activities $ 2,396,701 $ 637,881 $ 1,758,820
Cash used in investment activities (849,764 ) (281,203 ) (568,561 )
Cash provided by financing activities 122,773 – 122,773
Other Expense
~~Net cash provided by operating activities~~There were no significant changes in other expense for the nine months ended September 30, ~~2017 primarily resulted from~~2021 compared to the ~~increased volume~~same period in ~~our sales transactions~~2020.
Income Tax Benefit (Expense)
The Company’s provision for (benefit from) income taxes amounted to ($33.3) million and higher commissions receivable. As a result of the increased sales volume, we also incurred higher accrued expenses, specifically commissions payable. If we are successful in our growth plans, which would result in further increases in sales volumes, we expect to generate positive operating cash flows$0.3 million for ~~the next twelve months.~~
~~During~~ the nine months ended September 30, ~~2017,~~2021 and 2020, respectively, which represented an effective tax rate of negative 102.46% and 1.22%, respectively. The decrease in income tax expense was primarily attributable to the release of the valuation allowance and higher deductible stock-based compensation.
NON-U.S. GAAP FINANCIAL MEASURES
To supplement our ~~investing activities consisted~~consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use Adjusted EBITDA, a non-U.S. GAAP financial measure, to understand and evaluate our core operating performance. This non-GAAP financial measure, which may be different than similarly titled measures used by other companies, is presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S.GAAP.
We define the non-U.S. GAAP financial measure of Adjusted EBITDA to mean net income (loss), excluding other income (expense), income tax benefit (expense), depreciation, amortization, and impairment charges, stock-based compensation expense, and stock option expense.
We believe that Adjusted EBITDA provides useful information about our financial performance, enhances the overall understanding of our past performance and future prospects, and allows for greater transparency with respect to a key metric used by our management for financial and operational decision-making. We believe that Adjusted EBITDA helps identify underlying trends in our business that otherwise could be masked by the effect of the expenses that we exclude in Adjusted EBITDA. In particular, we believe the exclusion

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of stock and stock option expenses, provides a useful supplemental measure in evaluating the performance of our underlying operations and provides better transparency into our results of operations.

We are presenting the non-U.S. GAAP measure of Adjusted EBITDA to assist investors in seeing our financial performance through the eyes of management, and because we believe this measure provides an additional ~~expenditures~~tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. There are a number of limitations related to the ~~on-going development~~use of Adjusted EBITDA compared to Net Income (Loss), the closest comparable U.S. GAAP measure. Some of these limitations are that:

●

Adjusted EBITDA excludes stock-based compensation expense related to our agent growth incentive program and stock option expense, which have been, and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of our compensation strategy; and

●

Adjusted EBITDA excludes certain recurring, non-cash charges such as depreciation of fixed assets, amortization of intangible assets, and impairment charges related to these long-lived assets, and, although these are non-cash charges, the assets being depreciated, amortized, or impaired may have to be replaced in the future.

The following tables present a reconciliation of Adjusted EBITDA to net loss, the most comparable U.S. GAAP financial measure, for each of the periods presented:

Three Months Ended September 30,
Nine Months Ended September 30,

2021

2020

2021

2020
Net income

$ 23,814

$ 14,918

$ 65,703

$ 23,295
Other expense, net

237

80

164

163
Income tax (benefit) expense

(12,884)

225

(33,258)

