~~Statement Regarding Forward-Looking Statements~~CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

~~Certain statements contained in this report~~This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains statements that are not historical fact and may constitute 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~~of 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 capacity~~future. 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 management’s expectations, including, but not limited to:

●

the impact of macroeconomic conditions on the strength of the residential real estate market;

●

the impact of monetary policies of the U.S. federal government and its agencies on our operations;

●

the impact of changes in consumer attitudes on home sale transaction volume;

●

the impact of excessive or insufficient home inventory supply on home sale transaction value;

●

our ability to effectively manage rapid growth in our business;

●

our ability to attract and retain additional qualified personnel;

●

changes in tax laws and regulations that may have a material adverse effect on our business;

●

our ability to protect our intellectual property rights;

●

the impact of security breaches, interruptions, delays and failures in our systems and operations on our business;

●

financial condition and reputation;

●

our ability to predict the demand or growth of our new products and services;

●

our ability to maintain our agent growth rate;

●

the impact of adverse outcomes in litigation and regulatory actions against us and other companies and agents in our industry on our business; and

●

the effect of inflation and rising interest rates on real estate transaction values and our operating results, profits and cash flows.

Other factors not identified above, including those ~~contemplated by such forward-looking statements. Some of those risks~~described under the heading “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,~~2023 (the “2023 Annual Report”), may also causeactual results to differ materially from those described in our forward-looking statements. Most of these factors are difficult to anticipate and ~~the following: current global economic and capital market uncertainties; potential dilution to~~are generally beyond our ~~stockholders from our recapitalization and balance sheet restructuring activities; potential inability to continue to comply~~control. You should consider these factors in connection with ~~government regulations; adoption of, or changes in legislation or regulations adversely affecting our businesses; permitting constraints or delays, business opportunities~~considering any forward-looking statements that may be ~~presented to, or pursued~~made 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 attractus.

Forward-looking statements are based on currently available operating, financial and ~~retain key personnel; assertion of claims, lawsuits~~market information 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 (UNAUDITED)

~~Item 1. FINANCIAL STATEMENTS~~

~~eXp World Holdings, Inc.~~

~~(unaudited)~~

~~September 30, 2017~~

	~~Page~~

~~Condensed Consolidated Balance Sheets~~	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

~~(UNAUDITED)~~(In thousands, except share amounts)

(UNAUDITED)

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


	March 31, 2024	December 31, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$ 109,169	$ 125,873
Restricted cash	74,735	44,020
Accounts receivable, net of allowance for credit losses of $2,363 and $2,204, respectively	105,325	85,343
Prepaids and other assets	9,517	9,275
Current assets of discontinued operations	1,631	1,964
TOTAL CURRENT ASSETS	300,377	266,475
Property, plant, and equipment, net	12,231	12,967
Operating lease right-of-use assets	7	10
Other noncurrent assets	11,058	7,400
Intangible assets, net	6,644	7,012
Deferred tax assets	73,955	69,034
Goodwill	16,682	16,982
Noncurrent assets of discontinued operations	5,795	5,788
TOTAL ASSETS	$ 426,749	$ 385,668

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$ 8,986	$ 8,788
Customer deposits	75,789	44,550
Accrued expenses	102,104	86,483
Litigation contingency	16,000	-
Current portion of lease obligation - operating lease	7	10
Current liabilities of discontinued operations	1,406	1,809
TOTAL CURRENT LIABILITIES	204,292	141,640
Long-term payable	20	20
TOTAL LIABILITIES	204,312	141,660

EQUITY
Common Stock, $0.00001 par value 900,000,000 shares authorized; 186,361,476 issued and 154,846,563 outstanding at March 31, 2024; 183,606,708 issued and 154,669,037 outstanding at December 31, 2023	2	2
Additional paid-in capital	841,576	804,833
Treasury stock, at cost: 31,514,913 and 28,937,671 shares held, respectively	(578,591)	(545,559)
Accumulated deficit	(39,993)	(16,769)
Accumulated other comprehensive (loss) income	(557)	332
Total eXp World Holdings, Inc. stockholders' equity	222,437	242,839
Equity attributable to noncontrolling interest	-	1,169
TOTAL EQUITY	222,437	244,008
TOTAL LIABILITIES AND EQUITY	$ 426,749	$ 385,668

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 (LOSS)

~~(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 March 31,
	2024	2023
Revenues	$ 943,054	$ 848,453
Operating expenses
Commissions and other agent-related costs	864,746	776,838
General and administrative expenses	62,582	54,626
Technology and development expenses	14,761	14,060
Sales and marketing expenses	3,139	2,927
Litigation contingency	16,000	-
Total operating expenses	961,228	848,451
Operating (loss) income	(18,174)	2
Other (income) expense
Other (income) expense, net	(1,188)	(874)
Equity in losses of unconsolidated affiliates	149	342
Total (income) expense, net	(1,039)	(532)
Income (loss) before income tax expense	(17,135)	534
Income tax benefit	(3,305)	(1,458)
Net (loss) income from continuing operations	(13,830)	1,992
Net loss from discontinued operations	(1,809)	(539)
Net (loss) income	($ 15,639)	$ 1,453

(Loss) earnings per share
Basic, net (loss) income from continuing operations	($ 0.09)	$ 0.01
Basic, net loss from discontinued operations	($ 0.01)	($ 0.00)
Basic, net (loss) income	($ 0.10)	$ 0.01
Diluted, net (loss) income from continuing operations	($ 0.09)	$ 0.01
Diluted, net loss from discontinued operations	($ 0.01)	($ 0.00)
Diluted, net (loss) income	($ 0.10)	$ 0.01
Weighted average shares outstanding
Basic	154,740,334	152,546,766
Diluted	154,740,334	155,668,712
Comprehensive (loss) income:
Net (loss) income	($ 15,639)	$ 1,453
Other comprehensive (loss) income:
Foreign currency translation gain (loss), net of tax	(889)	643
Comprehensive (loss) income attributable to eXp World Holdings, Inc.	($ 16,528)	$ 2,096

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)~~EQUITY

~~(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 )


	Three Months Ended March 31,
	2024	2023
Common stock:
Balance, beginning of period	$ 2	$ 2
Balance, end of period	2	2
Treasury stock:
Balance, beginning of period	(545,559)	(385,010)
Repurchases of common stock	(33,032)	(29,916)
Balance, end of period	(578,591)	(414,926)
Additional paid-in capital:
Balance, beginning of period	804,833	611,872
Shares issued for stock options exercised	977	307
Agent growth incentive stock compensation	7,908	8,668
Agent equity stock compensation	25,868	26,775
Stock option compensation	1,990	2,761
Balance, end of period	841,576	650,383
Accumulated (deficit) earnings:
Balance, beginning of period	(16,769)	20,723
Net (loss) income	(15,639)	1,453
Dividends declared and paid ($0.05 and $0.045 per share of common stock in Q1 2024 and Q1 2023, respectively)	(7,585)	(6,596)
Balance, end of period	(39,993)	15,580
Accumulated other comprehensive income (loss):
Balance, beginning of period	332	236
Foreign currency translation gain (loss)	(889)	643
Balance, end of period	(557)	879
Noncontrolling interest:
Balance, beginning of period	1,169	1,169
Transactions with noncontrolling interests	(1,169)	-
Balance, end of period	(0)	1,169
Total equity	$ 222,437	$ 253,087

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 CASH FLOWS

~~(UNAUDITED)~~(In thousands)

(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 $ –


	Three Months Ended March 31,
	2024	2023
OPERATING ACTIVITIES
Net (loss) income	($ 15,639)	$ 1,453
Reconciliation of net income (loss) to net cash provided by operating activities:
Depreciation expense	2,059	2,067
Amortization expense - intangible assets	340	512
Allowance for credit losses on receivables/bad debt on receivables	159	(1,790)
Equity in loss of unconsolidated affiliates	149	342
Agent growth incentive stock compensation expense	8,827	9,660
Stock option compensation	1,990	2,761
Agent equity stock compensation expense	25,868	26,775
Deferred income taxes, net	(4,786)	277
Changes in operating assets and liabilities:
Accounts receivable	(20,141)	(10,808)
Prepaids and other assets	(311)	(3,722)
Customer deposits	31,239	17,382
Accounts payable	197	(1,310)
Accrued expenses	14,703	17,200
Long term payable	-	(4,692)
Litigation contingency	16,000	-
Other operating activities	-	37
NET CASH PROVIDED BY OPERATING ACTIVITIES	60,654	56,144
INVESTING ACTIVITIES
Purchases of property, plant, equipment	(1,323)	(1,432)
Investments in unconsolidated affiliates	(3,807)	(350)
Capitalized software development costs in intangible assets	(115)	-
NET CASH USED IN INVESTING ACTIVITIES	(5,245)	(1,782)
FINANCING ACTIVITIES
Repurchase of common stock	(33,032)	(29,916)
Proceeds from exercise of options	977	307
Transactions with noncontrolling interests	(1,169)	-
Dividends declared and paid	(7,585)	(6,596)
NET CASH USED IN FINANCING ACTIVITIES	(40,809)	(36,205)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash	(589)	594
Net change in cash, cash equivalents and restricted cash	14,011	18,751
Cash, cash equivalents and restricted cash, beginning balance	169,893	159,383
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE	$ 183,904	$ 178,134
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for income taxes	$ 1,109	$ 1,089

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

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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.	DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

~~1. BACKGROUND AND BASIS OF PRESENTATION~~

eXp World Holdings, Inc. ~~(the “Company”~~(“eXp,” or, ~~“we” or “eXp”) was incorporated in the State of Delaware on July 30, 2008. Through various operating~~collectively with its subsidiaries, the ~~Company is~~“Company,” “we,” “us,” or “our”) owns and operates a ~~cloud-based~~diversified portfolio of service-based businesses whose operations benefit substantially from utilizing our technology platform. We strategically prioritize our efforts to grow our real estate brokerage ~~operating~~by strengthening our agent value proposition, developing immersive and cloud-based technology to enable our model and providing affiliate and media services supporting those efforts. 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~~ and ~~the provinces of Alberta~~Canada and ~~Ontario, Canada. The Company focuses on a number of cloud-based technologies in order to grow an international brokerage without the burden of physical bricks and mortar or redundant staffing costs.~~is rapidly expanding internationally.