295
Depreciation and amortization ⁽¹⁾

1,694

1,005

4,511

2,785
Stock compensation expense ⁽²⁾

6,817

3,711

18,129

10,476
Stock option expense

3,376

1,879

9,608

4,179
Adjusted EBITDA

$ 23,054

$ 21,818

$ 64,857

$ 41,193
(1) Amortization of stock liability is included in the “Other expense (income)” line item.
(2) This includes agent growth incentive stock compensation expense and stock compensation expense related to business acquisitions.
LIQUIDITY AND CAPITAL RESOURCES
Our primary sources of liquidity are our cash and cash equivalents on hand and cash flows generated from our business operations. Our ability to generate sufficient cash flow from operations or to access certain capital markets, including banks, is necessary to fund our operations and capital expenditures, repurchase our common stock, and meet obligations as they become due. At present, our cash and cash equivalents balances and cash flows from operations have strengthened primarily due to transaction volume growth and improved cost leverage over the prior five years attributable to the expansion of our ~~internal~~independent agent and broker network and, to a lesser extent, increased average prices of home sales.
Currently, our primary use ~~software.~~of cash on hand is to sustain and grow our business operations, including, but not limited to, commission and revenue share payments to agents and brokers and cash outflows for operating expenses. Our current capital deployment strategy for 2021 is to utilize excess cash on hand to support our growth initiatives into select markets and enhance our technology platforms and for repurchases of our common stock. As ~~we continue~~of September 30, 2021, the Company is not party to ~~develop~~any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources. In addition, the Company has no known material cash requirements as of September 30, 2021 relating to capital expenditures, commitments, or human capital (except commissions to agents and ~~refine~~brokers concurrent with settled real estate transactions). The cash requirements for the upcoming fiscal year relating to our ~~cloud-based platforms, we expect~~leases and our debt associated with acquisitions is insignificant. For information regarding the Company’s expected cash requirement related to ~~continue~~leases, see Note 6 – Leases to ~~use~~the condensed consolidated financial statements. Cash requirements associated with our acquisitions include a $1.0 million payment of cash or common stock of the Company to the previous owners of Virbela, LLC due in November 2021. During the first quarter of 2021, the Company paid $1.5 million of principal amount outstanding for the full settlement of the promissory notes issued to the previous owners of Showcase, which were due in installment payments during 2021.
We believe that our existing balances of cash ~~resources on similar expenditures~~and cash equivalents and cash flows expected to be generated from our operations will be sufficient to satisfy our operating requirements for at least the next twelve months.
We generated approximately $0.12 million in cash flows from financing activities primarily related to the completion of our December 31, 2016 private placement and the exercise of 25,000 options to purchase 25,000 shares of common stock.
Our future capital requirements will depend on many factors, including our level of investment in technology, ~~and~~ our rate of growth into new ~~markets.~~markets, and cash used to repurchase shares of the Company’s common stock. Our capital requirements may be affected by factors which we cannot control such as the changes in the

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residential real estate market, interest rates, and other monetary and fiscal policy changes to the manner in which we currently operate. ~~We anticipate that between our current cash position and cash flow from ongoing operations we have the necessary resources to continue operating our business over the next 12 months.~~ In order to support and achieve our future growth plans, ~~however,~~ we may need or seek advantageously to obtain additional funding through equity or debt financing. We believe that our current operating structure will facilitate sufficient cash flows from operations to satisfy our expected long-term liquidity requirements beyond the next twelve months.

~~During the period, we secured a line of credit which provides that the Company may borrow up to $500,000.~~ We currently do not hold any bank debt, nor have ~~no borrowings against the line of credit facility~~we issued any debt instruments through public offerings or ~~any other term loan bank debt. In the event that additional financing is required in the future, we may not be able to raise it on terms acceptable to us or at all.~~private placements. If we are unable to raise additional capital when desired, our business, ~~and~~ results of operations, ~~will~~and financial condition would likely suffer. As of September 30, 2021, our cash and cash equivalents totaled $98.1 million. Cash equivalents are comprised of financial instruments with an original maturity of 90 days or less from the date of purchase; primarily money market funds. We currently do not possess any marketable securities.

Net Working Capital

Net working capital is calculated as the Company’s total current assets less its total current liabilities. The following table presents our net working capital as of September 30, 2021 and December 31, 2020:

September 30, 2021

December 31, 2020
Current assets

$ 306,141

$ 212,225
Current liabilities

(189,480)

(96,650)
Net working capital

$ 116,661

$ 115,575

For the nine months ended September 30, 2021, net working capital increased to $116.7 million, or 1%, compared to December 31, 2020 primarily due to an increase in agent and commission receivables directly related to the increase in revenue.
Cash Flows
The following table presents our cash flows for the nine months ended September 30, 2021 and 2020:

Nine Months Ended September 30,


2021

2020
Cash provided by operating activities

$ 198,413

$ 89,206
Cash used in investment activities

(13,663)

(5,651)
Cash used in financing activities

(145,144)

(16,514)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash

(60)

(129)
Net change in cash, cash equivalents and restricted cash

$ 39,546

$ 66,912

For the nine months ended September 30, 2021, cash provided by operating activities increased $109.2 million compared to the same period in 2020. The change resulted primarily from the increased real estate transactions volume, increase in customer deposits, and higher participation by our agents and brokers in our agent stock compensation programs.
For the nine months ended September 30, 2021, cash used in our investing activities increased due to higher capital expenditures and acquisition-related payments.
For the nine months ended September 30, 2021, the increase in cash flows used in financing activities primarily were related to repurchases of our common stock and payment of cash dividend, partially offset by proceeds received from the exercise of stock options.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
~~There has been no change~~The condensed consolidated financial statements should be read in ~~our critical accounting estimates as previously disclosed~~conjunction with the consolidated financial statements included in ~~our~~the Annual Report on Form 10-K for the year ended December 31, ~~2016.~~
~~Non-GAAP Measurements~~
As2020, which provides a description of ~~September 30, 2017 we have outstanding options~~our critical accounting policies. There were no changes to purchase approximately 6.0 million shares of common stock at a weighted average exercise price of $0.14 per share, measured using the intrinsic value method. In accordance with US GAAP and Rules and Regulationscritical accounting policies or estimates as promulgated by the Securities and Exchange Commission (“SEC”), we were unable to retroactively apply the fair value method to awards previously outstanding under the intrinsic value method. In accordance with the intrinsic value method, we are required to re-measure the intrinsic value at each reporting date through the date of exercise or other settlement, while recognizing the applicable changes in the intrinsic value as a component of operations in the accompanying consolidated statements of operations.
18
As a public company, we value stock options at their grant date fair value, and recognize the associated compensation cost systematically over the requisite service or performance period, with no consideration given to market changes in the underlying equity instruments or other assumptions used for valuation purposes on the grant date. If we had the ability to reasonably estimate the fair value of options issued at our inception as a private company, all associated expenses would have been recognized in prior periods as the awards vested without giving effect to re-measurement through the date of exercise or expiration.
The SEC has adopted rules to regulate the use in filings with the SEC, and in other public disclosures of financial measures, that are not calculated in accordance with US GAAP, such as EBITDA, omission of non-recurring or infrequent items, and other omissions of non-cash items whether recurring or non-recurring. These measures are derived from methodologies other than in accordance with US GAAP.
We believe that the omission of non-cash income or expense based on fluctuations in the Company’s stock price, which is significantly outside of its control, is more reflective of the key factors that affect our operating performance. Since the equity-linked instruments were issued earlyreflected in our ~~existence,~~2020 Annual Report. For additional information regarding our critical accounting policies and ~~there are no further performance requirements associated with earning~~estimates, see the ~~awards, we believe that omitting these fluctuations provides a useful supplemental measure~~Critical Accounting Policies and Estimates section of MD&A included in ~~evaluating the performance of~~ our operations and provides better transparency into our results of operations. Our management does not evaluate the Company’s performance, either financial or operational, inclusive of fluctuations in the intrinsic value of the awards issued prior becoming a public company.2020 Annual Report.

Eliminating non-cash fluctuations for awards fully earned in prior periods, has limitations as an analytical tool, and you should not consider these omissions either in isolation or as a substitute for analyzing our results as reported under US GAAP. Some of these limitations are:
· ~~this measure does not reflect changes in, or cash requirements for, our working capital needs;~~
· ~~this measure does not reflect the further issuance of equity and equity-linked instruments based on grant date fair values with continuing performance and service requirements;~~
· ~~this measure does not reflect historical cash expenditures or future requirements for expenditures or contractual commitments.~~
·
~~the recognition of significant intrinsic value fluctuations may result in the recognition of net income or losses that are not correlated to our business operations.~~
~~The following table represents the impacts of the intrinsic value variances on our results of operations for the periods presented:~~
Nine Months Ended
September 30,
2017 2016

Net loss $ (4,616,660 ) $ (21,272,872 )
Adjustment for change in intrinsic value 5,502,948 (20,456,078 )
Adjusted net loss $ (10,119,608 ) $ (816,794 )
Three Months Ended
September 30,
2017 2016
Net loss $ (7,780,570 ) $ (14,647,098 )
Adjustment for change in intrinsic value (2,478,062 ) (14,088,341 )
Adjusted net loss $ (5,302,508 ) $ (558,757 )
19
~~OFF-BALANCE SHEET ARRANGEMENTS~~
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.
Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in our exposures to market risk since December 31, 2020. For details on the Company's interest rate and foreign currency exchange, see “Item 7A. Quantitative and Qualitative Information About Market Risks” in our 2020 Annual Report.