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~~U.S. GAAP 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, 2023, filed with the SEC on February 22, 2024 (“2023 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 have been included.~~presentation. Operating results for the ~~three-month and nine-month periods~~three months ended ~~September 30, 2017 and 2016~~March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017.~~2024.

In the first quarter of 2024, the Company determined that there has been a significant change to the Virbela business model. As our customers evolve post-COVID, including a return-to-work-offices, and in light of ongoing internal and external demand for web-accessible platforms and artificial intelligence solutions, we have experienced a decline in demand for our application-based platform, Virbela, and a rising interest in our web-accessible platform, Frame^®. Accordingly, the Company has begun the process of winding down the Virbela business, which includes closing out current contracts, and reducing its external customers and internal employee support. Further, the technology is being replaced with Virbela Frame^® technology that will be primarily utilized internally within the Company. The Company expects the process to wind down the Virbela business to be completed by the fourth quarter of 2024. As a result of this change, the Company has determined that Virbela qualifies for reporting as discontinued operations and will be reported as discontinued operations in the Company’s quarterly report on Form 10-Q for the period ended March 31, 2024 (the “Form 10-Q”). In accordance with Accounting Standards Codification (“ASC”) 205 – Presentation of Financial Statements, we will present the assets and liabilities of Virbela within discontinued operations in the Company’s condensed consolidated balance sheet and Virbela’s results of operations will be included in discontinued operations in the Company’s condensed consolidated statements of comprehensive income (loss).

~~2. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES~~In prior years, Virbela represented an operating and reporting segment under ASC 280. Going forward, the remaining operations of Virbela will not meet the operating or reporting segment criteria, therefore, any operating results related to Virbela and Frame^® technologies will be included in the Other Affiliated Services segment. Prior year segment and financial statement information has been reclassified to reflect Virbela as discontinued operations.

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2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying interim unaudited condensed consolidated financial statements include the accounts of eXp ~~World Holdings, Inc.,~~ and its ~~subsidiaries; eXp Realty Holdings, Inc.; First Cloud Mortgage, Inc. (dormant as~~consolidated subsidiaries, 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. Joint ventures are typically included in the Other Affiliated Services unless the joint venture specifically supports one of the reportable segments.

The Company has several joint venture investments. The operations of these joint ventures are not material to the Company’s financial position or results of operations.

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 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

~~Recently Issued Accounting Pronouncements~~

~~In January 2017,~~When necessary, the Company ~~implemented accounting treatment~~will reclassify certain amounts in prior-period financial statements to conform to the current period’s presentation. Prior year segment and financial statement information has been reclassified to reflect Virbela as ~~promulgated~~discontinued operations.

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Restricted cash

Restricted cash consists of cash held in escrow by ~~FASB as issued in ASU No. 2016-09 Compensation – Stock Compensation (Topic 718).~~the Company on behalf of real estate buyers. The ~~new standard simplifies several aspects~~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 ~~accounting for share-based payments, including accounting for income taxes, forfeitures and statutory tax withholding requirements, and classification within~~same amounts shown on the ~~statement~~condensed consolidated statements of cash flows. ~~The Company made an election to account for forfeitures~~


	Cash and cash equivalents	Restricted cash	Total
Balance, March 31, 2023	$ 122,769	$ 55,365	$ 178,134
Balance, December 31, 2023	$ 125,873	$ 44,020	$ 169,893
Balance, March 31, 2024	$ 109,169	$ 74,735	$ 183,904

3.	DISCONTINUED OPERATIONS

In accordance with ASC 205-20, the results of ~~non-vested equity awards~~the Virbela business are presented as discontinued operations in the ~~periods in which they occur. The treatments implemented did not have a material impact on the accompanying unaudited~~ condensed consolidated ~~financial~~ statements of comprehensive income and, as ~~presented.~~

~~In May 2016,~~such, have been excluded from continuing operations. Further, the ~~FASB issued ASU 2016-02 Leases (Topic 842). Under~~Company reclassified the ~~new guidance a lessee is required to recognize lease~~assets and liabilities of the Virbela segment as assets and ~~corresponding right-of-use assets, initially measured at~~liabilities of discontinued operations in the consolidated balance sheets. The following tables present ~~value of lease payments, on~~the information for Virbela’s operations for the three months ended March 31, 2024 and 2023, and 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~~information as of ~~12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets~~March 31, 2024 and ~~lease liabilities. If the lessee makes the election, the lessee would recognize lease expense on a straight-line basis over the lease term.~~ December 31, 2023 (in thousands).


ASSETS AND LIABILITIES OF DISCONTINUED OPERATIONS
(Unaudited)

	March 31, 2024	December 31, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$ 1,064	$ 991
Accounts receivable, net of allowance for credit losses of $16 and $99, respectively	310	626
Prepaids and other assets	257	347
TOTAL CURRENT ASSETS	1,631	1,964
Property, plant, and equipment, net	9	11
Intangible assets, net	3,396	3,469
Deferred tax assets	2,390	2,308
TOTAL ASSETS	$ 7,426	$ 7,752

LIABILITIES
CURRENT LIABILITIES
Accounts payable	$ 26	$ 110
Accrued expenses	1,380	1,699
TOTAL CURRENT LIABILITIES	1,406	1,809
TOTAL LIABILITIES	$ 1,406	$ 1,809

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INCOME STATEMENT OF DISCONTINUED OPERATIONS
(Unaudited)

	Three Months Ended March 31,
	2024	2023
Revenues	$ 649	$ 2,163
Operating expenses
Commissions and other agent-related costs	679	721
General and administrative expenses	1,765	2,730
Technology and development expenses	116	351
Sales and marketing expenses	(3)	36
Total operating expenses	2,557	3,838
Operating (loss)	(1,908)	(1,675)
Other income
Other income, net	(17)	(6)
Total other income, net	(17)	(6)
(Loss) before income tax expense	(1,891)	(1,669)
Income tax benefit	(82)	(1,130)
Net loss from discontinued operations	($ 1,809)	($ 539)

4.	EXPECTED CREDIT LOSSES

The Company is ~~still evaluating our lease contracts however, we do not expect material changes~~exposed to credit losses primarily through trade and other financing receivables arising from revenue transactions. The Company uses the 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 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.

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 decrease to the ~~timing~~allowance for expected credit losses.

Receivables from real estate property settlements totaled $100,529 and ~~recognition~~$81,004 of ~~lease expense as a result of adoption of the ASU. This ASU update is effective in annual reporting periods beginning after December 15, 2018 and the interim periods within that year.~~

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 the potential impacts the new revenue standard may have as a result of adoption of the ASU however, we do not expect the new standard to have a material impact on financial results aswhich the Company ~~recognizes revenue at~~recognized expected credit losses of $2 and $-, respectively as of March 31, 2024 and December 31, 2023. As of March 31, 2024 and December 31, 2023 agent non-commission based fees receivable and short-term advances totaled $7,487 and $7,268, of which the ~~completion~~Company recognized expected credit losses of ~~a residential real estate sale transaction, on a gross basis, which will not result in a change in the timing~~$2,363 and ~~recognition of revenue. This ASU is effective in annual reporting periods beginning after December 15, 2017~~$2,204, respectively.

5.	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


							March 31, 2024	December 31, 2023
Computer hardware and software	$	1,518,785		$	219,590		$ 38,372	$ 37,444
Furniture, fixture and equipment		5,910			5,910
Furniture, fixture, and equipment							2,253	2,254
Total depreciable property and equipment		1,524,695			225,500		40,625	39,698
Less: accumulated depreciation and amortization		(304,405	)		(97,216	)
Less: accumulated depreciation							(29,778)	(27,733)
Depreciable property, net		1,220,290			128,284		10,847	11,965
Discontinued operations							(9)	(11)
Assets under development		77,925			410,121		1,393	1,013
Fixed assets, net	$	1,298,215		$	538,405
Property, plant, and equipment, net							$ 12,231	$ 12,967

~~Depreciation~~For the three months ended March 31, 2024 and 2023 depreciation expense was $2,059 and $2,067, respectively.

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6.	GOODWILL AND INTANGIBLE ASSETS

Goodwill was $16,682 as of March 31, 2024 and $16,982 as of December 31, 2023. As of March 31, 2024, the Company recorded cumulative translation adjustment of ($300) related to Canadian goodwill. 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 months ended March 31, 2024, no events occurred that indicated it was more likely than not that goodwill was impaired. The following tables present definite-lived intangible assets as of March 31, 2024 and December 31, 2023, in thousands:


	March 31, 2024
	Gross	Accumulated	Net Carrying
	Amount	Amortization	Amount
Trade name	$ 2,661	($ 1,071)	$ 1,590
Existing technology	3,254	(1,351)	1,903
Non-competition agreements	461	(125)	336
Customer relationships	1,284	(675)	609
Licensing agreement	210	(210)	-
Intellectual property	2,836	(630)	2,206
Total intangible assets	$ 10,706	($ 4,062)	$ 6,644


	December 31, 2023
	Gross	Accumulated	Net Carrying
	Operations	Amortization	Amount
Trade name	$ 2,672	($ 1,030)	$ 1,642
Existing technology	3,263	(1,122)	2,141
Non-competition agreements	468	(125)	343
Customer relationships	1,285	(652)	633
Licensing agreement	210	(210)	-
Intellectual property	2,836	(583)	2,253
Total intangible assets	$ 10,734	($ 3,722)	$ 7,012

Definite-lived intangible assets are amortized using the straight-line method over an asset’s estimated useful life. Amortization expense for ~~the nine months ended September 30, 2017 and 2016 was $207,189 and $38,110, respectively. Depreciation expense~~definite-lived intangible assets for the three months ended ~~September 30, 2017~~March 31, 2024 and ~~2016~~2023 was ~~$112,487~~$340 and ~~$12,555,~~$512, respectively.