~~Item 3.~~ 24

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~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~
~~As a “smaller reporting company”, we are not required to provide the information required by this Item.~~
Item 4.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
~~Item 4.~~ ~~CONTROLS AND PROCEDURES~~
~~EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES~~
~~We maintain~~Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as ~~defined in~~of September 30, 2021 pursuant to Rule ~~13a-15(e) and Rule 15d-15(e) promulgated~~13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by usa company in the reports that ~~we file~~it files or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
As of September 30, 2017, the end of the period covered by this report we carried out an evaluation of the effectiveness of our disclosure controls and procedures with the participation of our Chief Executive Officer and Chief Financial Officer. In making this assessment, management used the criteria for effective internal control over financial reporting described in the “Internal Control-Integrated Framework” (2013) set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective to ensure that information we are required to disclose in the reports we file or submitsubmits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and ~~forms,~~forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that ~~such~~ information ~~was not~~required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Based on the evaluation of our disclosure controls and procedures as of September 30, 2021, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2021.
Changes in Internal Control Over Financial Reporting
In addition, no significant changes in the Company’s internal control over financial reporting occurred during the quarter ended September 30, 2021, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. As the Company’s workforce already operates in a remote environment, there was no material impact of COVID-19 on our day-to-day operations or our internal control over financial reporting.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our management, including our Chief Executive Officer and Chief Financial Officer, ~~to allow~~conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2021. In making its evaluation, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control — Integrated Framework (2013).
Under standards established by the Public Company Accounting Oversight Board of the United States, a material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely ~~decisions regarding required disclosure.~~basis.
Inherent Limitations on Effectiveness of Internal Controls
~~The determination~~Our management, including the Principal Executive Officer, the Principal Financial Officer, and the Principal Accounting Officer, does not expect that our disclosure controls and procedures ~~were not effective was based on the following material weaknesses in~~or our internal control over financial reporting ~~which were identified~~will prevent or detect all errors and ~~described~~fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in ~~detail~~all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in ~~our Annual Report on Form 10-K for~~decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the ~~year ended December 31, 2016, and summarized below:~~
· ~~Failure to properly recognize and measure the fair value of equity and equity-linked awards issued to employees and non-employees.~~
· ~~Insufficient corporate governance policies.~~
· Despite the addition of two new independent directors and an independent Audit Committee during 2016, at December 31, 2016, our level of independent director oversight still posed risk of management override and potential fraud.
20
~~During 2017 through September 30, we continued our remediation activities related to the material weaknesses summarized above, including the following:~~
~~In January 2017, we appointed Laurie Hawkes to the Board as an additional independent director, resulting in a majority~~individual acts of ~~independent directors for the first time on the Board. However, Ms. Hawkes resigned as a director, effective August 9, 2017.~~
~~In March 2017, we constituted a Compensation Committee which is now comprised~~some persons, by collusion of two independent directors. Each of our standing committees, including the Audit Committee, Governance Committee and Compensation Committee, has been specifically charged with certain oversight functions. During 2017 to date, our Board committees have been active.
~~CHANGES IN INTERNAL CONTROL~~
~~Outside~~or more people, or by management override of the ~~remediation activities described above~~controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under ~~Controls and Procedures – Evaluation~~all potential future conditions. Projections of ~~Disclosure Controls and Procedures, there have been no~~any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in ~~our internal control over financial reporting (as defined~~conditions or deterioration in ~~Rule 13a-15(e) and Rule 15d-15(e) under~~ the ~~Exchange Act) during the period ended September 30, 2017 that materially affected,~~degree of compliance with policies or ~~are reasonably likely to materially affect, our internal control over financial reporting.~~procedures.