4. 7.STOCKHOLDERS’ EQUITY

AsThe following table represents a share reconciliation of ~~September 30, 2017,~~ the ~~Company had 53,995,962 shares of~~Company’s common stock issued ~~and outstanding.~~ for the periods presented:


	Three Months Ended March 31,
	2024	2023
Common stock:
Balance, beginning of quarter	183,606,708	171,656,030
Shares issued for stock options exercised	211,158	113,208
Agent growth incentive stock compensation	353,688	656,436
Agent equity stock compensation	2,189,922	2,106,369
Balance, end of quarter	186,361,476	174,532,043

The ~~following provides a detailed description~~Company’s equity programs described below are administered under the stockholder approved 2015 Equity Incentive Plan. The purpose of the ~~stock based transactions completed since January 1, 2017:~~

~~In January 2017,~~equity plan 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 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.and motivate excellent performance.

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

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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 for the period beginning January 1, 2024 through February 29, 2024, and a 5% discount on these issuances beginning as of March 1, 2024, as an additional cost of sales charge during the periods presented.

During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2024 and ~~2016,~~2023, the Company issued ~~1,197,567~~2,189,922 and ~~648,608~~2,106,369 shares ~~respectively,~~ of ~~restricted~~ common stock, respectively, to agents and brokers ~~for $3,173,490~~with a value of $25,868 and ~~$844,811,~~$26,775, 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 granted on a fixed-dollar amount of shares based on the achievement of ~~certain milestones for both~~performance metrics. As such, the awards are classified as liabilities until the number of share awards becomes fixed once the performance metric is achieved.

For the three months ended March 31, 2024 and 2023 the Company’s stock compensation expense attributable to the Agent Growth Incentive Program was $8,827 and $9,660, respectively, of which the total amount of stock compensation attributable to liability classified awards was $650 and $993, respectively.

Agent Thrive Program

Announced in October 2023, the Thrive program provides a stock incentive to the individual teams of leaders of culturally aligned teams that join the Company as part of the program. After affiliating with the Company, the team leader becomes eligible to receive an award of the Company’s common stock through team performance benchmarks. Awards typically vest after production benchmarks are reached and three years of subsequent service is provided to the ~~recruited agents. Subsequent to achieving and maintaining~~Company. Share-based performance awards are based on a fixed-dollar amount of shares based on the ~~milestones,~~achievement of production metrics. As such, the awards ~~vest ratably over service periods~~are classified as liabilities until the number of ~~three years.~~share awards becomes fixed once the production metric is achieved.

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

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


		Amount
Stock grant liability balance at December 31, 2022		$ 3,885
Stock grant liability increase year to date		3,832
Stock grants reclassified from liability to equity year to date		(2,717)
Balance, December 31, 2023		$ 5,000
Stock grant liability increase year to date		650
Stock grants reclassified from liability to equity year to date		-
Balance, March 31, 2024		$ 5,650

~~As of September 30, 2017, unvested restricted stock awards of approximately 2,084,000 shares had total unrecognized compensation costs totaling approximately $6,570,000.~~Stock Option Awards

~~Pre-2013~~ Stock ~~Options~~

~~As of September 30, 2017,~~options are granted to directors, officers, certain employees and consultants with an exercise price equal to the ~~Company had outstanding options to purchase 6,006,838 shares~~fair market value of common stock ~~accounted for in accordance~~on the grant date and the stock options expire 10 years from the date of grant. These options typically have time-based restrictions with ~~the intrinsic value method. The required re-measurement of the intrinsic value of the awards resulted in the recognition of~~equal and periodically graded vesting over a ~~stock option benefit of $5,502,948 for the nine months ended September 30, 2017; and an expense of $2,478,062 for~~three-year period.

During the three months ended ~~September 30, 2017; included in general~~March 31, 2024 and ~~administrative expenses in accompanying consolidated statements of operations. As of September 30, 2017,~~2023 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 353,656 and 88,553 stock options, respectively, to ~~purchase 2,783,231 shares of common stock,~~employees with an estimated grant date fair value of ~~$9,586,791.~~$6.93 and $8.18 per share, respectively. The ~~assumptions~~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 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. In May 2022,

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the Board approved an increase to the total amount of its buyback program from $400.0 million to $500.0 million. In June 2023, the Board approved an increase to the total amount of its buyback program from $500.0 million to $1.0 billion. Purchases under the repurchase program may be made in the open market or through a 10b5-1 plan and are expected to comply with Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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.

10b5-1 Repurchase Plan

The Company maintains a stock repurchase program with program changes subject to Board consent. In June 2023, the Board approved increasing the stock repurchase program to $1.0 billion. From time to time, the Company adopts written trading plans pursuant to Rule 10b5-1 of the Exchange Act to conduct repurchases on the open market.

On January 10, 2022, the Company and Stephens Inc. entered into a form of Issuer Repurchase Plan (“Issuer Repurchase Plan”) which authorized Stephens to repurchase common stock of the Company, which is amended from time to time to adjust the monthly repurchase amount. Most recently, on March 6, 2024, the Board approved, and the Company entered into a seventh amendment to the Issuer Repurchase Plan to increase the monthly repurchase to (i) $20.0 million during the calendar months commencing March 1, 2024 through and including April 30, 2024, and (ii) $15.0 million during the calendar months commencing May 1, 2024 through and including December 31, 2024.

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 considered issued but not outstanding.

The following table shows the share changes in treasury stock for the periods presented:


	Three Months Ended March 31,
	2024	2023
Treasury stock:
Balance, beginning of quarter	28,937,671	18,816,791
Repurchases of common stock	2,577,242	2,272,831
Balance, end of quarter	31,514,913	21,089,622

8.SEGMENT INFORMATION

The reportable segments presented below represent the Company’s segments for which separate financial information is available and which is utilized on a regular basis by its chief operating decision maker to assess performance and to allocate resources. In identifying its reportable segments, the Company also considers the nature of services provided by its segments.

Management evaluates the operating results of each of its reportable segments based upon revenue and Adjusted Segment EBITDA. Adjusted Segment EBITDA is defined by us as a segment’s operating profit (loss) from continuing operations plus depreciation and amortization, litigation contingency and stock-based compensation expenses. The Company’s presentation of Adjusted Segment EBITDA may not be comparable to similar measures used by other companies. Historically, the Company has reported results for four reportable segments. In the first quarter of 2024, the Company determined that the Virbela segment qualified for reporting as discontinued operations. In prior years, Virbela represented an operating and reporting segment under ASC 280. Going forward, the remaining operations of Virbela will not meet the operating or reporting segment criteria, therefore, any operating results related to Virbela technology will be included in the

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Other Affiliated Services segment. Prior year segment information has been reclassified to remove Virbela from the segment disclosure, in accordance with discontinued operations treatment.

The Company’s three reportable segments are as follows:

●

North American Realty: includes real estate brokerage operations in the United States and Canada, as well as lead-generation and other real estate support services provided in North America.

●

International Realty: includes real estate brokerage operations in all other international locations.

●

Other Affiliated Services: includes our SUCCESS^®Magazine, Frame^® technology, and other smaller ventures.

The Company also reports corporate expenses, as further detailed below, as “Corporate and other” which include expenses incurred in connection with business development support provided to the agents as well as resources, including administrative, brokerage operations and legal functions.

All segments follow the same basis of presentation and accounting policies as those described throughout the Notes to the Condensed Consolidated Financial Statements included herein. The Company accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices. The following table provides information about the Company’s reportable segments and a reconciliation of the total segment Revenues to consolidated Revenues and Adjusted Segment EBITDA to the consolidated operating profit (loss) from continuing operations and Goodwill (in thousands). Financial information for the comparable prior periods presented have been revised to conform with the current year presentation.


	Revenues
	Three Months Ended March 31,
	2024	2023
North American Realty	$ 927,137	$ 837,114
International Realty	15,596	10,758
Other Affiliated Services	1,788	1,677
Revenues reconciliation:
Segment eliminations	(1,467)	(1,096)
Consolidated revenues	$ 943,054	$ 848,453


	Adjusted EBITDA
	Three Months Ended March 31,
	2024	2023
North American Realty	$ 17,807	$ 21,203
International Realty	(3,355)	(3,676)
Other Affiliated Services	(767)	(681)
Corporate expenses and other	(2,643)	(2,223)
Consolidated Adjusted EBITDA	$ 11,042	$ 14,623

Operating (Loss) Profit Reconciliation:
Depreciation and amortization expense	2,399	2,215
Litigation contingency	16,000	-
Stock compensation expense	8,827	9,660
Stock option expense	1,990	2,746
Consolidated operating (loss) profit	($ 18,174)	$ 2


	Goodwill
	March 31, 2024	December 31, 2023
North American Realty	$ 14,295	$ 14,595
International Realty	-	-
Other Affiliated Services	2,387	2,387
Segment and consolidated total	$ 16,682	$ 16,982

The Company does not use segment assets to allocate resources or to assess performance of the segments and therefore, total segment assets have not been disclosed.

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9.EARNINGS PER SHARE

Basic earnings per share is computed based on 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 method to reflect the potential dilutive effect of unvested stock awards and unexercised options.

The following table sets forth the calculation of basic and diluted earnings per share attributable to common stock during the periods presented:


	Three Months Ended March 31,
	2024	2023
Numerator:
Net (loss) income from continuing operations	($ 13,830)	$ 1,992
Net loss from discontinued operations	($ 1,809)	($ 539)
Denominator:
Weighted average shares - basic	154,740,334	152,546,766
Dilutive effect of common stock equivalents	-	3,121,946
Weighted average shares - diluted	154,740,334	155,668,712
Earnings per share:
Net (loss) income from continuing operations per share - basic	($ 0.09)	$ 0.01
Net (loss) income from discontinued operations per share - basic	($ 0.01)	($ 0.00)
Net (loss) income from continuing operations per share - diluted	($ 0.09)	$ 0.01
Net (loss) income from discontinued operations per share - diluted	($ 0.01)	($ 0.00)

For three months ended March 31, 2024 and 2023 total outstanding shares of common stock excluded 3,212,244 and 635,343 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 plus discrete tax items arising in the period. Our provision for income tax expense (benefit) amounted to ($3.4) million and ($2.6) million for the three months ended March 31, 2024 and 2023, which represent effective tax rates of positive 18% and 238%, respectively. The provision for income tax benefit was primarily attributable to income(loss) from continuing and discontinuing operations, deductible stock-based compensation shortfalls and research and development credit. The effective tax rate differs from our statutory rates in both periods primarily due to the impact of the stock- based compensation and R&D tax credit.

The Company is subject to a wide variety of tax laws and regulations across the jurisdictions where it operates. Regulatory developments from the U.S. or international tax reform legislation could result in an impact to the Company's effective tax rate. The Company continues to monitor the Base Erosion and Profit Shifting (BEPS) Integrated Framework provided by the Organization for Economic Co-operation and Development (OECD) including the legislative adoption of Pillar II by countries, and all other tax regulatory changes, to evaluate the potential impact on future periods. The Company does not expect adoption of Pillar Two rules to have a significant impact on its consolidated financial statements during fiscal year 2024.

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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 ~~estimate~~determine fair values. Categorization within the ~~grant date~~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 March 31, 2024 and December 31, 2023, the fair value of the ~~awards issued for~~Company’s money market funds was $46,665 and $46,268, respectively.

There have been no transfers between Level 1, Level 2 and Level 3 in the ~~nine months ended September 30, 2017 include:expected volatility based on historical stock prices ranging from 142%~~period presented. The Company did not have any Level 2 or Level 3 financial assets or liabilities in the period presented.

12.COMMITMENTS AND CONTINGENCIES

From time to ~~157%; an average expected term of 6.25 years; risk free rates based on U.S. Treasury instruments for the expected term of approximately 2.2%; and no dividend payments.~~

~~In January 2017,~~time, the Company ~~modified certain terms~~is subject to potential liability under laws and government regulations and various claims and legal actions that may be asserted against us that could have a material adverse effect on the business, reputation, results of ~~previously outstanding option awards~~operations, cash flows or financial condition. Such litigation includes, but is not limited to, ~~purchase 500,000 shares~~actions or claims relating to cyber-attacks, data breaches, the Real Estate Settlement Procedures Act (“RESPA”), the Telephone Consumer Protection Act of ~~common stock, including accelerating portions~~1991 and state consumer protection laws, antitrust and anticompetition, worker classification, timely filing required SEC filings and non-compliance with contractual or other legal obligations.

The Company and its affiliated brokerage entities are among several defendants in eight U.S. and one Canadian putative class action lawsuits alleging that the Company participated in a system that resulted in sellers of residential property paying inflated buyer broker commissions in violation of U.S. federal and state antitrust laws and federal Canadian antitrust laws, as applicable, as discussed further in our 2023 Annual Report and Note 13 – Subsequent Events to these unaudited consolidated financial statements (“antitrust litigation”). As of March 31, 2024, the Company has determined that it is probable that a loss associated with the antitrust litigation has occurred and that the lower boundary of potential loss is reasonably estimable.

Based on an analysis of settlements negotiated by co-defendants companies in similar legal matters and ongoing developments in the antitrust litigation, the Company has recorded a provision for loss of $16.0 million which represents the lower boundary of a reasonably possible range of loss. The high-end range of loss cannot be reasonably estimated at this time due to the dynamic nature of the ~~award~~lawsuit and the contingent nature of possible outcomes. We have determined that it is at least reasonably possible that the loss estimate provision could change in the near term and that such change could be material. This contingent uncertainty highlights the provisional nature of the current loss estimate. Additionally, we cannot provide any assurances that results of such litigation will not have a material adverse effect on our business, results of operations, cash flows or financial condition.

The Company continues to ~~vest prior~~vigorously defend against these claims. However, due to the ~~original terms~~complexities inherent in such litigation, including the uncertainty of legal processes and potential developments in the ~~forfeiture of unvested options to purchase 275,000 shares of common stock. As a result of~~cases, the ultimate liability may differ from the current provision. The Company will reassess this ~~modification, the Company recognized approximately $368,000 of~~estimate as additional ~~stock option expense during the nine months ended September 30, 2017.~~information becomes available or as circumstances change.

~~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

For the nine months ended September 30, 2017 and September 30, 2016, the Company recognized total stock-based compensation of ($523,043) and $21,183,498, respectively, associated with all equity and equity-linked awards, inclusive of intrinsic value re-measurement.

For the three months ended September 30, 2017 and September 30, 2016, the Company recognized total stock-based compensation 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.~~

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13.SUBSEQUENT EVENTS

Quarterly Cash Dividend

~~5. RELATED PARTY TRANSACTIONS~~

~~In January 2017, and as part of her agreement to join~~On April 24, 2024, the Company’s Board of Directors ~~Ms. Laurie Hawkes~~declared a dividend of $0.05 per share which is expected to be payable on May 27, 2024, to stockholders of record as of the close of business on May 13, 2024. The ex-dividend date is expected to be on or around May 10, 2024. The dividend will be paid in cash.

Antitrust Litigation

On April 11, 2024, the Company was ~~granted an option to purchase~~named in Shauntell Burton et al. v. Bluefield Realty Group, LLC, et al., Case No. 7:24-cv-01800-JDA (filed in the United States District Court for the District of South Carolina) (the “Burton Litigation”), brought by a ~~total~~putative class of ~~350,000 shares~~residential property sellers, alleging that defendants participated in a system that resulted in sellers of ~~common stock from a significant stockholder at an exercise price~~residential property purportedly paying inflated buyer broker commissions in violation of ~~$4.22 per share. The Company estimated the grant date fair value of these options using a Black-Scholes model~~federal antitrust law. As with the ~~assumptions described in Footnote 4. The aggregate grant date fair value~~other antitrust litigation, the plaintiffs seek a permanent injunction enjoining the defendants from requiring home sellers to pay buyer-broker commissions or from otherwise restricting competition among brokers, an award of ~~this award was $1,333,501. During 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~~declaratory relief and ~~not the Company, upon the exercise~~damages or restitution on behalf 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~~certain home sellers as well as ~~customary affirmative~~attorneys’ fees and ~~negative covenants that restrict our ability~~costs of suit. Plaintiffs allege joint and several liability and seek treble or other multiple damages. The Burton Litigation is in the pleadings phase and the Company intends to ~~among~~vigorously defend against all claims. The Company may become involved in additional litigation or 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 all oflegal proceedings concerning the ~~financial covenants under the line of credit.~~same or similar claims.

~~As of September 30, 2017, we had no amount outstanding under the line of credit and have the entire amount remaining available of $500,000.~~

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 for many reasons. Those reasons include, without limitation, those described at the beginning of this report under “Statement regarding forward-looking statements,” as well as those that may be set forth elsewherestatements. See “Item 1 A. – Risk Factors” in our 2023 Annual Report and “Item 1 A. – Risk Factors” in this ~~report. Except~~Quarterly Report for a discussion of certain risks, uncertainties and assumptions associated with these statements.

This MD&A is divided into the following sections:

●

Operational Highlights for the Three Months Ended March 31, 2024

●

Overview

●

Market Conditions and Industry Trends

●

Key Business Metrics

●

Results of Operations

●

Business Segment Disclosures

●

Non-U.S. GAAP Financial Measures

●

Liquidity and Capital Resources

●

Critical Accounting Policies and Estimates

All dollar amounts are in USD thousands except share amounts and per share data and as otherwise ~~required~~noted.

OPERATIONAL HIGHLIGHTS FOR THE THREE MONTHS ENDED MARCH 31, 2024

●

eXp ended the first quarter of 2024 with a global agent Net Promoter Score (“aNPS”) of 73.

●

Agents and brokers on the eXp Realty platform decreased 2% year-over-year to 85,780.

●

Transactions increased 8% year-over-year to 110,976.

●

Transaction volume increased 12% year-over-year to $37.2 billion.

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OVERVIEW

eXp World Holdings, Inc. (the “Company”) was incorporated in Delaware on July 30, 2008 and launched the first cloud-based real estate brokerage offering agent-centric commission structure, revenue sharing, and agent equity opportunities in 2009. Today, the Company operates a diversified portfolio of service-based businesses whose operations benefit substantially from utilizing our enabling technology platform. A substantial portion of our revenue is derived from commissions received by ~~law,~~our residential real estate brokerages which provide a full suite of brokerage and adjacent services (such as mortgage, title, and content creation) to our real estate agents and brokers. Our residential real estate agents and brokers affiliate their real estate licenses with us and operate their businesses utilizing our cloud-based technology platform to enhance their real estate business and optimize efficiencies. Our enabling and innovative technology platform is a robust suite of cloud-based applications and software services tailored for our real estate agents and brokers and targets business operations such as customer relationship management, marketing, client services, and brokerage functionalities. We succeed when our real estate professionals succeed and we remain focused on being the most agent-centric business on the planet.