21
25

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PART II – OTHER INFORMATION
Item 1.
LEGAL PROCEEDINGS
From time to time, we are involved in ~~lawsuits, claims, investigations~~ordinary routine litigation incidental to the conduct of our business, including matters that may be certified as class or collective actions.
On June 1, 2021, the Company received a subpoena issued by the staff of the Division of Enforcement of the Securities and ~~proceedings~~Exchange Commission (the “SEC Staff”) requesting certain documentation and information relating to the Company and to its commission and agent compensation practices during 2018 and 2019. The Company is fully cooperating with the SEC Staff regarding this non-public, fact-finding inquiry. The SEC Staff has informed the Company that ~~arise in~~this inquiry should not be construed as an indication that any violations of law have occurred or that the ~~ordinary course~~SEC Staff has formed an opinion concerning the Company’s agent compensation practices. The Company does not believe that the inquiry will have a material impact on the Company’s financial condition, results of ~~business.~~ operations or cash flow, but can provide no assurance concerning the timing or outcome of the inquiry.
There are no ~~matters~~other legal proceedings pending or, to our knowledge, threatened that we ~~expect to~~believe could have a material adverse impact on our business, reputation, results of operations or financial ~~condition or cash flows.~~condition.
Item 1A.
RISK FACTORS
~~As a “smaller reporting company”, we are not required~~There were no material changes to ~~provide~~ the ~~information required by this Item.~~risk factors reported in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020.
Item 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
The following table provides ~~a discussion~~information about repurchases of our ~~recent sales of unregistered securities that have not been previously disclosed:~~
~~During~~common stock through the ~~nine months~~quarter ended September 30, ~~2017, the Company issued 25,000 shares of restricted common stock upon the exercise of stock options, a connection with which it received cash consideration totaling $20,000.~~2021:
~~During the nine months ended September 30, 2017, the Company issued 1,655,590 shares of restricted common stock for services totaling $7,076,363.~~
All of the securities issued to employees and consultants were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act. In addition, all service providers receiving equity as compensation pursuant to the 2015 Agent Equity Program have made representations to the Company, including, without limitation, that it is knowledgeable, sophisticated and experienced in making investment decisions of this kind, or has consulted with its legal and financial advisers regarding the suitability of receiving equity as compensation; understands the restricted nature of the securities issued; and (iii) has had adequate access to information about the Company.

Period

Total number of shares purchased

Average price paid per share

Total number of shares purchased as part of publicly announced plans or programs⁽¹⁾

Approximate dollar value of shares that may yet be purchased under the plans or programs
7/1/2021 - 7/31/2021

607,357

$ 36.64

607,357

$ 269,236,049
8/1/2021 - 8/31/2021

466,917

45.30

466,917

248,250,861
9/1/2021 - 9/30/2021

213,225

46.60

213,225

238,263,017
Total

1,287,499

$ 42.85

1,287,499

(1) The repurchase program began on January 2, 2019 and was set to expire on June 28, 2019. On June 12, 2019, the Company, under authorization from the Board of Directors, amended the plan. The amended plan extended the repurchase program through December 31, 2019. On November 26, 2019, the Company announced the approval to increase the authorization limits of the Company’s stock repurchase program by the Board. The Board agreed to extend the stock repurchase program through the fourth quarter of 2020 and to increase the authorization for the stock repurchase program from $25.0 million to $75.0 million of the Company’s common stock. The Company discontinued the repurchase program in March 2020 and subsequently reinstated it in June 2020 with a maximum authorization of $75.0 million. In December 2020, the Board approved an increase to the total amount of its buyback program from $75.0 million to $400.0 million. The stock repurchase program is more fully disclosed in Note 8 – Stockholders’ Equity to the condensed consolidated financial statements.
Item 3.
DEFAULTS UPON SENIOR SECURITIES
None.
Item 4.
MINE SAFETY DISCLOSURES
Not applicable.
Item 5.
OTHER INFORMATION
None.

~~Not applicable.~~Table of Contents

Item 6.
22
EXHIBITS

~~Item 6.~~

~~EXHIBITS~~

~~Exhibit Number~~
Exhibit		Exhibit ~~Description~~
Number		Description
~~3.1~~ 31.1		~~Certificate of Incorporation (incorporated by reference from our Registration Statement on Form S-1, filed on July 7, 2010)~~

~~3.2~~		~~Certificate of Amendment of Certificate of Incorporation dated effective September 9, 2013 (incorporated by reference from our Form 8-K, filed on September 9, 2013)~~

~~3.3~~		~~Certificate of Amendment of Certificate of Incorporation~~

~~3.4~~		~~Bylaws (incorporated by reference from our Registration Statement on Form S-1, filed on July 7, 2010)~~

~~10.1~~		~~First Amendment to eXp Realty International Corporation 2015 Equity Incentive Plan (incorporated by reference to Company’s Definitive Information Statement on Schedule 14C filed on October 6, 2017)~~

~~10.2~~		~~eXp Realty International Corporation 2015 Agent Equity Program Enrollment Form (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed on April 30, 2015)~~

~~10.3~~		~~Employment Agreement of Alan Goldman, dated September 27, 2017~~

~~31.1~~		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 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 the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 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 the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

Table of Contents

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: November 3, 2021
eXp World Holdings, Inc.

(Registrant)

~~Date: November 14, 2017~~

/s/ ~~Alan Goldman~~Jeff Whiteside
~~Alan Goldman~~

Jeff Whiteside

Chief Financial Officer (Principal Financial Officer)

~~Delaware~~	~~000-533000~~	~~98-0681092~~
Delaware		98-0681092
(State or other jurisdiction	~~(Commission~~	(IRS Employer
of ~~incorporation)~~incorporation or organization)	~~File Number)~~	Identification No.)


Common Stock, par value $0.00001 per share	EXPI	NASDAQ
(Title of Each Class)	(Trading Symbol)	(Name of each exchange on which registered)


Large accelerated filer ☐	Accelerated filer☒	Non-accelerated filer ☐	Smaller reporting company ☐
Emerging Growth Company ☐

		~~Page~~
				Page
		Forward Looking Statements		3

	PART I –		FINANCIAL INFORMATION
Item 1.		Financial Statements (Unaudited)		4
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	14	16
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	20	24
Item 4.		Controls and Procedures	20	25

	PART II –		OTHER INFORMATION
Item 1.		Legal Proceedings	22	26
Item 1A.		Risk Factors		26
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	22	26
Item 3.		Defaults Upon Senior Securities	22	26
Item 4.		Mine Safety Disclosures	22	26
Item 5.		Other information	22	26
Item 6.	~~Exhibits~~	23 Exhibits		27

	September 30,			December 31,
	2017			2016

ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	3,347,910		$	1,684,608
Restricted cash		1,134,109			481,704
Accounts receivable, net of allowance $177,563 and $133,845, respectively		7,549,469			3,015,767
Prepaids and other assets		587,904			383,563

TOTAL CURRENT ASSETS		12,619,392			5,565,642

OTHER ASSETS
Fixed assets, net		1,298,215			538,405

TOTAL OTHER ASSETS		1,298,215			538,405

TOTAL ASSETS	$	13,917,607		$	6,104,047


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable	$	412,439		$	317,420
Customer deposits		1,134,109			481,704
Accrued expenses		7,745,153			2,742,119
Notes payable		–			35,778

TOTAL CURRENT LIABILITIES		9,291,701			3,577,021

Commitments and contingencies		–			–

STOCKHOLDERS' EQUITY
Common Stock, $0.00001 par value 220,000,000 shares authorized; 53,995,962 shares and 52,316,679 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively		540			523
Additional paid-in capital		41,238,713			34,526,859
Accumulated deficit		(36,621,221	)		(32,004,561	)
Accumulated other comprehensive income (loss)		7,874			4,205

TOTAL STOCKHOLDERS' EQUITY		4,625,906			2,527,026

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	13,917,607		$	6,104,047

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016

Net revenues	$	48,105,769		$	15,756,956		$	109,691,317		$	36,181,796

Operating expenses
Cost of revenues		43,291,473			13,294,452			97,620,066			30,868,564
General and administrative		11,987,268			16,810,567			14,697,040			25,801,423
Professional fees		223,811			140,804			906,654			414,197
Sales and marketing		380,452			158,968			1,030,497			358,396

Total expenses		55,883,004			30,404,791			114,254,257			57,442,580

Net loss from operations		(7,777,235	)		(14,647,835	)		(4,562,940	)		(21,260,784	)