Beginning in the first quarter of 2024, following the discontinuation of Virbela, eXp manages its operations in three operating business segments: North American Realty; International Realty; and Other Affiliated Services. While we do not ~~intend~~consider acquisitions a critical element of our ongoing business, we seek opportunities to ~~update any~~expand and enhance our portfolio of solutions and believe we are well-positioned to capture additional revenue from such solutions.

Update Relating to Reportable Segments

In the first quarter of 2024, we determined that there has been a significant change to the Virbela business model. We have begun the process of winding down the Virbela business, which includes closing out current contracts and reducing our external customers. Further, the technology is being replaced with Virbela Frame^® technology that will be initially utilized internally within the Company. We expect the process to wind down the Virbela business to be completed by the fourth quarter of 2024. As a result of this change, the Company has determined that Virbela qualifies for reporting as discontinued operations and will be reported as discontinued operations in our consolidated balance sheet and condensed consolidated statements of comprehensive income. Prior year segment and financial statement information ~~contained~~has been reclassified to reflect Virbela as discontinued operations. See Note 3 –Discontinued Operations to the condensed consolidated financial statements for additional information regarding the discontinuation of Virbela.

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 attractive verticals and adjacent markets.

The Company’s primary emphasis is on achieving operational excellence for our real estate agents, which we monitor using the aNPS. We remain focused on optimizing our operating costs to match our revenue trends. One critical area of capital deployment during the first quarter of 2024 remained our Sustainable Revenue Share Plan (the “Revenue Share Plan”), whereby we pay real estate professionals affiliated with the Company a portion of eXp Realty’s commission for their contribution to Company growth. Regular evaluations are conducted to ensure the plan’s continued alignment with the Company's overarching objectives and for regulatory compliance.

MARKET CONDITIONS AND INDUSTRY TRENDS

Our business is dependent on the levels of home sales transactions and prices, which can vary based on economic conditions within the markets for which we operate. Changes in these ~~forward-looking statements.~~conditions can have a positive or negative impact on our business. The ~~following discussion~~economic conditions influencing housing markets primarily include economic growth, interest rates, unemployment, consumer confidence, mortgage availability and supply and demand.

In periods of economic growth, rising consumer confidence and lower interest rates, demand typically increases resulting in higher home sales transactions and home sales prices. Conversely, in periods of economic recession, declining consumer confidence and higher interest rates, demand typically decreases, resulting in lower home sales transactions and home sale prices. Additionally, regulations imposed by local, state and federal government agencies and geopolitical instability can also ~~addresses matters~~negatively impact the housing markets in which we ~~consider important for an understanding~~operate.

Table of ~~our financial position as~~Contents

Beginning in the second quarter of ~~September 30, 2017, and~~2022, several macroeconomic conditions have been contributing to the ~~results of operations for~~slowdown in the ~~three and nine months ended September 30, 2017, which may not be indicative of our future results through the year ended December 31, 2017 or beyond.~~

~~OVERVIEW~~

~~eXp World Holdings, Inc., (the “Company”, “eXp”, “we”, “us”, “our”), is a cloud-based~~U.S. residential real estate ~~brokerage. Our operations~~market, which directly impacts our business and financial results. These conditions include, but are ~~focused on~~not limited to rising inflation, rising mortgage interest rates driven by the ~~use of cloud-based technologies~~Federal Reserve Board increasing federal funds rate, volatility in ~~order~~the U.S. equity markets and continued unrest around the world.

The Company believes it is well positioned to grow its market share in the current market conditions. We have a strong base of agent support, which should drive organic market share growth, retention and productivity. Additionally, we offer agents a low-cost, high-engagement model, which affords agents and brokers increased income and ownership opportunities while offering a scalable solution to brokerage owners who want to survive and thrive during market fluctuations. We have an ~~international brokerage without~~efficient operating model with lower fixed costs driven by our cloud-based model, with no brick-and-mortar locations.

National Housing Inventory

In the ~~burden~~first quarter of ~~physical bricks~~2024, the continued increase of mortgage rates and ~~mortar or redundant staffing costs. Our technology focus includes~~higher home prices have contributed to a rise in inventory levels, as measured in months of supply. According to NAR, inventory of existing homes for sale in the ~~development of a proprietary cloud based real estate transactional platform.~~

~~Continued Accelerated Growth~~ ~~– During the nine-month period ended September 30, 2017, we increased our net real estate brokerage agent and broker base by 104%, from approximately 2,400~~U.S. was 1.1 million as of ~~December 31, 2016 to over 4,900. These increases were incurred in both new and existing geographical markets and contributed to net revenue increases of 203% and 205% as~~March 2024 (preliminary) compared to 970,000 at the ~~nine~~end of March 2023. This represents 3.2 months ~~and three~~of inventory in 2024 compared to 2.7 months ~~ended September 30, 2016, respectively.~~of inventory in the prior year.

Mortgage Interest Rates

~~RECENT BUSINESS DEVELOPMENTS~~

~~Advancements~~Persistently high mortgage rates during the ~~three months ended September 30, 2017 centered~~first quarter of 2024 continue to negatively impact the demand for homebuying. Based on Freddie Mac data, 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 continues to grow in an effort to support our rapidly growing agent base, we believe it is important to continue building our culture 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.

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 allowsaverage rate for a ~~flow of real time information~~30-year, conventional, fixed rate mortgage was 6.8% in March 2024 compared to ~~eXp agents, while also providing a singular platform for eXp staff to perform a variety of back office functions~~6.3% 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.March 2023.

Housing Affordability Index

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 its executive team in future periods.~~

~~MARKET CONDITIONS AND TRENDS~~

According to NAR, the National Association of REALTORS (“NAR”) home sale transactions of single family homes volume was projected to increase 10.4% in the third quarter of 2017 as compared to the same period in 2016 as a result of both an increase in the number of home sale transactions, combined with average home sale price growth (preliminary). Also according to NAR,~~the~~composite housing affordability index ~~has continued~~decreased to ~~be at historically favorable levels.~~103.0 for February 2024 (preliminary) from 109.3 for February 2023. 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~~has been declining year over year due ~~in part~~ to ~~favorable~~ mortgage rate ~~conditions. Mortgage rates increased approximately 60 basis points from September 30, 2016~~conditions and higher average home prices driven by constrained inventory levels.

Existing Home Sales Transactions and Prices

According to September 30, 2017, but continue 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 andNAR, existing home sale ~~volume growth.~~transactions decreased to an annual rate of 4.2 million in March 2024 (preliminary) compared to 4.4 million in March 2023, a decrease of 3.7%.

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~~nationwide existing home sales average price for March of ~~existing homes for sale~~2024 (preliminary) was $393,500 compared to $375,300 in March 2023, an increase of 4.8%.

The declining home sales transactions and increased prices in the U.S. ~~is 1.90 million (preliminary)~~havenegativelyimpacted our transaction and ~~2.03 million at the end~~volume metrics.

Legal & Regulatory Environment

See Part II, Item 1 of ~~September 2017 and September 2016, respectively. The July 2017 inventory represents~~this Quarterly Report for a ~~national average supply~~discussion of ~~4.2 months at~~ the current ~~home sales pace which~~legal environment and how such environment could potentially impact our business, results of operations, cash flows or financial condition.

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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 key business metrics that we periodically review to track the Company’s performance:


	Three Months Ended March 31,		Change
	2024	2023	2024 vs. 2023	% Change

Performance:
Agent NPS	73	70	3	4%
Agent count	85,780	87,327	(1,547)	(2)%
Real estate sales transactions	91,780	87,101	4,679	5%
Real estate sales volume	$ 37,154,750	$ 33,241,616	$ 3,913,134	12%
Other real estate transactions	19,196	15,204	3,992	26%
Real estate per transaction cost	$ 650	$ 613	$ 37	6%
Revenues	$ 943,054	$ 848,453	$ 94,601	11%
Operating profit (loss)	($ 18,174)	$ 2	($ 18,176)	(908,800)%
Adjusted EBITDA⁽¹⁾	$ 11,042	$ 14,623	($ 3,581)	(24)%

(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 (loss) from continuing operations, 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 (loss) from continuing operations, see “Non-U.S. GAAP Financial Measures”.

Revenue and adjusted EBITDA are key financial measures, and we review these measures to evaluate and drive our core operating performance.

Agent net promoter score (aNPS)

aNPS is ~~below the 6.1 months 25-year average.~~

~~Additional factors offsetting the positive impact~~a scale-based measure of ~~low mortgage rates include the ongoing rise~~customer satisfaction and an aNPS above 50 is considered excellent. aNPS plays a crucial role in ~~home prices,less than favorable mortgage underwriting standards~~attracting and ~~some would-be home sellers having limited or negative equity in homes.~~ ~~Mortgage credit conditions tightened significantly~~retaining agents and teams, especially 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~~period marked by market contraction, due to ~~current~~lower transaction volumes and higher 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~~rates. Despite the challenging market conditions, 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~~aNPS was 73 in the ~~regulatory environment~~first quarter of 2024 compared to 70 in ~~which~~ the ~~Company~~first quarter of 2023, due to our continuous investment in agent onboarding, expert care, transaction processing process and technology.

Agent count

One of our ~~customers operate could impact~~key strengths is attracting real estate agent and broker professionals that contribute to our growth. 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 actions taken by our competitors and macroeconomic factors affecting the real estate industry in general including rising interest rates and declining transaction volume in the U.S.

The number of ~~mortgage originations~~agents declined 2% in the first quarter of 2024, compared to the first quarter of 2023, as we continue to off board less productive agents. However, we are committed to retaining our most productive agents in the United States and Canada through the ~~Company’s competitive position~~execution of our growth strategies and ~~results~~the end-to-end suite of ~~operations. At this time,~~services we offer our agents.