Other income and (expenses)
Other income		–			(432	)		–			14
Interest expense		(58	)		–			(2,105	)		–

Total other income and (expenses)		(58	)		(432	)		(2,105	)		14

Loss from before income tax expense		(7,777,293	)		(14,648,267	)		(4,565,045	)		(21,260,770	)

Income tax expense		(3,277	)		(7,444	)		(51,615	)		(33,015	)

Net loss		(7,780,570	)		(14,655,711	)		(4,616,660	)		(21,293,785	)

Net loss attributable to non-controlling interest in subsidiary		–			8,613			–			20,913

Net loss attributable to common shareholders	$	(7,750,570	)	$	(14,647,098	)	$	(4,616,660	)	$	(21,272,872	)

Net loss per share attributable to common shareholders
Basic from continuing operations	$	(0.15	)	$	(0.29	)	$	(0.09	)	$	(0.42	)
Diluted from continuing operations	$	(0.15	)	$	(0.29	)	$	(0.09	)	$	(0.42	)

Weighted average shares outstanding
Basic		53,335,822			51,225,817			52,837,134			50,929,102
Diluted		53,335,822			51,225,817			52,837,134			50,929,102


	Cash and cash equivalents	Restricted cash	Total
Balance, December 31, 2019	$ 40,087	$ 6,987	$ 47,074
Balance, September 30, 2020	$ 91,871	$ 22,115	$ 113,986
Balance, December 31, 2020	$ 100,143	$ 27,781	$ 127,924
Balance, September 30, 2021	$ 98,064	$ 69,406	$ 167,470

	Shares			Weighted Average Grant Date Fair Value
Balance, December 31, 2015		1,293,056		$	0.45
Granted		2,452,965			3.65
Issued		(503,922	)		4.30
Forfeited		(688,142	)		0.62
Balance, December 31, 2016		2,553,957			2.82
Granted		1,719,744			3.27
Issued		(383,492	)		2.57
Forfeited		(313,875	)		2.24
Balance, September 30, 2017		3,576,334		$	2.99

	Options			Weighted Average Price		Intrinsic Value		Weighted Average Remaining Contractual Term (Years)
Balance, December 31, 2015		7,281,250		$	0.17	$	0.17		6.75
Granted		4,130,000			1.53		–		9.75
Exercised		(159,678	)		0.13		1.42		–
Forfeited		(504,014	)		1.19		3.36		–
Balance, December 31, 2016		10,747,558			0.67		3.56		7.75
Granted		2,783,231			3.75		–		6.23
Exercised		(25,000	)		0.80		2.62		–
Forfeited		(2,537,970	)		2.30		1.06		–
Balance, September 30, 2017		10,967,819			1.47		2.80		6.81
Exercisable at September 30, 2017		7,274,946			0.42		3.00		5.65
Vested at September 30, 2017		7,607,170		$	0.50	$	2.97		5.79


	Three Months Ended	% of	Three Months Ended	% of	Change 2021 vs. 2020
	September 30, 2021	Revenue	September 30, 2020	Revenue	$	%

	(In thousands, except share amounts and per share data)
Statement of Operations Data:
Revenues	$ 1,110,480	100%	$ 564,017	100%	$ 546,463	97%
Operating expenses
Commissions and other agent-related costs	1,030,937	93%	517,169	92%	513,768	99%
General and administrative expenses	64,615	6%	30,130	5%	34,485	114%
Sales and marketing expenses	3,761	-%	1,495	-%	2,266	152%
Total operating expenses	1,099,313	99%	548,794	97%	550,519	100%
Operating income	11,167	1%	15,223	3%	(4,056)	(27)%
Other expense
Other expense, net	239	-%	80	-%	159	199%
Equity in losses of unconsolidated affiliates	(2)	-%	-	-%	(2)	N/A
Other expense, net	237	-%	80	-%	157	196%
Income before income tax expense	10,930	1%	15,143	3%	(4,213)	(28)%
Income tax (benefit) expense	(12,884)	(1)%	225	-%	(13,109)	(5,826)%
Net income	23,814	2%	14,918	3%	8,896	60%
Add back: Net loss attributable to noncontrolling interest	7	-%	52	-%	(45)	(87)%
Net income attributable to eXp World Holdings, Inc.	23,821	2%	14,970	3%	8,851	59%
Adjusted EBITDA⁽¹⁾	$ 23,054	2%	$ 21,818	4%	$ 1,236	6%
Earnings per share
Basic	$ 0.16		$ 0.11		$ 0.05	45%
Diluted	$ 0.15		$ 0.10		$ 0.05	50%
Weighted average shares outstanding
Basic	146,862,978		138,513,465
Diluted	157,345,924		150,917,721