Real estate sales transactions and volume

Real estate sales transactions are based on the ~~nature~~side (buyer or seller) of each real estate transaction and ~~impact~~are recorded when our agents and brokers represent buyers and/or sellers in the purchase or sale, respectively, of ~~any future~~a home. The number of real estate transactions is a key driver of our revenue and profitability. Transaction volume represents the total sales value for all transactions and is influenced by several market factors, including, but not limited to, the pricing and quality of our services and market conditions that affect home sales, such as macroeconomic factors, economic growth, local inventory levels, mortgage interest rates, and seasonality.

Our real estate sales transactions and volume typically fluctuate with changes ~~is unknown.~~

~~Existing Home Sales~~

~~According to NAR, for~~in the ~~year ended December 31, 2016,~~market’s existing home ~~sale~~sales transactions ~~increased to 5.5 million~~.as reported by NAR; however, company-specific initiatives influence the transaction volume and productivity of our agents. In the first ~~nine months~~quarter of ~~2017, NAR existing home sale transactions increased 4.2 million year to date, but decreased 4.3%~~2024, compared to the ~~same period~~first quarter of ~~2016.During the same period, eXp Realty home sale~~2023, our real estate sales transactions increased ~~223%~~5% due to our agents’ productivity, which more than offset the decline in existing home sales in the U.S. as reported by the NAR. Transaction volume increased 12% due to increased transactions and increased home sales prices.

Table of Contents

Other real estate transactions

Other real estate transactions are recorded for leases, rentals and referrals that are undertaken by our agents and brokers. The increase in other real estate transactions reflects the productivity of our agents and brokers.

Real estate per transaction cost

Real estate per transaction cost is measured as selling, general and administrative, sales and marketing and technology and development expenses resulting from our services that directly support our agents and brokers, divided by total transactions (real estate and other). Real estate per transaction cost increased 6% in the first quarter of 2024 compared to the first quarter of 2023, primarily due to strategic investments in personnel to support increased transaction volumes and agent NPS, and increased severance and employee-related expenses and legal expenses related to the antitrust lawsuits.

Revenues

Revenues represent the commission revenue earned by the Company for closed brokerage real estate transactions. In the first quarter of 2024, compared to the first quarter of 2023, the Company’s revenue increased due to increased real estate transactions driven by increased agent productivity and higher home sales prices, which more than offset declines in the U.S. real estate markets. Our revenues also increased due to increased international production in previously launched markets.

Operating profit (loss)

The operating loss in the first quarter of 2024 of $18.2 million compared to operating profit of $0.2 million in the first quarter of 2023, reflects the litigation contingency accrual of $16 million, and increased legal expenses related to the antitrust lawsuits, as well as increased severance and employee-related expenses, partially offset by increased revenues, net of agent commissions and other agent-related costs.

Adjusted EBITDA

Management reviews Adjusted EBITDA, which is a non-U.S. GAAP financial measure, to understand and evaluate our core operating performance.Adjusted EBITDA, for the three months ended March 31, 2024 was $11.0 million compared to $14.6 million at March 31, 2023. The decrease in adjusted EBITDA reflects increased legal expenses related to the antitrust lawsuits, as well as increased severance and employee-related expenses, partially offset by increased revenues, net of agent commissions and other agent-related costs.

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RESULTS OF OPERATIONS

Three Months Ended March 31, 2024 compared to the Three Months Ended March 31, 2023


	Three Months Ended	Three Months Ended	Change 2024 vs. 2023
	March 31, 2024	March 31, 2023	$	%

	(In thousands)
Statement of Operations Data:
Revenues	$ 943,054	$ 848,453	$ 94,601	11%
Operating expenses
Commissions and other agent-related costs	864,746	776,838	87,908	11%
General and administrative expenses	62,582	54,626	7,956	15%
Technology and development expenses	14,761	14,060	701	5%
Sales and marketing expenses	3,139	2,927	212	7%
Litigation contingency	16,000	-	16,000	-%
Total operating expenses	961,228	848,451	112,777	13%
Operating (loss) income	(18,174)	2	(18,176)	(908,800)%
Other (income) expense
Total (income) expense, net	(1,188)	(874)	(314)	(36)%
Equity in losses of unconsolidated affiliates	149	342	(193)	(56)%
Total other (income) expense, net	(1,039)	(532)	(507)	(95)%
Income (loss) before income tax expense	(17,135)	534	(17,669)	(3,309)%
Income tax benefit	(3,305)	(1,458)	(1,847)	(127)%
Net (loss) income from continuing operations	(13,830)	1,992	(15,822)	(794)%
Adjusted EBITDA⁽¹⁾	$ 11,042	$ 14,623	($ 3,581)	(24)%

(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 (loss) from continuing operations, operating income or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA, a reconciliation of Adjusted EBITDA to net income (loss) from continuing operations and a discussion of why we believe Adjusted EBITDA provides useful information to investors, see “Non-U.S. GAAP Financial Measures.”


			Change 2024 vs. 2023
	March 31, 2024	March 31, 2023	$	%

	(In thousands, except percentages)
Revenues	$ 943,054	$ 848,453	$ 94,601	11%

Total revenues increased 11% as a result of an increase in real estate transactions compared to the same period in ~~2016. Our home sale transactions were impacted by~~2023, because of the ~~growth~~unique productivity of our ~~agent base~~agents, which ~~grew from approximately 2,400 at~~more than offset declines in the ~~end of 2016 to over 4,900 by~~U.S. real estate market in the ~~end of the third~~first quarter of ~~2017.~~

~~As of their most recent releases, NAR is forecasting existing~~2024. Our revenue also increased due to increased home sales ~~to increase 3% in 2017~~prices.


			Change 2024 vs. 2023
	March 31, 2024	March 31, 2023	$	%

	(In thousands, except percentages)
Commissions and other agent-related costs	$ 864,746	$ 776,838	$ 87,908	11%

Commissions and ~~another 2% in 2018.~~

~~Existing Home Sale Price~~

We believe primary drivers to the long-term demand for housing and 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 September 30, 2017, we believe that these factors are generally favorable.However, significant changes to one or more of these drivers could cause the demand for housing to slow, negatively affecting all real estate brokerage firms, including 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~~other agent-related costs increased ~~income and ownership opportunities while offering a scalable solution to brokerage owners looking to survive and thrive in a wide range of economic conditions.~~

~~Results of Operations~~

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

~~Revenues~~

During the three-month period ended September 30, 2017 net revenues increased $32.35 million to $48.11 million as compared to the three-month period ended September 30, 2016 when we generated $15.76 million. The increase as compared to the prior period is a direct result11% primarily because of the increase in real estate transactions and increased home sales prices. Commissions and other agent-related costs include sales commissions, revenue share and stock-based compensation paid to our ~~sales agent base by over 173% to over 4,900.~~agents.

~~Operating Expenses~~23

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~~Table 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 $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.Contents


			Change 2024 vs. 2023
	March 31, 2024	March 31, 2023	$	%

	(In thousands, except percentages)
General and administrative expenses	$ 62,582	$ 54,626	$ 7,956	15%

General and administrative ~~includes~~expenses increased 15% due to increased severance and employee-related expenses and increased legal expenses related to the antitrust lawsuits. General and administrative expenses include costs related to wages, ~~including~~employee stock compensation, ~~dues, operating leases, utilities, travel~~ and other general overhead expenses. ~~The decrease~~


			Change 2024 vs. 2023
	March 31, 2024	March 31, 2023	$	%

	(In thousands, except percentages)
Technology and development expenses	$ 14,761	$ 14,060	$ 701	5%

Technology and development expenses increased 5% and include employee and other costs related to the maintenance and development of ~~$4.82 million in general~~the technology used by our agents and ~~administrative costs~~our employees.


			Change 2024 vs. 2023
	March 31, 2024	March 31, 2023	$	%

	(In thousands, except percentages)
Sales and marketing expenses	$ 3,139	$ 2,927	$ 212	7%

Sales and marketing expenses increased 7% due to advertising in the ~~three-month period ended September 30, 2017 as~~U.S. and Canada residential real estate market.


			Change 2024 vs. 2023
	March 31, 2024	March 31, 2023	$	%

	(In thousands, except percentages)
Total other (income) expense, net	($ 1,039)	($ 532)	($ 507)	(95)%

Other (income) increased 95% primarily due to increased interest income when compared to the ~~three-month period ended September 30, 2016 was driven primarily by the increase in compensation~~first quarter of ~~$2.57~~2023. Other (income) expense include interest income earned on cash and cash equivalents, and (earnings) losses related to equity investments.

Income Tax Benefit

The Company’s provision for income tax (benefit) amounted to ($3.4) million and ($2.6) million for the ~~decrease~~three months ended March 31, 2024 and 2023, respectively, which represented effective tax rates of positive 18% and 238%, respectively. The provision for income tax (benefit) expense was primarily attributable to income (loss) from continuing and discontinuing operations, deductible stock-based compensation shortfalls and research and development credit.


			Change 2024 vs. 2023
	March 31, 2024	March 31, 2023	$	%

	(In thousands, except percentages)
Operating (loss) income	($ 18,174)	$ 2	($ 18,176)	(908,800)%

The operating loss in ~~stock options~~the first quarter of 2024 reflects the litigation contingency accrual of $16 million, and ~~stock compensation expense of $7.90 million.~~

~~Professional fees include costs~~increased legal expenses related to the antitrust lawsuits, as well as increased severance and employee-related expenses, partially offset by increased revenues.

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			Change 2024 vs. 2023
	March 31, 2024	March 31, 2023	$	%

	(In thousands, except percentages)
Adjusted EBITDA	$ 11,042	$ 14,623	($ 3,581)	(24)%

Adjusted EBITDA decreased 24% and reflects increased legal ~~accounting~~expenses related to the antitrust lawsuits, as well as increased severance and employee-related expenses, partially offset by increased revenues, net of commissions and other ~~consultants. Costs increased $0.08 million~~agent-related costs.

BUSINESS SEGMENT DISCLOSURES

See Note 8 – Segment Informationto the unaudited condensed consolidated financial statements for additional information regarding our business segments. The following table reflects the results of each of our reportable segments during the ~~three-month period~~three months ended ~~September 30, 2017 as compared~~March 31, 2024 and 2023:


	Three Months Ended	Three Months Ended	Change 2024 vs. 2023
	March 31, 2024	March 31, 2023	$	%

	(In thousands)
Statement of Operations Data:
Revenues
North American Realty	$ 927,137	$ 837,114	$ 90,023	11%
International Realty	15,596	10,758	4,838	45%
Other Affiliated Services	1,788	1,677	111	7%
Segment eliminations	(1,467)	(1,096)	(371)	(34)%
Total Consolidated Revenues	$ 943,054	$ 848,453	$ 94,601	11%
Adjusted Segment EBITDA(¹⁾
North American Realty	17,807	21,203	($ 3,396)	(16)%
International Realty	(3,355)	(3,676)	321	9%
Other Affiliated Services	(767)	(681)	(86)	(13)%
Total Segment Adjusted EBITDA	13,685	16,846	(3,161)	(19)%
Corporate expenses and other	(2,643)	(2,223)	(420)	(19)%
Total Reported Adjusted EBITDA(1)	$ 11,042	$ 14,623	($ 3,581)	(24)%

(1)

Adjusted Segment EBITDA and Adjusted EBITDA are not measurements of our financial performance under U.S. GAAP and should not be considered as alternatives to net income (loss) from continuing operations, operating income, or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted Segment EBITDA and Adjusted EBITDA and a reconciliation of such measures to operating profit and net income (loss) from continuing operations, respectively, see “Non-U.S. GAAP Financial Measures”. Management evaluates the operating results of each of its reportable segments based upon revenue and Adjusted Segment EBITDA. Adjusted Segment EBITDA is defined by us as operating profit (loss) from continuing operations plus depreciation and amortization and stock-based compensation expenses. Adjusted EBITDA is defined by us as net income (loss) from continuing operations, excluding other income (expense), income tax benefit (expense), depreciation, amortization, impairment charges, litigation contingency expenses, stock-based compensation expense, and stock option expense and other items that are not core to the operating activities of the Company. The Company’s presentation of Adjusted Segment EBITDA and Adjusted EBITDA may not be comparable to similar measures used by other companies.

North American Realty revenues increased 11% in the ~~three-month period ended September 30, 2016. Professional fees were higher due to higher audit costs as~~first quarter of 2024 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 into 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 $0.22 million was~~2023 primarily due to increased ~~cost~~real estate transactions and increased home sales prices, despite the challenging market in ~~lead capture~~the U.S. residential real estate markets. Adjusted EBITDA decreased (16)% due to increased legal expenses, increased severance 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~~employee-related expenses, partially offset by increased revenues, net 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 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~~other agent-related costs.

International Realty revenues increased 45% 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~~first quarter 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 as2024 compared to the same period ~~last year~~ in ~~addition~~2023 primarily due to ~~other non-recurring~~increased real estate transactions ~~specifically as it relates~~driven by increased production in previously launched markets. Adjusted EBITDA improved 9% in the first quarter of 2024 compared to ~~performing diligence~~the same period in 2023 due to increased revenue which was partially offset by increased selling, general and ~~contract review and preparation~~administrative expenses to support the incremental production in existing operations.

Other Affiliated Services revenues increased 7% due to Virbela Frame^® revenue, which more than offset lower SUCCESS® revenues. Adjusted EBITDA decreased (13)% due to increases in selling, general and administrative expenses related to investing in business initiatives.

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Corporate expenses and other contain the costs incurred to operate the corporate parent of eXp Realty.

NON-U.S. GAAP FINANCIAL MEASURES

To supplement our condensed 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 Consolidated Adjusted EBITDA to mean net income (loss) from continuing operations, excluding other income (expense), income tax benefit (expense), depreciation, amortization, litigation contingency, impairment charges, litigation contingency expenses, stock-based compensation expense and stock option expense. Adjusted Segment EBITDA is defined as operating profit (loss) from continuing operations plus depreciation and amortization and stock-based compensation expenses. We believe that Consolidated Adjusted EBITDA and Adjusted Segment 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 Segment EBITDA helps identify underlying trends in our business that otherwise could be masked by the effect of the expenses that we exclude in Adjusted Segment EBITDA. In particular, we believe the exclusion 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 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 use of Adjusted EBITDA compared to net income (loss) from continuing operations, 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) income from continuing operations, the most comparable U.S. GAAP financial measure, for each of the periods presented:


	Three Months Ended March 31,
	2024	2023
Net (loss) income from continuing operations	($ 13,830)	$ 1,992
Total other (income) expense, net	(1,039)	(532)
Income tax (benefit) expense	(3,305)	(1,458)
Depreciation and amortization	2,399	2,215
Litigation contingency	16,000	-
Stock compensation expense ⁽¹⁾	8,827	9,660
Stock option expense	1,990	2,746
Adjusted EBITDA	$ 11,042	$ 14,623

(1)	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. Our cash and cash equivalents balances and cash flows from operations have strengthened primarily due to

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transaction volume growth and improved cost leverage over the prior five years, attributable to the expansion of ~~new~~our independent agent and broker ~~bases as well as entry~~network and, to ~~new geographical markets.~~a lesser extent, increased average prices of home sales.

~~Sales~~Currently, our primary use of cash on hand is to sustain and ~~marketing includes costs related~~grow our business operations, including, but not limited to, ~~lead capture, digital~~commission and ~~print media,~~revenue share payments to agents and ~~trade shows, in~~brokers and cash outflows for operating expenses and dividend payments. 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~~Company has no known material cash requirements as of ~~September 30, 2017 increased~~March 31, 2024, relating to capital expenditures, commitments, or human capital (except as ~~compared~~passthrough commissions to ~~December 31, 2016. Our increased sales volumes, resulting in increased receivables~~agents and ~~restricted~~brokers concurrent with settled real estate transactions).

We believe that our existing balances of cash ~~were off-set by corresponding increases in accrued expenses related to commissions payable.~~

~~The following table presents our~~and cash equivalents and cash flows expected to be generated from our operations will be sufficient to satisfy our operating requirements for ~~the nine months ended September 30, 2017 and 2016:~~

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

Net cash provided by operating activities for the nine months ended September 30, 2017 primarily resulted from the increased volume in our sales transactions 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 forat least the next twelve months.

During the nine months ended September 30, 2017, our investing activities consisted of additional expenditures related to the on-going development of our internal use software. As we continue to develop and refine our cloud-based platforms, we expect to continue to use our existing cash resources on similar expenditures for 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 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.

Net Working Capital

~~During~~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 March 31, 2024 and December 31, 2023:


	March 31, 2024	December 31, 2023
Current assets	$ 300,377	$ 266,475
Current liabilities	(204,292)	(141,640)
Net working capital	$ 96,085	$ 124,835

For the three months ended March 31, 2024, net working capital decreased ($28.8) million, or (23)%, compared to December 31, 2023.

Cash Flows

The following table presents our cash flows for the three months ended March 31, 2024 and 2023:


	Three Months Ended March 31,
	2024	2023
Net cash provided by operating activities	$ 60,654	$ 56,144
Net cash used in investment activities	(5,245)	(1,782)
Net cash used in financing activities	(40,809)	(36,205)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash	(589)	594
Net change in cash, cash equivalents and restricted cash	$ 14,011	$ 18,751

For the three months ended March 31, 2024, net cash provided by operating activities increased $4.5 million compared to the same period in 2023. The increase in operating activities was primarily driven by increased customer deposits, partially offset by the decrease in working capital.

For the three months ended March 31, 2024, net cash used in our investing increased primarily due to cash used for investments in our affiliates compared to 2023.

For the three months ended March 31, 2024 and 2023 net cash flows used in financing activities primarily were related to stock repurchases and the payment of cash dividends.

Acquisitions

While we ~~secured~~do not consider acquisitions a ~~line~~critical element of ~~credit~~our ongoing business, we seek opportunities to expand and enhance our portfolio of solutions, access new revenue streams, or otherwise complement or accelerate the growth of our existing operations. We may fund acquisitions or investments in complementary businesses with various sources of capital including existing cash balances and cash flow from operations.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Thecondensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the 2023 Annual Report, which provides ~~that the Company may borrow up to $500,000. We currently have no borrowings against the line~~a description of credit facility 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. If we are unable to raise additional capital when desired, our business and results of operations will likely suffer.

~~CRITICAL ACCOUNTING ESTIMATES~~

~~There has been no change in~~ our critical accounting policies. There were no changes to critical accounting policies or estimates as ~~previously disclosed~~reflected in our 2023 Annual ~~Report on Form 10-K for~~Report. For additional information regarding our critical accounting policies and estimates, see the ~~year ended December 31, 2016.~~

~~Non-GAAP Measurements~~

AsCritical Accounting Policies and Estimates section of September 30, 2017 we have outstanding options 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 Regulations 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.

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 earlyMD&A included in our existence, and there are no further performance requirements associated with earning the awards, we believe that omitting these fluctuations provides a useful supplemental measure 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.2023 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 )

~~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, 2023. For details on the Company's interest rate and foreign currency exchange, see “Item 7A. Quantitative and Qualitative Information About Market Risks” in our 2023 Annual Report.