	Three Months Ended September 30,
	2017		2016		Change

Operating expenses:
Cost of revenues	$	43,291,473	$	13,294,452	$	29,997,021
General and administrative		11,987,268		16,810,567		(4,823,299	)
Professional fees		223,811		140,804		83,007
Sales and marketing		380,452		158,968		221,484
Total operating expenses	$	55,883,004	$	30,404,791	$	25,478,213


	Nine Months Ended	% of	Nine Months Ended	% of	Change 2021 vs. 2020
	September 30, 2021	Revenue	September 30, 2020	Revenue	$	%

	(In thousands, except share amounts and per share data)
Statement of Operations Data:
Revenues	$ 2,694,200	100%	$ 1,188,963	100%	$ 1,505,237	127%
Operating expenses
Commissions and other agent-related costs	2,481,254	92%	1,079,739	91%	1,401,515	130%
General and administrative expenses	171,636	6%	82,145	7%	89,491	109%
Sales and marketing expenses	8,701	-%	3,326	-%	5,375	162%
Total operating expenses	2,661,591	99%	1,165,210	98%	1,496,381	128%
Operating income	32,609	1%	23,753	2%	8,856	37%
Other expense
Other expense, net	159	-%	129	-%	30	23%
Equity in losses of unconsolidated affiliates	5	-%	34	-%	(29)	(85)%
Total other expense, net	164	-%	163	-%	1	1%
Income before income tax expense	32,445	1%	23,590	2%	8,855	38%
Income tax (benefit) expense	(33,258)	(1)%	295	-%	(33,553)	(11,374)%
Net income	65,703	2%	23,295	2%	42,408	182%
Add back: Net loss attributable to noncontrolling interest	14	-%	115	-%	(101)	(88)%
Net income attributable to eXp World Holdings, Inc.	65,717	2%	23,410	2%	42,307	181%
Adjusted EBITDA⁽¹⁾	$ 64,857	2%	$ 41,193	3%	$ 23,664	57%
Earnings per share
Basic	$ 0.45		$ 0.17		$ 0.28	165%
Diluted	$ 0.42		$ 0.16		$ 0.26	163%
Weighted average shares outstanding
Basic	145,610,008		135,207,101
Diluted	157,838,134		147,091,720

	Nine Months Ended September 30,
	2017		2016		Change

Operating expenses:
Cost of revenues	$	97,620,066	$	30,868,564	$	66,751,502
General and administrative		14,697,040		25,801,423		(11,104,383	)
Professional fees		906,654		414,197		492,457
Sales and marketing		1,030,497		358,396		672,101
Total operating expenses	$	114,254,257	$	57,442,580	$	56,811,677

	·	~~this measure does not reflect the further issuance of equity and equity-linked instruments based on grant date fair values with continuing performance and service requirements;~~
	·	~~this measure does not reflect historical cash expenditures or future requirements for expenditures or contractual commitments.~~
	·	~~the recognition of significant intrinsic value fluctuations may result in the recognition of net income or losses that are not correlated to our business operations.~~


Period	Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs⁽¹⁾	Approximate dollar value of shares that may yet be purchased under the plans or programs
7/1/2021 - 7/31/2021	607,357	$ 36.64	607,357	$ 269,236,049
8/1/2021 - 8/31/2021	466,917	45.30	466,917	248,250,861
9/1/2021 - 9/30/2021	213,225	46.60	213,225	238,263,017
Total	1,287,499	$ 42.85	1,287,499


Date: November 3, 2021		eXp World Holdings, Inc.
		(Registrant)

~~Date: November 14, 2017~~		/s/ ~~Alan Goldman~~Jeff Whiteside
	~~Alan Goldman~~	Jeff Whiteside
		Chief Financial Officer (Principal Financial Officer)