~~Item 3.~~ ~~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~~Management is responsible for establishing and maintaining disclosure controls and procedures ~~as defined~~that are designed to ensure that information required to be disclosed in ~~Rule 13a-15(e) and Rule 15d-15(e) promulgated~~its reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)~~, that are designed to ensure that information required to be disclosed by us in the reports that we file 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 submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information ~~was not~~is accumulated and communicated to management, including our Chief Executive Officer (as the principal executive officer) and ~~Chief~~Principal Financial Officer, to allow timely decisions regarding required ~~disclosure.~~disclosures.

~~The determination~~As of March 31, 2024, an evaluation was conducted by the Company under the supervision and with the participation of its management, including our Chief Executive Officer and Principal Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Principal Financial Officer each concluded that ~~our~~the Company’s disclosure controls and procedures were ~~not~~ effective ~~was based on~~at the ~~following material weaknesses~~reasonable assurance level as of March 31, 2024.

Changes in ~~our internal control~~Internal Control over ~~financial reporting, which~~Financial Reporting

There were ~~identified and described in detail in our Annual Report on Form 10-K for 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.

~~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 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 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 of the remediation activities described above under Controls and Procedures – Evaluation of Disclosure Controls and Procedures, there have been~~ no changes in our internal control over financial reporting ~~(as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act)~~that occurred during the ~~period~~quarter ended ~~September 30, 2017~~March 31, 2024 that have materially affected, or are reasonably believed to be likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.

LEGAL PROCEEDINGS

~~From time~~ See Note 12 -Commitments and Contingencies and Note 13 –Subsequent Events to ~~time, we are involved~~the unaudited condensed consolidated financial statements included in ~~lawsuits, claims, investigations and~~Part I, Item 1 of this Quarterly Report for additional information regarding the Company’s legal proceedings, which is incorporated herein by reference. We cannot provide any assurances that ~~arise in the ordinary course~~results of ~~business. There are no matters pending or threatened that we expect to~~such litigation will not have a material adverse ~~impact~~effect on our business, results of operations, cash flows or financial condition.

Litigation and other legal matters are inherently unpredictable and subject to substantial uncertainties and adverse resolutions could occur. In addition, litigation and other legal matters, including class action lawsuits, government investigations and regulatory proceedings can be costly to defend and, depending on the class size and claims, could be costly to settle. As such, the Company could incur judgments, penalties, sanctions, fines or enter into settlements of claims with liability that are materially in excess of amounts accrued and these settlements could have a material adverse effect on the Company’s financial condition, results of operations or cash ~~flows.~~flows in any particular period.

Item 1A.

RISK FACTORS

The business, financial condition and operating results of the Company can be affected by a number of risks, whether currently known or unknown. For a discussion of our potential risks and uncertainties, please see in Part I, Item 1A Risk Factors of the 2023 Annual Report. Additional risks not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations in future periods. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price. Except for the risk factors disclosed in Part I, Item 1A of 2023 Annual Report, which are hereby

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incorporated by reference into this Part II, Item 1A of this Quarterly Report, and the modified risk factor set forth below, there have been no material changes to the Company’s risk factors as disclosed in the 2023 Annual Report.

Risks Related to Legal and Regulatory Matters

Adverse outcomes in litigation and regulatory actions against other companies and agents in our industry could adversely impact our financial results.

Adverse outcomes in legal and regulatory actions against other companies, brokers, and agents in the residential and commercial real estate industry may adversely impact the financial condition of the Company and our real estate brokers and agents when those matters relate to business practices shared by the Company, our real estate brokers and agents, or our industry at large. Such matters may include, without limitation, RESPA, Telephone Consumer Protection Act of 1991 and state consumer protection law, antitrust and anticompetition, and worker classification claims. Additionally, if plaintiffs or regulatory bodies are successful in such actions, this may increase the likelihood that similar claims are made against the Company and/or our real estate brokers and agents which claims could result in significant liability and be adverse to our financial results if we or our brokers and agents are unable to distinguish or defend our business practices.

As an example, in the matter of Burnett v. National Association of Realtors (U.S. District Court for the Western District of Missouri), a ~~“smaller reporting company”~~federal jury found NAR and certain other remaining brokerage defendants liable for $1.8 billion in damages, which verdict was appealed on October 31, 2023. That same day, the Company, along with other brokerage and non-brokerage defendants, were named as defendants in Gibson v. National Association of Realtors, ~~we are not required~~alleging a similar fact pattern and antitrust violations. Since that time, the Company has been named as a defendant in additional putative class action lawsuits alleging similar fact patterns and antitrust violations. NAR and certain brokerage defendants have settled certain of these lawsuits (which lawsuits remain subject to ~~provide~~final court approval), which include both monetary and non-monetary settlement terms. Those settlement terms may impact business practices within the ~~information required by this Item.~~industry which could adversely impact the Company’s business, results of operations, and financial condition.

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 the nine months ended September 30, 2017, the Company issued 25,000 shares of restricted~~ common stock ~~upon~~through the ~~exercise of stock options, a connection with which it received cash consideration totaling $20,000.~~

~~During the nine months~~quarter ended ~~September 30, 2017, the Company issued 1,655,590 shares of restricted common stock for services totaling $7,076,363.~~March 31, 2024:

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
1/1/2024-1/31/2024	442,369	$ 13.65	442,369	$ 424,569,747
2/1/2024-2/29/2024	496,925	12.06	496,925	418,569,828
3/1/2024-3/31/2024	1,637,948	11.23	1,637,948	399,073,544
Total	2,577,242	$ 12.31	2,577,242

(1)

In December 2018, the Board approved a stock repurchase program authorizing the Company to purchase its common stock. In November 2019, the Board amended the repurchase program, increasing the total amount authorized to be purchased from $25.0 million to $75.0 million. In December 2020, the Board approved another amendment to the repurchase program increasing the total amount authorized to be purchased from $75.0 million to $400.0 million. In May 2022, the Board approved another amendment to the repurchase program increasing the total amount authorized to be purchased from $400.0 million to $500.0 million. In June 2023, the Board approved another amendment to the repurchase program increasing the total amount authorized to be purchased from $500.0 million to $1.0 billion. The stock repurchase program is more fully disclosed in Note 6 – Stockholders’ Equity to the consolidated financial statements.

Item 3.

DEFAULTS UPON SENIOR SECURITIES

None.

~~None.~~

Item 4.

MINE SAFETY DISCLOSURES

Not applicable.

Table of Contents

Item 5.

OTHER INFORMATION

On February 29, 2024, Glenn Sanford, the Company’s Chairman of the Board and Chief Executive Officer, adopted a Rule 10b5–1 trading arrangement (as defined in Item 408 of Regulation S-K). The duration of the trading arrangement is through May 21, 2025. The aggregate number of shares of the Company’s common stock that may be sold pursuant to the trading arrangement is 4,800,000.

On March 25, 2024, Randall Miles, the Company’s director and Vice Chair of the Board, adopted a Rule 10b5–1 trading arrangement (as defined in Item 408 of Regulation S-K). The duration of the trading arrangement is through June 30, 2025. The aggregate number of shares of the Company’s common stock that may be sold pursuant to the trading arrangement is 240,000.

~~Not applicable.~~Except as set forth in this Item 5, during the three months ended March 31, 2024, no other directors of officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408 of Regulation S-K.

Table of Contents

Item 6.

EXHIBITS


Exhibit	Exhibit			Incorporated by Reference
Number	Description	Form	Exhibit	Filing Date/Period End Date
3.1	Restated Certificate of Incorporation	10-K	3.1	2/28/2023

3.2	Restated Bylaws	10-K	3.2	2/28/2023

4.1	Description of Securities	10-K	4.1	2/22/2024


10.1	Seventh Amendment to eXp World Holdings, Inc. Stock Repurchase Plan	8-K	10.1	3/8/2024

10.2*†	Separation and Release of Claims Agreement, dated March 20, 2024, by and between eXp Realty, LLC and Shoeb Ansari

10.3*	U.S. Form of eXp Realty, LLC Independent Contractor Agreement

10.4*	U.S. Form of eXp Realty, LLC Policies & Procedures

31.1*	Certification of the Chief Executive Officer pursuant to Rule 13a 14(a) under the Securities Exchange Act of 1934

31.2*	Certification of the Chief Financial Officer pursuant to Rule 13a 14(a) under the Securities Exchange Act of 1934

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)

* Filed herewith

~~Exhibit Number~~		~~Exhibit~~ ~~Description~~

~~3.1~~		~~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 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~~		~~XBRL Instance Document~~

~~101.SCH~~		~~XBRL Taxonomy Extension Schema Document~~

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase Document~~

** Furnished herewith and not “filed” for purposes of Section 18 of the Exchange Act

† Management contract or compensatory plan or arrangement

Table of Contents

SIGNATURES

~~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.


May 1, 2024		eXp World Holdings, Inc.
		(Registrant)

~~Date: November 14, 2017~~		/s/ ~~Alan Goldman~~Kent Cheng
	~~Alan Goldman~~	Kent Cheng
		Chief ~~Financial~~Accounting Officer (Principal Financial Officer)

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

2219 Rimland Drive, Suite 301, Bellingham, WA		98226
(Address of principal executive offices)		(Zip Code)
(360) 685-4206
(Registrant’s telephone number, including area code)


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


Largeacceleratedfiler☒	Acceleratedfiler☐	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	18
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	20	28
Item 4.		Controls and Procedures	20	28

	PART II –		OTHER INFORMATION
Item 1.		Legal Proceedings	22	28
Item 1A.		Risk Factors		28
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	22	29
Item 3.		Defaults Upon Senior Securities	22	29
Item 4.		Mine Safety Disclosures	22	29
Item 5.		Other ~~information~~Information	22	30
Item 6.	~~Exhibits~~	23 Exhibits		31

	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

	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 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 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